ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE PART I. Texas Department of Agriculture CHAPTER 1.General Procedures SUBCHAPTER A.General Rules of Practice 4 TAC sec.1.14 The Texas Department of Agriculture (the department) adopts the repeal of sec.1.14 concerning general provisions for licensing, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1758). The repeal is adopted in order to allow sec.1.14 to be moved to a new Chapter 2 of this title, relating to general licensing requirements for the agency. The repeal deletes sec.1.14. The department is adopting new sec.2.1 to replace this section. No comments were received on the proposal. The repeal is adopted under the Texas Agriculture Code, sec.12.016, which provides the department with the authority to adopt rules as necessary for the efficient enforcement and administration of the Texas Agriculture Code. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804661 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 2.Licensing The Texas Department of Agriculture (the department) adopts new sec.sec. 2.1-2.2 and sec.sec.2.10-2.14 concerning general provisions applicable to all department licenses, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1759). The department adopts the new sections to implement a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033, and to establish a chapter for licensing rules applicable to all agency programs. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. New sec.2.1 moves current sec. 1.14 into new Chapter 2, Subchapter B. The repeal of sec.1.14 is being filed as a separate submission. New sec.2.1 provides requirements for the processing of licenses, notice requirements for licensing, and standards for the effect of criminal convictions on licensing. New sec.2.2 provides an expiration date for sections found in Chapter 2. New sec.sec.2.10-2.14 provide definitions to be used in Chapter 2, license specifications, license fee requirements, inspection requirements and license sanctions. No comments were received on the proposal . SUBCHAPTER A.General Provisions 4 TAC sec.sec.2.1, 2.2 New sec.sec.2.1 and 2.2 are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license; and sec.12.016, which provides the department with the authority to adopt rules as necessary for the efficient enforcement and administration of the Texas Agriculture Code. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804662 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 SUBCHAPTER B.Consolidated Licenses 4 TAC sec.sec.2.10-2.14 New sec.sec.2.10-2.14 are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804663 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 7.Pesticides SUBCHAPTER C.Licensing 4 TAC sec.7.20 The Texas Department of Agriculture (the department) adopts amendments to sec.7.20, concerning the expiration date and fees for pesticide licenses, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1761). The department adopts the amendments to sec.7.20, relating to licensing requirements because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments to sec.7.20 relating to licensing requirements allow the department to adjust the expiration date and fee schedules for a pesticide license when the licensee's pesticide license is consolidated with another license, certification, or registration issued by the department. The amendments to sec.7.20 also change the applicator license fees for certain employees of political subdivisions of the state of Texas or of the federal government. The licensing fees for employees of certain political subdivisions of the state, and federal agencies who apply pesticides as part of their employment have been decreased in order to accommodate budgetary constraints of those entities. Employees of governmental entities, including political subdivisions of the state, have been exempt from department pesticide licensing fees in the past. In 1997, the department revised its regulations to charge a $100 fee to all noncommercial applicators, except for employees of state universities and state agencies, which were charged a $10 fee. Operating budgets of political subdivisions of the state (other than state universities and state agencies) and federal agencies, had not allowed for the licensing fees for those entities required to pay the $100 fee. In an effort to avoid financial hardship for those entities, epecially those who employ, as a necessity, a large number of applicators, the amendment as adopted establishes a $10 license fee for employees of all political subdivisions of the state and federal agencies who use the pesticide applicator license solely in the course of their employment. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license; and the Texas Agriculture Code, sec.76.109, which provides the department with the authority to fix and collect a fee for licensing of noncommercial applicators. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804664 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 12.Weights and Measures The Texas Department of Agriculture (the department) adopts amendments to sec.12.12, concerning the registration fee for weights and measures devices and sec.sec.12.40 and 12.43, concerning the expiration date and fees for the licensing of weights and measures service companies, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1762). The department adopts the amendments because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments allow the department to adjust the fee schedule for weights and measures device registrations when the registration is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. SUBCHAPTER B.Devices 4 TAC sec.12.12 The amendment to sec.12.12 is adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804665 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 SUBCHAPTER E.Licensed Service Companies 4 TAC sec.sec.12.40, 12.43 The amendments to sec.sec.12.40 and 12.43 are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804666 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 13.Grain Warehouse 4 TAC sec.sec.13.3, 13.4 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.13.3 and 13.4, concerning the expiration date and fees for grain warehouse licenses, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1763). The department adopts these amendments because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments allow the department to adjust the expiration date and fee schedules for a grain warehouse license when the licensee's grain warehouse license is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804667 Dolores Alavarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 14.Vegetable and Citrus Fruit Handling and Marketing Program SUBCHAPTER A.General Provisions 4 TAC sec.14.3 The Texas Department of Agriculture (the department) adopts an amendment to sec.14.3, concerning the fee for an Agricultural Protective Act license, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1764). The department adopts this amendment because it is necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendment allows the department to adjust the fee schedule for an Agricultural Protective Act license when the license is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804668 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 15.Egg Law 4 TAC sec.sec.15.4, 15.5 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.15.4 and 15.5, concerning the fees and special fees for egg licenses, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1764). The department adopts these amendments because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments allow the department to adjust the fee schedules for an egg license when the license is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804669 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 16.Aquaculture 4 TAC sec.16.3 The Texas Department of Agriculture (the department) adopts an amendment to sec.16.3, concerning the fee for an aquaculture license, without changes to the proposal published in the February 27, 1998, issue of the Texas Register. The department adopts this amendment because it is necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendment allows the department to adjust the fee schedule for an aquaculture license when the license is consolidated with another license, registration, or certification issued by the department. No comments were received on the proposal. The amendment is adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804670 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 18.Organic Standards and Certification 4 TAC sec.sec.18.2, 18.5 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.18.2 and 18.5, concerning the expiration date and fees for organic certification, without changes to the proposal published in the February 27, 1998, issue of the Texas Register (23 TexReg 1765). The department adopts these amendments because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments allow the department to adjust the expiration date and fee schedules for organic certification when the organic certification is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804671 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 CHAPTER 22.Nursery Products and Floral Items 4 TAC sec.sec.22.2, 22.3 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.22.2 and 22.3, concerning the expiration date and fees for nursery/floral registrations, without changes to the proposal published in the February 27, 1998, issue of the Texas Register. The department adopts these amendments because they are necessary for the implementation of a consolidated license program pursuant to Texas Agriculture Code, Chapter 12, sec.12.033. The consolidated licensing program is being implemented to improve service to persons served by the department who hold certain multiple licenses, certifications and/or registrations issued by the department, and to improve the efficiency of the department's licensing program. One license will be provided with one renewal date and one fee, rather than the present system of having multiple licenses with different renewal dates and fees attached. The amendments allow the department to adjust the expiration date and fee schedules for a nursery/floral registration when the nursery/floral registration is consolidated with another license, certification, or registration issued by the department. No comments were received on the proposal. The amendments are adopted under the Texas Agriculture Code, sec.12.033, which provides that the department by rule must implement a program for the issuance of a consolidated license. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804672 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: April 23, 1998 Proposal publication date: February 27, 1998 For further information, please call: (512) 463-7541 TITLE 10. COMMUNITY DEVELOPMENT PART V. Texas Department of Economic Development CHAPTER 176. Enterprise Zone Program 10 TAC sec.sec.176.1-176.4, 176.7, 176.8, 176.10, 176.11 The Texas Department of Economic Development (department) adopts amendments to sec.sec.176.1-176.4, 176.7, 176.8, 176.10, and 176.11, relating to the Texas Enterprise Zone Program (program). Section 176.7 and sec.176.10 are adopted with changes to the proposed text as published in the February 20, 1998, issue of the Texas Register (23 TexReg 1457). Sections 176.1-176.4, 176.8, and 176.11 are adopted without changes to the proposed text and will not be republished. The amendments to sec.176.1 change the name of the department to reflect the abolishment of the Texas Department of Commerce by Senate Bill 932 of the 75th Legislature, the transfer of that agency's functions to the department, effective September 1, 1997, and the replacement of the Texas Department of Commerce Policy Board with the governing board of the department. The amendments further change legal citations to reference the correct sections of the Government Code and the Texas Administrative Code and change the name of the division that administers the program within the department. The amendments to sec.176.2 change legal citations to correctly reference sections of the Texas Administrative Code. Section 176.2(b)(5), concerning a qualified hotel project, is being amended to define the application requirements for hotel projects and to conform the rule to the Enterprise Zone Act, sec.sec.2303.003 and 2303.5055. Section 176.2(b)(6)(A)(i), relating to enterprise project certifications, is being amended to eliminate contradictory language and to add clarification. Section 176.2(d) is being amended to further define the fee structure for a name change and assumption of an enterprise project. This section is also being amended to include a nonrefundable fee to recover the department's cost of providing direct technical assistance to enterprise projects relating to the adjustment of the total number of jobs allocated in their original project application. The amendments to sec.176.3(e) allow the inclusion of an industrial park in an enterprise zone without including unemployment and poverty data for the block groups included in the park, if no other area of the block group outside the industrial park is included. This would benefit the communities in that the program could be used as an incentive to attract businesses in the industrial park, thereby providing employment opportunities for enterprise zone residents. The amendments to sec.176.3(f)(2), establish guidelines for applicants to submit their application after the nominating ordinance or order is passed. This language is being added to define the time frame in which nominating ordinances or orders are submitted. The amendments to sec.176.4 clarify the information needed in a nominating ordinance or order when applying for an enterprise zone designation. The amendments to sec.176.4(a)(2)(B), clarify the identification of the designated representative and liaison to communicate and negotiate with the department. The amendments to sec.176.4(a)(5)(A), add identification of industrial parks, when applicable, as a requirement when mapping out the proposed area of an enterprise zone. The amendment to sec.176.4(a)(6)(B) adds the effective date on which the term of reinvestment zones became the same as state enterprise zone designations. The amendments to sec.176.7 add language setting forth job creation and job retention requirements in order to clarify existing program policies used to determine whether or not a project qualifies as a retention project. The amendments to sec.176.8(c)(2), correct the legal citation to the Texas Enterprise Zone Act. The amendments to sec.176.8(d), add language allowing enterprise projects to adjust the total number of jobs allocated as a result of their original project application. This process would benefit the related community and enterprise project because it may be used as an incentive for businesses to continue to create additional jobs and to further expand, it would reward successful companies, and it may prevent the community from using one of the limited 65 project designations on a project that is already approved. The amendments to sec.176.10(b)(1) clarify enterprise project application deadlines. The amendments to sec.176.10(b)(2)(B) clarify the circumstances under which a governing body may receive a bonus enterprise project and to further clarify where bonus projects can be used. This section has also been amended to reflect the availability of regular and bonus designations. The amendments to sec.176.11 reflect the repeal of the bi-annual cost-benefit analysis reporting requirement by House Bill 2906 of the 75th Legislature. The department received comments regarding the proposed amendments during the 30 day public comment period. With the exception of general comments in support of proposed amendments, the comments are summarized, along with the department's response, as follows: Comment: Clarify the intent of added language regarding industrial parks. Response: The intent of the language is to allow a distressed community to attract businesses to an industrial park in the community that might not otherwise be eligible for zone designation because it is not populated or is not densely populated. Qualified businesses located in the industrial park must still meet the hiring requirements for enterprise zone residents or economically disadvantaged individuals. Comment: Allow an industrial park to be added to an existing enterprise zone, not just a proposed zone. Response: An existing enterprise zone may be amended to include an industrial park. Comment: (1) Define a retained job as, "any job which might be lost to another competing taxing jurisdiction, as a company considers competing sites for a given economic development project;" the proposed language relating to retained jobs goes far beyond what the Legislature intended. (2) Change job retention language to apply when a business will locate out of the municipal jurisdiction, rather than the State. Response: The department does not agree with the comments. The Enterprise Zone Program is a statewide program that would not benefit if it could be used to move a business from one part of the State to another. This economic development policy is consistent throughout the department's programs. Comment: Add job retention language to apply when a business has been destroyed by natural disaster. Response: The suggested language has been added at sec.176.7(d)(6), relating to Requirements for Designation of Enterprise Projects. Comment: Do not require an amendment adding to the number of jobs to be created to be submitted through the governing body, but allow the governing body's designee to to make the request, eliminating the need for city council action. Response: The department does not agree with the comment. The program is a partnership between the community and the State. The community's involvement is needed in the process, and the community needs to be fully informed and given an opportunity to comment prior to any changes to the status of enterprise zone projects in the community. Comment: Leave the number of enterprise zone designations at four. Response: This comment was received from several communities and was received from both large and small communities. As a result, the language will not be changed as proposed, but will remain at four project designations (with the possibility of two bonus projects). Comments were received from Bastrop Economic Development Corporation, City of Corsicana, City of Dallas, Greater Houston Partnership, City of Houston, City of Kilgore, City of San Antonio, City of Temple, Office of Senator Carlos F. Truan, and City of Wichita Falls. The amendments are adopted pursuant to Government Code, sec.481.0044(a), authorizing the governing board of the department to adopt rules for the administration of department programs, Government Code, sec.2303.051(c) directing the department to adopt rules to carry out the Enterprise Zone Program, and Government Code, chapter 2001, subchapter B, setting forth the agency rulemaking process. Government Code, chapter 2303, is affected by these amendments. sec.176.7. Requirements for Designation of Enterprise Projects. (a) The department may not designate a nominated qualified business as an enterprise project unless it determines that: (1) the business meets the requirements set forth in the Act, sec.2303.402, and this chapter; (2) the qualified business is located in or has made substantial commitment to locate in an enterprise project eligible enterprise zone; (3) the project demonstrates viability as determined by the department; (4) the applicant's governing body or bodies have demonstrated that a high level of cooperation between public, private, and neighborhood entities exists in the zone; and (5) the designation of the qualified business as an enterprise project will contribute significantly to the achievement of the plans of the applicant for development and revitalization of the zone. (b) The department may approve the assumption of a state-designated enterprise project that leases or transfers ownership to another entity that will continue operations in the enterprise zone in the same way that was originally committed to in the initial enterprise project application or which otherwise demonstrates to the satisfaction of the department that the designation assumption is warranted to avoid disruption of operations and loss of jobs. (c) For job creation a business must be seeking to create new jobs, or for an existing business seeking to expand and increase their current level of employment in Texas. The program, however, does not allow benefit for moving existing jobs from one Texas city to another within the state. (d) For job retention a business must submit documentation and receive prior approval of documentation in order to qualify for using one of the following criteria: (1) that permanent employees will be permanently laid off; or (2) the business will permanently close down; or (3) the business will relocate out of state; or (4) a 10% increase in production capacity will occur; or (5) a 10% decrease in overall cost per unit produced will occur; (6) the business facility has been legitimately destroyed or impaired due to fire, flood, tornado, hurricane, or any other natural disaster. (e) In any case, for job retention, the business must maintain the same level of employment that existed 90 days prior to the date of application. sec.176.10. Approval Standards. (a) Final approval standards for designation of enterprise zones and recycling market development zones. Within 10 business days of final approval of the designation of a zone by the executive director, the staff shall present the form of the negotiated agreements to the governing body or bodies of the applicant. Such agreements must include designation of the zone and the administrative authority, if any, and its function and duties and any other information required under the Act and this chapter. The department shall complete the negotiations and sign the agreements in accordance with the Act, sec.2303.107. (b) Approval standards for designation of enterprise projects. The department shall designate qualified businesses as enterprise projects on a competitive basis. Applications for designation of enterprise projects will be accepted on a quarterly basis on or before the following application deadlines: (1) The application deadline for receipt of enterprise project applications by the department is 5:00 p.m., Austin, Texas time, on the first business day of every third month beginning with September 1995. The department may designate no more than 65 enterprise projects during any fiscal biennium, as specified by the Act, sec.2303.403. (2) The department will designate qualified businesses as enterprise projects under the following conditions: (A) Each enterprise zone governing body may not have more than four qualified businesses designated as enterprise projects in enterprise project eligible enterprise zones within its jurisdiction during the state fiscal biennium beginning September 1, 1995. The enterprise project designations will be granted by the department on a first-come, first-served basis, subject to the limitations in this section and based upon the availability of enterprise project designations. Although enterprise project designations will be awarded on a first-come, first-served basis, applications will be scored for the purpose of awarding bonus enterprise project designations. (B) Each enterprise project application will be scored against all other enterprise project applications approved during a quarterly deadline, as specified in paragraph (1) of this subsection. If an enterprise project application scores within the top quartile (25%) of all the other applications approved in a quarterly deadline, the nominating enterprise zone may nominate a qualified business for a bonus enterprise project designation on any subsequent quarterly deadline within the state fiscal biennium. Designations will be awarded only if enterprise project designations are available. The bonus enterprise project applications will be scored in the same manner as all other enterprise project applications received on each quarterly deadline. If a bonus project application scores within the top quartile (25%) of all the bonus and regular applications received on a quarterly deadline, the nominating enterprise zone may nominate an additional bonus enterprise project for designation on any subsequent quarterly deadline within the same fiscal biennium. The bonus enterprise project designations may only be located in an enterprise zone within the governing body's jurisdiction from which the bonus enterprise project designation was earned, subject to enterprise project availability. Each application submitted to the department will be evaluated on the commitments made by the community and qualified business as specified under the Act, sec.2303.405. In no case may an enterprise zone governing body have a combined total of more than six enterprise project designations, including regular and bonus designations, during the state fiscal biennium beginning September 1, 1995. (C) In the event the number of enterprise project applications submitted during a quarterly round exceeds the number of remaining designations that may be made during the state fiscal biennium, as specified under paragraph (1) of this subsection, the applications that score the highest based upon the evaluation system specified in this chapter will be awarded designations. (3) The criteria for evaluating enterprise project applications will be based on weighting as specified by the Act, sec.2303.406(b). The department will make its decision on a weighted scale in which: (A) 50% of the evaluation weight will be evenly divided between the economic distress of: (i) the enterprise zone in which a proposed enterprise project is or will be located; and (ii) the area within the enterprise zone where the project is or will be located. In the event the zone was designated using primary or secondary distress criteria that are not available on a sub-community or sub-enterprise zone level, the economic distress of the zone will be evaluated using the data at the most discrete level available. (B) 25% of the evaluation depends on the local effort to achieve development and revitalization of the enterprise zone. This evaluation criteria is designed to measure the level of local support on the part of the community or communities nominating the qualified business and the qualified business applying for enterprise project designation. This includes, but is not limited to, such factors as set forth in the Act, sec.2303.405 (c), sec.2303.405 (d), and sec.2303.405 (e); and (C) 25% of the evaluation depends on the evaluation criteria as determined by the department, which will be evenly divided between: (i) the amount of capital investment and the number of jobs to be created or retained by the qualified business, as applicable; and (ii) the type and wage level of the jobs to be created and retained by the qualified business. The wage level of the jobs will be evaluated on how they compare to the regional average salary of a high wage/high skill job. (c) Period for which designation is in effect. (1) An area may be designated as an enterprise zone for a maximum period of seven years. Designation of an enterprise zone as a recycling market development zone will run concurrently to begin with the date the recycling market development zone is designated and to end with the date the applicable enterprise zone designation expires. However, if an area is designated as a federal enterprise zone, the area may be designated for a longer period not to exceed that permitted by federal law. Any designation of an area as an enterprise zone and a recycling market development zone, if applicable, shall remain in effect during the designation period beginning on the date of the designation and ending on the earliest of: (A) September 1 of the seventh calendar year following the calendar year in which such date ending the enterprise zone designation occurs, or in the case of federal enterprise zone designation, the date federal designation period ends, or (B) following a public hearing, the date the department removes the designation of zone for the following reason: (i) the area no longer qualifies for designation as an enterprise zone as forth in the Act, sec.2303.102 or this chapter; or (ii) the department determines that the governing body has not complied with commitments made in the ordinance or order nominating the area as an enterprise zone or recycling market development zone, as applicable. (2) A qualified business may be designated as an enterprise project for a maximum period of five years. The designation of a qualified business as an enterprise project shall remain in effect during the period beginning on the date of the designation and ending on the earliest of: (A) five years after the date the designation is made; or (B) the last day that completes the original project designation period of a qualified business that has assumed the designation of the enterprise project through a lease or purchase of a designated qualified business for the purpose of continuing its operations in the applicable enterprise zone under a name or legal structure other than that of the qualified business originally receiving the designation and that has met the requirements of the department to qualify for the assumption, as specified under sec.176.8(c) of this title (relating to Application Contents for Designation of an Enterprise Project). The assumption of a project designation or a name change by a qualified business does not extend the original designation period, which is applicable to the original and subsequent designee, and which will end on the earliest of the last day of the original five-year designation; or (C) following a public hearing by the governing body or bodies that nominated the qualified business for enterprise project designation, the date the department determines that the qualified business is not in compliance with any requirement for designation as an enterprise project. The governing body or bodies will be deemed to have held a public hearing if the removal of the designation of an enterprise project is included as an agenda item of a regular session in which the governing body or bodies meet to take official action. The department will act to dedesignate an enterprise project upon the written request of a governing body or bodies after: (i) the governing body or bodies has provided written notice to the qualified business that has been designated an enterprise project, 30 calendar days in advance of the proposed action, that the governing body or bodies is initiating proceedings to remove the project designation. The notice must specify the reason why the governing body or bodies believes the project is in noncompliance and specify the time, date and location where the enterprise zone governing body or bodies plans to take official action to request the department to remove the designation. A copy of the notice and copies of any written responses to the notice by the qualified business must be provided to the department; (ii) a public hearing is held and a resolution adopted that requests the department to remove the project designation as of a specific date. The resolution must specify the conditions that caused the dedesignation process to be initiated and include a finding that written notice as specified under this title has been given; (iii) following the governing body's or bodies' written request to the department to dedesignate an enterprise project, the qualified business may appeal the governing body's or bodies' action to the department's executive director. Such appeal must be made in writing within thirty days of the governing body's or bodies' written request to the department for dedesignation. Upon receipt of such appeal, the executive director shall act upon the appeal within 30 days from the date the appeal is received. (d) Approval standards for certification of a recycling market development zone. (1) Selection of recycling market development zones will be based upon the commitment level and incentives offered by each applicant. (2) Recycling market development zone loans will be made to applicants on a first-come, first served basis. Recycling market development zones having outstanding loans of the maximum allowed will not be eligible for new loans until retirement of their existing loans. Each recycling marketing development zone governing body or bodies will receive no more than the maximum amount allowed each year to ensure equal distribution of funds. (e) Approval standards for certification of a qualified business. Qualified business certification and the certification of new or retained jobs may be granted by the local governing body or bodies for purposes of local benefits, if applicable, or the department, for purposes of state benefits, as applicable, in accordance with the Act. The department shall provide the assistance the Comptroller requires in administering this section. (1) Once certified by the local governing body, a qualified business must apply to the local governing body for local tax benefits. (2) The governing body or bodies must provide written notification to the department of each commitment made to a qualified business for a one-time state sales tax refund, authorized under the Tax Code, sec.151.431, or state franchise tax refund, under the Tax Code, sec.171.501. Once certified a qualified business by the department, the business must apply to the Comptroller for state sales tax refunds, under the Tax Code, sec.151.431, or state franchise tax refunds, under the Tax Code, sec.171.501, as applicable. The written notification to the department must include: (A) a copy of the request for the incentive sent to the governing body or bodies by the business; (B) an original or a certified copy of the resolution adopted to nominate the qualified business and setting the nomination period during which the qualified business will create or retain the required jobs to receive the intended benefit; and (C) a letter to the department from the governing body or bodies to the department forwarding the resolution and officially nominating the business. (3) A business that is an enterprise project that is certified a qualified business must also apply to the Comptroller for state sales tax refunds, under sec.151.429, Tax Code or state franchise tax reductions, under sec.171.1015, Tax Code, as applicable. (4) Refunds of state sales or use taxes provided to an enterprise project under the Tax Code, sec.151.429, are conditioned on the enterprise project maintaining at least the same level of employment of qualified employees as existed on the date it was certified as eligible for a refund for a period of three years from that date. The department shall annually certify to the comptroller and the Legislative Budget Board whether that level of employment of qualified employees has been maintained. In the event that the department certifies that such a level has not been maintained, the comptroller shall assess that portion of the refund attributable to any such decrease in employment, including penalty and interest from the date of refund. (5) A state-designated project may request certification of its jobs created or retained, as specified in sec.176.2(b)(6) of this title (relating to Filing Requirements for Applications and Claims), by the department on an annual or semi annual basis during the applicable five year designation period within the limits of the number of jobs allocated at the time of its project designation in accordance with the Act, sec.2303.407. An enterprise project designated after August 31, 1995, may not receive a tax refund under the Tax Code, sec.151.429, or a tax reduction under the Tax Code, sec.171.1015, before September 1, 1997. (6) Only qualified businesses that have been certified by the department to the comptroller and the Legislative Budget Board are eligible for a franchise tax reduction under the Tax Code, sec.171.1015. (f) Approval standards for certification of a builder as a qualified business. (1) A builder must complete the enterprise project application form and other information as stipulated in this subsection to be eligible to be designated an enterprise project. A builder that meets the criteria in this chapter is eligible for the benefits allowed a qualified business under the Act. To be eligible to apply for enterprise project designation, the builder or consortium of builders that is certified as a qualified business must have permanent offices located in Texas. In addition to the information required of a business applying for enterprise project designation under sec.176.8 of this title, the applicant must provide: (A) the name of the builder, name of company under which building occurs, principle business location, address of office serving the enterprise zone construction activity, telephone numbers, including the telecommunication devices for the deaf (TDD) number, if available, and facsimile numbers if applicable; (B) five written references from satisfied homeowners for whom properties were constructed by the builder in the three years preceding the date of the application; (C) current bank references and bank references for the past three years; (D) financial evidence including two years of tax returns or other satisfactory evidence to substantiate financial viability as a builder; and (E) documentation that supports participation in a 10-year insured warranty program. (2) A builder proposing a housing project in an enterprise zone, must provide a complete description of the new residential housing to be constructed, including a statement concerning whether the housing constitutes affordable housing under the governing body's or bodies' criteria, preliminary building plans, the location(s) of planned construction, number of units to be constructed, estimated sales price of homes, statement of affirmative action participation in employment practices, a statement regarding the coordinated use of other federal, state, or local funds, and other enhancements to the project. The applicant builder(s) must meet all requirements other than physical headquarters location in the zone and hiring requirements required of other enterprise projects. (g) Approval standards for certification of neighborhood enterprise associations. (1) Such standards will be determined and final certification may be granted by local governing body or bodies or the department as applicable in accordance with the Act, sec.2303.302. (A) The governing body or bodies or the department may not grant its approval unless the association has hired or appointed a chief executive officer. (B) The department may not grant state certification to a neighborhood enterprise association, unless that association has first made a diligent effort to obtain certification from the applicable enterprise zone governing body or bodies and the association provides documentation to the department of that effort to obtain local certification and the reasons the association was unable to obtain certification from the applicable governing body or bodies. (2) The neighborhood enterprise association may implement projects, other than those enumerated in the Act, by submitting an application to the governing body or the state for approval of the specific project or activity. Applications submitted for approval to the governing body or the state must describe the nature and benefit of the project, including: (A) how it will contribute to the self-help efforts of the residents of the area involved; (B) how it will involve the residents of the area in project planning and implementation; (C) whether there are sufficient resources to complete the project and whether the association will be fiscally responsible for the project; and (D) how it will enhance the enterprise zone in one of the following ways: (i) by creating permanent jobs; (iii) by physically improving the housing stock; (iii) by stimulating neighborhood business activity; or (iv) by preventing crime. (3) An existing responsible unit of government may contract with a neighborhood enterprise association to provide services in an amount corresponding to the amount of money saved by the unit of government through this method of providing a service. (h) If the governing body or bodies does not specifically disapprove of a project proposed by the association before the 45th day after the day of the receipt of the application, it shall be considered approved. If the governing body or bodies disapproves of the application, it shall specify its reasons for this decision and allow 60 days for the applicant to make amendments. (i) The association may enter into contracts and participate in joint ventures with the state or a state agency or institution. The association may receive money without approval of the governing body or bodies. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804684 W. Lane Lanford Chief Administrative Officer Texas Department of Economic Development Effective date: April 23, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 936-0181 TITLE 22. EXAMINING BOARDS PART V. State Board of Dental Examiners CHAPTER 101.Dental Licensure 22 TAC sec.101.2 The State Board of Dental Examiners adopts new sec.101.2, concerning staggered dental registrations without changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1255). The rule provides for procedures already in place as authorized by the Dental Practice Act at Article 4550b. The rule is intended to clarify for dental licensees the procedure by which dental registrations are staggered and the fees due for the initial staggered registration period and subsequent annual renewals. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code sec.2001.021 et.seq; Texas Civil Statutes, Article 4543sec.2 and 4551d which provide the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4550b, which provides that the Board by rule may adopt a staggered registration system. 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. Filed with the Office of the Secretary of State on March 30, 1998. TRD-9804470 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-6400 CHAPTER 102.Fees 22 TAC sec.102.1 The State Board of Dental Examiners adopts amendments to sec.102.1, concerning fees without changes to proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1256). The rule provides a list of fees so that licenses, registrants, and dental schools will know the appropriate fees due to State Board of Dental Examiners. The amended rule includes subsections (d) and (e) which establish fees for issuance by the State Board of Dental Examiners of tracking numbers for unlicensed faculty of dental schools and dental interns and residents. As an accommodation to the dental schools such numbers are issued upon request so that recipients may obtain authority from the Department of Public Safety to prescribe certain narcotics to patients. No comments were received regarding adoption of the amended rule. The amended rule is adopted under Texas Government Code sec.2001.021 et.seq; Texas Civil Statutes, Article 4543sec.2 and 4551d which provide the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act, and Article 4550a sec.1 and sec.2, Article 4550c, Article 4551e sec.5, Article 4551f sec.6, Article 4547, Article 4545a, and Article 4544 sec.1 and sec.2 and sec.467.0041, Title 6, Chapter 467 of the Health and Safety Code, Peer Assistance Programs. 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. Filed with the Office of the Secretary of State on March 30, 1998. TRD-9804471 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-6400 CHAPTER 103.Dental Hygiene Licensure 22 TAC sec.103.4 The State Board of Dental Examiners adopts new sec.103.4, concerning staggered dental hygiene registrations without changes to proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1257). The new rule provides for procedures already in place as authorized by the Dental Practice Act at Article 4550b. The rule will clarify for dental hygiene licensees the procedure by which dental hygiene registrations are staggered and the fees due for the initial staggered registration period and subsequent annual renewals. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Government Code sec.2001.021 et.seq; Texas Civil Statutes, Article 4543sec.2 and 4551d which provide the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4550b, which provides that the Board by rule may adopt a staggered registration system. 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. Filed with the Office of the Secretary of State on March 30, 1998. TRD-9804472 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-6400 CHAPTER 104.Continuing Education 22 TAC sec.104.1 The State Board of Dental Examiners adopts amendments to sec.104.1, concerning requirements for continuing education without changes to proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1258). The rule provides that individuals who cannot meet the continuing education requirements may have alternative methods available to them to meet statutory requirements, credit for interactive computer courses can be given, and the term "scientific or technical" is better defined. The amended paragraph (3) will allow individuals who are not able to obtain continuing education to request the Board to approve alternatives to meet continuing education requirements. Paragraph (5) is amended to provide a definition of the term "scientific or technical." Paragraph (9) is added to allow credit for up to 12 hours per three year period for interactive computer courses. No comments were received regarding adoption of this rule. The amended rule is adopted under Texas Government Code sec.2001.021 et.seq; Texas Civil Statutes, Article 4543sec.2 and 4551d which provide the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act; and Article 4544sec.5 and Article 4551e. 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. Filed with the Office of the Secretary of State on March 30, 1998. TRD-9804474 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: May 20, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-6400 CHAPTER 107.Dental Board Procedures 22 TAC sec.107.63 The State Board of Dental Examiners adopts amendments to sec.107.63, concerning informal disposition without changes to proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1259). The rule does not empower the settlement conference panel to take any action other than making recommendations to the board. With this change, informal settlement conferences can be conducted as closed meetings thereby facilitating settlement of complaints. The amended rule clarifies that panels of board members who participate in informal settlement conferences act only in an advisory capacity to the board. The rule as currently written allows the panel to dismiss cases; the amendment will allow the panel to only recommend dismissal to the board. Further, the panel no longer will be empowered to order further investigations but rather to refer a case to the Board Secretary for further action. No comments were received regarding adoption of this rule. The amended rule is adopted under Texas Government Code sec.2001.021 et.seq; Texas Civil Statutes, Article 4543sec.2 and 4551d which provide the State Board of Dental Examiners with the authority to adopt and promulgate rules consistent with the Dental Practice Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on March 30, 1998. TRD-9804473 Douglas A. Beran, Ph.D. Executive Director State Board of Dental Examiners Effective date: April 19, 1998 Proposal publication date: February 13, 1998 For further information, please call: (512) 463-6400 PART XVIII. Texas State Board of Podiatric Medical Examiners CHAPTER 376.Violations and Penalties 22 TAC sec.376.1 The Texas State Board of Podiatric Medical Examiners adopts an amendment to sec.376.1, concerning Violations and Penalties with changes to the proposed text as published in the January 16, 1998, issue of the Texas Register (23 TexReg 408). The text will not be republished. The amendment is being proposed to comply with Chapter 36, Subchapter D, sec.36.132 of the Human Resources Code regarding medicaid fraud. There is one change in sec.376.1(b). The wording is being changed from The Board shall revoke a license by their authority to The Board shall revoke a license of. The amendment will allow this agency to enforce the requirements in Chapter 36, Subchapter D sec.36.132 of the Human Resources Code regarding medicaid fraud. No comments were received regarding adoption of the amendments. The amendment is adopted under Texas Civil Statutes, Article 4568(j), which provides the Texas State Board of Podiatric Medical Examiners with the authority to adopt all reasonable or necessary rules, regulations, and by-laws not inconsistent with the law regulating the practice of podiatric medicine, the laws of this state, or of the United States; to govern its proceedings and activities, the regulation of the practice of podiatric medicine, and the enforcement of the law regulating the practice of podiatric medicine. The adopted amendment implements Chapter 36, Subchapter D sec.36.132 of the Human Resources Code. sec.376.1.Penalties. (a) Any podiatric physician who violates any provision of these rules, or any provision of the Podiatric Medical Practice Act of Texas shall be, at the discretion of the Board, subject to the following penalties: (1)-(7) (No change.) (b) The Board shall revoke a license of a podiatric physician (licensee) if that licensee has been convicted of a felony under Chapter 36, Subchapter D, sec.36.132 of the Human Resources Code, to wit: (1) a state jail felony if the value of any payment or monetary in-kind benefit provided under the Medicaid program, directly or indirectly, as a result of an unlawful act is $1,500 or more but less than $20,000; (2) a felony of the third degree if the value of any payment or monetary benefit provided under the Medicaid program, directly or indirectly, as a result of an unlawful act is $20,000 or more, but less than $100,000; (3) a felony of the second degree if the value of any payment or monetary or in- kind benefit provided under the Medicaid program, directly or indirectly, as a result of the unlawful act is $100,000 or more but less than $200,000; (4) a felony of the first degree if the value of the payment or monetary or in- kind benefit provided under the Medicaid program, directly or indirectly, as a result of the unlawful act is $200,000 or more. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804516 Janie Alonzo Staff Services Officer I Texas State Board of Podiatric Medical Examiners Effective date: April 20, 1998 Proposal publication date: January 16, 1998 For further information, please call: (512) 305-7000 CHAPTER 378.Continuing Education 22 TAC sec.378.1, sec.378.8 The Texas State Board of Podiatric Medical Examiners adopts an amendment to sec.378.1, and sec.378.8, concerning Continuing Education with changes to the proposed text as published in the January 16, 1998 issue of the Texas Register (23 TexReg 409). The text will not be republished. The amendment has one change in sec.378.1 and sec.378.8. The word bi-annually in sec.378.1(a) and (d) must be changed to mean every 2 years and not 2 times a year. There is one place in the last sentence where three years should be changed to four years and that was overlooked in the proposed submission. The rule is being amended to change the due dates for continuing medical education to be submitted to the Board from 15 hours each year to 30 hours every 2 years. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Article 4568(j), which provides the Texas State Board of Podiatric Medical Examiners with the authority to adopt all reasonable or necessary rules, regulations, and by-laws not inconsistent with the law regulating the practice of podiatric medicine, the laws of this state, or of the United States; to govern its proceedings and activities, the regulation of the practice of podiatric medicine, and the enforcement of the law regulating the practice of podiatric medicine. The adopted amendments implement the Podiatric Medical Practice Act, Article 4571(c). sec.378.1.Continuing Education Required. (a) Each person licensed to practice podiatric medicine in the State of Texas is required to have 30 hours of continuing education every two (2) years for the renewal of their license to practice podiatric medicine. Two hours of the required 30 hours of annual continuing education may be a course, class, seminar, or workshop in Ethics. (b) These hours of continuing education must be obtained in the 24-month period immediately preceding the year for which the license is issued. The two-year period will begin on September 1 and end on August 31 two years later. The cme requirement will be either odd or even based on whether the original licensure was in an odd or even year. A licensee who completes more than the required 30 hours during the preceding cme period may carry forward a maximum of 10 hours for the next cme period. Each licensee shall maintain records for four years evidencing completion of the continuing education programs completed by the licensee. Notice is hereby given that receipt for proof of completion of the required 30 hours must be received by the State Board of Podiatric Medical Examiners no later than August 31, of the relevant 2 year cme period. Receipt of completion of such requirement after August 31 date subjects the practitioners to the penalty fees for late license renewal as provided in sec.379.2 of this title (relating to Fees and License Renewal). (c) (No change.) (d) Continuing Education obtained as part of a disciplinary action is not acceptable credit towards the total of 30 hours required every two (2) years. sec.378.8. Inactive License Status. (a)-(b) (No change.) (c) A licensee may remain on inactive status for four years. In order for a licensee to return to active status, the licensee must complete 15 hours of continuing education per year of inactive status not to exceed four years in addition to any outstanding hours of continuing education and pay the required renewal license fees prior to the expiration of the four years. If licensee does not return to active status prior to the expiration of four years, the license is delinquent and the licensee must pay a late renewal penalty in addition to the requirements for returning to active status. This agency hereby certifies that this section as adopted has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas on March 31, 1998. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804517 Janie Alonzo Staff Services Officer I Texas State Board of Podiatric Medical Examiners Effective date: April 20, 1998 Proposal publication date: January 16, 1998 For further information, please call: (512) 305-7000 CHAPTER 380.Hyperbaric Oxygen Guidelines 22 TAC sec.380.1 The Texas State Board of Podiatric Medical Examiners adopts an amendment to sec.380.1, concerning Hyperbaric Oxygen Guidelines with changes to the proposed text as published in the January 16, 1998, issue of the Texas Register (23 TexReg 409). The text will not be republished. The amendments are being proposed to better clarify the procedures a podiatric physician must follow in order to be granted authority to use Hyperbaric Oxygen in his/her practice. There is one change in sec.380.1(2). The wording is being changed from show that he has attended and successfully completed to show evidence of attendance and successful completion of. No comments were received regarding adoption of the amendments. The amendments are proposed under Texas Civil Statutes, Article 4568(j), which provides the Texas State Board of Podiatric Medical Examiners with the authority to adopt all reasonable or necessary rules, regulations, and by-laws not inconsistent with the law regulating the practice of podiatric medicine, the laws of this state, or of the United States; to govern its proceedings and activities, the regulation of the practice of podiatric medicine, and the enforcement of the law regulating the practice of podiatric medicine. No other code, statute or article are affected by this rule change. sec.380.1. Hyperbaric Oxygen Guidelines. A podiatric physician shall be recognized and permitted to supervise and administer hyperbaric oxygen following the published recommendations of the Undersea and Hyperbaric Medical Society, Inc. (UHMS) and within the credentials and bylaws of the hospital that operates the hyperbaric unit with the following stipulations: (1) (No change.) (2) The podiatric physician must, in addition, show evidence of attendance and successful completion of a course of hyperbaric training that is recognized by the Undersea and Hyperbaric Medical Society. That person may only utilize hyperbaric oxygen in the treatment of the foot as recognized by the Podiatric Medical Practice Act, Texas Civil Statutes, Article 4567, et. seq. A person shall be regarded as practicing podiatric medicine within the meaning of this law and shall be deemed and construed to be a podiatric physician, who shall treat or offer to treat any disease or disorder, physical injury, or deformity, or ailment of the human foot by any system or method. (3) (No change.) (4) A copy of the published recommendations of the Undersea and Hyperbaric Medical Society, Inc., are available from the Texas State Board of Podiatric Medical Examiners, P.O. Box 12216, Austin, Texas 78711-2216. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804518 Janie Alonzo Staff Services Officer I Texas State Board of Podiatric Medical Examiners Effective date: April 20, 1998 Proposal publication date: January 16, 1998 For further information, please call: (512) 305-7000 PART XXI. Texas State Board of Examiners of Psychologists CHAPTER 461.General Rulings 22 TAC sec.461.20 Due to publishing error, the repeal was published in the March 20, 1998, issue with the new document language. The Texas State Board of Examiners of Psychologists adopts the repeal of sec.461.20, concerning Monitoring of Licensure or Certificate Holder, without changes to the proposed text published in the January 9, 1998, issue of the Texas Register (23 TexReg 313). This rule is being repealed in order to make the rules more accessible and easily understood by licensees and the public by renumbering the rule as sec.461.30. The repeal of this rule will make the rules more accessible and easily understood by licensees and the general public by renumbering this rule as sec.461.30. No comments were received regarding repeal of the rule. The repeal is adopted under Texas Revised Civil Statutes, 4512c, which provide the Texas State Board of Examiners of Psychologists with the authority to promulgate rules consistent with the 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. Filed with the Office of the Secretary of State on March 3, 1998. TRD-9803080 Sherry L. Lee Executive Director Texas State Board of Examiners of Psychologists Effective date: March 23, 1998 Proposal publication date: January 9, 1998 For further information, please call: (512) 305-7700 TITLE 25. HEALTH SERVICES PART I. Texas Department of Health CHAPTER 29.Purchased Health Services SUBCHAPTER G.Hospital Services 25 TAC sec.29.609 On behalf of the State Medicaid Director, the Texas Department of Health (department) submits for adoption an amendment to sec.29.609, concerning reimbursement to disproportionate share hospitals. Section 29.609 is adopted without changes as proposed in the text published in the December 26, 1997, issue of the Texas Register (22 TexReg 12657). This amendment outlines trauma system development participation requirements to include continued participation and completed verification survey or designation survey in later years of participation in disproportionate share hospitals. The amendment standardizes continued participation requirements, which results in more effective trauma systems in Texas hospitals. The following comment was received concerning the proposed amendment. Comment: A commenter stated that the extension of the time requirement for a hospital to receive a trauma facility designation supports the public mission of Tarrant County Hospital District and the JPS Health Network in providing medical care to the public. Response: The department did not change the text as a result of this comment. One comment was received from the Tarrant County Hospital District and the JPS Health Network in support of the proposed amendment. The amendment 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804521 Susan K. Steeg General Counsel Texas Department of Health Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 458-7236 SUBCHAPTER L.General Administration 25 TAC sec.29.1130 On behalf of the State Medicaid Director, the Texas Department of Health (department) submits for adoption new sec.29.1130, concerning provider compliance with durable medical equipment (DME) certification requirements, with changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 TexReg 12658). Senate Bill 30, 75th Legislature, 1997, amended the Human Resources Code, Chapter 32, to require the department to establish a rule requiring a health care provider who arranges for DME for Medicaid recipients under age 21 to ensure that the equipment fits properly, recipients are educated on the use and maintenance of the equipment, and a record of compliance is maintained. At the time that the Legislature passed Senate Bill 30, the Medicaid program provided limited DME benefits for adults. The department has since expanded the DME benefits available to adults. Because the department believes the intent of the Legislature was to ensure that recipients who receive DME are properly fitted and educated in the use and maintenance of DME, the department considers it appropriate to extend the certification requirements of Senate Bill 30 to all Medicaid recipients. No comments were received on the proposal during the comment period; however, the Board of Health requested a change to clarify the intent of the section. Change: Concerning sec.29.1130(3), the paragraph has been revised to include "primary caregiver" to clarify that if a recipient has a caregiver other than a parent or guardian, that person must receive training and instruction on proper use and maintenance of the DME. The new 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). sec.29.1130.Provider Compliance with Durable Medical Equipment (DME) Certification Requirements. Providers of DME must sign the Texas Department of Health (department) DME Certification and Receipt prior to submitting any claim to the department's designee for payment for DME. The DME provider must maintain the DME Certification and Receipt in the provider's office and must produce it for review upon the request of the department or its designee. The signature of the DME provider certifies that the: (1) recipient has received the equipment as prescribed by the physician; (2) equipment has been properly fitted to the recipient and/or meets the recipient's needs; and (3) recipient, the parent or guardian of the recipient, and/or the primary caregiver of the recipient, has received training and instruction regarding the equipment's proper use and maintenance. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804520 Susan K. Steeg General Counsel Texas Department of Health Effective date: April 20, 1998 Proposal publication date: December 26, 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 K.Commercial Mult-Peril Policies 28 TAC sec.5.9101 The Texas Department of Insurance adopts an amendment to sec.5.9101 which concerns the deletion of the equivalent coverage requirements for policy form and endorsement filings by individual insurers writing commercial multi-peril package policies. The amended section is adopted without changes to the proposed text as published in the February 6, 1998 issue of the Texas Register (23 TexReg 915). The amendment is necessary to conform this section to amendments to the Insurance Code, Article 5.13-2 enacted by Senate Bill 1499, 75th Texas Legislature, 1997. The writing of multi-peril policies was authorized through the enactment of Article 5.81. Under Article 5.81, the Texas Department of Insurance is authorized to prescribe policy forms and rates for multi-peril policies of insurance and the commissioner has the authority to choose the procedure under any of the subchapters of Chapter 5 of the Insurance Code for the purpose of determining the regulatory scheme for commercial multi-peril rates and forms. In 1992, the State Board of Insurance selected, through the adoption of sec.5.9101, the regulatory scheme in Article 5.13-2, applicable to general liability lines and commercial property lines of insurance, to govern the regulation of forms and rates for commercial multi-peril policies. Senate Bill 1499 amended subsection (e), section 8, of Article 5.13-2 to delete the requirements that forms submitted by individual insurers for approval must provide coverage equivalent to that provided in the policy forms used for these lines of coverage and that an endorsement may not reduce coverage provided under the approved policy form. Since there is no longer an equivalent coverage requirement for multi-peril form filings and no longer a prohibition against filing multi-peril endorsements that reduce coverage, sec.5.9101 must be amended to reflect these statutory changes. Subsections (a) through (e) are unchanged. Paragraph (5) of subsection (f) is being amended to eliminate the requirements that policy forms submitted by individual insurers for approval must provide coverage equivalent to that provided in the policy forms used for these lines of coverage and that endorsements submitted may not reduce coverage provided under the approved policy form. No comments were received regarding adoption of the proposal. The amendment is adopted under the Insurance Code, Articles 5.13-2, 5.81, 5.98, and 1.03A; and the Government Code sec.sec.2001.004-2001.038. Article 5.13-2 regulates the policy forms submitted by insurers for approval in general liability, commercial property, commercial casualty, and medical professional liability insurance. Article 5.81 authorizes the commissioner to approve forms for multi-peril policies of insurance and to adopt rules as in the best judgment of the commissioner are necessary and desirable to carry out the purposes and objectives of this article. Article 5.98 authorizes the commissioner to adopt reasonable rules and rates that are appropriate to accomplish the purposes of Chapter 5. Article 1.03A authorizes the commissioner 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 department 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. 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. Filed with the Office of the Secretary of State on April 6, 1998. TRD-9804743 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 26, 1998 Proposal publication date: February 6, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER M.Filing Requirements 28 TAC sec.5.9301 The Texas Department of Insurance adopts an amendment to sec.5.9301, which concerns the deletion of the equivalent coverage requirements for policy form and endorsement filings by insurers sharing primary, excess or layered insurance coverage on a single commercial risk or account on a pro rata basis. The amended section is adopted without changes to the proposed text as published in the January 16, 1998 issue of the Texas Register (23 TexReg 410). The amendment is necessary to conform this section to amendments to the Insurance Code, Article 5.13-2 enacted by Senate Bill 1499, 75th Texas Legislature, 1997. Insurers writing commercial property insurance, general liability insurance, medical professional liability insurance, and commercial casualty insurance, pursuant to Article 5.13-2, sec.8, Insurance Code, and commercial multi-peril insurance, pursuant to Article 5.81, Insurance Code, and sec.5.9101 of this title (relating to commercial multi-peril policies) are required to file, on an individual insurer basis, policy forms and endorsements for approval by the commissioner. This individual insurer filing procedure is required regardless of whether several insurers are insuring the same risk or account on a shared basis. The rule provides that policy forms and endorsements filed for approval and used for insuring a single commercial risk or account shared by two or more insurers must meet the applicable equivalent coverage requirements set forth in sec.5.9302 of the subchapter. Senate Bill 1499 amended subsection (e), section 8, of Article 5.13-2 to delete the requirements that forms submitted by individual insurers for approval must provide coverage equivalent to that provided in the policy forms used for these lines of coverage and that an endorsement may not reduce coverage provided under the approved policy form. Since there is no longer an equivalent coverage requirement for individual insurer policy form filings and no longer a prohibition against filing endorsements that reduce coverage, sec.5.9301 must be amended to reflect these statutory changes. Subsections (a) and (b) are unchanged. Subsection (c) is being amended to change the reference to the State Board of Insurance to the Texas Department of Insurance. Subsection (d) is unchanged. Subsection (e) is being deleted to eliminate the requirements that policy forms submitted by individual insurers for approval must provide coverage equivalent to that provided in the policy forms used for these lines of coverage and that an endorsement may not reduce coverage provided under the approved policy form. No comments were received regarding adoption of the proposal. The amendment is adopted under the Insurance Code, Articles 5.13-2, 5.81, 5.98, and 1.03A; and the Government Code sec.sec.2001.004-2001.038. Article 5.13-2 regulates the policy forms submitted by insurers for approval in general liability, commercial property, commercial casualty, and medical professional liability insurance. Article 5.81 authorizes the commissioner to approve forms for multi-peril policies of insurance and to adopt rules as in the best judgment of the commissioner are necessary and desirable to carry out the purposes and objectives of this article. Article 5.98 authorizes the commissioner to adopt reasonable rules and rates that are appropriate to accomplish the purposes of Chapter 5. Article 1.03A authorizes the commissioner 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 department 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. 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. Filed with the Office of the Secretary of State on April 6, 1998. TRD-9804744 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 26, 1998 Proposal publication date: January 16, 1998 For further information, please call: (512) 463-6327 28 TAC sec.5.9302 The Texas Department of Insurance adopts the repeal of sec.5.9302, without changes to the proposed text as published in the February 6, 1998 Texas Register (23 TexReg 916). Section 5.9302 concerns the standards for equivalent coverage, as provided for in the Insurance Code, Article 5.13-2 sec.8(e), for policy forms filed by individual insurers for commercial property insurance, general liability insurance, commercial casualty insurance, and medical professional liability insurance, and as provided in 28 TAC sec.5.9101(f)(5) (relating to Multi-Peril Policies) for policy forms filed by individual insurers for commercial multi- peril insurance. Section 5.9302 was first adopted in 1992 in accordance with the provisions of Article 5.13-2. Article 5.13-2 was enacted in 1991 by the Legislature for the purpose of establishing a new system of regulation for the rates and forms for general liability and commercial property insurance. Section 5.9302 was adopted as part of the implementation of the new system of regulation mandated in Article 5.13-2. In 1993, Article 5.13-2 was amended to add commercial casualty insurance and medical professional liability insurance under the new system of regulation and to exempt insurers writing large risks from being required to file policy forms. Section 5.9302 was amended to reflect these statutory changes. Prior to the enactment of 5.13-2, insurers writing the lines of insurance which came under the regulation of 5.13-2 were required to use promulgated or standard and uniform policy forms. After the enactment of 5.13-2, insurers were no longer required to use promulgated and standard and uniform policy forms but could submit their own policy forms for approval. However, the individual insurer policy form filings were required to provide coverage equivalent to that provided in the policy forms used for these lines of coverage. Furthermore, filings of endorsements could not reduce coverage under the approved policy form. This equivalent coverage requirement was evaluated by the department based on a comparison of the policy forms filed by the individual insurers to similar policy forms that were approved by the State Board of Insurance prior to and in effect on October 1, 1991. The repeal of sec.5.9302 is necessary because Senate Bill 1499, 75th Texas Legislature, 1997, amended Article 5.13-2 to delete the equivalent coverage requirement for individual insurer policy form filings and to delete the prohibition against filing endorsements that reduce coverage. Since there is no longer an equivalent coverage requirement for individual insurer policy form filings and no longer a prohibition against filing endorsements that reduce coverage, sec.5.9302 must be repealed to remove a section which no longer has statutory authority for its adoption. The repeal of sec.5.9302 eliminates a section from this title of the Texas Administrative Code that no longer has a statutory basis for its adoption. No comments were received regarding adoption of the repeal. The repeal is adopted under the Insurance Code, Articles 5.13-2, 5.81, 5.98, and 1.03A; and the Government Code sec.sec.2001.004-2001.038. Article 5.13-2 regulates the policy forms submitted by insurers for approval in general liability, commercial property, commercial casualty, and medical professional liability insurance. Article 5.81 authorizes the commissioner to approve forms for multi-peril policies of insurance and to adopt rules as in the best judgment of the commissioner are necessary and desirable to carry out the purposes and objectives of this article. Article 5.98 authorizes the commissioner to adopt reasonable rules and rates that are appropriate to accomplish the purposes of Chapter 5. Article 1.03A authorizes the commissioner 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 department only as authorized by statute. The Government Code sec.sec.2001.004-2001.038 (Administrative Procedures 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. 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. Filed with the Office of the Secretary of State on April 6, 1998. TRD-9804745 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 26, 1998 Proposal publication date: January 16, 1998 For further information, please call: (512) 463-6327 CHAPTER 19.Agent's Licensing SUBCHAPTER I.Licensing Fees 28 TAC sec.19.802 The Commissioner of Insurance adopts amendments to sec.19.802, concerning the amounts of fees for original and renewal applications, appointments and examinations for various licensees. Section 19.802 is adopted without changes to the proposed text as published in the February 13, 1998, issue of the Texas Register (23 TexReg 1265) and will not be republished. The Texas Department of Insurance is required by Insurance Code Article 21.58A sec.3(f) to establish original application and renewal certification fees for utilization review agents in amounts not greater than that necessary to cover the cost of administration. The original fees were calculated based upon the department receiving relatively few applications. An internal audit by the department has shown the actual number of submitted applications to be well in excess of the projected figures. This increase in applications received compared to projected applications has resulted in a decrease in the administrative processing costs of these applications. The amendments reduce the fees charged utilization review agents for an original application and for renewal certification and thus more accurately reflect the administrative costs to process original and renewal certifications under this article. The amendments to sec.19.802 operate to decrease the amount of fees for original applications and renewal certification of utilization review agents' licenses. These changes will more accurately reflect the actual costs incurred by the department in administering this license type. No comments were received regarding the adopted amendment. The amendment is adopted under Insurance Code Articles 21.58A and 1.03A. Insurance Code Article 21.58A provides for the certification of utilization review agents and sets out the standards and procedures to be used by such agents when conducting utilization reviews. Section 3(f) of Article 21.58A states that the department shall establish and administer certification and renewal fees in amounts no greater than is necessary to cover the cost of administration of the article. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by a 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804746 Caroline Scott General Counsel and Chief Clerk Texas Department of Insurance Effective date: April 26, 1998 Proposal publication date: December 13, 1997 For further information, please call: (512) 463-6327 TITLE 34. PUBLIC FINANCE PART VI. Texas Municipal Retirement System CHAPTER 127.Miscellaneous Rules 34 TAC sec.127.5 The Texas Municipal Retirement System adopts new section sec.127.5, concerning credited service under the Uniformed Services Employment and Reemployment Rights. Section 127.5 (b) was revised on adoption to reflect the definition of USERRA as Uniformed Services Employment and Reemployment Rights Act into the rule for clarification. This new section is being adopted to provide the rights and benefits of an eligible member under the Texas Municipal Retirement System shall not be less than those rights and benefits provided by the USERRA (Uniformed Services Employment and Reemployment Rights Act). No comments were received regarding the adoption. The new section is adopted under the Government Code, sec.855.102, which provides the board of trustees of the Texas Municipal Retirement System with the authority to adopt rules necessary or desirable for effective administration of the System. The Government Code, sec.855.102, is affected by the new section. sec.127.5. Credited Service Under the Uniformed Services Employment and Reemployment Rights Act. (a) Definitions: (1) Eligible Member - An employee of a participating municipality who is or would be considered to be employed in a position eligible for membership but who leaves employment with that municipality to perform service in the uniformed services; whose employer was notified of the obligation or intention of the employee to perform service in the uniformed services; who is released or discharged from such service on or after December 12, 1994 under honorable conditions; whose cumulative period of service in the uniformed services with respect to that participating municipality does not exceed five years not including periods excluded under 38 U.S.C. sec.1412(c); who applies for reemployment with that participating municipality within 90 days of release or discharge from the uniformed services, or after recovery from an illness or injury incurred in, or aggravated during, the performance of service in the uniformed services (but such recovery period does not exceed two years); and who is reemployed by the participating municipality. (2) Uniformed Services - The Armed Forces of the United States of America; the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty; the commissioned corps of the Public Health Service; and any other category of persons designated by the President in time of war or emergency. (3) Service in the Uniformed Services - The performance of duty on a voluntary or involuntary basis in a uniformed service under competent authority and includes active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, and a period for which an employee is absent from a position of employment for the purpose of an examination of to determine the fitness of the employee to perform such duty. (4) Participating Municipality - A municipality as defined in Government Code, sec.851.001(9) (including entities having the status of a municipality under Government Code, sec.852.005) that is participating in the Texas Municipal Retirement System at the time the eligible member leaves employment with the municipality to perform service in the uniformed services; or a municipality that is not participating in the System at the time the employee leaves employment with the municipality to perform service in the uniformed services but commences participating during the period of the employee's performance of duty in a uniformed service. (b) Certification of Eligibility by Participating Municipality. An eligible member will be credited with current service in accordance with the Uniformed Services Employment and Reemployment Rights Act (the USERRA) (38 U.S.C. sec.4301 et seq.) upon certification by the participating municipality on forms provided by the System: (1) that the eligible member's reemployment application is timely; (2) that the eligible member has not exceeded the service limitations set forth in the USERRA; (3) that the eligible member was not released or discharged from the uniformed service under other than honorable conditions; (4) the period in which the eligible member performed service in the uniformed services; (5) that the eligible member did not receive service credit for the period of uniformed service; (6) the estimated compensation that the eligible member would have received from the municipality but for the period of service in the uniformed services; and (7) the eligible member's date of reemployment. (c) Crediting of Current Service under the USERRA. (1) An eligible member shall be credited with one month of current service credit for each month or part of a month in which: (A) the eligible member performed service in the uniformed services, and (B) a person who begins military service prior to the 16th day of a calendar month, or terminates military service after the 15th day of a calendar month is considered to have served a full month, and (C) the participating municipality participated in the System. (2) On or before the last day of the fifth calendar year following the year in which the eligible member was reemployed, the eligible member may, but is not required to, deposit with the System any or all employee contributions that would have been deposited to his/her individual account for each period during which he/she performed service in the uniformed services if the eligible member had been employed with the participating municipality during the period of uniformed service. Deposits under this provision are subject to the following rules: (A) The total deposits may not exceed the amount the eligible member would have been required to contribute had the eligible member remained continuously employed by the participating municipality throughout the period of service in the uniformed services. (B) The compensation upon which allowable deposits will be calculated is the estimated compensation that the eligible member would have received from the municipality but for the period of service in the uniformed services. (C) For purposes of determining the amount of current service credit and allowable monetary credit, months of uniformed service and estimated compensation shall be calculated from the later of the date the eligible member entered uniformed service or the date the participating municipality commenced participation in the System. (D) Within the allowable period for making deposits and subject to the maximum total amount of deposits, an eligible member may make deposits at any time and in any amount. (E) Deposits must be paid directly to the System by the eligible member, will be treated as after-tax contributions, and may not be returned until the member terminates from all covered employment in this System. (F) Deposits will be allocated prospective interest only, and in the same manner as interest is allocated on member contributions to individual accounts. (G) Deposits, when received by the System, shall be credited to the eligible person's individual account and shall be considered to be contributions attributable to the months of uniformed service performed beginning with the earliest month of uniformed service. (H) For vesting and funding purposes, current service credit, and any monetary credit arising from voluntary deposits, shall be considered as having been earned through service with the reemploying municipality and as having been credited during the period of uniformed service. (I) An eligible member receiving service credit for a specific month pursuant to sec.853.506 may not receive service credit for the same month under any other provision of Subtitle G of Title VIII of the Texas Government Code. 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. Filed with the Office of the Secretary of State on April 3, 1998. TRD-9804654 Gary W. Anderson Executive Director Texas Municipal Retirement System Effective date: April 23, 1998 Proposal publication date: November 21, 1997 For further information, please call: (512) 476-7577 TITLE 37. PUBLIC SAFETY AND CORRECTIONS PART I. Texas Department Public Safety CHAPTER 3.Traffic Law Enforcement SUBCHAPTER D.Traffic Supervision 37 TAC sec.sec.3.59, 3.62 The Texas Department of Public Safety adopts amendments to sec.3.59, Regulations Governing Transportation of Hazardous Materials and sec.3.62, Regulations Governing Transportation Safety. sec.3.62 is adopted with changes to the proposed text as published in the December 19, 1997, issue of the Texas Register (22 TexReg 12434). sec.3.59 is adopted without changes and will not be republished. The justification for the amendments will be to ensure to the public that a motor carrier is in compliance with all of the statutes and regulations pertaining to the safe operation of commercial vehicles in this state. The amendments are necessary to implement the changes enacted by the 75th Texas Legislature, 1997, in House Bills 1418 and 3252 and Senate Bills 370, 1486, and 1828. The amendments are also necessary to implement changes to Part 395 of the Federal Motor Carrier Safety Regulations concerning the hours of service requirements for drivers transporting agricultural commodities or farm supplies, to correct a provision of the vision waiver process, to clarify the training requirements for peace officers authorized to enforce the motor carrier safety standards provided in Texas Civil Statutes, Article 6675d, to implement changes to the Safety Audit Program to maintain compatibility with the Federal SAFESTAT Program, and to establish procedures to accept installment payments for administrative penalties assessed for violations discovered during compliance review audits. In sec.3.62, subsection (j)(1), is amended to include Chapter 522 (Commercial Driver's License) as requirements to which the department may impose administrative penalties against a motor carrier who violates the provisions of that chapter. A summary of the comments received and the department's response to the comments follow: No group or associations offered written comments on the amendments to the proposed rules. A public hearing was held on January 30, 1998, at the department headquarters in Austin. Listed below are the comments received at the hearing followed by the department's response: COMMENT: A comment was received requesting clarification of the authority of the department to adopt the provisions of Parts 393 and 396 of the Code of Federal Regulations on contract carriers transporting the operating employees of a railroad when House Bill 3252 only dealt with the hours of service requirements. RESPONSE: While House Bill 3252 authorized the department to adopt rules regulating the number of hours that a driver employed by a contract carrier could drive each day, the bill also authorized the department to adopt rules, as determined by the department, that are necessary to protect the safety of the passengers being transported or the general public. This language in the statute clearly gives the department the authority to adopt the additional requirements. The department believes that the additional regulations are necessary and prudent. The inclusion of the driver file requirements in Part 391 is needed to enable the department to identify all of the drivers employed by a contract carrier in order to conduct a full review of the carrier's hours of service compliance level. The vehicle maintenance requirements of Part 393 and the vehicle maintenance file requirements of Part 396 are necessary to ensure that the vehicles operated by the carriers meet the minimum safety standards required by statute to protect the passengers and the general public. COMMENT: A comment was received concerning the limit on the number of hours a driver employed by a contract carrier could operate the vehicle to no more than 12 hours per day. RESPONSE: House Bill 3252 provided that the rules adopted by the department must include provisions that prohibited a person from operating a vehicle for more than 12 hours in a day. This is the same requirement for intrastate drivers contained in Texas Transportation Code, sec.644.053 and Subsection (d) of these administrative rules that allow drivers in intrastate commerce to drive 12 hours following eight consecutive hours off duty. The 12-hour driving time is in contrast to the 10-hour driving time allowed in sec.395 of the Code of Federal Regulations for drivers operating in interstate commerce that operate vehicles designed to transport more than 15 passengers, including the driver. Since the drivers employed by the contract carriers to transport the employees of a railroad would be operating vehicles designed to carry 15 or fewer passengers, the drivers would normally not be subject to the federal regulations. However, since House Bill 3252 imposes the driving time limits on these drivers with no reference to interstate or intrastate commerce, these drivers would be limited to driving no more that 12 hours followed by eight consecutive hours off. The interested parties to the proposed rules in attendance at the public hearing included Sam Arrington of the United Transportation Union; Ray West of Renzenberger Inc. of Shawnee, Kansas; Rickey McCormick of American Moving & Storage; Dick Forster, Keith Janovec, and Tim Mallory of Cimarron Coach of Virginia, Inc. of Falls Mills, Virginia. The amendments are adopted pursuant to Texas Civil Statutes, Article 6675d and Article 6687b-2; Texas Transportation Code, Chapters 522 and 549; and Texas Government Code, sec.411.006(4), which provide the director of the Texas Department of Public Safety with the authority to establish rules for the conduct of the work of the Texas Department of Public Safety, and which authorize the director to adopt rules regulating the safe operation of commercial motor vehicles. sec.3.62Regulations Governing Transportation Safety (a) (No Change). (b) Terms. Certain terms, when used in the federal regulations as adopted in subsection (a) of this section, will be defined as follows: (1) the definition of motor carrier will be the same as that given in Texas Transportation Code sec.643.001 (6); (2)-(6) (No Change). (7) farm vehicle means any vehicle or combination of vehicles controlled and/or operated by a farmer or rancher being used to transport agriculture products, farm machinery, and farm supplies to or from a farm or ranch; (8) commercial motor vehicle has the meaning assigned by Texas Transportation Code sec.548.001 (1); (9) foreign commercial motor vehicle has the meaning assigned by Texas Civil Statutes, Article 6675c-2; (10) agricultural commodity is defined as an agricultural, horticultural, viticultural, silvicultural, or vegetable product, bees and honey, planting seed, cottonseed, rice, livestock or a livestock product, or poultry or a poultry product that is produced in this state, either in its natural form or as processed by the producer, including woodchips. The term does not include a product which has been stored in a facility not owned by its producer; (11) planting and harvesting seasons are defined as January 1 to December 31; and, (12) producer is defined as a person engaged in the business of producing or causing to be produced for commercial purposes an agricultural commodity. The term includes the owner of a farm on which the commodity is produced and the owner's tenant or sharecropper. (c) Applicability. (1) The regulations shall be applicable to the following vehicles: (A) (No Change). (B) a farm vehicle with an actual gross weight, a registered gross weight, or a gross weight rating in excess of 48,000 pounds when operating intrastate; (C) a vehicle designed to transport more than 15 passengers, including the driver; and, (D) (No Change). (2) a motor carrier transporting household goods for compensation in intrastate commerce in a vehicle not defined in Texas Transportation Code sec.548.001 (1) is subject to the record-keeping requirements in 49 Code of Federal Regulations, Part 395 and the hours of service requirements specified in this subchapter. (3) a foreign commercial motor vehicle that is owned or controlled by a person or entity that is domiciled in or a citizen of a country other than the United States. (4) a contract carrier transporting the operating employees of a railroad on a road or highway of this state in a vehicle designed to carry 15 or fewer passengers. (5) All regulations contained in Title 49, Code of Federal Regulations, Parts 382, 385, 386, 390-393 and 395-397, and all amendments thereto pertaining to interstate drivers and vehicles are also adopted except as otherwise excluded. (6) Nothing in this section shall be construed to prohibit an employer from requiring and enforcing more stringent requirements relating to safety of operation and employee health and safety. (d) Exemptions. Exemptions to the adoption in subsection (a) of this section were made pursuant to Texas Transportation Code sec.644.052, Texas Civil Statutes, Article 6675d, sec.5 (as authorized by Senate Bill 370 and House Bill 1418), and sec.5 (as authorized by Senate Bill 1486), and sec.3A and are adopted as follows: (1)-(4) (No Change). (5) The provisions of Title 49, Code of Federal Regulations, sec.395.3 shall not apply to drivers transporting agricultural commodities in intrastate commerce for agricultural purposes within a 150 air-mile radius from the source of the commodities or the distribution point for the farm supplies during planting and harvesting seasons. Drivers claiming this exemption must comply with the provisions of Title 49, Code of Federal Regulations sec.395.8, Driver's Record of Duty Status. (6) Unless otherwise specified, a motor carrier transporting household goods for compensation in intrastate commerce in a vehicle not defined in Texas Transportation Code sec.548.001 (1) is subject to the recordkeeping requirements in Title 49, Code of Federal Regulations, Part 395 and the hours of service requirements specified in this subchapter. (7) Unless otherwise specified, a contract carrier is subject only to Title 49, Code of Federal Regulations, Part 391, except 391.11(b) (6) and subparts E and H, Parts 393, 395, and 396, except sec.396.17. (e) Exceptions. Exceptions adopted by the director of the Texas Department of Public Safety not specified in Texas Transportation Code, sec.644.053, are as follows: (1)-(7) (No Change). (8) Texas Transportation Code, sec.547.401 and sec.547.404, concerning brakes on trailers weighing 15,000 pounds gross weight or less take precedence over the brake requirements in the federal regulations for trailers of this gross weight specification unless the vehicle is required to meet the requirements of Federal Motor Vehicle Safety Standard No. 121 (49 Code of Federal Regulations 571.121) applicable to the vehicle at the time it was manufactured. (9) (No Change). (10) Title 49, Code of Federal Regulations, Part 390.23 (Relief from Regulations), is adopted for intrastate motor carriers with the following exceptions: (A) (No Change). (B) The requirements of Title 49, Code of Federal Regulations, Parts 390.23(c)(1) and (2), for intrastate motor carriers shall be: (i) the driver has met the requirements of Texas Transportation Code sec.644; and (ii) the driver has had at least eight consecutive hours off-duty when the driver has been on duty for 15 or more consecutive hours, or the driver has been on duty for more than 70 hours in seven days. (f) Vision Waiver. Under this section the Texas Department of Public Safety may provide a waiver for a person who is otherwise disqualified under Title 49, Code of Federal Regulations, Part 391.41(b)(10) provided that intrastate drivers meet the vision standards specified in sec.16.9 of this title (relating to Qualifications to Drive in Intrastate Commerce). (1)-(4) (No Change). (5) Applicants denied a waiver may appeal the decision of the department by contacting the director, in writing, within 20 days after receiving notification of the denial. The request for an appeal must contain the name, address and driver's license number of the applicant, the reasons why the waiver should be granted, and include all pertinent documents which support the reasons why the waiver should be granted. The denial is stayed pending the review of the director. The decision of the director is final. (g) Authority to Enforce. (1) An officer of the department may enter or detain on a highway or at a port of entry a motor vehicle that is subject to Texas Transportation Code sec.644 and Texas Civil Statutes, Article 6675d. (2) Police officers from any of the following Texas cities meeting the training and certification requirements contained in subsection (h) of this section and certified by the department may enter or detain on a highway or at a port of entry within the municipality a motor vehicle subject to Texas Transportation Code sec.644 and Texas Civil Statutes, Article 6675d: (A)-(C) (No Change). (h) Training and Certification Requirements. (1) Minimum standards. Police officers from the municipalities specified in subsection (g) of this title and certified to enforce this article must meet the following standards: (A)-(B) (No Change). (C) successfully complete an annual recertification examination. (2) Hazardous materials. Police officers desiring to enforce the Hazardous Materials Regulations must: (A) successfully complete the North American Standard Roadside Inspection Course; (B) (No Change). (C) participate in an on-the-job training program following each course with a certified officer and perform a minimum of 16 level one inspections; and, (D) (No Change). (3) Cargo Tank Specification. Police officers desiring to enforce the Cargo Tank Specification requirements must: (A) (No Change). (B) successfully complete a Basic Hazardous Materials Course; (C) (No Change). (D) participate in an on-the-job training program following each course with a certified officer and perform a minimum of 16 level one inspections; and (E) (No Change). (4) Motor Coach. Police officers desiring to enforce motor coach requirements must: (A) successfully complete the North American Standard Roadside Inspection Course; (B) successfully complete a Motor Coach Inspection Course; (C) participate in an on-the-job training program following each course with a certified officer and perform a minimum of 24 level one inspections; and (D) successfully complete an annual recertification examination. (5) Training provided by the department. When the training is provided by the Texas Department of Public Safety, the department shall collect fees in an amount sufficient to recover from municipalities the cost of certifying its peace officers. The fees shall include: (A) the per diem costs of the instructors established in accordance with the Appropriations Act regarding in-state travel; (B) the travel costs of the instructors to and from the training site; (C) all course fees charged to the department; (D) all costs of supplies; and (E) the cost of the training facility, if applicable. (6) Training provided by other training entities. A public or private entity desiring to train police officers in the enforcement of the Federal Motor Carrier Safety Regulations must: (A) submit a schedule of the courses to be instructed; (B) submit an outline of the subject matter in each course; (C) submit a list of the instructors and their qualifications to be used in the training course; (D) submit a copy of the examination; (E) submit an estimate of the cost of the course; (F) receive approval from the director prior to providing the training course; (G) provide a list of all police officers attending the training course, including the police officer's name, rank, agency, social security number, dates of the course, and the examination score; and (H) receive from each police officer or municipality the cost of providing the training course(s). (i) Safety Audit Program. The rules in this subsection, as authorized by Texas Transportation Code sec.644.155, establish procedures to determine the safety fitness of motor carriers, assign safety ratings, take remedial actions when necessary, assess administrative penalties when required, and prohibit motor carriers receiving a safety rating of "unsatisfactory" from operating a commercial motor vehicle. The department will use the Compliance Review Audit to determine the safety fitness of motor carriers and to assign safety ratings. The safety fitness determination will be assessed on intrastate motor carriers and the intrastate operations of interstate motor carriers based in Texas. (1) (No Change). (2) Inspection of Premises. (A) Authority to Inspect. An officer or employee of the department who has been certified by the director may enter a motor carrier's premises to inspect lands, buildings, and equipment and copy or verify the correctness of any records, reports or other documents required to be kept or made pursuant to the regulations adopted by the director in accordance with Texas Transportation Code sec.644.155. (B) (No Change). (C) Civil and Criminal Penalties for Refusal to Allow Inspection. (i) A person who does not permit an inspection authorized under Texas Transportation Code sec.644.104, is liable to the state for a civil penalty not to exceed $1,000. The director may request that the attorney general sue to collect the penalty in the county in which the violation is alleged to have occurred or in Travis County. (ii) The civil penalty is in addition to the criminal penalty provided by Texas Transportation Code sec.644.151. (iii) (No Change). (3) Compliance Review Audits. A Compliance Review will be conducted based upon the following criteria: (A) unsatisfactory safety assessment factor evaluations; (B)-(C) (No Change). (D) requests from the Legislature and state or federal agencies, and; (E) request for a safety rating determination. (4) (No Change). (j) Administrative Penalties. (1) The compliance review may result in the initiation of an enforcement action based upon the number and degree of seriousness of the violations discovered during the review as well as those factors listed in Title 49, Code of Federal Regulations, Part 385.7. As a result of the enforcement action, the department may impose an administrative penalty against a motor carrier who violates a provision of Texas Civil Statutes, Article 6675d or a provision of the Texas Transportation Code Title 7, Subtitle B, Chapter 522 (relating to Commercial Driver's License), and Subtitle C, Chapters 541 - 600 (relating to the Rules of the Road), including any amendments not codified in the Texas Transportation Code. Each of these provisions relates to the safe operation of a commercial motor vehicle under Texas Transportation Code sec.644.153 (b). (2) The department shall have discretion in determining the appropriate amount of the administrative penalty assessed for each violation. A penalty under this section may not exceed the maximum penalty provided for violations of a similar federal safety regulation as provided under 49 United States Code, sec.521(b), sec.5123, and Title 49, Code of Federal Regulations, Parts 386.81, 386.82, and Appendix A to Part 386. (A) (No Change). (E) Hazardous materials violations. A person that knowingly violates a hazardous material regulation is liable for an administrative penalty of at least $250 but not more than $27,500 for each violation. A person acts knowingly when the person has actual knowledge of the facts giving rise to the violation, or a reasonable person acting in the circumstance and exercising reasonable care would have that knowledge. A separate violation occurs for each day the violation, committed by a person that transports or causes to be transported hazardous material, continues. (3) (No Change). (k) (No Change). (l) Informal hearing. (1) Request. If requested, the department will hold an informal hearing to discuss a penalty recommended under this section. Such hearing will be scheduled and conducted by the manager of the Motor Carrier Bureau or the director's designee. (2) (No Change). (3) Resolution. In the event matters are resolved in the motor carrier's favor, the manager or the director's designee will send the carrier written notification that the proposed penalty is withdrawn. (4) Modified penalty. If matters are resolved resulting in a modified penalty, the manager or the director's designee may prepare a settlement agreement as provided by subsection (n) of this section. (5) (No Change). (m) (No Change). (n) Collection and Settlement. (1) (No Change). (2) At any time prior to the date on which a final order is issued by the director, the department and the motor carrier may agree to enter into a compromise settlement agreement. The compromise settlement agreement shall be signed by the motor carrier and the director, or the director's designee and will reflect that the motor carrier consents to the assessment of a specific administrative penalty or other action by the department against the motor carrier. (3) (No Change). (o) Installment Payment of Administrative Penalty. (1) A person(s), firm, or business may, upon approval of the director or the director's designee, be allowed to make installment payments of an administrative penalty, costs, fees, expenses, and reasonable and necessary attorney's fees incurred by the state upon submission of adequate proof of inability to pay. An application shall be submitted on a form approved by the department. (2) The person(s), firm, or business requesting the installment agreement must submit adequate documentation to support the request and make all relevant financial records of the person(s), firm, or business available to the department for inspection and verification. (3) In the event of a default of the installment agreement by the person(s), firm, or business, then the remaining balance of the installment agreement will be due immediately. (p) Suspension and revocation by the Texas Department of Transportation. (1) The director will determine whether the department will request the Texas Department of Transportation to suspend or revoke a registration issued by the Texas Department of Transportation based upon the department's compliance review. (2) This determination may be based upon the following: (A) an unsatisfactory safety rating under Title 49, Code of Federal Regulations, Part 385; (B) multiple violations of Texas Transportation Code sec.644 and Texas Civil Statutes, Article 6675d; (C) multiple violations of one of these rules; and/or, (D) multiple violations of the Uniform Traffic Act or Transportation Code. (3) Once the determination has been made the director will forward a letter to the executive director of the Texas Department of Transportation requesting said department initiate a suspension/revocation proceeding against the motor carrier. (4) Any suspension/revocation action initiated by the Texas Department of Transportation, pursuant to this section, shall be administered in the manner specified by the rules of the Texas Department of Transportation. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on April 2, 1998. TRD-9804625 Dudley M. Thomas Director Texas Department of Public Safety Effective date: April 22, 1998 Proposal publication date: December 19, 1997 For further information, please call: (512) 424-2890 PART III. Texas Youth Commission CHAPTER 95.Youth Discipline SUBCHAPTER A.Disciplinary Practices 37 TAC sec.95.9 The Texas Youth Commission (TYC) adopts an amendment to sec.95.9, concerning parole revocation consequence, with changes to the proposed text as published in the December 19, 1997, issue of the Texas Register (22 TexReg 12439). The amendment as proposed adds criterion under which the parole status of certain TYC youth who commit a major rule violation will be revoked. The change included in this adoption attaches a time line relationship between the rule violation and issuance of a less severe disciplinary consequence. The justification for amending the section is greater protection for the public. The amendment will ensure that other interventions are pursued before parole revocation is sought. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, sec.61.0811, which provides the Texas Youth Commission with the authority to develop a management system for parole services that objectively measures and provides for the classification of children based on the level of children's needs and the degree of risk they present to the public. The adopted rule implements the Human Resource Code, sec.61.034. sec.95.9.Parole Revocation Consequence. (a) Purpose. The purpose of this rule is to provide for the revocation of parole status as a disciplinary consequence for behavior that presents an unacceptable risk to the safety of persons and property. Parole revocation is considered a major consequence. (b) Applicability. (1) The due process necessary to effect this rule is found in (GAP)sec.95.51 of this title (relating to Level I Hearing Procedure). (2) Additional procedures and restrictions are applied prior to any movement of a sentenced offender youth. See (GAP) sec.85.29 of this title (relating to Program Completion and Movement). Also see (GAP) sec.85.37 of this title (relating to Sentenced Offender Disposition). (c) Explanation of Terms Used. A high risk offense - is any major rule violation which may result in a classification other than general offender or violator of CINS probation. (d) Criteria and Disposition. (1) Parole will be revoked if it is found at a level I hearing that a youth has: (A) committed a high risk offense; (B) committed a felony; or (C) committed any major rule violation and has previously been classified for a high-risk offense. (2) Parole of a general offender is revoked if it is found at a level I hearing that the general offender has committed a major rule violation; and (A) the violation was committed, in whole or in part, within 90 days of imposition of a less severe disciplinary consequence; or (B) is a threat to the safety of persons or property. (3) If extenuating circumstances are found incident to a high risk offense, parole is revoked, but the high risk classification may be waived pursuant to (GAP) sec.85.23 of this title (relating to Classification). (4) If extenuating circumstances are found incident to any violation other than a high risk offense, parole is not revoked. See extenuating circumstances discussed in (GAP) sec.85.23 of this title (relating to Classification). (5) If criteria for revocation are not established at a level I hearing, the youth's parole is not revoked, but lesser disciplinary consequences may be imposed for any rule violation(s) proved at the hearing. (e) Restrictions. (1) A level I hearing is required in order to revoke a youth's parole status. (2) Unless otherwise requested in writing by local authorities, a level I hearing may be held even if TYC staff receive information that criminal or delinquent proceedings against the youth are planned or anticipated by local authorities. (3) If a youth is on parole from another state and is being supervised by Texas Youth Commission (TYC) under agreement with the other state, a parole revocation hearing is held by TYC and the youth returned to the sending state, coordinated by the interstate compact administrator and general counsel. (4) If a TYC parolee commits an offense in another state, the return of such youth is coordinated by the interstate compact administrator and the general counsel. A parole revocation hearing is coordinated by and held at the request of the assigned parole officer. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804609 Steve Robinson Executive Director Texas Youth Commission Effective date: April 24, 1998 Proposal publication date: December 8, 1997 For further information, please call: (512) 424-6244 PART VII. Texas Commission on Law Enforcement Officer Standards and Education CHAPTER 211. Administration Division 37 TAC sec.211.33 The Texas Commission on Law Enforcement Officer Standards and Education adopts new sec.211.33, concerning a memorandum of understanding between the Commission and the Texas Department of Criminal Justice (TDCJ) regarding firearms proficiency training for supervision officers, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 TexReg 12708). This section was developed to implement a new certification program for community supervision officers, probation officers, and parole officers (collectively referred to as "supervision officers"). House Bill 2909, passed by the 75th Legislature, amended sec.415.038 of the Government Code to require the two agencies to enter into such an agreement. The memorandum of understanding establishes the Commission's and the TDCJ's respective responsibilities in developing a basic training program and certifying the firearms proficiency of supervision officers. No comments were received regarding the adoption of this new section. The new section is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415; and sec.415.038, which requires the Commission and TDCJ to enter into a memorandum of understanding to establish their respective responsibilities in developing a basic training program in the use of firearms by supervision officers. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804603 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.211.79 The Texas Commission on Law Enforcement Officer Standards and Education adopts the repeal of sec.211.79, concerning in-service training credit for license holders, without changes to the proposal as published in the December 26, 1997, issue of the Texas Register (22 TexReg 12709). This section will be replaced by new sec.217.79, which was developed pursuant to the ongoing reorganization of the Commission rules. The reorganization plan was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commission's Administrative Code had become too complex and difficult to understand. Included in this ongoing reorganization is a schedule for renumbering certain sections of the rules as a way to more clearly label specific topics and to more fully utilize the chapter numbers available in the Administrative Code for the Commission's rules. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the commission to promulgate rules for the administration of Chapter 415; and under sec.415.034, which requires the commission to adopt rules relating to the administration of continuing education programs for officers and county jailers. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804601 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.211.87 The Texas Commission on Law Enforcement Officer Standards and Education adopts the repeal of sec.211.87, concerning suspension of licenses, without changes to the proposal as published in the December 26, 1997 issue of the Texas Register (22 TexReg 12709). This section will be replaced by new sec.223.87, which was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commission's Administrative Code had become to complex and difficult to understand. Included in this ongoing reorganization is a schedule for renumbering certain sections of the rules as a way to more clearly label specific topics and to more fully utilize the chapter numbers available in the Administrative Code for the Commission's Rules. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the commission to promulgate rules for the administration of Chapter 415; and under sec.415.060, which authorizes the commission to adopt rules relating to revocation, probation, and suspension of any license that it grants under this chapter. 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. Filed with the Office of the Secretary of State on April 6, 1998. TRD-9804713 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.211.88 The Texas Commission on Law Enforcement Officer Standards and Education adopts the repeal of sec.211.88, concerning reporting responsibilities of individuals, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 Tex Reg 12709). This section will be replaced by the new sec.217.88, which was developed pursuant to an ongoing reorganization of the Commission's rules. The reorganization plan was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commission's Administrative Code had become too complex and difficult to understand. Included in this ongoing reorganization is a schedule for renumbering certain sections of the rules as a way to more clearly label specific topics and more fully utilize the chapter numbers available in the Administrative Code for the Commission's rules. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010 which authorizes the commission to promulgate rules for the administration of Chapter 415. 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. Filed with the Office of the Secretary of State on April 6, 1998. TRD-9804714 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 CHAPTER 217. Licensing Requirements Division 37 TAC sec.217.1 The Texas Commission on Law Enforcement Officer Standards and Education adopts amendments to sec.217.1, concerning minimum standards for licensing, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 Tex Reg 12710). This section is amended to prohibit a person from obtaining a Commission license if that person has been convicted of a misdemeanor or felony offense, or been placed on deferred adjudication community supervision for a misdemeanor or felony offense, if that offense directly related to the duties and responsibilities of an officer requiring such a license. The conditions for determining whether an offense related to the duties and responsibilities of the office are drawn from the existing Revocation section (sec.223.7). No comments were received regarding the adoption of these amendments. The amendment is authorized under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415, and to establish minimum standards for competence and reliability for licensing. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804597 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.217.79 The Texas Commission on Law Enforcement Officer Standards and Education adopts new sec.217.79, concerning continuing education credit for license holders, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 TexReg 12711). Section 217.79 was developed to replace current sec.211.79, which is being repealed concurrently, pursuant to the Commission's ongoing rule review project. The reorganization plan was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commission's Administrative Code had become to complex and difficult to understand. The new section contains two important changes. The first changes terminology included in the section from "in-service training" to "continuing education," and the second allows continuing education data to be reported to the Commission electronically when that option is made available. No comments were received regarding adoption of the new section. The new section is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the commission to promulgate rules for the administration of Chapter 415; and under sec.415.034, which requires the commission to adopt rules relating to the administration of continuing education programs for officers and county jailers. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804600 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.217.88 The Texas Commission on Law Enforcement Officer Standards and Education adopts new sec.217.88, concerning the reporting responsibilities of individuals, without changes to the proposed text published in the December 26, 1997, issue of the Texas Register (22 Tex Reg 12711). Section 217.88 was developed to replace current sec.211.88, which is being repealed concurrently, pursuant to the Commission's ongoing rule review project. The reorganization plan was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commission's Administrative Code had become too complex and difficult to understand. The new section eliminates obsolete references to "retention standards," which no longer exist in the Commission's rules, and renumbers the provision to place the topic under a more appropriate chapter heading. No comments were received regarding the adoption of this new section. The new section is adopted under Texas Government Code Annotated, Chapter 415 sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415; and under sec.415.052, which authorizes the Commission to require the submission of a proper application for a license. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804598 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 CHAPTER 221. Proficiency Certificates and Other Post-Basic Licenses Division 37 TAC sec.221.17 The Texas Commission on Law Enforcement Officer Standards and Education adopts amendments to sec.221.17, concerning peace officer proficiency, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 Tex Reg 12712). The amendments incorporate provisions of House Bill 1856, passed by the 75th Legislature, requiring peace officers and county jailers to have taken a course on federal and state statutes that related to employment issues affecting them in order to qualify for a basic proficiency certificate. Such courses must be provided by the employing agency. No comments were received regarding the adoption of these amendments. The amendments are authorized under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415; and under sec.415.062, which authorizes the Commission to issue proficiency certificates. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804596 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 37 TAC sec.221.35 The Texas Commission on Law Enforcement Officer Standards and Education adopts new sec.221.35, concerning the issuance of a firearms proficiency certificate for supervision officers, without changes to the proposed text as published in the December 26, 1997, issue of the Texas Register (22 TexReg 12713). This section was developed pursuant to House Bill 2909, passed by the 75th Legislature, which requires the Commission and the Texas Department of Criminal Justice to adopt a memorandum of understanding regarding firearms proficiency training for supervision officers. Under the terms of the memorandum of understanding, the Commission will be responsible for approving firearms proficiency training and issuing certificates of firearms proficiency to supervision officers, a group that includes community supervision officers, probation officers or parole officers employed by the Texas Department of Criminal Justice or a community supervision and corrections department. Section sec.221.35 establishes the requirements for issuance of firearms proficiency certificates to supervision officers. Comments were received from the Director of the Community Justice Assistance Division of TDCJ requesting that the effective date of the rule (June 1, 1998) be changed to allow the rule to become effective immediately after it was adopted by the Commission at its quarterly meeting in March, in order to allow supervision officers to begin firearms training as soon as possible. The Commissioners considered the comment and agreed that the June 1st effective date was appropriate, considering the notification requirements imposed upon the Commission by the Administrative Procedure Act. The Commissioners agreed that firearms training may be offered to supervision officers prior to the effective date of the rule; however, no certificates will be issued until June 1, 1998. The new section is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415; under sec.415.038, which requires the Commission and TDCJ to enter into a memorandum of understanding to establish their respective responsibilities in developing a basic training program in the use of firearms by supervision officers; and under sec.415.062, which authorizes the commission to issue proficiency certificates. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804602 Edward T. Laine Chief, Professional Standards and Administrative Operations Texas Commission on Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 CHAPTER 223. Enforcement and Compliance Matters Division 37 TAC sec.223.87 The Texas Commission on Law Enforcement Officer Standards and Education adopts new sec.223.87, concerning suspension of licenses, without changes to the proposed text published in the December 26, 1997, issue of the Texas Register (22 Tex Reg 12713). Section 223.87 was developed to replace current sec.211.87, which is being repealed concurrently, pursuant to the Commission's ongoing rule review project. The reorganization plan was developed by staff and considered by the Commission's Ad Hoc Rules Committee in response to concerns that the Commissions Administrative Code had become too complex and difficult to understand. The new section increases the general duration of a license suspension for a misdemeanor conviction from twelve months to five years. Staff proposed, and the Commissioners concurred, that the general term of suspension should be at least as long as the prohibition for licensing after a misdemeanor conviction, which is currently five years. The section was also renumbered to place the topic under a more appropriate chapter heading. No comments were received regarding the adoption of the new section. The new section is adopted under Texas Government Code Annotated, Chapter 415, sec.415.010, which authorizes the Commission to promulgate rules for the administration of Chapter 415; and under sec.415.060, which authorizes the commission to adopt rules relating to revocation, probation and suspension of any license that it grants under this chapter. 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. Filed with the Office of the Secretary of State on April 1, 1998. TRD-9804599 Edward T. Laine Chief Professional Standards and Administrative Operations Texas Commission of Law Enforcement Officer Standards and Education Effective date: June 1, 1998 Proposal publication date: December 26, 1997 For further information, please call: (512) 450-0188 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART I. Texas Department of Human Services CHAPTER 15.Medicaid Eligibility SUBCHAPTER G.Application for Medicaid 40 TAC sec.15.610 The Texas Department of Human Services (DHS) adopts an amendment to sec.15.610, with a change to the proposed text published in the February 20, 1998, issue of the Texas Register (23 TexReg 1520). The amendment is justified because, for certified Supplemental Security Income (SSI) clients, Medicaid coverage begins the month prior to the first month of SSI payment and is available for the two preceding months if the client meets all criteria for that period. The amendment will function by assuring that there will be no gap in Medicaid coverage for certified SSI clients who are also eligible for retroactive coverage. During the comment period, DHS received two comments from The Association of Texas Hospitals and Health Care Organizations (THA) and Medical Advocacy Services for Healthcare, Inc. supporting adoption of the amendment. Both commenters also requested that the Medicaid coverage be extended back to August 1996; however, federal matching funds are not available for that period. The months covered by the amendment follow the policy interpretation from the Health Care Financing Administration that permits DHS to cover the gap month. DHS, however, has initiated a change in the text to clarify SSI by spelling out Supplemental Security Income in subsection (c). The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which authorizes the department to administer public and medical assistance programs and under Texas Government Code sec.531.021, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. The amendment implements sec.sec.22.001-22.030 and 32.001-32.042 of the Human Resources Code. sec.15.610.Medicaid Coverage. (a)-(b) (No change.) (c) Retroactive coverage. For certified Supplemental Security Income (SSI) clients, Medicaid coverage automatically begins with the month prior to the first month of SSI payment and is also available for the two preceding months if the individual meets all Medicaid eligibility requirements for those two months. For other clients, the three months considered in determining eligibility are those months immediately before the month in which the individual filed a denied application for SSI, filed a formal application for MAO, transferred from a limited Medicaid program such as QMB, or the three months before the month an application is received from a decedent's agent. The department considers as potentially eligible for retroactive Medicaid coverage the following individuals: (1)-(3) (No change.) (d) SSI-MAO eligibility requirements. (1) General requirements. Although the applicant need not be currently eligible, he must prove that SSI-MAO requirements were met in the month of requested coverage. Except for 1929(b) clients, a client eligible for retroactive coverage receives a medical care identification for the appropriate period. He presents this information to providers so that claims can be filed within 90 days of the Medicaid decision. To meet requirements, the individual must have been (A)-(E) (No change.) (2) Prior coverage for SSI applicants. The SSI client may apply for retroactive Medicaid coverage. To apply for retroactive medical coverage, the client must complete both the application form, which is based on current circumstances, and the application form attachment, which is based on circumstances during the three months before application for SSI. An SSI client who claims unpaid or reimbursable medical expenses incurred within the retroactive period receives a computer-generated notice of potential eligibility. He must contact the local department office for his eligibility to be determined. The department determines his eligibility according to SSI program criteria. An individual may be eligible for more than one retroactive period if he applies for SSI more than once. Determination of eligibility on a month-to-month basis may result in nonsequential periods of eligibility. The department notifies the client about the eligibility determination decision and sends him a medical identification card for his period of retroactive eligibility. (3)-(4) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on April 2, 1998. TRD-9804613 Glenn Scott General Counsel, Legal Services Texas Department of Human Services Effective date: June 1, 1998 Proposal publication date: February 20, 1998 For further information, please call: (512) 438-3765 TITLE 43. TRANSPORTATION PART I. Texas Department of Transportation CHAPTER 17.Vehicle Titles and Registration SUBCHAPTER A.Motor Vehicle Certificates 43 TAC sec.17.2, sec.17.9 The Texas Department of Transportation adopts amendments to sec.17.2, concerning definitions, and new sec.17.9, concerning child support liens. Section 17.2 and sec.17.9 are adopted with changes to the proposed text as published in the January 2, 1998, issue of the Texas Register (23 TexReg 113). EXPLANATION OF ADOPTION OF AMENDMENTS Senate Bill 29, 75th Legislature, 1997, amended Family Code, Chapter 157, to provide for child support liens to be recorded on motor vehicle certificates of title for past due child support and required that the lien be perfected in accordance with Transportation Code, Chapter 501. To comply with Senate Bill 29, sec.17.2 is amended to add the definition of "obligor" as an individual who is required to make payments under a support order for a child. This section has been changed to number the definitions in accordance with Texas Register requirements. New sec.17.9 describes the process and the documents necessary for perfection of a child support lien against a motor vehicle. In order to perfect a lien, a certified copy of the child support lien notice that has been filed with the county clerk's office or an abstract of judgment for past due child support must be presented to the county tax assessor-collector along with the obligor's evidence of ownership and application for certificate of title. RESPONSE TO COMMENTS Written comments were received from the Texas Automobile Dealers Association with suggested changes. The comments did not indicate whether the commenter was in favor or against the rules. Comment: Concerning sec.17.9(2), regarding documents required to be presented in order to perfect a child support lien, the comment was made that all titles, negotiable, non-negotiable, and certified copies, be surrendered prior to any additional lien being placed on the motor vehicle, not just the obligor's certificate of title, which may be a negotiable or non-negotiable title or a certified copy. It was suggested that all evidence of title (negotiable, non- negotiable and certified copies) should be surrendered to the tax assessor- collector prior to issuance of any new title with a new lien. Response: The department does not have the authority to require the surrender of all titles; however, Family Code, sec.157.316(b) requires that a child support lien be perfected in the manner provided by Transportation Code, Chapter 501, which requires that negotiable evidence of ownership to a motor vehicle be surrendered with an application for title. The Transportation Code provides other safeguards to the transfer of title. Transportation Code, sec.501.029 provides that a non-negotiable or "duplicate original" title may only be used to evidence title to a motor vehicle and not to transfer interest in or establish a lien on the vehicle. Additionally, Transportation Code, sec.501.134 provides that a certified copy of an original title may only be issued if the original title is lost or destroyed and further provides that a purchaser or lienholder receiving a certified copy of a certificate of title may require the seller or owner to indemnify the purchaser, lienholder and all subsequent purchasers of the vehicle against any loss the person may suffer because of a claim presented on the original certificate of title. However, it is within the department's authority to require the obligor to surrender evidence of ownership. For clarity, sec.17.9(2) is adopted with changes to require that the obligor's evidence of motor vehicle ownership, as described in 43 TAC sec.17.3(c), be surrendered with an application for certificate of title filed to record a child support lien. This is the same evidence of ownership that the order for child support requires the obligor to surrender pursuant to Family Code, sec.157.316(b). Comment: Concerning sec.17.9, it was requested that when a child support lien is perfected and recorded on a subsequent certificate of title, that a clear and conspicuous notation be disclosed on the face of the title indicating that the vehicle is subject to a child support lien. Response: Once perfected, the child support lien will be shown on the face of the subsequent certificate of title in a clear and conspicuous manner. Comment: Concerning sec.17.9, it was also requested that the department act as a "clearinghouse" by maintaining information regarding the amount of the child support lien owed by the obligor and whom to contact regarding clearing of the child support lien. Response: As with any other type of disclosed lien, a purchaser must contact the recorded lienholder in order to obtain specific information regarding the balance due or to obtain a release of lien. Additionally, the department does not have the statutory authority to act as a "clearinghouse" for this information. A situational question was also posed; however, as the question does not directly relate to the proposed amendments, it will be addressed separately by the department. STATUTORY AUTHORITY The amendments and new section are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, more specifically, Transportation Code, Chapter 501, which authorizes the department to carry out the provisions of the those laws governing the titling of motor vehicles, and Family Code, Chapter 157, which requires a Child Support Lien on a motor vehicle be filed in accordance with Transportation Code, Chapter 501. sec.17.2. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Actual cash value - The market value of a motor vehicle as determined: (A) from publications commonly used by the automotive and insurance industries to establish the value of motor vehicles; or (B) if the entity determining the value is an insurance company, by any other procedure recognized by the insurance industry, including market surveys, that is applied by the company in a uniform manner. (2) Automobile recycler - A person in the business of dealing in salvage motor vehicles for the purpose of dismantling the vehicles to sell used parts, or a person otherwise engaged in the business of acquiring, selling, or dealing in salvage parts for reuse or resale as parts. The term includes a dealer in used motor vehicle parts. (3) Alias - The name of a vehicle owner reflected on the certificate of title, different than the name of the legal owner of the vehicle. (4) Alias certificate of title - A title document issued by the department for a vehicle that is used by an exempt law enforcement agency in covert criminal investigations. (5) Bond release letter - Written notification from the United States Department of Transportation authorizing United States Customs to release the bond posted for an imported motor vehicle to ensure compliance with federal motor vehicle safety standards. (6) Casual sale - The sale at auction of not more than one nonrepairable motor vehicle or new or late model salvage motor vehicle to the same person during a calendar year. (7) Certificate of title - A written instrument which may be issued solely by and under the authority of the department, which reflects the transferor, transferee, vehicle description, license plate and lien information, and rights of survivorship agreement as specified in this subchapter or as may be required by the department. (8) Certificate of title application - A form prescribed by the division director that reflects the information required by the department to create a motor vehicle title record. (9) Date of sale - The date of the transfer of possession of a specific vehicle from a seller to a purchaser. (10) Department - The Texas Department of Transportation. (11) Distributor - A person engaged in the business of selling to a dealer motor vehicles bought from a manufacturer. (12) Division director - The director of the department's Vehicle Titles and Registration Division. (13) Executive administrator - The director of a federal agency, the director of a Texas state agency, the sheriff of a Texas county, or the chief of police of a Texas city who by law possesses the authority to conduct covert criminal investigations. (14) Exempt agency - A governmental body exempt by law from paying registration fees for motor vehicles. (15) Federal motor vehicle safety standards - Motor vehicle safety requirements promulgated by the United States Department of Transportation, National Highway Traffic Safety Administration, set forth in Title 19, Code of Federal Regulations. (16) First sale - A bargain, sale, transfer, or delivery with intent to pass an interest therein, other than a lien, and accompanied by registration, of a motor vehicle which has not been previously registered in this state or elsewhere. (17) Flood damage - A remark initially indicated on a salvage or nonrepairable motor vehicle certificate of title to denote that the damage to the vehicle was caused exclusively by flood, which is carried forward upon subsequent title issuance. (18) House moving dolly - An apparatus consisting of metal beams and axles used to move houses. House moving dollies, by nature of their construction and use, actually form a large semi-trailer. (19) House trailer - A vehicle without automotive power designed for human habitation and for carrying persons and property upon its own structure and for being drawn by a motor vehicle, not to include manufactured housing. (20) Identification certificate - A form issued by an inspector of an authorized safety inspection station on a vehicle previously registered or titled in another state or country in accordance with Transportation Code, sec.548.256. (21) Implements of husbandry - Farm implements, machinery and tools used in tilling the soil, including self-propelled machinery specifically designed or especially adapted for applying plant food materials or agricultural chemicals. This term does not include implements that are not designed or adapted for the sole purpose of transporting the farm materials or chemicals, or any passenger car or truck. (22) Importer - A person, except a manufacturer, who brings any used motor vehicle into this state for the purpose of sale within this state. (23) Insurance company - A person authorized to write automobile insurance in Texas or an out-of-state insurance company that pays a loss claim for a motor vehicle in Texas. (24) Late model motor vehicle - A motor vehicle with a model year equal to the then current calendar year or one of the five preceding calendar years. (25) Late model salvage motor vehicle - A late model motor vehicle, other than a late model vehicle that is a nonrepairable motor vehicle, that is damaged to the extent that the total estimated cost of repairs, other than repairs related to hail damage but including parts and labor, is equal to or greater than an amount equal to 75% of the actual cash value of the vehicle in its predamaged condition. (26) Lien - A security interest, as defined in Business and Commerce Code, sec.1.201(37), of whatsoever kind or character whereby an interest, other than an absolute title, is sought to be held or given in a motor vehicle, and a lien created or given by constitution or statute in a motor vehicle. (27) Major component part - One of the following parts of a motor vehicle: (A) the engine; (B) the transmission; (C) the frame; (D) the right or left front fender; (E) the hood; (F) a door allowing entrance to or egress from the passenger compartment of the vehicle; (G) the front or rear bumper; (H) the right or left quarter panel; (I) the deck lid, tailgate, or hatchback; (J) the cargo box of a pickup truck; (K) the cab of a truck; or (L) the body of a passenger vehicle. (28) Manufacturer - A person regularly engaged in the business of manufacturing or assembling new motor vehicles, either within this state or elsewhere. (29) Manufacturer's certificate of origin - A form prescribed by the department showing the original transfer of a new motor vehicle from the manufacturer to the original purchaser, whether importer, distributor, dealer, or owner, and when presented with an application for certificate of title show thereon, on appropriate forms to be prescribed by the department, each subsequent transfer between distributor and dealer, dealer and dealer, and dealer and owner. (30) Moped - A motor driven cycle whose attainable speed is not more than 30 miles per hour and that is equipped with a motor that produces not more than two-brake horsepower. If an internal combustion engine is used, the piston displacement may not exceed 50 cubic centimeters and the power drive system may not require the operator to shift gears. (31) Motor vehicle - Every kind of motor driven or propelled vehicle required to be registered under the laws of the state, including trailers, house trailers, and semitrailers, and shall also include motorcycles, motor-driven cycles, mopeds, and four-wheel all-terrain vehicles designed by the manufacturer for off-highway use, whether or not the vehicle is required to be registered under Transportation Code, Chapter 501. The term motor vehicle does not include manufactured housing, motorcycles, motor-driven cycles, and mopeds designed for and used exclusively on golf courses. (32) Motor vehicle importation form - An importer's declaration form prescribed by the United States Department of Transportation and certified by United States Customs that relates to an imported motor vehicle's compliance with federal motor vehicle safety standards. (33) Negotiable title - A title that may be used to transfer an interest or ownership in a motor vehicle, or to establish a new lien. (34) New model motor vehicle - A motor vehicle with a model year that is newer than the current calendar year. (35) New model salvage motor vehicle - A new model motor vehicle, other than a new model vehicle that is a nonrepairable motor vehicle, that is damaged to the extent that the total estimated cost of repairs, other than repairs related to hail damage but including parts and labor, is equal to or greater than an amount equal to 75% of the actual cash value of the vehicle in its predamaged condition. (36) New motor vehicle - A motor vehicle which has never been the subject of a first sale either within this state or elsewhere. (37) Non-negotiable title - A title that may be used only as evidence of title and may not be used to transfer any interest or ownership in a motor vehicle, or to establish a new lien. (38) Nonrepairable motor vehicle - A new or late model motor vehicle that is damaged or missing a major component part to the extent that the total estimated cost of repairs to rebuild or reconstruct the vehicle, including parts and labor other than the costs of materials and labor for repainting the vehicle and excluding sales taxes on the total cost of the repairs, and excluding the cost of repairs to repair hail damage, is equal to or greater than an amount equal to 95% of the actual cash value of the vehicle in its predamaged condition. (39) Nonrepairable motor vehicle certificate of title - A document issued by the department that evidences ownership of a nonrepairable motor vehicle. (40) Non United States standard motor vehicle - A motor vehicle not manufactured in compliance with federal motor vehicle safety standards. (41) Obligor - An individual who is required to make payments under the terms of a support order for a child. (42) Older model motor vehicle - A motor vehicle that was manufactured in a model year before the sixth preceding model year, including the current model year. (43) Other negotiable evidence of ownership - A document, other than a Texas certificate of title or a salvage certificate of title, that relates to a motor vehicle which the department considers sufficient to support issuance of a Texas certificate of title for the vehicle. (44) Out-of-state buyer - A person licensed by another state or jurisdiction in an automotive business if the department has listed the holders of such license as permitted purchasers of salvage motor vehicles or nonrepairable motor vehicles based on substantially similar licensing requirements and on whether salvage vehicle dealers licensed in Texas are permitted to purchase salvage motor vehicles or nonrepairable motor vehicles in the other state or jurisdiction. (45) Owner - A person, firm, association, or corporation other than a manufacturer, importer, distributor, or dealer claiming title to, or having a right to operate pursuant to a lien on a motor vehicle after the first sale, except the Federal Government and its agencies, and the State of Texas and a governmental subdivision or agency thereof not required by law to register motor vehicles owned or used thereby in this State. (46) Person - An individual, firm, corporation, company, partnership, or other entity. (47) Rebuilder - A person that acquires and repairs, for operation on public highways, five or more new or late model salvage motor vehicles in any 12-month period. (48) Rebuilt salvage - A remark indicated on the face of a certificate of title issued by the department that evidences ownership of a rebuilt salvage motor vehicle. (49) Safety certification label - A label placed on a motor vehicle by a manufacturer certifying that the motor vehicle complies with all federal motor vehicle safety standards. (50) Salvage motor vehicle - A new or late model motor vehicle, other than a new or late model vehicle that is a nonrepairable motor vehicle, that is damaged to the extent that the total estimated cost of repairs, other than repairs related to hail damage but including parts and labor, is equal to or greater than an amount equal to 75% of the actual cash value of the vehicle in its predamaged condition. (51) Salvage motor vehicle certificate of title - A document issued by the department that evidences ownership of a salvage motor vehicle. (52) Salvage vehicle - A term which refers to both salvage and nonrepairable vehicles. (53) Salvage vehicle dealer - A person who is engaged in this state in the business of acquiring, selling, or otherwise dealing in salvage vehicles or vehicle parts of a type required to be covered by a salvage vehicle certificate of title or nonrepairable vehicle certificate of title under a license issued by the department that allows the holder of the license to acquire, sell, dismantle, repair, or otherwise deal in salvage vehicles. (54) Semi-Trailer - A vehicle of the trailer type having a gross weight in excess of 4,000 pounds so designed or used in conjunction with a motor vehicle that some part of its own weight and that of its load rests upon or is carried by another vehicle. (55) Statement of fact - A written declaration executed by the seller or involved party of a motor vehicle that clarifies an error made on evidence of ownership which supports the application for certificate of title. (56) Subsequent sale - A bargain, sale, transfer, or delivery, with intent to pass an interest therein, other than a lien, of a motor vehicle which has been registered with this state or elsewhere, save and except when such vehicle is not required under law to be registered in this State. (57) Token trailer fee - A registration fee paid for certain semitrailers, meeting the qualifications delineated in Transportation Code, sec.502.167, and used in combination with truck tractors or commercial motor vehicles whose registration is based upon a combined gross weight. (58) Trailer - Every vehicle having a gross unloaded weight in excess of 4,000 pounds and designed or used to carry its load wholly on its own structure and to be drawn by a motor vehicle. (59) Used motor vehicle - A motor vehicle that has been the subject of a first sale whether within this state or elsewhere. (60) Vehicle identification number - A number assigned by the manufacturer of a motor vehicle or the department that describes the motor vehicle for purposes of identification. sec.17.9.Child Support Liens. Pursuant to Family Code, Chapter 157, a child support lien arises by operation of law through court ordered payment of past due child support. (1) A child support lien must be perfected in accordance with Chapter 501, Transportation Code. (2) The person filing the lien must provide the department with the obligor's evidence of motor vehicle ownership, as described in Section 17.3(c), and an application for a certificate of title for the same vehicle, and; (A) a certified copy of the child support lien notice containing the information required by Family Code, sec.157.313, which has been filed with the county clerk's office; or (B) an abstract of judgment for past due child support. (3) The lien is perfected when the department has issued a subsequent title disclosing that the vehicle is subject to a child support lien. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804513 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 20, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 463-8630 43 TAC sec.17.3 The Texas Department of Transportation adopts amendments to sec.17.3, concerning motor vehicle certificates of title. Section 17.3 is adopted with changes to the proposed text as published in the January 2, 1998, issue of the Texas Register (23 TexReg 114). EXPLANATION OF ADOPTION OF AMENDMENTS House Bill 1173, 75th Legislature, 1997, amended Transportation Code, sec.501.115(a) to require that a lienholder must discharge a lien on a motor vehicle within 21 days once the lien is satisfied. To comply with House Bill 1173, sec.17.3 is amended by adding new subsection (h) to require a lienholder to discharge a lien within 21 days from receipt of the final payment, prescribe the contents of the form for release of lien, and clarify the release of lien procedures. Section 17.3(h) is adopted with changes to correct typographical errors in numbering of subparagraphs. RESPONSE TO COMMENTS No oral or written comments were received on the proposed amendments. STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapter 501 which authorizes the department to carry out the provisions of the those laws governing the issuance of motor vehicle certificates of title. sec.17.3. Motor Vehicle Certificates of Title. (a) Certificates of Title. Unless otherwise exempted by law or this chapter, the owner of any vehicle that is required to be registered in accordance with Transportation Code, Chapter 502, shall be required to apply for a Texas Certificate of Title in accordance with the Certificate of Title Act, Transportation Code, Chapter 501. (1) Motorcycles, motor-driven cycles, and mopeds. (A) The title requirements of a motorcycle are the same requirements prescribed for any motor vehicle. (B) A motorcycle, motor-driven cycle, or a moped designed for or used exclusively on golf courses is not classified as a motor vehicle and, therefore, title cannot be issued until such time as the unit is registered. (C) A vehicle which meets the criteria for a moped and has been certified as a moped by the Department of Public Safety, must be registered and titled as a moped; otherwise, if the vehicle does not appear on the list of certified mopeds published by that agency, the vehicle will be treated as a motorcycle for title and registration purposes. (D) A motor installed on a bicycle must be certified by the Department of Public Safety before the vehicle may be classified as a moped. (2) Farm vehicles. (A) The term motor vehicle does not apply to implements of husbandry and may not be titled. (B) Farm tractors owned by agencies exempt from registration fees in accordance with Transportation Code, sec.502.283, and farm tractors used as road tractors to mow rights-of-way or used to move commodities over the highway for hire are required to be registered and titled. (3) Exemptions from title. Vehicles registered with the following distinguishing license plates may not be titled under the Certificate of Title Act, Transportation Code, Chapter 501: (A) vehicles eligible for machinery license plates in accordance with Transportation Code, sec.502.276, and sec.502.278; (B) vehicles eligible for farm trailer license plates in accordance with Transportation Code, sec.502.163; and (C) vehicles eligible for permit license plates in accordance with Transportation Code, sec.sec.502.351-502.353. (4) Trailers, semitrailers, and house trailers. Owners of trailers and semitrailers must apply for and receive a Texas Certificate of Title for any stand alone (full) trailer, including homemade full trailers, having an empty weight in excess of 4,000 pounds or any semitrailer having a gross weight in excess of 4,000 pounds. House trailer-type vehicles must meet the criteria outlined in subparagraph (C) of this paragraph in order to be titled. (A) In the absence of a manufacturer's rated carrying capacity for trailers and semitrailers, the rated carrying capacity shall not be less than one-third of its empty weight. (B) Mobile office trailers, mobile oil field laboratories, and mobile oil field bunkhouses are not designed as a dwelling, but classified as commercial semitrailers, and must be registered and titled as such if operated upon the public streets and highways. (C) House trailer-type vehicles and camper trailers must meet the following criteria in order to be titled. (i) A house trailer-type vehicle designed for living quarters and which is eight body feet or more in width or forty body feet or more in length (not including the hitch), is classified as a mobile home and is titled under the Texas Manufactured Housing Standards Act, Texas Civil Statutes, Article 5221f, administered by the Department of Housing and Community Affairs. (ii) A house trailer-type vehicle which is less than eight feet in width and less than forty feet in length is classified as a travel trailer and must be registered and titled. (iii) A camper trailer must be titled as a house trailer and must be registered with travel trailer license plates. (b) Initial application for Certificate of Title. (1) Place of application. When motor vehicle ownership is transferred, except as provided by 16 TAC, sec.111.15(c) (relating to Record of Sales and Inventory) and sec.17.8(a)(1) (relating to Certificates of Title for Salvage Vehicles), a certificate of title application must be filed with the county tax assessor- collector in the county in which the applicant resides, or the county in which the motor vehicle was purchased or encumbered, within 20 working days of the date of sale. (2) Information to be included on application. An applicant for an initial certificate of title shall file an application on a form prescribed by the department. The form shall at a minimum require the: (A) motor vehicle description which includes, but is not limited to, the motor vehicle's: (i) year; (ii) make; (iii) model; (iv) identification number; (v) body style; (vi) manufacturer's rated carrying capacity in tons for commercial motor vehicles; and (vii) empty weight; (B) license plate number, if the motor vehicle is subject to registration under Transportation Code, Chapter 502; (C) odometer reading and brand, or the word "exempt" if the motor vehicle is exempt from federal and state odometer disclosure requirements; (D) previous owner's name and city and state of residence; (E) name and complete address of the applicant; (F) name and mailing address of any lienholder and the date of lien, if applicable; (G) signature of the seller of the motor vehicle or the seller's authorized agent and the date the certificate of title application was signed; (H) signature of the applicant or the applicant's authorized agent and the date the certificate of title application was signed; and (I) applicant's social security number, if the application is filed in a county in which the department's automated registration and title system has been implemented, with the following exceptions: (i) applications filed in the name of entities which do not have, or are not eligible to obtain, a social security number, or (ii) individual applicants who do not have, or are not eligible to obtain, a social security number (such applicants shall be required to execute a statement to that effect on a form prescribed by the department). (3) Serial Number. If no serial number is die-stamped by the manufacturer upon a motor vehicle, house trailer, trailer, semi-trailer, or an item of equipment required to be titled, or if the serial number assigned and die-stamped by the manufacturer has been lost, removed or obliterated, the department will upon proper application, presentation of evidence of ownership, and presentation of a law enforcement physical inspection, assign a serial number to the motor vehicle, trailer or equipment; the manufacturer's serial number or the assigned serial number will be used by the department as the major identification of the motor vehicle or trailer in the issuance of a certificate of title. (4) Accompanying documentation. The certificate of title application shall be supported by, at a minimum, the following documents: (A) evidence of vehicle ownership, as described in subsection (c) of this section; (B) odometer disclosure statement properly executed by the seller of the motor vehicle and acknowledged by the purchaser, if applicable; (C) the identification certificate required by Transportation Code, sec.548.256, and Transportation Code, sec.501.030, if the vehicle was last registered in another state or country; and (D) release of any liens or, if not released, the liens shall be carried forward on the new certificate of title application pursuant to the following limitations. (i) An out-of-state lien recorded on out-of-state evidence as described in subsection (c) of this section cannot be carried forward to a Texas title when there is a transfer of ownership, unless a release of lien or authorization from the lienholder is attached. (ii) A lien recorded on out-of-state evidence as described in subsection (c) of this section is not required to be released when there is no transfer of ownership from an out-of-state title and the same lienholder is being recorded on the Texas application as is recorded on the out-of-state title. (c) Evidence of motor vehicle ownership. Evidence of motor vehicle ownership properly assigned to the applicant shall accompany the certificate of title application. Evidence shall include, but is not limited to, the following documents. (1) New motor vehicles. A manufacturer's certificate of origin assigned by the manufacturer or the manufacturer's representative or distributor to the original purchaser shall be required for a new motor vehicle that is sold or offered for sale. (A) The manufacturer's certificate of origin shall be in the form prescribed by the division director and shall contain, at a minimum, the following information: (i) motor vehicle description which includes, but is not limited to, the motor vehicle's year, make, model, identification number, body style and empty weight; (ii) the manufacturer's rated carrying capacity in tons when the manufacturer's certificate of origin is invoiced to a Texas dealer as defined in 16 TAC, sec.111.2, (relating to Definitions), and is issued for commercial motor vehicles as that term is defined in Transportation Code, Chapter 502; and (iii) a statement identifying a motor vehicle designed by the manufacturer for off-highway use only. (B) When a motor vehicle manufactured in another country is sold directly to a non-manufacturer's representative or distributor, the manufacturer's certificate of origin shall be assigned to the purchaser by the importer. (2) Used motor vehicles. (A) Evidence of ownership. A certificate of title issued by the department, a certificate of title issued by another state if the motor vehicle was last registered and titled in another state, or other evidence of ownership shall be relinquished in support of the certificate of title application for any used motor vehicle. A letter of Title and Registration verification is required from a vehicle owner coming from a state that no longer titles vehicles after a certain period of time. (B) Rights of survivorship. A signed "rights of survivorship" agreement, which is either attached to or printed on the certificate of title, allows the transfer of ownership by a surviving spouse. The surviving spouse or the surviving spouse's transferee may make application for a new certificate of title in accordance with the provisions of subsection (b) of this section, surrendering the properly executed certificate of title, along with a copy of the death certificate of the deceased spouse. (3) Imported motor vehicles. An application for certificate of title for a motor vehicle last registered or titled in a foreign country shall be supported by, but is not limited to, the following documents: (A) the motor vehicle registration certificate or other verification issued by a foreign country which reflects the name of the applicant as the motor vehicle owner, or reflects that such evidence of ownership has been legally assigned to the applicant; and (B) proof of compliance with United States Department of Transportation regulations for all 1968 and subsequent year model motor vehicles and for all 1969 and subsequent year model motorcycles which shall include, but is not limited to, the following documents: (i) the original bond release letter with all attachments advising that the motor vehicle meets federal motor vehicle safety requirements or a letter issued by the United States Department of Transportation, National Highway Traffic Safety Administration, verifying the issuance of the original bond release letter; (ii) a legible copy of the motor vehicle importation form validated with an original United States Customs stamp, date, and signature as filed with the United States Department of Transportation confirming the exemption from the bond release letter required in subitem (i) of this subparagraph, or a copy thereof certified by United States Customs; (iii) a verification of motor vehicle inspection by United States Customs certified on United States Customs letterhead and signed by a United States Customs agent verifying that the motor vehicle complies with United States Department of Transportation regulations; (iv) a written confirmation that a physical inspection of the safety certification label has been made by the department and that the motor vehicle meets United States motor vehicle safety standards; (v) the original bond release letter, or verification thereof, or written confirmation from the previous state verifying that a bond release letter issued by the United States Department of Transportation was relinquished to that jurisdiction, if the non United States standard motor vehicle was last titled or registered in another state for one year or less; or (vi) verification from the vehicle manufacturer on their letterhead stationary. (4) Alterations to documentation. An alteration to a registration receipt, certificate of title, manufacturer's certificate, or other evidence of ownership shall constitute valid reason for the rejection of any transaction to which such altered evidence is attached. The department may accept certain types of alterations provided that they are corrected in accordance with the following procedures. (A) Altered lien information on any surrendered evidence of ownership requires a release from the original lienholder or a statement from the proper authority of that state in which the lien originated verifying the correct lien information. (B) A strikeover on any document which leaves any doubt as the legibility of any digit in a number will not be accepted. (C) A correct manufacturer's certificate of origin will be required if the documents show an: (i) incomplete or altered vehicle identification number; (ii) alteration or strikeover of the vehicle's year model; (iii) alteration or strikeover to the body style, or omitted body style on the manufacturer's certificate of origin; or (iv) alteration or strikeover to the manufacturer's rated carrying capacity. (D) A Statement of Fact may be requested to explain errors, corrections, or conditions from which doubt does or could arise concerning the legality of any instrument. A Statement of Fact will be required in all cases: (i) where the date of sale on an assignment has been erased or altered in any manner; or (ii) of alteration or erasure on a Dealer's Reassignment of Title. (d) Certificate of title issuance. Upon receiving a completed application for certificate of title, along with the title application fee of $13 and any other applicable fees, the department or its designated agent will process and issue a certificate of title. (1) Negotiable titles. The department will issue and mail or deliver negotiable titles, marked "Original," to the applicant or, in the event that there is a lien disclosed in the application, to the first lienholder. (2) Non-negotiable titles. The department will issue non-negotiable titles, which may be used only as evidence of title and may not be used to transfer any interest or ownership in a motor vehicle, or to establish a new lien: (A) in the event that there is a lien disclosed in the application a duplicate certificate of title marked "Duplicate Original," will be mailed or delivered to the address of the applicant as disclosed upon the application; (B) in the event that the owner of a vehicle last registered or titled in another state (and subject to registration in this state) cannot or does not wish to relinquish the negotiable out-of-state evidence of ownership to obtain a negotiable Texas title, a duplicate certificate of title marked "Registration Purposes Only" will be mailed or delivered to the address of the applicant as disclosed upon the application (in instances where the title or registration receipt is assigned to the applicant, an application for "Registration Purposes Only" will not be processed). (e) Replacement of certificate of title. If a certificate of title is lost or destroyed, the owner or lienholder may obtain a certified copy of that title upon proper application with the department in accordance with the Certificate of Title Act, Transportation Code, Chapter 501, and payment of the appropriate fee to the department. (1) Certified copy. (A) Applicant who is a vehicle owner, lienholder, or verified agent. (i) If the applicant requests that a certified copy be issued before the fourth business day following application, the application must be made in person and the applicant must present valid personal identification, including a photograph, issued by an agency of this state or of the United States. (ii) If the applicant is an agent, the applicant must present verifiable proof that he or she is an agent of the owner or lienholder. This proof may include a power of attorney, business card, written authorization on company letterhead, or employee identification. (B) Applicant other than the vehicle owner, lienholder, or verified agent. (i) The department will not issue a certified copy of a certificate of title before the fourth business day after application has been made. (ii) Such titles shall only be issued by mail. (2) Certified copy designation. A certified copy of an existing certificate of title will be marked "Certified Copy" until such time that ownership of the vehicle is transferred, when the words "Certified Copy" will be eliminated from the new certificate of title. (3) Fees. The fee for obtaining a certified copy of a certificate of title shall be $2.00 if the application is processed at the department's headquarters office, and $5.45 if such application is processed at one of the department's regional offices. (4) Recovery of lost title. In the event that the "Duplicate Original" or "Original" certificate of title is recovered, the owner shall relinquish the certified copy to the department for cancellation and the words "Certified Copy" will be eliminated from certificates issued thereafter by the department as a result of transfer of ownership. (f) Department notification of second hand vehicle transfers. A transferor of a motor vehicle may voluntarily make written notification to the department of the sale of the vehicle, in accordance with Texas Civil Statutes, Article 6687-5 as amended, and this subsection. (1) Notification form. The department shall provide a form for written notice of transfer, which shall include: (A) vehicle identification number of the vehicle; (B) license plate number issued to the vehicle; (C) full name and address of the transferor; (D) full name and address of the transferee; (E) date the transferor delivered possession of the vehicle to the transferee; (F) signature of transferor; and (G) date the transferor signed the form. (2) Records. Upon receipt of written notice of transfer and a $5.00 fee from the transferor of a motor vehicle, the department shall mark its records to indicate the date of transfer and the full name and address of the transferee. (3) Ownership of transferred vehicle. After the date of the transfer of the vehicle as shown in the department records, the transferee of the vehicle is rebuttably presumed to be: (A) the owner of the vehicle; and (B) subject to civil and criminal liability arising out of the use, operation, or abandonment of the vehicle, to the extent that ownership of the vehicle subjects the owner of the vehicle to criminal or civil liability under another provision of the law. (4) Certificate of title issuance. A certificate of title may not be issued in the name of a transferee until such transferee files an application for the certificate of title as described in this section. (g) Suspension, revocation, or refusal to issue Certificates of Title. (1) Grounds for title suspension, revocation, or refusal to issue. The department will refuse issuance of a certificate of title, or having issued a certificate of title, suspend or revoke the certificate of title if the: (A) application contains any false or fraudulent statement; (B) applicant has failed to furnish required information requested by the department; (C) applicant is not entitled to the issuance of a certificate of title under the Certificate of Title Act, Transportation Code, Chapter 501; (D) department has reasonable ground to believe that the vehicle is a stolen or converted vehicle, or that the issuance of a certificate of title would constitute a fraud against the rightful owner or a mortgagee; (E) registration of the vehicle stands suspended or revoked; or (F) required fee has not been paid. (2) Contested case procedure. Any person who has an interest in a motor vehicle to which the department has refused to issue a certificate of title or has suspended or revoked the certificate of title may contest such decisions in accordance with the Certificate of Title Act, Transportation Code, sec.sec.501.052-501.053, in the following manner: (A) Hearing. Any person who has an interest in a motor vehicle to which the department has refused to issue a certificate of title or has suspended or revoked the certificate of title may apply to the designated agent of the county in which they reside for a hearing. At the hearing the applicant and the department may submit evidence, and a ruling of the designated agent will bind both parties. An applicant wishing to appeal the ruling of the designated agent may do so to the County Court of the county in which the applicant resides. (B) Alternative to hearing. In lieu of a hearing, any person who has an interest in a motor vehicle to which the department has refused to issue a certificate of title or has suspended or revoked a certificate of title may file a bond with the department, in an amount equal to one and one-half times the value of the vehicle as determined by the department, and in a form prescribed by the department. Upon the filing of the bond, the department may issue a certificate of title. The bond shall expire three years after the date it becomes effective and shall be returned to the person posting bond, upon expiration, unless the department has been notified of the pendency of an action to recover on the bond. (h) Discharge of lien. A lienholder must provide the owner, or the owner's designee, a discharge of the lien within 21 days from receipt of the final payment. The lienholder must submit one of the following documents: (1) the certificate of title including an authorized signature in the space reserved for release of lien; (2) a release of lien form prescribed by the department that requires the: (A) certificate of title/document number or motor vehicle description including, but not limited to, the motor vehicle's: (i) year; (ii) make; (iii) vehicle identification number; and (iv) license plate number, if the motor vehicle is subject to registration under Transportation Code, Chapter 502; (B) printed name of lienholder; (C) signature of lienholder or an authorized agent; (D) printed name of authorized agent if agent's signature is shown; (E) telephone number of lienholder; and (F) date signed by lienholder; (3) signed and dated correspondence submitted on company letterhead that includes: (A) a statement that the lien has been paid; (B) a description of the vehicle as indicated in paragraph (2)(A) of this subsection; (C) a certificate of title/document number; or (D) lien information; (4) any out-of-state prescribed release of lien form or a lien filing receipt; (5) out-of-state evidence with the word "Paid" or "Lien Satisfied" stamped or written in longhand on the face, followed by name of lienholder, countersigned or initialed by an agent, and dated; or (6) original or copies of original security agreements if they are stamped "Paid" or "Lien Satisfied" with a company paid stamp, or a "Paid Statement" in longhand followed by the company's name. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804514 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 20, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 463-8630 SUBCHAPTER D.Salvage Vehicle Dealers 43 TAC sec.17.62 The Texas Department of Transportation adopts amendments to sec.17.62, concerning salvage vehicle dealer and agent licenses. Section 17.62 is adopted with changes to the proposed text as published in the January 2, 1998, issue of the Texas Register (23 TexReg 118). EXPLANATION OF ADOPTION OF AMENDMENTS Senate Bill 370, sec.5.02, 75th Legislature, 1997, amended Texas Civil Statutes, Article 6687-1a, concerning vehicle dealer and agent licenses to require the department to notify a salvage vehicle dealer or agent of expiration of license and to revise the deadlines and fees for renewal of licenses. The amendments to sec.17.62(h) require the department to notify a salvage vehicle dealer or agent at least 30 days prior to expiration of license, to allow renewal up to one year after expiration of license for an additional fee, and to allow a license holder who has moved out-of-state and has been doing business there to renew its license for an additional fee. RESPONSE TO COMMENTS Written comments were received from Insurance Auto Auctions. These comments were neither in favor nor against the rules. Comment: The commentors suggested sec.17.62(h)(4)(C)(iii), should allow a licensed agent as well as a dealer who has moved out-of-state and has been doing business in another state for two years to renew a Texas license. Response: The department agrees that this subsection should be clarified to specifically state that both license holders should be allowed to renew licenses if they meet the other requirements. Comment: The commentors suggested that the final subsection under sec.17.62(h)(4) should be numbered (5), and the reference in that subsection to paragraph (3)(C) should, instead, be to paragraph (4)(C). Response: The department agrees that this revision would remedy the numbering inconsistencies. STATUTORY AUTHORITY The amendments are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Texas Civil Statutes, Article 6687-1a, which authorizes the department to develop and implement policies regarding the issuance and renewal of licenses to salvage vehicle dealers and agents and to adopt rules regarding the policies and procedures. sec.17.62. Salvage Vehicle Dealer and Agent Licenses. (a) Applicability. A person who acts as an automobile recycler, salvage vehicle agent, or salvage vehicle dealer, including a person who stores or displays vehicles as an agent or escrow agent of an insurance company, must obtain a salvage vehicle dealer or an agent license in accordance with Texas Civil Statutes, Article 6687-1a, and the provisions of this subchapter. (b) Exemptions. The provisions of this subchapter do not apply to: (1) a person who purchases a nonrepairable or salvage vehicle from a salvage pool operator in a casual sale; (2) an insurance company authorized to engage in the business of insurance in this state; (3) a person predominantly engaged in the business of obtaining ferrous or nonferrous metals; (4) a person who sells or offers for sale less than five new or late model salvage motor vehicles of the same type in a calendar year when such vehicles are owned, and registered and titled in the name of such person; (5) a person who sells or offers to sell a new or late model salvage motor vehicle acquired for personal or business use if the person does not sell or offer to sell to a retail buyer and the transaction is not held for the purpose of avoiding the provisions of Texas Civil Statutes, Article 6687-1a; (6) an agency of the United States, this state, or local government; (7) a financial institution or other secured party selling a vehicle in which it holds a security interest, in the manner provided by law for the forced sale of that vehicle; (8) a receiver, trustee, administrator, executor, guardian, or other person appointed by or acting pursuant to the order of a court; (9) a person selling an antique passenger car or truck that is at least 25 years old or a collector selling a special interest motor vehicle as defined in the Transportation Code, sec.683.077, if the special interest vehicle is at least 12 years old; and (10) a licensed auctioneer who, as a bid caller, sells or offers to sell property to the highest bidder at a bona fide auction if neither legal nor equitable title passes to the auctioneer and if the auction is not held for the purpose of avoiding a provision of Texas Civil Statutes, Article 6687-1a, and this subchapter; and provided that if an auction is conducted of vehicles owned, legally or equitably, by a person who holds a salvage dealer's license, the auction may be conducted at any location for which a salvage dealer's license has been issued to that person or at a location approved by the department as provided by sec.17.63(a)(1) of this title (relating to Place of Business). (c) Classification of licenses. The department will classify salvage vehicle dealers according to the type of activity performed by the dealer. A salvage vehicle dealer may not engage in activities of a particular classification as indicated in this subsection unless the salvage vehicle dealer holds a license authorizing business under that classification. An applicant may apply for a salvage vehicle dealer license in one or more of the following classifications: (1) new automobile dealer; (2) used automobile dealer; (3) used vehicle parts dealer; (4) salvage vehicle pool operator; (5) salvage vehicle broker; or (6) salvage vehicle rebuilder. (d) Application for salvage vehicle dealer or agent license. (1) Application for salvage vehicle dealer license. An applicant for a salvage vehicle dealer license must apply on a form prescribed by the department. An applicant who will operate as a salvage vehicle dealer under a name other than the name of that applicant shall use the name under which that applicant is authorized to do business, as filed with the secretary of state or county clerk, and the assumed name of such legal entity shall be recorded on the application form using the letters "DBA." (A) Form of application. The application form must be signed by the applicant, be accompanied by the application fee of $95, and include: (i) the name, business address(es), and business telephone number(s) of the applicant; (ii) the name under which the applicant will do business; (iii) the location, by number, street, and municipality, of each office from which the applicant will conduct business; (iv) a statement indicating whether the applicant has previously applied for a salvage dealer vehicle license under this section, the result of the previous application, and whether the applicant has ever been the holder of a salvage vehicle dealer license that was revoked or suspended; (v) an affidavit containing a statement that the applicant has never been convicted of a felony or that it has been at least three years since the applicant's termination of the sentence, parole, mandatory supervision, or probation for a felony conviction; (vi) three business association references; (vii) the applicant's federal tax identification number, if any; (viii) the applicant's state sales tax number; (ix) the applicant's social security number, if the applicant is an individual; and (x) the classification(s) of license(s) for which the form is being submitted. (B) Verification of assumed name. The department will require verification of the assumed name, if applicable, in the form of an assumed name certificate on file with the secretary of state or county clerk at the time the application form is submitted. (2) Application for salvage vehicle agent license. An applicant, who is authorized to operate as an agent for a salvage vehicle dealer must apply on a form prescribed by the department. The application form must be signed by the applicant, be accompanied by the application fee, and include: (A) the name of the applicant; (B) the name, business address, and business telephone number of the salvage vehicle dealer authorizing the applicant as a salvage vehicle agent; (C) the name under which the salvage vehicle dealer will do business; (D) the location, by number, street, and municipality, of each office from which the applicant will conduct business; (E) a statement indicating whether the applicant has previously applied for a salvage vehicle dealer or agent license under this section, the result of the previous application, and whether the applicant has ever been the holder of a salvage vehicle dealer or agent license that was revoked or suspended; (F) an affidavit containing a statement that the applicant has never been convicted of a felony or that it has been at least three years since the applicant's termination of the sentence, parole, mandatory supervision, or probation for a felony conviction; (G) three business association references; (H) the applicant's federal tax identification number, if any; (I) the applicant's state sales tax number; and (J) the applicant's social security number. (3) Application for corporate salvage vehicle dealer license. If a salvage vehicle dealer license applicant intends to engage in business through a corporation, the applicant must apply on a form prescribed by the department. (A) Form of application. The form must indicate the name of the corporation, as it appears on file with the secretary of state, be signed by the applicant, be accompanied by the application fee, and include: (i) the name, business address(es), and business telephone number(s) of the corporation; (ii) the name under which the corporation will do business; (iii) the location, by number, street, and municipality, of each office from which the corporation will conduct business; (iv) the state of incorporation; (v) a statement indicating whether an employee, officer, or director has previously applied for a salvage vehicle dealer license under this section, the result of the previous application, and whether an employee, officer, or director has ever been the holder of a salvage dealer vehicle license that was revoked or suspended; (vi) an affidavit containing a statement that each officer and director has never been convicted of a felony or that it has been at least three years since the termination of the sentence, parole, mandatory supervision, or probation for a felony conviction of each officer and director; (vii) three business association references; (viii) the applicant's federal tax identification number, if any; (ix) the applicant's state sales tax number; (x) the name, address, date of birth, and social security number of each of the principal officers and directors of the corporation; (xi) the classification(s) of license(s) for which the form is being submitted. (B) Verification of corporate franchise taxes. The corporation must also provide verification that all corporate franchise taxes required under the Texas Business Corporation Act, Article 2.45, have been paid at the time the application form is submitted to the department. (4) Partnerships. If the license applicant intends to engage in business through a partnership, the applicant must apply on a form prescribed by the department. The form must be signed by the applicant, be accompanied by the application fee, and include: (A) the name, business address(es), and business telephone number(s) of the partnership; (B) the name under which the partnership will do business; (C) the location, by number, street, and municipality, of each office from which the partnership will conduct business; (D) a statement indicating whether an owner, partner, or employee, has previously applied for a salvage vehicle dealer license under this section, the result of the previous application, and whether an owner, partner, or employee, has ever been the holder of a salvage vehicle dealer license that was revoked or suspended; (E) an affidavit containing a statement that each owner or partner has never been convicted of a felony or it has been at least three years since the termination of the sentence, parole, mandatory supervision, or probation for a felony conviction of each owner or partner; (F) three business association references; (G) the partnership's federal tax identification number, if any; (H) the partnership's state sales tax number; (I) the name, address, date of birth, and social security number of each owner and partner; and (J) the classification(s) of license(s) for which such form is being submitted. (e) Issuance, investigation, and report by the department. The department will not grant a salvage vehicle dealer or an agent a license until the department completes an investigation of the applicant's qualifications and references in accordance with Texas Civil Statutes, Article 6687-1a. Such investigation shall be conducted not later than the 15th day after the date the application is received by the department. Upon completion of the investigation, the results of the investigation shall be reported to the applicant(s) by written notification from the department. If the applicant is denied, the applicant may appeal the decision as specified in sec.17.64 of this title (relating to Denial, Suspension, or Revocation). (f) License issuance. The department will issue a license to an applicant who meets the license qualifications of subsection (d) of this section and pays the required fees described in this subsection. (1) The license fee for each salvage vehicle dealer or agent license issued for a period of less than one year shall be prorated and only that portion of the $95 license fee allocable to the number of months for which the license is issued shall be payable by the licensee. The amount of such license fees will be rounded off to the nearest dollar. (2) A license may not be issued in a fictitious name that may be confused with or is similar to that of a governmental entity or that is otherwise deceptive or misleading to the public. (3) A person whose license has been revoked in accordance with sec.17.64 of this title (relating to Denial, Suspension, or Revocation) may not be issued a new license before the first anniversary of the date of the revocation. (g) Use of agents by salvage vehicle dealers. The holder of a salvage vehicle dealer license may authorize not more than five persons to operate as salvage vehicle agents under the dealer's license. An agent may acquire, sell, or otherwise deal in new or late model salvage or nonrepairable vehicles or salvage parts as directed by the dealer. An agent authorized to operate for a salvage vehicle dealer is entitled to a salvage vehicle agent license on application to the department and payment of the required $95 fee as provided by subsection (e) of this section. (h) License renewal. (1) The department shall notify a salvage vehicle dealer or agent at least 30 days prior to expiration of license. The notice will be in writing and sent to the person's last known address according to the records of the department. (2) A salvage vehicle dealer or agent license expires on the first anniversary of the date of issuance and may be renewed annually on or before the expiration date on payment of the required renewal fee of $85. (3) If the license is not renewed prior to the expiration date, a salvage vehicle dealer or agent may not engage in the activities that require the license until the license has been renewed. (4) If the license is not renewed prior to the expiration date, and: (A) if it has been 90 days or less since the date of expiration, the license holder may renew the license on payment of the renewal fee of $127.50; (B) if it has been more than 90 days since the date of expiration, the license holder may renew the license on payment of the renewal fee of $170; or (C) if the license holder has moved out-of-state and has been doing business in another state for two years, the license holder may renew the license by providing: (i) the renewal fee of $170; (ii) a certificate or other official document issued by the other state demonstrating that the license holder has a business in that state; and (iii) the expired Texas salvage vehicle dealer or agent license number. (5) If the license has been expired for a period of one year or longer, the license holder must apply for a new license in the same manner as an applicant for an initial license, except as provided in paragraph (4)(C) of this subsection. (i) Licensee duties. (1) Proper assignment of ownership. (A) If a salvage vehicle dealer acquires ownership of a new or late model salvage vehicle from an owner, the dealer must receive a properly assigned certificate of title. If the assigned certificate of title is not a salvage or nonrepairable motor vehicle certificate of title or comparable ownership document issued by another state or jurisdiction, the licensed salvage vehicle dealer shall, not later than the 10th day after the date of receipt of the title, surrender the assigned certificate of title to the department and apply for a salvage or nonrepairable motor vehicle certificate, as appropriate as provided by sec.17.8 of this title (relating to Certificates of Title for Salvage Vehicles). (B) If a new or late model salvage or nonrepairable vehicle is to be dismantled, scrapped, or destroyed, the salvage vehicle dealer shall surrender the assigned ownership document to the department in the manner prescribed by the department not later than the 30th day after the date the vehicle is acquired and report to the department that the vehicle was dismantled, scrapped, or destroyed. (C) If the holder of a salvage vehicle dealer license acquires ownership of an older model vehicle from an owner and receives an assigned certificate of title and the vehicle is to be dismantled, scrapped, or destroyed, the license holder shall surrender the assigned certificate of title to the department on a form prescribed by the department not later than the 30th day after the date on which the title is received. Evidence that the vehicle was dismantled, scrapped, or destroyed must also be presented. (D) As required by Texas Civil Statutes, Article 6687-2, a salvage vehicle dealer licensed as a used vehicle parts dealer may not receive a motor vehicle unless the dealer first obtains a certificate of authority, sales receipt, or transfer document in accordance with Transportation Code, Chapter 683, or a certificate of title showing that there are no liens on the vehicle or that all recorded liens have been released. (2) Unique inventory number. (A) As required by Texas Civil Statutes, Article 6687-2, a salvage vehicle dealer shall assign a unique inventory number to each transaction in which the dealer purchases or takes delivery of one or more component parts. The unique inventory number shall contain the: (i) salvage vehicle dealer's license number; (ii) day, month, and year of the purchase or delivery; and (iii) sequential log number for that day. (B) The unique inventory number shall then be attached to each component part the dealer obtains in the transaction. The unique inventory number may not be removed from the component part while the part remains in the inventory of the salvage vehicle dealer. (C) Each component part shall be retained in its original condition on the business premises of the salvage vehicle dealer who originally purchased the part for at least three calendar days, excluding Sundays, after the date on which the dealer obtains the part. (D) The provisions of subsection (i)(2)(A) and (B) do not apply to a nonoperable engine, transmission, or rear axle assembly purchased by one salvage vehicle dealer from another salvage vehicle dealer or an automotive-related business. (E) The provisions of subsection (i) do not apply to: (i) interior used component parts or special accessory parts on a motor vehicle more than 10 years of age; or (ii) used component parts delivered by commercial freight lines or commercial carriers. (j) Record of purchases, sales, and inventory. (1) Each holder of a salvage vehicle dealer license shall maintain records of each salvage or nonrepairable vehicle and any salvage parts purchased, sold, or being held in inventory by the license holder. Such records, except as specified in paragraph (2)(C) of this subsection, shall be maintained for a five-year period. These records shall include the: (A) date of purchase; (B) name and address of the person selling the vehicle or part to the dealer; (C) a description of the vehicle or part to include the year model, make, and vehicle identification or component part number, if applicable; (D) ownership document number and state of issuance, if applicable; (E) copy of the front and back of the ownership document for the vehicle or salvage part purchased by the dealer unless the year model exceeds 10 or more years; (F) date the ownership document was surrendered to the department; (G) evidence indicating that an older model salvage vehicle was dismantled, scrapped, or destroyed; (H) date of sale; (I) name and address of the person purchasing the vehicle or part from the dealer; and (J) copy of the front and back of the ownership document for the vehicle or salvage part sold by the dealer unless the year model exceeds 10 or more years. (2) As required by Texas Civil Statutes, Article 6687-2, a salvage vehicle dealer licensed as a used vehicle parts dealer shall keep an accurate and legible inventory of each used component part purchased by or delivered to the dealer. (A) Such parts inventory shall include: (i) the date of purchase or delivery; (ii) the name, age, address, sex, and driver's license number of the seller and a legible photocopy of the seller's driver's license; (iii) the license number of the motor vehicle used to deliver the used component part; (iv) a complete description of the item purchased, including the type of material and, if applicable, the make, model, color, and size of the item; and (v) the vehicle identification number of the motor vehicle from which the used component part was removed. (B) In lieu of the information required in subparagraph (A) of this paragraph, a salvage vehicle dealer may record the name of the business from which the motor vehicle or motor vehicle part is purchased and the Texas certificate of inventory number or federal taxpayer identification number of the business. (C) A salvage vehicle dealer is not required to keep records under this subsection for: (i) interior used component parts or special accessory parts on a motor vehicle more than 10 years of age; or (ii) used component parts delivered by commercial freight lines or commercial carriers. (D) As required by Texas Civil Statutes, Article 6687-2, a salvage vehicle dealer shall maintain two copies of each record for used component parts addressed by paragraph (2) of this subsection on a form prescribed by the department for one year after the date of sale or disposal of the item. (k) Authorized sale. (1) New or late model water damaged salvage motor vehicles. The owner of a new or late model salvage motor vehicle or a nonrepairable motor vehicle so classified solely caused by flood conditions is exempt from the provisions of this subsection, and is not prohibited from selling such vehicle to any person. (2) Sales, transfer or release of new or late model salvage or nonrepairable motor vehicle. A salvage vehicle dealer or agent may not sell, transfer, or release a new or late model salvage or nonrepairable motor vehicle to anyone other than: (A) a governmental entity; (B) the vehicle's former owner; (C) a licensed salvage vehicle dealer; (D) an out-of-state buyer; (E) a buyer in a casual sale at auction; or (F) a person described by Texas Civil Statutes, Article 6687-2b, Section (g). (l) Determination of estimated cost of repair. If it is necessary for a salvage vehicle dealer or agent to determine the estimated cost of repair, which includes parts and labor, for completion of an application for Texas salvage or nonrepairable motor vehicle certificate of title, the estimated cost of repair parts shall be determined as follows: (1) by using a manual of repair costs or other instrument that is generally recognized and commonly used in the motor vehicle insurance industry to determine those costs or an estimate of the actual cost of the repair parts; and (2) the estimated labor costs shall be computed by using the hourly rate and time allocations that are reasonable and commonly assessed in the repair industry in the community in which the repairs are performed. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804515 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 20, 1998 Proposal publication date: January 2, 1998 For further information, please call: (512) 463-8630 CHAPTER 18.Motor Carriers The Texas Department of Transportation adopts the repeal of sec.18.12, amendments to sec.sec.18.1, 18.2, 18.10, 18.11, 18.13-18.16, 18.31, 18.32, 18.51-18.54, 18.56, 18.61, 18.70-18.72, and new sec.18.19, concerning motor carriers. Sections 18.2, 18.13, and 18.16 are adopted with changes to the proposed text as published in the October 17, 1997 issue of the Texas Register (22 TexReg 10296). Sections 18.1, 18.10, 18.11, 18.12, 18.14, 18.15, 18.19, 18.31, 18.32, 18.51-18.54, 18.56, 18.61, and 18.70-18.72 are adopted without changes and will not be republished. EXPLANATION OF PROPOSED RULE The amendments are necessary to implement the provisions of Senate Bill 370, Senate Bill 1486 and House Bill 1418, 75th Legislature, 1997, and to ensure the department's proper administration of the laws concerning motor carrier registration. Senate Bill 370 amended Texas Civil Statutes, Article 6675c to: clarify department and motor carrier registrant responsibilities; require the department to adopt simplified procedures for registering household goods agents; provide the department with the authority to place on probation a motor carrier whose registration has been suspended; and require for-hire household goods carriers not required to register under sec.3 of this article to register their operations with the department. Further, Senate Bill 370 adds new Texas Civil Statutes, Article 6675c-2, relating to Foreign Commercial Motor Transportation, which requires the department to adopt rules that conform with federal statutes requiring motor carriers operating foreign commercial motor vehicles in this state to maintain proof of financial responsibility. Senate Bill 1486 amended Texas Civil Statutes, Article 6675c to: exempt from motor carrier registration motor vehicles used to transport passengers which are operated by an entity whose primary function is not the transportation of passengers; authorize the department to provide for flexible registration procedures for short-term lease vehicles; authorize the department to provide alternative motor carrier registration periods; clarify which motor carriers are required to protect their employees with workers' compensation insurance; and authorize the use of escrow accounts for payment of motor carrier registration fees. House Bill 1418 amended Texas Civil Statutes, Article 6675c to require for-hire household goods carriers under 26,000 pounds to register their operations with the department. For-hire household goods carriers under 26,000 pounds were not previously required to register with the department. House Bill 1418 also requires the department to provide a streamlined registration process for household goods carriers and their agents. Section 18.1. Purpose, is amended to state that, in addition to prescribing the policies and procedures for the regulation of motor carriers, transportation brokers, and vehicle storage facilities, this subchapter also prescribes the policies and procedures for the registration of vehicles leased by a "leasing business" to a motor carrier on a short-term basis. Section 18.2. Definitions, is amended to clarify and delete definitions and to define additional terms. Section 18.10. Purpose, is amended to identify that the purpose of Subchapter B is, in addition to prescribing the procedures by which a motor carrier may register, to also prescribe the procedures by which a leasing business shall register and file insurance under this subchapter. Section 18.11. Motor Carrier Registration, is amended to state that a motor carrier transporting household goods for-hire may not operate on the public streets and highways without first registering with the department. Section 18.12. Applicability, is amended to remove the entire section, as its provisions are no longer in effect. Section 18.13. Application for Motor Carrier Registration, is amended to describe how alternative vehicle registration for household goods agents may be accomplished; describe motor carrier registration procedures for for-hire household goods carriers operating equipment weighing 26,000 pounds or less ("Type B household goods carriers"), including applications, issuance, evidence of registration, cancellation, and replacement registration certificates; allow a motor carrier to obtain motor carrier registration for a seven day, ninety day, one year, or two year period and outlines procedures and fees for such; set out the policy for vehicle registration fees paid under the Single State Registration System to a motor carrier obtaining seven day and ninety day motor carrier registration; clarify that a motor carrier is not required to pay any additional vehicle registration fees when substituting a new vehicle in the place of a vehicle it has already registered; and require a motor carrier that is a corporation to include a copy of any amendment to its articles of incorporation along with any supplement name change applications. Section 18.14. Expiration and Renewal of Commercial Motor Vehicle Registration, is amended to delineate registration expiration and renewal procedures for Type A and Type B household goods carriers, seven day certificates of registration, ninety day certificates of registration, annual registration and biennial registration, based upon existing statutes and administrative rules. Section 18.15. Payment of Fees, is amended to state that fees provided for in this subchapter may be paid with funds deposited in an escrow account and describes how such accounts may be established and replenished. Section 18.16. Insurance Requirements, is amended to: clarify that Type A household goods carriers required to register under this subchapter shall carry at least the minimum cargo insurance requirements prescribed by 49 U.S.C. sec.10102; provide that a for-hire Type B household goods carrier shall maintain and file proof of financial responsibility with the department in a minimum amount of $5,000 for loss or damage to total cargo shipped, a minimum of $5,000 for loss of or damage to total cargo carried on any one motor vehicle, and a minimum of $5,000 for aggregate loss or damage to cargo at one time; provide procedures and fees for Type B household goods carriers to file a surety bond or letter of credit as proof of financial responsibility; provide minimum insurance levels of $1,500,000 for commercial buses with a seating capacity of 15 passengers or less and which are operated by a foreign motor carrier; provide minimum insurance levels of $5,000,000 for commercial buses with a seating capacity of 16 passengers or more and which are operated by a foreign motor carrier; provide minimum insurance levels of $750,000 for commercial motor vehicles operated by a foreign motor carrier; and clarify which motor carriers are required to provide employee workers' compensation or accidental insurance coverage. Section 18.19. Short-Term Lease and Substitute Vehicles, prescribes registration methods including application, registration, proof of contingency liability insurance, substitute vehicles, and identification. Section 18.31. Investigation and Examination of Records, is amended to state that the department will investigate motor carriers and leasing businesses for possible violations of Transportation Code, Chapter 643, and Texas Civil Statutes, Article 6675c sec.3A, respectively. Section 18.32. Records, is amended to specify procedures for the maintenance of certificates of registration by Type B household goods carriers. Section 18.51. Household Goods Agents, is amended to prescribe procedures for notifying the department regarding the appointment, utilization, and termination of agreements with household goods agents. Section 18.52. Rates, is amended to specify that this section applies only to Type A household goods carriers. Section 18.53. Tariff Registration, is amended to specify that this section applies only to Type A household goods carriers. Section 18.54. Transportation Standards, is amended to specify that a household goods carrier whose transportation is not governed by a tariff filed under sec.18.53 (relating to Tariff Registration) may, alternatively, furnish binding estimates of costs to shippers and allows for binding estimates on household movements not governed by a tariff; require a household goods carrier to list on its bill of lading or receipt a street address in the State of Texas and the motor carrier certificate number issued for the carrier issuing the bill of lading or receipt and for any other household goods carrier, when known, who will participate in transporting the shipment; and require a Type B household goods carrier to notify the shipper of its limitation of liability for loss or damage. Section 18.56. Liability of Carriers, is amended to stipulate that a Type B household goods carrier's liability for loss or damage is sixty cents per pound per article. Section 18.61. Reporting Requirements, is amended to clarify existing administrative rules, and to replace references to Texas Civil Statutes with Transportation Code where applicable. Section 18.70. Purpose, is amended to include suspension and revocation of leasing business registration in addition to motor carrier registration and include probation of the suspension of a motor carrier's certificate of registration. Section 18.71. Administrative Penalties, is amended to: extend penalty provisions to motor carriers violating the short-term lease vehicle registration; clarify penalty provisions for motor carriers violating the terms of Single State Registration outlined in Transportation Code, Chapter 645. Section 18.72. Suspension and Revocation, is amended to: specify that this section applies to leasing businesses and Type B household goods carriers in addition to motor carriers; specify that the department may place on probation a motor carrier whose certificate has been suspended; and specify that the department may require a motor carrier on probation to report regularly to the department on any matter that is the basis of the probation. RESPONSE TO COMMENTS A public hearing was held on November 12, 1997. Seventeen oral and written comments were received. Section 18.2. Definitions. Comment: One commenter suggested the definition of "advertisement" be clarified to exclude business cards. Treating business cards as advertisement would require the household goods carrier to print the carrier's certificate number on the card, and the commenter stated that printing the certificate number on the shipping documents should be adequate notice to the consumer. Response: The department does not consider business cards to fall within the definition of advertisement, as business cards are used to let the public know how to contact a business, rather than being used to solicit shipments for the household goods carrier, and, therefore, no revisions are necessary. Comment: One commenter stated that the definition of "household goods" should not be changed without specific action by the legislature, and wanted the existing definition to remain. Additionally, the commenter stated that the department does not have the ability to change the definition of "household goods" without action by the legislature. Response: The proposed definition of "household goods" for intrastate transportation follows the federal definition of "household goods" and the proposed amendment is the result of tracking the changes in the federal definition (49 U.S.C. sec.10102 to 49 U.S.C. sec.13102). Comment: One commenter requested that the department amend the definition of "household goods" to mirror the federal definition of "household goods" in 49 U.S.C. sec.13102(10) rather than leaving the current definition of "household goods" in place. Response: The department concurs with the reasons expressed by the commenter. However, the department has already accomplished the commenter's request. The department proposed a definition of "household goods" similar to the federal definition in 49 U.S.C. sec.13102 rather than retaining the current definition of "household goods" with the outdated three provisos formerly found in 49 U.S.C. sec.10102. The proposed definition of "household goods" is based on the current federal definition of "household goods" by taking into consideration the federal definition of private carrier. The interaction of the proposed definitions of "household goods" and "household goods carrier" follows the federal practice of excluding regulation of private household goods carriers. Comments: One commenter stated that the current definition of "household goods" should remain in force. The commenter stated that his client will be brought back within the definition of "household goods" and thus household goods transportation requirements after several years of the carrier being deregulated. Response: The amended definition of "household goods" for intrastate transportation mirrors the federal definition of "household goods" as required by Texas Civil Statutes, Article 6675c, sec.1. Comment: One commenter was concerned that the definition of "household goods carrier" is circular and confusing. The commenter wanted the definition of "household goods carrier" amended to strike the language "required to register with the department under Subchapter B of this chapter (relating to Motor Carrier Registration)." Response: The department concurs with this comment. The definition has been amended by deleting "required to register with the department under Subchapter B of this chapter (relating to Motor Carrier Registration)." Comment: One commenter supported the definition of "household goods carrier" including Type B carriers. The commenter stated that Type B carriers should be included in all household goods regulations unless specifically exempted by the Legislature in order to meet the department's authority to protect consumers who use the services of a household goods carrier. Response: The department concurs in part, and the proposed amendments require Type B household goods carriers to meet requirements concerning the maintenance, investigation and examination of records, carrier-agent relationship, transportation standards, carrier liability, collection of freight charges, information to shippers, claims and complaint resolution, and reporting requirements in Subchapters C and E of 43 TAC Chapter 18. However, the department does not concur that Type B household goods carriers should be required at this time to meet the rate and tariff requirements in sec.18.52 and sec.18.53 of Subchapter E. The rate and tariff requirements in Texas Civil Statutes, Article 6675c, sec.8 and the antitrust exemption for collective rate-making agreements in Texas Civil Statutes, Article 6675c, sec.9 do not expressly apply to Type B household goods carriers. The Household Goods Advisory Committee was established by the Legislature to make recommendations concerning consumer protection rules, and the department will consider any such recommendations in future rulemaking activities. Comment: Two commenters requested clarification of the definition of "household goods carrier" to specify whether the definition includes companies offering container transportation and storage for household goods. Response: The definition of "household goods carrier" excludes carriers "when transporting in furtherance of their primary business which is a non- transportation business." Container transporters may be considered "household goods carriers" depending on the specific scenario, so an exemption for all container transporters is not appropriate. The definition of "household goods carrier" as written excludes a carrier transporting in furtherance of its primary business which is a non-transportation business, but the department does not intend to exclude those container transporters transporting in furtherance of its primary business which is a transportation business. Comment: One commenter agreed with the proposed definitions of the household goods carriers as Type A household goods carrier and Type B household goods carrier. Response: No response required. Section 18.13. Application for Motor Carrier Registration. Comment: Two commenters stated that Single State Registrants should not be excluded from obtaining biennial Texas Motor Carrier Registration, as there is no restriction required by statute. Response: The department concurs and has amended sec.18.13(a)(8) and related areas to allow Single State Registrants to obtain biennial Texas Motor Carrier Registration. Comment: One commenter stated that sec.18.13(a)(9)(A) should specifically require Type B household goods carriers to pay the $100 application fee. Response: The department concurs, in part, with the commenter's statement regarding the assessment of an application fee for Type B household goods carriers. Texas Civil Statutes, Article 6675c, sec.8(g) states, "the department shall charge a motor carrier who registers under this subsection a fee that does not exceed the total fees imposed by Section 3 of this article." However, rather than adding the fee requirement to sec.18.13(a)(9)(A), the department has added the fee requirement for Type B household goods carriers to sec.18.13(f), entitled Type B Household Goods Carriers, to maintain this subsection as the area for further information on the application process for Type B household goods carriers. New paragraph sec.18.13(f)(2) expressly requires the $100 application fee for Type B household goods carriers. New paragraph sec.18.13(f)(3) was also added to expressly require the filing fee for proof of financial responsibility for cargo to clarify the requirements for Type B household goods carriers. Successive paragraphs were then appropriately renumbered. Comment: Two commenters were concerned that, for a household goods carrier and its agent to use the alternative agent vehicle registration procedure in sec.18.13(e)(2), the household goods carrier must be responsible for all vehicles on the agent's certificate. Response: Allowing the household goods carrier to limit responsibility to part of the agent's fleet would result in increased administrative and enforcement difficulties. The department does not intend to create a burden for consumers and law enforcement by requiring such to determine whether a particular vehicle is registered to a household goods carrier's certificate. The agent must be registered under his own certificate and therefore carries a copy of the certificate in the vehicle, but the household goods carrier will not be issued a certificate of his own showing the individual agent vehicles for which the household goods carrier will be responsible. Because the household goods carrier is not issued a certificate with the specific vehicle information for the agent's vehicles, law enforcement would not be able to determine whether the vehicle is registered under the household goods carrier's certificate in addition to the agent's certificate. Consumers would also have difficulty determining whether a vehicle is registered to a household goods carrier's certificate or only to the agent's own motor carrier registration. Comment: Two commenters stated they want Type B household goods carriers to have the option of carrying the certificate of registration in the trailer or painting the certificate number on the trailer rather than being required to carry a copy of the certificate in the cab of the vehicle (sec.18.13(f)(3)). The commenters stated that Type B household goods carriers often hire drivers who use their own vehicles to pull trailers owned by the household goods carrier, and the carrier may have little control over the driver maintaining a copy of the certificate in the vehicle. Additionally, the commenters expressed concern that the driver may not return the certificate to the household goods carrier after the driver ceases working for the carrier. Response: Motor carriers required to register with the department must carry the proof of registration and insurance in the vehicle for law enforcement inspection. Allowing a Type B household goods carrier to paint the certificate number on the trailer rather than carry the certificate issued by the department would not provide reasonable assurance that the company is registered with the department. The department will not allow differing methods of showing the certificate of registration for various types of motor carriers, since allowing the differing methods would create confusion and difficulties in enforcement by law enforcement agencies. Additionally, the consumer may examine the carrier's certificate to make sure the household goods will be transported by the carrier with whom the consumer contracted. Comment: One commenter expressed concern about the statement in sec.18.13(f)(3) that the certificate of registration shall serve as proof of cargo insurance. The commenter felt that that the statement has no enforcement value, is confusing, and ignores any other form of financial responsibility. Response: The department agrees the statement does not add any enforcement value to this paragraph. The paragraph is amended to eliminate the statement which reads, "The certificate of registration serves as proof of cargo insurance provided proof of the insurance is filed with the department and the carrier is registered with the department." Section 18.16. Insurance Requirements. Comment: Two commenters were concerned about the availability of surety bonds as proof of financial responsibility for loss or damage to cargo (sec.18.16(e)(1)(c)). One of the commenters stated he believes the department should investigate to determine the reasons no household goods carriers have filed surety bonds and should provide a list of insurance carriers who are willing to provide such bonds. Response: The department does not have rulemaking authority to compel insurance companies to issue bonds. Registrants have other options for filing proof of financial responsibility with the department, however, the department has received information from three insurance companies who have indicated they will issue surety bonds. Comment: Three commenters were concerned with the lack of additional methods of proving Type B household goods carriers' financial responsibility for loss or damage to cargo other than insurance, letter of credit and surety bonds (sec.18.16(e)(1)C)). One commenter suggested carriers should be allowed to document a $5,000 line of credit at a financial institution or prove a company net worth of $5,000. Response: Proof of financial responsibility for Type B household goods carriers mirrors the requirements for Type A carriers, as the department must be able to assure financial responsibility at all times. The Household Goods Carrier Advisory Committee, created by the 75th Texas Legislature (1997), may recommend additional methods of proving financial responsibility for loss or damage of cargo, and the department will consider any such recommendations in future rulemaking activities. Comment: One commenter questioned the department's research regarding banking industry practices in issuing letters of credit (sec.18.16(e)(5)). The commenter stated the provisions of this paragraph are inconsistent with standard bank practices. The commenters suggested the department interview bankers and learn more about letters of credit and the condition under which banks will issue these instruments. Response: The amended provisions for letter of credit requirements have been accepted by the banking industry for years when used for automobile liability self-insurance applications with the department. The wording required for letters of credit for Type B household goods carriers' proof of financial responsibility for cargo is substantially similar. Comment: Two commenters were concerned about the requirements of a letter of credit as proof of financial responsibility for loss or damage to cargo. The commenters stated the provisions are too restrictive and incompatible with banking industry practices resulting in a lack of letter of credit filings. Response: The department concurs that the rule needs clarification. The rule is amended to reflect the department's intentions that a qualified beneficiary is one who has established its claim by having a written agreement with the carrier as to the specific amount to be paid in final settlement of the claim or by having obtained a final judgment establishing the amount of the carrier's liability. Comment: One commenter indicated that financial institutions will not issue letters of credit for Type B carriers because the group of claimants is too open-ended. Response: As stated earlier, the department concurs that the group of claimants must be expressly limited and the rule is amended to clarify that a qualified beneficiary is one who has established its claim by having a written agreement with the carrier as to the specific amount to be paid in final settlement of the claim or by having obtained a final judgment establishing the amount of the carrier's liability. Comment: Two commenters were concerned the proposed rules for letters of credit go beyond the scope of the statute. One of these commenters added that the proposed rules for surety bonds also go beyond the scope of the statute. Response: The statute requires the department to allow proof of financial responsibility through surety bonds and letters of credit. The statute does not, however, prohibit the department from creating requirements for the letters of credit and surety bonds. The statute also allows the department to adopt rules to protect customers of household goods movers. Failing to place certain requirements on proof of financial responsibility would neglect the department's consumer protection responsibilities. Comment: One commenter was concerned that the provisions for letters of credit will require financial institutions to pay funds from a letter of credit to a claimant without the carrier receiving due process on the claim (sec.18.16(e)(5)). The commenter wanted the letter of credit to be payable only after final judgment or final adjudication. Response: The department concurs in part. The rule is amended to clarify that a qualified beneficiary is one who has established its claim by having a written agreement with the carrier as to the specific amount to be paid in final settlement of the claim or by having obtained a final judgment establishing the amount of the carrier's liability. Comment: One commenter stated that the department should be named as the beneficiary in letters of credit for Type B household goods carriers, making the department responsible for paying the consumer once the consumer has obtained a final judgment not otherwise paid by the household goods carrier. Response: Letters of credit are the means for Type B household goods carriers to ensure meeting their contractual obligations to their customers. Because the carrier's contractual obligations are with the carrier's customer, the letter of credit is for the customer's use rather than the department's use. Comment: One commenter was concerned that banks will not issue letters of credit that may not be revoked until all cognizable claims have been settled. The commenter stated he does not understand what this time description means and how long the liability endures. Response: The department agrees that the proposed rule needs clarification, and the clause is amended to incorporate the time limitations for filing claims and lawsuits currently found in 43 TAC sec.18.54(c)(1)(B)(ii). The department amended sec.18.16(e)(5)(ii) by adding, "Claims must be filed with the household goods carrier within nine months after delivery of the property or, in case of failure to make delivery, within nine months after a reasonable time for delivery has elapsed. Suits must be instituted within two years and one day from the day when notice is given, in writing, by the household goods carrier to the claimant that part or all of the claim has been disallowed. Where a claim is not filed or a suit is not instituted in accordance with the foregoing provisions, a household goods carrier shall not be held liable and the claim will not be paid." Comment: One commenter stated the department has gone beyond the statutory provisions in requiring Type B household goods carrier's letters of credit to be irrevocable. Response: Letters of credit filed as proof of financial responsibility for cargo loss or damage must be irrevocable to protect consumers using the household goods carrier's services, and Texas Civil Statutes, Article 6675c, sec.8 allows the department to adopt rules for consumer protection purposes. The bank issuing an irrevocable letter of credit guarantees that it will not withdraw or cancel the letter of credit before the expiration date. The statute allows Type B household goods carriers to meet the proof of financial responsibility for cargo loss or damage requirements by filing proof of insurance, a surety bond or a letter of credit. Both cargo insurance and surety bonds provide a means for payment of household goods claims from an independent third party rather than the household goods carrier, protecting the consumer from a household goods carrier who is unwilling to pay a claim even after the consumer obtains a judgment. An irrevocable letter of credit similarly provides a secured fund with an independent party, the bank issuing the letter of credit, that will pay the judgment. By requiring the letter of credit to be irrevocable, the consumer is protected from the carrier spending the funds, leaving the consumer without certain resources to pay the claim. Additionally, requiring the letter of credit to be irrevocable may further protect the consumer who uses a household goods carrier who has financial difficulty or who goes through bankruptcy proceedings. Comment: One commenter wanted the department to use a letter of credit similar to the version accepted by the Texas Alcoholic Beverage Commission (TABC). Response: Although the letter of credit accepted by the TABC is an irrevocable letter of credit, the letter names the TABC as the beneficiary for unpaid taxes and fees owed to the regulatory agency. The letter of credit allowed for Type B household goods carriers is not a letter of credit ensuring availability of funds to pay taxes or fees owed to the department, but is to ensure availability of funds to cover contractual obligations and claims against the household goods carrier's customers. Comment: One commenter requested that the department supply a copy of an acceptable letter of credit for proof of financial responsibility for cargo loss or damage for Type B household goods carriers. Response: The department has prepared a sample letter of credit that is available to the public. The sample is an example of an acceptable style for the letter of credit but is not intended to be the only acceptable style. The sample will not be included in administrative rules. Section 18.19. Short-term Lease and Substitute Vehicles. Comment: One commenter expressed support for this section of rules concerning substitute and replacement vehicles and made no suggestions for changes to the section. Response: No response required. Section 18.32. Records. Subsection (a), General records to be maintained. Comment: One commenter wanted an amendment to sec.18.32(a)(2) to allow records printed from a database to comply with the record requirements of this paragraph. Response: The current rule does not prohibit a household goods carrier from maintaining information in a database. All information should be kept in accordance with reasonable accounting procedures, and a complete and accurate record of all services performed should be kept by the carrier. Further, the information should be easily retrievable and admissible as evidence in any legal proceeding. Due to the nature of the documents and records which a household goods carrier is required to maintain, not all information can be stored on a database and still meet the accuracy, admissibility and accounting requirements. The Household Goods Carrier Advisory Committee may consider this issue when making recommendations for streamlining and modernizing the department's rules. Section 18.32. Records. Subsection (b), Specific records and documents to be inspected. Comment: One commenter agreed with the requirement in sec.18.32(b)(2) that Type B household goods carriers carry a copy of their certificate of registration in their vehicles. Response: No response required. Comment: One commenter agreed with and supported requiring all household goods carriers, including Type B household goods carriers, to maintain records and documents, as the Legislature would have expressly exempted Type B household goods carriers from these requirements if it so intended. Response: No response required. Section 18.51. Household Goods Agents. Subsection (d), Use of trade name. Comment: One commenter wanted sec.18.51(d) amended to require the household goods carrier name to be on all shipping documents, rather than on all communications. This comment was a suggestion to the department, not a response to a proposed amendment. Response: The department has not proposed the change at this time but acknowledges that this suggestion can be reviewed by the Household Goods Carrier Advisory Committee created by the Legislature. One of the committee's duties is to make suggestions to the department on modernizing and streamlining consumer protection rules. This concern is within the committee's area of review. Section 18.52. Rates. Subsection (a), Applicability. Comment: One commenter wanted Type B household goods carriers to have a rate package because it would be irrational for consumers to be protected from price- related activities from one segment of the industry and not the other. Although the statute does not require a rate package for Type B carriers, the commenter stated that the department should require this as necessary consumer protection. Response: Texas Civil Statutes, Article 6675c, sec.8(d) limits tariff filings to Type A household goods carriers. Additionally, Texas Civil Statutes, Article 6675c, sec.9 exempts Type A carriers from antitrust difficulties for collective rate-making agreements, but does not extend the protection to Type B household goods carriers. Section 18.53. Tariff Registration. Subsection (a), Applicability. Comment: One commenter wanted Type B household goods carriers to file a tariff with the department to help protect consumers and to disclose the maximum price a consumer could be required to pay. Response: Texas Civil Statutes, Article 6675c, sec.8(d) limits tariff filings to Type A household goods carriers. Additionally, Texas Civil Statutes, Article 6675c, sec.9 exempts Type A carriers from antitrust difficulties for collective rate-making agreements, but does not extend the protection to Type B household goods carriers. Section 18.54. Transportation Standards. Comment: One commenter stated that transportation standards in sec.18.54 should not apply equally to intracity and intercity household goods transportation. Response: The legislature has created two types of household goods carriers, based on the size of the carrier's vehicles. The legislature specified somewhat differing standards for these two types of household goods carriers, but made no distinction based on the distance of the transportation. Similarly, the department makes no distinction in the rules between intracity and intercity transportation. Comment: One commenter stated that the transportation standards of sec.18.54 are based on outdated Interstate Commerce Commission regulations and should apply only to Type A household goods carriers, if anyone, until after the Household Goods Carrier Advisory Committee makes recommendations to the department. Response: The Legislature has given direction to the Household Goods Carrier Advisory Committee to make recommendations regarding existing rules, and the department will consider any such recommendations in future rulemaking activities. The provisions in Texas Civil Statutes, Article 6675c that require Type B household goods carriers to register and come under the department's rules went into effect on September 1, 1997. The department does not have the authority to exempt from regulation a group of carriers that the Legislature brought under the department's regulation. Comment: One commenter wanted the department to restrict consumer protection requirements to those requirements specifically mentioned in the statute, including deleting the bill of lading or receipt requirements. Response: The legislature gave the department the responsibility in Texas Civil Statutes, Article 6675c, sec.8, to adopt rules to protect consumers who use the services of a household goods carrier. Section 8, paragraph (c) states, "the department shall adopt rules to protect consumers who use the services of household goods carriers for compensation." Further, this paragraph outlines some minimum guidelines. However, it is clear that these minimum guidelines are not sufficient to fulfill the responsibility of adopting rules to protect consumer who use the services of household goods for compensation. In this respect, Texas Civil Statutes, Article 6675c, sec.8 makes no distinction between Type A and Type B household goods carriers. Therefore, the department requires Type B household goods carriers to follow certain regulations, including the bill of lading or receipt requirements, to protect consumers. Comment: One commenter supported the application of transportation standards to both Type A household goods carriers and Type B household goods carriers. Response: No response required. Comment: One commenter was concerned about binding and non-binding estimates (sec.18.54(a)). He stated that the rule will make it difficult for carriers to provide estimates and collect fees due to the nature of the local moving market. The commenter was concerned that prices given over the telephone to the consumer are binding estimates, and that the carrier must treat items added to the list of services on the day of the move as transportation under a non-binding estimate. Response: The current binding and non-binding estimate rules found in 43 TAC sec.18.54(a) do not require a Type B household goods carrier to provide binding estimates unless the carrier so chooses. However, household goods carriers must clearly indicate whether the estimate is binding or non-binding, as required by Texas Civil Statutes, Article 6675c, sec.8(c)(2). If the carrier chooses to provide a binding estimate to the consumer, the estimate is binding only for services listed on the estimate. Should the actual shipment differ from the shipment described on the binding estimate, the estimate can be amended prior to loading if both the shipper and carrier agreed on the amendment. Comment: One commenter stated that weighing provisions should not apply to binding estimate moves, since the household goods carrier cannot charge more than the estimated cost. Response: The department made no proposed amendment to this rule. The commenter's concern is a matter of the carrier's tariff requirements rather than requirements from the department's rules. The department's rules concerning weights in sec.18.54(g) do not apply on binding estimates, and any further requirements would be through the carrier's tariff filed with the department by the carrier or his collective ratemaking association. Comment: One commenter wanted to eliminate the requirement that the bill of lading or receipt contain a statement that a non-binding estimate was not requested or furnished to the customer (sec.18.54(a)(2)(g)). The commenter pointed out that the household goods carrier is required to retain non-binding estimates as addendums to the bill of lading under sec.18.54(c)(1). Response: The department is required to adopt consumer protection rules for consumers using household goods carriers under Texas Civil Statutes, Article 6675c sec.8(c). Designating an estimate as binding or non-binding is essential to determining the potential cost involved for the transportation. Allowing the carrier to simply retain the copies of the non-binding estimates rather than stating whether a non-binding estimate was requested and provided could result in incorrect assumptions that a non-binding estimate was not requested or furnished if the carrier fails to place the non-binding estimate in the shipment file. A statement on the bill of lading or receipt indicating whether a non- binding estimate was requested or furnished assists the consumer, the household goods carrier, the department, and the legal system in determining the amount of the bill and the allowable billing method. Comment: One commenter wanted the minimum information required to be found on any combination of the shipping documents, rather than solely on the bill of lading or receipt. Response: The department has not proposed amendments regarding this subject. The Household Goods Carrier Advisory Committee may address this issue when making rule streamlining and modernization recommendations. The department will consider any such recommendations in future rulemaking activities. Comment: One commenter requested that the claim filing period for household goods transportation be shortened from nine months to 90 days (sec.18.54(c)(1)(B)(ii)). Response: The department has not proposed amendments regarding this subject. The Household Goods Carrier Advisory Committee may consider this matter when making streamlining and modernization recommendations, and the department will consider any such recommendations in future rulemaking activities. Comment: One commenter stated that sec.18.54(c)(2)(A) needs to be clarified to state that bills of lading and receipts are not required to be consecutively numbered. Response: The department has not proposed amendments regarding this subject. However, the department agrees that bills of lading and receipts do not need to be consecutively numbered. As sec.18.54 (c)(2)(A) does not state that bills of lading and receipts are required to be specifically numbered, no amendment is necessary. Comment: One commenter stated that sec.18.54(c)(2)(S) should be amended to state that the limitation of liability must be conspicuously stated on the bill of lading for Type B household goods carriers, as required in Texas Civil Statutes, Article 6675c, sec.8(c)(6). Response: The department concurs with the commenter's statement. Texas Civil Statutes, Article 6675c, sec.8(c)(6), states the department shall "require motor carriers who are required to register under this section to conspicuously advise consumers concerning limitation of any carrier liability for loss or damage". The department amends sec.18.54(c)(2)(S) to require "conspicuous notice of the Type B household goods carrier's limitation of liability for loss or damage." Section 18.56. Liability of Carriers. Comment: One commenter requested that the reference to 49 C.F.R. Part 1056.12 be deleted as the language does not add to consumer protection. Response: This reference was not proposed to be deleted, however, the cite was updated to continue to reference the appropriate federal statute. The Household Goods Carrier Advisory Committee may choose to address this concern when making recommendations for streamlining and modernizing the consumer protection rules, and the department will consider any such recommendations in future rulemaking activities. Section 18.58. Information for Shippers. Comment: Two commenters stated they do not want Information to Shippers requirements to apply to Type B household goods carriers. They believe if the requirements are applied to Type B household goods carriers, only the information required by statute should be in this rule. One commenter stated that he believes the Household Goods Carrier Advisory Committee should be consulted. Response: The Legislature gave direction for the Household Goods Carrier Advisory Committee to review existing rules and to make recommendations to streamline customer protection rules for all household goods carriers. However, the Legislature did not specify that no consumer protection rules may be created or applied to Type B household goods carriers until after the Committee meets. The department has the responsibility under Texas Civil Statutes, Article 6675c, sec.8 to create consumer protection rules for consumers using household goods movers, and the statute does not exempt Type B household goods carriers from these requirements. Comment: One commenter did not want household goods carrier agents to be required to put the carrier's name, certificate number, and address in the state of Texas into their advertisements. Response: Household goods carriers are required by Texas Civil Statutes, Article 6675c, sec.8(c)(4) to list a place of business with a street address in Texas and the carrier's certificate number on advertisements published in this state. As an agent of a household goods carrier, this requirement also applies to the agent's advertisements. Comment: One commenter wanted to eliminate the annual report requirement. Response: Amendments were not proposed regarding this subject. Under the department's ability in Texas Civil Statutes, Article 6675c, sec.8 to adopt consumer protection rules for consumers using household goods movers, the department requires the annual report in an effort to provide information on the carrier's performance during the past year. The Household Goods Carrier Advisory Committee may address this issue when making streamlining and modernization recommendations to the department, and the department will consider any such recommendations in future rulemaking activities. Comment: One commenter stated the pamphlet entitled "Your Rights and Responsibilities When You Move," as published by the Southwest Movers Association, was drafted for Type A household goods carriers, and is not appropriate for Type B household goods carriers. Response: The department agrees that the pamphlet published by Southwest Movers Association is tailored to Type A household goods carriers' business and is not appropriate for Type B household goods carriers. A pamphlet more suitable to Type B carriers' customers may need to be published. Section 18.59. Claims. Comment: One commenter wanted the department to specify in sec.18.59(a)(1)(B) that a household goods carrier is not required to handle a claim that does not give a demand for payment in a determinable amount of money. Response: The household goods carrier should inform consumers of their rights to filing a claim upon receipt of a consumer's claim for loss, damage, injury, or delay to a shipment. However, the consumer must present the carrier with an amended claim for a specified or determinable amount of money in order to resolve the claim, as currently required by this subparagraph. Comment: One commenter was concerned about the time and cost involved in collecting information regarding claims as required by sec.18.59(d). Response: The department is also concerned about the costs involved, but cost is not the determining factor of this requirement. The department is allowed under Texas Civil Statutes, Article 6675c, sec.8(c) to adopt rules to protect consumers using household goods movers. The carrier is required to collect and maintain information concerning claims to encourage thorough handling of claims and to allow the department to determine if the household goods carrier has met the department's requirements for handling claims. The claim register or claim file documents produce a more complete description of the details and outcome of claims than partial documents randomly kept by a carrier. Comment: One commenter was concerned about being required to maintain a claim file and, more specifically, claim numbers (sec.18.59(d)). Response: The department must be able to find records and verify information contained in the annual report required in 43 TAC sec.18.61. In order for department investigators to verify information concerning the number of claims and the handling of the claims as reported on the annual report, the investigator must be able to see the overall claims handling history and must be able to determine that all claims made to the carrier have been appropriately completed. The claim file, including claim numbers, is the most efficient means of maintaining claim information and ensuring that claims are handled according to the department's requirements. Section 18.60. Complaint Resolution Processes. Comment: Three commenters stated mediation and arbitration are too expensive compared to the price of the typical Type B household goods carrier move. One of the commenters stated he believes the cost of mediation should either be shared by the carrier and shipper, or paid by the "losing party". Another of the commenters stated that expanding the mediation and arbitration rules to Type B household goods carrier is contrary to the intent of Texas Civil Statutes, Article 6675c. Response: The department made no proposed rule changes in the mediation and arbitration requirements other than to apply the requirements to Type B household goods carriers in addition to Type A household goods carriers. The department has the ability under Texas Civil Statutes, Article 6675c, sec.8, to adopt consumer protection rules for customers using household goods movers. The Legislature has given direction to the Household Goods Carrier Advisory Committee to review existing rules and to make recommendations for streamlining and modernizing the consumer protection rules, and the department will consider any such recommendations in future rulemaking activities. Comment: One commenter stated that Type B household goods carriers should not be required to provide mediation and arbitration to claimants before the Household Goods Carrier Advisory Committee makes recommendations to the department. Response: After the changes to Texas Civil Statutes, Article 6675c, sec.8, made by Senate Bill 370 and House Bill 1418 (75th Legislature, 1997), the department retained the ability to adopt consumer protection rules for customers of household goods movers. The Legislature did not exempt Type B household goods carriers from consumer protection requirements or specify that consumer protection requirements cannot apply to Type B household goods carriers before the Committee meets. The Legislature directed the Household Goods Carrier Advisory Committee to review existing rules and make recommendations on streamlining and modernizing the consumer protection rules, and the department will consider any such recommendations prior to amending this section. Comment: One commenter wanted to eliminate the mediation requirement in sec.18.60, as mediation is no longer specifically required by statute. Response: The department made no proposed amendments to the mediation requirement. The changes to Texas Civil Statutes, Article 6675c, sec.8 removed most specific requirements within consumer protection, but let stand the department's authority to adopt consumer protection rules. The Legislature replaced the mandatory requirements in that statute with a review of existing rules by the Household Goods Carrier Advisory Committee. The Committee is directed to make recommendations to streamline and modernize existing consumer protection rules, and the department will consider any such recommendations in future rulemaking activities. Section 18.61. Reporting Requirements. Comment: Two commenters were concerned about the time and cost involved in collecting information required in the annual report. Response: The department is concerned with costs to household goods carriers associated with filing the annual report, but cost is not the only determining factor. The annual report is required through the department's ability under Texas Civil Statutes, Article 6675c, sec.8 to adopt consumer protection rules for consumers using household goods movers. The annual report is required in an effort to provide the consumer with information on the carrier's performance during the past year. Comment: Two commenters stated they did not want Type B household goods carriers to be required to file annual reports. The commenters stated the type of information required is not usually kept by Type B household goods carriers and would be burdensome to produce, and there are no statutory requirements or other evidence indicating this type of report is needed. One of the commenters stated the rule should be limited to Type A household goods carriers. Response: Under its ability to adopt consumer protection rules, the department requires annual reports in an effort to provide consumers with information on the carrier's performance during the past calendar year. However, the department has revised sec.18.61(a) by adding, "Type B household goods carrier shall file their first annual operating report on May 15, 1999 and then every subsequent year on May 15th." This revision is made to provide Type B household goods carriers the time necessary to gradually gather the information needed for the annual report rather than requiring a report filing for September 1, 1997 through December 31, 1997. The Household Goods Carrier Advisory Committee may consider the annual report filing during its deliberations concerning streamlining and modernizing consumer protection rules, and the department will consider any committee recommendations regarding this subject in future rulemaking activities. Comment: One commenter wanted sec.18.61 repealed completely and the annual reports eliminated. The commenter said the annual report does not help protect consumers, and Texas statutes no longer require department rules to be as stringent as federal law. Response: Under its ability to adopt consumer protection rules, the department requires annual reports in an effort to provide consumers with information on the carrier's performance during the past calendar year. The Household Goods Carrier Advisory Committee may consider the annual report filing during its deliberations concerning streamlining and modernizing consumer protection rules, and the department will consider any committee recommendations regarding this subject in future rulemaking activities. General Comments: Comment: Three commenters did not agree with the statement in paragraph 28 of the preamble, published in 22 TexReg 10276 (October 17, 1997), that the implementation of these rules will have no impact on small businesses. Response: The department points out that this statement concerning small businesses does not apply to effected regulated household goods carriers. The fiscal impact to persons required to comply with the proposed rule amendments is addressed in paragraph 26. Paragraph 26 explains that fiscal impacts to persons required to comply with the proposed amendments will total $100,000 in fiscal year 1998 and $10,000 annually in fiscal years 1999 through 2002. Comments: Three commenters did not want the consumer protection rules to apply to Type B household goods carriers and three other commenters do not want the consumer protection rules to apply to Type B household goods carriers until after the Household Goods Carrier Advisory Committee makes its recommendations to the department. Two of these commenters stated that enough evidence does not exist to indicate a need for consumer protection requirements for Type B household goods carriers. Response: The Legislature amended Texas Civil Statutes, Article 6675c, to regulate Type B household goods carriers and to adjust consumer protection requirements. However, the Legislature did not specifically exempt Type B household goods carriers from consumer protection requirements. Additionally, the department has the ability under Texas Civil Statutes, Article 6675c, sec.8, to adopt rules to protect consumers of household goods movers. This statute specifically requires all household goods carriers to register with the department as of September 1, 1997, and the department does not have the authority to exempt a class of carriers from the requirements. The Legislature gave direction for the Household Goods Carrier Advisory Committee to review existing rules and to make recommendations to streamline and modernize the consumer protection rules, and the department will consider any such recommendations in future rulemaking activities. Although the rules need to be streamlined for all household goods carriers, the rules have previously been applied to household goods transportation by operations similar to the Type B carriers, in that consumer protection rules apply to Type A household goods carriers even when using vehicles under 26,000 pounds. Comment: One commenter stated that the consumer protection regulations are extremely difficult to read. Response: While the department recognizes that the consumer protection rules are intricate, the detail of the rules is intended to set out the parties' specific responsibilities and to adhere to traditional phrasing that has been used for bills of lading and receipts. The Legislature has charged the Household Goods Carrier Advisory Committee with the task of reviewing existing rules and making recommendations to streamline and modernize such rules. The department will take any such recommendations under consideration in future rulemaking activities. SUBCHAPTER A.General Provisions 43 TAC sec.18.1, sec.18.2 STATUTORY AUTHORITY The amended sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. sec.18.1. Purpose. Transportation Code, Chapters 643, 645, and 646 and Texas Civil Statutes, Articles 6675c-2, and 6687-9a, require the department to regulate motor carriers, leasing businesses, as defined in sec.18.2 of this title (relating to Definitions), motor transportation brokers, and vehicle storage facilities, in order to protect the welfare of the public and ensure fair treatment of consumers by household goods carriers. The sections under this chapter prescribe the policies and procedures for the regulation of motor carriers, leasing businesses, transportation brokers, and vehicle storage facilities by providing for insurance limits, the issuance of motor carrier credentials, the licensing of vehicle storage facilities, the filing of performance bonds for transportation brokers, audit and record keeping functions, and enforcement. sec.18.2. Definitions. The following words and terms, when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise. (1) Advertisement - Any communication to the public in connection with an offer or sale of intrastate transportation service, except for a single-line listing of a carrier name, address, and telephone number in a directory or similar classification. (2) Approved association - A group of household goods carriers, or its agents, or both, which has an approved collective ratemaking agreement on file with the department pursuant to sec.18.52 of this title (relating to Rates). (3) Arbitration - A forum in which each party and counsel for that party present their position before an impartial third party, who renders a specific award. The award is not binding on either party and serves only as a basis for the parties' further settlement negotiations. (4) Audit - A review of records and source documents of a registrant to determine its compliance with the requirements of subchapter E of this chapter (relating to Enforcement). (5) Certificate of convenience and necessity - A certificate issued by the Railroad Commission of Texas under Chapter 270, Acts of the 40th Legislature, Regular Session, 1927, or Chapter 314, Acts of the 41st Legislature, Regular Session, 1929, granting the right to operate in the carriage of persons or goods for hire in intrastate traffic. (6) Certificate of insurance - A certificate prescribed by and filed with the department, in which an insurance carrier or surety company warrants that a motor carrier for whom the certificate is filed has the minimum coverage as required by sec.18.16 of this title (relating to Insurance Requirements). (7) Certificate of registration - A certificate issued by the department to a motor carrier, containing a unique number. (8) Certified scale - Any scale designed for weighing motor vehicles, including trailers or semitrailers not attached to a tractor, and certified by an authorized scale inspection and licensing authority; a certified scale may also be a platform or warehouse type scale properly inspected and certified. (9) Commercial motor vehicle - (A) Includes: (i) any motor vehicle or combination of vehicles with a gross weight, registered weight, or gross weight rating in excess of 26,000 pounds, which is designed or used for the transportation of cargo in furtherance of any commercial enterprise; (ii) all tow trucks, as that term is defined in this section, regardless of the gross weight rating of the tow truck; (iii) any vehicle, including buses, designed to transport more than 15 passengers, including the driver; (iv) any vehicle used in the transportation of hazardous materials in a quantity requiring placarding under the regulations issued under the federal Hazardous Materials Transportation Act (Title 49, United States Code, App. sec.sec.1801- 1813); and (v) a commercial motor vehicle, as defined by 49 C.F.R. sec.390.5, that is owned or controlled by a person or entity that is domiciled in or a citizen of a country other than the United States. (B) Does not include: (i) a farm vehicle, as defined in this section, with a gross weight, registered weight, and gross weight rating of less than 48,000 pounds; (ii) cotton vehicles registered in accordance with Transportation Code, sec.502.277; (iii) a vehicle registered with the Railroad Commission pursuant to Texas Natural Resources Code, sec.113.131 and sec.116.072; (iv) a vehicle transporting liquor under a private carrier permit issued in accordance with Alcoholic Beverage Code, Chapter 42; (v) a motor vehicle used to transport passengers operated by an entity whose primary function is not the transportation of passengers, such as a vehicle operated by a hotel, day-care center, public or private school, nursing home, governmental entity, or similar organization; and (vi) a motor vehicle registered under the Single State Registration System established under 49 U.S.C. sec.11506(c) when operating exclusively in interstate or international commerce. (10) Commission - The Texas Transportation Commission. (11) Department - Texas Department of Transportation. (12) Director - The director of the Motor Carrier Division, Texas Department of Transportation. (13) Division - The Motor Carrier Division. (14) Farmer - A person who operates a farm or is directly involved in the cultivation of land, crops, or livestock which are owned by that person or are under the direct control of that person. (15) Farm vehicle - Any vehicle or combination of vehicles controlled and/or operated by a farmer or rancher being used to transport agriculture products, farm machinery, and farm supplies to or from a farm or ranch. (16) Gross weight rating - The maximum loaded weight of any combination of truck, tractor, and trailer equipment, as specified by the manufacturer of the equipment. If the manufacturer's rating is unknown, the gross weight rating is the greater of: (A) the actual weight of the equipment and its lading; or (B) the maximum lawful weight of the equipment and its lading. (17) Household goods - Personal effects and property used or to be used in a dwelling when the transportation of such effects and property is: (A) arranged for and paid by the householder, including property moving from a factory, warehouse or store which the householder has purchased with the intent to use in his or her dwelling and which is transported to the dwelling or storage; or (B) arranged for and paid by another party. (18) Household goods agent - A motor carrier who transports household goods on behalf of another motor carrier. (19) Household goods carrier - A motor carrier who transports household goods for compensation or hire in furtherance of a commercial enterprise, except when transporting in furtherance of their primary business which is a non- transportation business. (20) Independent - An individual who is not an employee of a household goods carrier or a shipper and who is not related by blood or marriage to the household goods carrier or the shipper. (21) Interstate Commerce Commission (ICC) - A federal agency which regulates interstate commerce. (22) Insurer - A person, including a surety, authorized in this state to write lines of insurance coverage required by subchapter B of this chapter (relating to Motor Carrier Registration). (23) Leasing business - A person that leases vehicles requiring registration under this subchapter to a motor carrier required to be registered. (24) Manager - The manager of the department's Motor Carrier Division, Compliance and Enforcement Section. (25) Mediation - A forum in which an impartial person, the mediator, facilitates communication between two parties to promote reconciliation, settlement, or understanding among the participants. (26) Motor Carrier - An individual, association, corporation, or other legal entity that controls, operates, or directs the operation of one or more vehicles which transport persons or cargo over a road or highway in this state. (27) Motor transportation broker - A person who sells, offers for sale, or negotiates for the transportation of cargo by a motor carrier operated by another person; or a person who aids and abets a person in performing an activity described in this definition. (28) Multiple user - An individual or business who has a contract with a household goods carrier and who uses the carrier's services more than 10 times within the preceding 12 months. (29) Principal place of business - A single location that serves as the motor carrier's headquarters and where it maintains or can make available its operational records. (30) Public highway - Any publicly owned and maintained street, road, or highway in this state. (31) Reasonable dispatch - The performance of transportation, excluding transportation provided under tariff provisions requiring guaranteed service dates, on the date or during the period of time agreed upon by the carrier and the shipper and shown on the shipment documentation; provided, however, that the defenses of force majeure as construed by the courts shall not be denied the carrier. (32) Registration receipt - A receipt issued to the registrant by its registration state after the requirements of 49, Code of Federal Regulation (CFR), Part 1023 have been met. (33) Registration state - A state where the registrant maintains a valid single state registration as defined in 49 CFR Part 1023. (34) Revocation - The withdrawal of registration and privileges by the department or a registration state. (35) Shipper - A person who is the consignor or consignee of a household goods shipment and is identified as such in the bill of lading contract and owns the goods being transported. (36) Short-term lease - A lease of 30 days or less. (37) Single state registration system - The program established by 49 U.S.C. sec.11506. (38) SOAH - The State Office of Administrative Hearings. (39) State(s) of travel - The state or states in which a motor carrier or carrier operates motor vehicles subject to the single state registration system. (40) Substitute vehicle - A vehicle used as a temporary replacement for a vehicle leased from a leasing business that has been taken out of service due to maintenance, repair, or other unavailability of the vehicle. (41) Suspension - Temporary removal of privileges granted to the registrant by the department or registration state. (42) Tow truck - A motor vehicle equipped with, or used in combination with, a mechanical device, mini-wrecker, or auto-trailer, and which is adapted or used to tow, winch, or otherwise move another vehicle. (43) Type A household goods carrier - A household goods carrier who utilizes at least one vehicle or a combination of vehicles with a gross weight, registered weight, or gross weight rating in excess of 26,000 pounds. (44) Type B household goods carrier - A household goods carrier who utilizes exclusively vehicle(s) or combination(s) of vehicles with a gross weight, registered weight, or gross weight rating equal to or less than 26,000 pounds. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804564 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 1997 For further information, please call: (512) 463-8630 SUBCHAPTER B.Motor Carrier Registration 43 TAC 18.10, 18.11, 18.13-18.16, 18.19 STATUTORY AUTHORITY The amendments and new section are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. sec.18.10. Purpose. Transportation Code, Chapter 643, provides that a motor carrier may not operate a commercial motor vehicle or a tow truck or transport household goods on a for- hire basis on a road or highway of this state unless the carrier registers with the department. This subchapter prescribes the procedures by which a motor carrier, leasing business, or for-hire transporter of household goods may register, sets out minimum insurance requirements and minimum workers' compensation or accident insurance requirements, and prescribes procedures for registering as a motor carrier under the single state registration system. sec.18.13.Application for Motor Carrier Registration. (a) Form of application. Except as provided in subsection (f) of this section, all applications for motor carrier registration shall be in the form prescribed by the director and shall contain, at a minimum, the following information. (1) Business or trade name. The applicant shall designate the business or trade name of the motor carrier. (2) Owner name. If the motor carrier is a sole proprietorship, the owner shall indicate the name and social security number of the owner. A partnership shall indicate the partners' names, and a corporation shall indicate principal officers and titles. (3) Principal place of business. A motor carrier shall designate on the application the motor carrier's principal business address. If the mailing address is different than the principal business address, the mailing address shall also be designated on the application. (4) Legal Agent. A Texas domiciled motor carrier will be the agent for service of process unless otherwise designated by the motor carrier. (A) The Texas domiciled motor carrier shall provide the name and address of a legal agent for service of process, if different than the motor carrier. (B) A motor carrier domiciled outside of Texas shall provide the name and Texas address of the legal agent for service of process. (C) A legal agent of process shall be a Texas resident, a domestic corporation, or a foreign corporation authorized to transact business in Texas with a Texas address for service of process. (5) Description of vehicles. All applications shall include a motor carrier equipment report identifying each commercial motor vehicle requiring registration that the carrier proposes to operate. Each commercial motor vehicle shall be identified by its motor vehicle identification number, make, model year, type of cargo, and the unit number assigned to the commercial motor vehicle by the motor carrier. Any subsequent registration of vehicles shall be made in accordance with subsection (d) of this section. (6) Description of cargo. An applicant shall also: (A) state as to whether or not the carrier proposes to transport passengers, household goods, or hazardous materials; (B) state whether or not the applicant is a tow truck operator; and (C) specify the amount of insurance coverage. (7) Safety Affidavit. Each motor carrier shall complete, as part of the application, an affidavit stating that the motor carrier has knowledge of, and will conduct operations in accordance with, all federal and state safety regulations. (8) Duration of registration. An applicant shall indicate the duration of the desired registration. Registration may be for seven calendar days, or for a period of 90 days, one year, or two years. The duration of registration chosen by the applicant is applied to all vehicles on the registration for the entire registration period. Household goods carriers may not obtain seven day or 90 day certificates of registration. (9) Accompaniments to application. The following fees and information shall be included with all applications: (A) an application fee of $100, plus a fee to equal $10 for each vehicle requiring registration that the motor carrier proposes to operate under a seven day, 90 day, or annual registration, or $20 for each vehicle requiring registration that the motor carrier proposes to operate under a biennial registration; (B) proof of insurance or financial responsibility and insurance filing fee as required by sec.18.16 of this title (relating to Insurance Requirements); and (C) any other information as required by law. (10) Payment of fees. Fees paid under paragraph (9)(A) of this subsection are non-refundable and will not be prorated. Credit will be given to seven day, 90 day, and annual registration applicants for fees paid under sec.18.17 of this title (relating to Single State Registration System), if the carrier provides a copy of the single state registration receipt. (11) Place of application. All applications for motor carrier registration shall be filed with the department's Motor Carrier Division. (b) Incomplete applications. Any application for registration that is incomplete, but that is accompanied by all fees and proof of insurance or financial responsibility, may be conditionally accepted by the director. Conditional acceptance shall in no way constitute approval of the application. The director will notify the applicant of the additional information necessary to complete the application. If the applicant does not supply all necessary information within 45 days from notification by the director, the application will be considered withdrawn and all fees will be retained. (c) Disposition of application. (1) Approval. An applicant meeting the requirements of this section and whose registration is approved shall be issued the following information. (A) Certificate of registration. A certificate of registration will contain the name and address of the motor carrier and a single registration number, regardless of the number of vehicles the carrier operates which require registration. (B) Registration listing. An original registration listing will be issued by the department and shall be continuously maintained at the registrant's principal place of business. Such listing will contain information regarding each vehicle registered by the motor carrier. (i) A copy of the page of the registration listing on which the power unit is shown shall be maintained in each power unit registered, with the appropriate information concerning that vehicle to be highlighted. The registration listing shall serve as proof of insurance as long as such insurance is in effect and such vehicle is registered with the department. (ii) The highlighted page of the registration listing maintained in the power unit shall, upon demand, be presented by the driver to a department certified inspector or any other authorized government personnel for inspection in accordance with sec.18.31 of this title (relating to Investigation and Examination of Records). (iii) Before the expiration of its registration listing, the commercial carrier shall notify the department in writing when it discontinues use of a registered commercial motor vehicle. (iv) Any erasure, alteration, or unauthorized use of a registration listing shall render it void. (v) If an original registration listing is lost, stolen, destroyed, mutilated, becomes illegible, or otherwise requires replacement, a new registration listing will be issued by the department upon written request by the motor carrier. (2) Denial. The department may deny a registration if the applicant has a registration revoked under sec.18.72 of this title (relating to Suspension and Revocation). (d) Supplement to original application. A motor carrier required to register under this section shall submit a supplemental application under the conditions described in this subsection. (1) Additional vehicles. (A) A motor carrier may not operate an additional vehicle requiring registration unless the carrier pays a $10 registration fee for each additional vehicle the motor carrier proposes to operate under a seven day, 90 day, or annual registration, or a $20 registration fee for each additional vehicle the motor carrier proposes to operate under a biennial registration, except as provided in subparagraphs (B) and (C) of this paragraph, and must have evidence of continuing insurance or financial responsibility in the amounts set forth in sec.18.16 of this title (relating to Insurance Requirements). (B) A motor carrier registered under a 90 day, annual, or biennial registration is not required to pay the $10 registration fee for a substitute vehicle that is a replacement for a vehicle for which the fee was previously paid, provided that the motor carrier notifies the department of the vehicle being taken out of service and identifies the replacement vehicle on a form prescribed by the department, before the replacement vehicle is put into operation. (C) Credit will be given to a seven day, 90 day, or annual registration certificate holder for fees paid for vehicles registered in accordance with sec.18.17 of this title (relating to Single State Registration System), if the carrier provides the department with a copy of the single state registration receipt. (2) Change of cargo. A registered motor carrier may not begin transporting household goods or hazardous materials unless the carrier presents a supplemental application which shows the department evidence of insurance or financial responsibility in the amounts specified by sec.18.16 of this title (relating to Insurance Requirements). (3) Change of name. A motor carrier that changes its name (other than by transferring ownership) shall file a supplemental application for registration in compliance with this section no later than the effective date of the change. The motor carrier shall include evidence of insurance or financial responsibility in the new name, and in the amounts specified by sec.18.16 of this title (relating to Insurance Requirements). A motor carrier that is a corporation shall include a copy of the amendment to its articles of incorporation approved by the Texas Secretary of State along with its supplemental application for registration. A motor carrier incorporated outside the State of Texas shall include a copy of its amendment to its articles of incorporation approved by the corresponding chartering authority. (4) Change of address or legal agent for service of process. A motor carrier shall notify the director, in writing, of any change of address or legal agent for service of process no later than the effective date of the change. The address most recently filed shall be presumed conclusively to be the current address. (5) Change of ownership. (A) A change of ownership of a sole proprietorship or partnership, and the merger, sale, or transfer of a corporation will require the new owner to file a new application for registration in accordance with the provisions of this section. (B) A motor carrier that is a corporation shall notify the director, in writing, of any change in the principal officers and titles no later than the effective date of the change. (e) Alternative vehicle registration for household goods agents. To avoid multiple registrations of a commercial motor vehicle, a household goods agent's vehicles may be registered under the motor carrier's certificate of registration in accordance with this subsection. (1) The carrier must notify the department on a form approved by the director of its intent to register its agent's vehicles under this subsection. (2) When registering a vehicle under this subsection, a carrier's certificate includes all vehicles registered under its agent's certificates of registration. The carrier must register under its certificate of registration all vehicles operated on its behalf that do not appear on its agent's certificate of registration. (3) The department may send to a carrier registered under this subsection a copy of any notification sent to the agent concerning a change in the agent's motor carrier certificate of registration which could lead to denial, suspension, or revocation of the agent's certificate. (f) Type B household goods carriers. An application for motor carrier registration submitted by a Type B household goods carrier, as defined in sec.18.2 of this title (relating to Definitions), shall be in the form prescribed by the director. (1) The carrier's application shall contain all the information described in subsection (a) of this section, except for the information prescribed by subsection (a)(5) and (7) of this section. (2) The carrier's application must be accompanied by a $100 application fee. (3) The carrier's application must be accompanied by proof of financial responsibility for cargo loss or damage and the filing fee as required by (18.16 of this title (relating to Insurance Requirements). (4) An original certificate of registration will be issued by the department and must be continuously maintained at the registrant's principal place of business. (5) A carrier must carry a copy of its certificate of registration in each vehicle used for the transportation of household goods. (6) The carrier must notify the department in writing when it discontinues operations as a transporter of household goods. (7) The certificate of registration maintained in the vehicle shall, upon demand, be presented by the driver to a department certified inspector or any other authorized government personnel for inspection in accordance with sec.18.31 of this title (relating to Investigation and Examination of Records). (8) The certificate of registration is continuously in effect until canceled by the department through suspension or revocation. If the carrier wishes to cancel its certificate of registration, it must submit a written request for cancellation to the department. (9) Any erasure, alteration, or unauthorized use of a certificate of registration shall render it void. (10) The carrier may make a written request for a replacement certificate of registration. (g) Substitute vehicles leased from leasing businesses. A registered motor carrier is not required to comply with the provisions of subsection (d) of this section for a vehicle leased from a leasing business registered under sec.18.19 of this title (relating to Short Term Lease) and used as a temporary replacement for the originally leased vehicle due to maintenance, repair, or other unavailability. A motor carrier is not required to carry proof of registration as described in subsection (c) of this section if a copy of the lease agreement for the originally leased vehicle is carried in the cab of the temporary replacement vehicle. sec.18.16. Insurance Requirements. (a) Automobile liability insurance requirements. A motor carrier, other than a Type B household goods carrier, registered under this subchapter shall carry at least the minimum amount of automobile liability insurance and file proof of insurance with the department for each vehicle registered under this subchapter. Such insurance must be sufficient to pay, not more than the amount of the insurance, for each final judgment against the carrier (combined single limit) for bodily injury to or death of an individual per occurrence, and loss or damage to property (excluding cargo) per occurrence, or both. Minimum insurance levels shall be maintained in at least the amounts indicated in the following table. Figure 2: 43 TAC sec.18.16 (a). (b) Cargo insurance. (1) A Type A household goods carrier shall carry cargo insurance in the same amount required by 49 U.S.C. sec.10102. The minimum limits of financial responsibility for household goods carriers for hire are as follows: (A) loss of or damage to total cargo carried on any one motor vehicle - $5,000; and (B) aggregate loss of or damage to multiple shipper cargo carried on any one motor vehicle - $10,000 (in cases where multiple shippers sustain damage and the aggregate amount of cargo damage is greater than the cargo insurance in force, the insurance company shall prorate the benefits among the shippers in relationship to the damage incurred by each shipper). (2) A Type B household goods carrier shall file and maintain with the department proof of financial responsibility for cargo in at least the amount of $5,000 for: (A) loss of or damage to total cargo carried on any one motor vehicle; and (B) aggregate loss of or damage to multiple shipper cargo carried on any one motor vehicle (in cases where multiple shippers sustain damage and the aggregate amount of cargo damage is greater than the cargo insurance in force, the insurance company shall prorate the benefits among the shippers in relationship to the damage incurred by each shipper). (c) Workers' compensation or accidental insurance coverage. (1) Motor carriers required to register under this subchapter whose primary business is transportation for compensation or hire, and who operate between two or more incorporated cities, towns, or villages, shall provide for all its employees workers' compensation, or accidental insurance coverage in the amounts prescribed in paragraph (2) of this subsection. Provisions of this subsection do not apply to Type B household goods carriers. (2) Accidental insurance coverage required by paragraph (1) of this subsection shall be at least in the following amounts: (A) $300,000 for medical expenses and coverage for at least 104 weeks; (B) $100,000 for accidental death and dismemberment, 70% of employee's pre- injury income for not less than 104 weeks when compensating for loss of income; and (C) $500 for the maximum weekly benefit. (d) Qualification of carrier as self-insurer. (1) General qualifications. A motor carrier may meet the insurance requirements of subsections (a) and (b) of this section by filing an application, in the form prescribed by the department, to qualify as a self-insurer. The application shall include a true and accurate statement of the motor carrier's financial condition and other evidence that establishes its ability to satisfy obligations for bodily injury and property damage liability, without affecting the stability or permanency of its business. In lieu of other proof, the department may accept United States Department of Transportation or Interstate Commerce Commission evidence of the motor carrier's qualifications as a self-insurer. (2) Adopted final orders. The department will adopt all RRC final orders concerning self-insurance active on August 31, 1995, and will continue such final orders as authorized by the RRC until further amended or changed by order of the department. (3) Applicant guidelines. In addition to filing an application as prescribed by the department, an applicant for self-insurer status shall submit materials that will allow the department to determine the following information. (A) Applicant's net worth. An applicant's net worth shall be adequate in relationship to the size of its operations and the extent of its request for self-insurance authority. The applicant shall demonstrate that it can and will maintain such a net worth. (B) Self-insurance program. An applicant shall demonstrate that it has established, and will maintain, a sound insurance program that will protect the public against all claims involving motor vehicles to the same extent as the minimum security limits applicable under this section. In determining whether an applicant is maintaining a sound insurance program, the department will consider: (i) reserves; (ii) sinking funds; (iii) third-party financial guarantees; (iv) parent company or affiliate sureties; (v) excess insurance coverage; and (vi) other appropriate aspects of the applicant's program. (C) Safety program. An applicant shall submit evidence of substantial compliance with the Federal Motor Carrier Safety Regulations as adopted by the Texas Department of Public Safety, and with Transportation Code, Chapter 644 (4) Other securities or agreements. The department may consider applications for approval of securities or agreements and may approve any such application if satisfied that the security or agreement offered will afford adequate protection of the public. (5) Periodic reports. An applicant shall file annual statements, semi-annual and quarterly reports, and any other reports required by the department reflecting the applicant's financial condition and status of its self-insurance program during the period of the motor carrier's self-insurer status. (6) Duration of self-insurer status. The department may approve an applicant as a self-insurer for any specific time period, or for an indefinite period until revoked under the provisions of paragraph (7) of this subsection. (7) Revocation of self-insurer status. Upon evidence that a self-insured motor carrier's financial condition has changed, safety program or record is inadequate, or is otherwise not in compliance with this subchapter, the department may at any time, with 10 days notice to the self-insurer, require the self-insurer to appear and demonstrate that it continues to have adequate financial resources to pay all claims involving motor vehicles for bodily injury and property damage liability; and that it remains in compliance with the requirements of this section and any active self-insurance orders issued or adopted by the department. If an applicant fails to so demonstrate, its self- insurer status may be revoked. (8) Appeal. An applicant may appeal a denial of self-insurance status or revocation of such status by filing a petition for an administrative hearing in accordance with sec.sec.1.21 et seq. of this title (relating to Contested Case Procedure). (e) Proof of insurance. (1) Proof of insurance. (A) A motor carrier, other than a Type B household goods carrier, shall maintain its vehicle registration listing as proof of insurance in its vehicles at all times. This proof shall be in the form prescribed by the department and the Texas Department of Insurance (DOI) in coordination with the Texas Department of Public Safety. (B) A Type A household goods carrier shall file and maintain proof of cargo insurance for its cargo at all times. This proof shall be on a Form H or its successor as prescribed by the department and the DOI. (C) A Type B household goods carrier shall file and maintain proof of financial responsibility for its cargo at all times. Proof of financial responsibility may be made by filing proof of cargo insurance on a Form H or its successor as prescribed by the department and the DOI. Alternatively, the proof of financial responsibility may be a surety bond, filed on a Form J or its successor as prescribed by the department and the DOI, or a letter of credit as described in subsection (e)(5) of this section. (2) Filing proof of insurance and financial responsibility. A motor carrier's insurance or surety company, bank or other financial institution, shall file and maintain proof of insurance or financial responsibility on the appropriate form: (A) at initial application for motor carrier certificate of registration; (B) at initial registration of a vehicle; (C) when the insurance carrier changes; (D) when the ownership of the certificate changes; (E) when the motor carrier changes its name under sec.18.13(d)(3) of this title (relating to Application for Motor Carrier Registration); and (F) when the motor carrier, under subsection (a) of this section, changes the classification of the cargo being transported. (3) Filing fee. Each certificate of insurance or proof of financial responsibility filed with the department for the coverage required under this section shall be accompanied by a nonrefundable filing fee of $100. (4) Other bonds, policies or certificates. No surety bond, insurance policy, or certificate of insurance will be accepted by the department unless issued by an insurance or surety company licensed and authorized to do business in the State of Texas, in the form prescribed or approved by the DOI, and signed or countersigned by an authorized agent of the insurance or surety company. The department will accept a certificate of insurance issued by a surplus lines insurer that meets the requirements of Insurance Code, Article 1.14-2, and rules adopted by the DOI under that article. (5) Letters of credit as proof of financial responsibility for Type B household goods carriers' cargo. (A) An irrevocable letter of credit will be accepted by the department if issued by a bank or financial institution whose deposits are guaranteed by the Federal Deposit Insurance Corporation. A letter of credit filed by a carrier must be signed or countersigned by an officer of the bank or financial institution and must comply with the following provisions at a minimum. (i) The beneficiaries of the letter of credit must be designated clearly as cargo loss or damage claimants of the carrier. No other parties may have rights of recovery against the letter of credit. Payments under the letter of credit must be made directly to the cargo loss or damage claimant. A qualified beneficiary must establish and perfect its claims by having agreed with the motor carrier in writing on a specific amount to be paid in final settlement of the claim, or by having obtained a final judgment rendered by a court of competent jurisdiction establishing the motor carrier's liability and the amount thereof. (ii) The letter of credit may not be revoked until all claims, arising during the time the carrier has authority from the department to use the letter of credit to satisfy cargo insurance requirements of this section, have been settled. Claims must be filed with the household goods carrier within nine months after delivery of the property or, in case of failure to make delivery, within nine months after reasonable time for delivery has elapsed. Suits must be instituted within two years and one day from the day when notice is given, in writing, by the household goods carrier to the claimant that part or all of the claim has been disallowed. Where a claim is not filed or a suit is not instituted in accordance with the foregoing provisions, a household goods carrier shall not be held liable and the claim will not be paid. (iii) The letter of credit must state that the bank or financial institution will notify the department of cancellation of or change in the letter of credit. (B) The carrier shall provide the department with copies of amendments or successor letters of credit no later than 30 days prior to the change. Any changes in the terms of the letter of credit must be given prior approval by the department. Draw downs may be made only to satisfy claims for cargo loss or damage, and any draw down from the letter of credit not replenished within seven days must be reported immediately to the department. (C) The department retains the authority to terminate the letter of credit filing at any time if it appears to the department that the carrier's letter of credit fails to provide satisfactory protection for shippers or the carrier fails to timely file any of the information required by the department. (D) Upon evidence that the letter of credit is no longer adequately funded, the financial condition of a carrier with a letter of credit filing has changed, or the carrier is otherwise not in compliance with this subchapter, the department may at any time, with 10 days notice to the carrier, require the carrier to appear and demonstrate that it continues to have adequate letter of credit funding to pay all claims involving cargo loss or damage liability, and that it remains in compliance with the requirements of this section. The department may revoke the letter of credit if a carrier fails to demonstrate adequate letter of credit funding to pay all claims involving cargo loss or damage or fails to comply with any requirement of this section. (E) A carrier may appeal a denial or revocation of a letter of credit filing by filing a petition for an administrative hearing in accordance with sec.sec.1.21 et seq. of this title (relating to Contested Case Procedure). (f) Termination of insurance coverage. Except when replaced by another acceptable form of insurance coverage or proof of financial responsibility approved by the department, no insurance coverage, surety bond, or letter of credit shall be canceled or withdrawn until after 30 days notice has been given to the department by the insurance or surety company or bank or financial institution, in the form prescribed by the department and the DOI, or approved by the department. However, proof of insurance coverage for a seven day or 90 day certificate of registration may be canceled by the insurance company without 30 days notice provided the certificate of registration is expired, canceled, or revoked, and the insurance company provides a termination date on the proof of insurance coverage. (1) Insolvency of insurance carrier. If the insurer or surety of a motor carrier becomes insolvent or becomes involved in a receivership or other insolvency proceeding, the motor carrier may apply for approval of a surety bond, insurance policy or letter of credit issued by another surety, insurer, bank, or other financial institution upon filing an affidavit with the department. Such affidavit shall be executed by an owner, partner, or officer of the motor carrier, and show that: (A) no accidents or claims have occurred or arisen during the insolvency of the insurance carrier, surety, bank, or other financial institution; or (B) that all damages and claims have been satisfied. (2) Notifications. The department shall notify the Texas Department of Public Safety of each notice received by the department under this subsection. sec.18.19. Short-trem Lease and Substitute Vehicles. (a) Registration. A short-term lease vehicle registered under this section is exempt from the registration requirements described in sec.18.13 of this title (relating to Application for Motor Carrier Registration) while leased to a registered motor carrier. (1) Application. A leasing business registering vehicles under this section shall file an application on a form prescribed by the director. (2) Annual Report. (A) The operation of a short-term lease vehicle shall be reported to the department on a form prescribed by the director not later than April 1 of each calendar year for the previous calendar year's operations. The report shall identify the number of short-term lease vehicles which would otherwise be subject to the registration requirements of this subchapter. (B) The initial March 1998 report shall identify the number of short-term lease vehicles operated from September 1, 1997 through December 31, 1997. (3) Fees. An annual registration fee of $10 per vehicle operated shall be paid at the time the report is filed under paragraph (2) of this subsection. (4) Cancellation, Expiration, and Revocation. (A) A request for cancellation of a leasing business registration must be made in writing to the department by the leasing business. (B) A leasing business registration shall expire on April 30 of each year unless the leasing business reports, by April 1, the actual number of vehicles requiring registration operated in the previous calendar year. (C) A leasing business registration may be suspended or revoked by the department in accordance with sec.18.72 of this title (relating to Suspension and Revocation). (b) Proof of contingency liability insurance. A leasing business registering a vehicle under this section shall file and maintain proof of liability insurance as required by sec.18.16 of this title (relating to Insurance Requirements) with the department on a form prescribed by the director. (1) Filings. A leasing business shall file proof of insurance upon initial registration, and whenever it changes insurance carriers, in accordance with sec.18.16 of this title (relating to Insurance Requirements). (2) Filing fee. Each insurance filing under this section shall be accompanied by a nonrefundable $100 filing fee. (3) Termination of insurance coverage. Any termination of insurance filed under this section must comply with the requirements set out in sec.18.16 of this title (relating to Insurance Requirements). (c) Substitute vehicles. A registered motor carrier is not required to comply with the provisions of subsection sec.18.13(d) of this title (relating to Application for Motor Carrier Registration) for a vehicle leased from a leasing business registered under this section and used as a temporary replacement for the originally leased vehicle due to maintenance, repair, or other unavailability. (d) Identification. A registered motor carrier is not required to carry proof of registration, as required by sec.18.13(c)(1)(B) of this title (relating to Motor Carrier Registration), in a vehicle leased from a registered leasing business. A copy of the lease agreement, or the lease for the originally leased vehicle, in the case of a temporary replacement vehicle, must be carried in the cab of the vehicle. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804566 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 19978 For further information, please call: (512) 463-8630 43 TAC sec.18.12 STATUTORY AUTHORITY The repealed section is adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804565 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 1997 For further information, please call: (512) 463-8630 SUBCHAPTER C.Records and Inspections 43 TAC sec.18.31, sec.18.32 STATUTORY AUTHORITY The amended sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804567 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 1997 For further information, please call: (512) 463-8630 SUBCHAPTER E.Consumer Protection 43 TAC sec.sec.18.51-18.54, 18.56, 18.61 STATUTORY AUTHORITY The amended sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804568 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 1997 For further information, please call: (512) 463-8630 SUBCHAPTER F.Enforcement 43 TAC sec.sec.18.70-18.72 STATUTORY AUTHORITY The amended sections are adopted under Transportation Code, sec.201.101, which provides the Texas Transportation Commission with the authority to establish rules for the conduct of the work of the Texas Department of Transportation, and more specifically, Transportation Code, Chapters 643, 645, and 646, as amended, which authorize the department to carry out the provisions of those laws governing the registration of motor carriers. 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. Filed with the Office of the Secretary of State on March 31, 1998. TRD-9804569 Bob Jackson Acting General Counsel Texas Department of Transportation Effective date: April 21, 1998 Proposal publication date: October 17, 1997 For further information, please call: (512) 463-8630