ADOPTED RULES
An agency may take final action on a section 30 days after a proposal has been 
published in the Texas Register. The section becomes effective 20 days after the 
agency files the correct document with the Texas Register, unless a later date 
is specified or unless a federal statute or regulation requires implementation 
of the action on shorter notice.
If an agency adopts the section without any changes to the proposed text, only 
the preamble of the notice and statement of legal authority will be published. 
If an agency adopts the section with changes to the proposed text, the proposal 
will be republished with the changes.

TITLE 1. ADMINISTRATION
PART XV. Texas Health and Human Services Commission
CHAPTER 381. Guardianship Services
The Health and Human Services Commission adopts new sec.sec.381.1, 381.2, 
381.101-381.103, and 381.201-381.210 of new chapter 381, Guardianship Services, 
new subchapter A, Purpose and Definitions: Concerning the purpose and definition 
of terms for this chapter; new subchapter B, Guardianship Advisory Board: The 
establishment of the Guardianship Advisory Board within HHSC; and new subchapter 
C, Grants for Local Volunteer Guardianship Programs: The award of grants for the 
establishment of local volunteer guardianship programs, without changes to the 
proposed text as published in the June 26, 1998, issue of the Texas Register (23 
TexReg 6675). The text will not be republished.
The adopted rules partially implement the provisions of Chapter 531, the 
Guardianship Advisory Board and directs HHSC to, among other things, develop and 
award grants for the establishment of local volunteer guardianship programs. 
Comments were received from Dennis Henegar, President of EduCare Community 
Living Corporation America. 
COMMENTS ON SUBCHAPTER B. GUARDIANSHIP ADVISORY BOARD 
Comment: The commenter writes that "establishing an office of guardianship is a 
fabulous idea and long overdue for the counties of Texas that do not already 
have this program in place." The commenter also asked whether rules were going 
to be written to govern this program. 
Response: As stated in proposed section 381.101, the Guardianship Advisory Board 
will advise HHSC concerning its administration of chapter 531, subchapter D of 
the Government Code including, among other things, the development and (subject 
to appropriation of funds by the Texas Legislature) implementation of a plan to 
ensure each incapacitated person in Texas who needs guardianship or less 
restrictive forms of assistance receives necessary and appropriate assistance. 
The rules do not establish a statewide office to govern or administer 
guardianships. If chapter 531, subchapter D is amended to establish such an 
office, administrative rules to govern its activities will be developed at that 
time. 
Comment: The commenter asked who will enforce and monitor the guardianship 
program. 
Response: Again, HHSC assumes the commenter is referring to a statewide office 
of guardianship. The proposed rules do not govern the establishment or operation 
of such an office. The structure of a statewide office of guardianship must be 
determined by the Texas Legislature. 
COMMENTS ON SUBCHAPTER C. GRANTS FOR LOCAL VOLUNTEER GUARDIANSHIP PROGRAMS 
Comment: The commenter asked what happens to guardianships if the grant is not 
renewed. 
Response: HHSC assumes that commenter requests clarification of the status of a 
guardianship established by a local volunteer guardianship program pursuant to a 
grant awarded by HHSC when the grant is not renewed. The proposed rules do not 
govern the administration of a guardianship following termination of a grant. A 
guardianship is created by an order from a county court appointing an individual 
or program to serve as guardian. Local volunteer guardianship grants to a 
program in no way effect these orders. If a program or individual in a program 
is unable to continue as guardian for any reason, the program or the individual 
will be required to file an application to resign as guardian with the court 
pursuant to section 760 of the Texas Probate Code. The Court will seek to find a 
successor guardian. Proposed section 381.205 provides that HHSC makes no 
commitment that a grant, once funded, will receive priority consideration for 
subsequent funding. Programs that apply for grants should therefore secure other 
funding sources to ensure that such programs will not depend upon future grants 
from HHSC to stay in existence.
Comment: The commenter asked whether the agency that is granted the award has 
any legal responsibility for the guardian's actions.
Response: The assignment or determination of legal responsibility for the 
actions of a guardian is beyond the scope of these rules and is more 
appropriately addressed by the Texas Legislature and courts. 
Comment: The commenter stated that if the intent is to handle this program only 
through volunteers, then it has been its experience that guardianship by 
volunteer is not the most successful program-obtaining volunteers has been 
difficult at best, especially in the rural areas. 
Response: Section 531.125 authorizes the award of grants to a local guardianship 
center to establish local "volunteer" guardianship programs. The statute does 
not authorize grants for purposes of establishing non-volunteer programs. The 
establishment of grants for programs other than local volunteer guardianship 
programs must be authorized by the Texas Legislature. 

SUBCHAPTER A. Purpose and Definitions
1 TAC sec.381.1, sec.381.2
The new rules are adopted under the Texas Government Code, Chapter 531, 
sec.531.033, which authorizes the Commissioner of Health and Human Services to 
adopt rules necessary to carry out the Health and Human Services Commission's 
duties under Chapter 531.
The new rules affect Chapter 531 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 August 10, 1998.
TRD-9812612
Marina S. Henderson
Executive Deputy Commissioner
Texas Health and Human Services Commission
Effective date: August 30, 1998
Proposal publication date: June 26, 1998
For further information, please call: (512) 424-6576

SUBCHAPTER B. Guardianship Advisory Board
1 TAC sec.sec.381.101-381.103
The new rules are adopted under the Texas Government Code, Chapter 531, 
sec.531.033, which authorizes the Commissioner of Health and Human Services to 
adopt rules necessary to carry out the Health and Human Services Commission's 
duties under Chapter 531. 
The new rules affect Chapter 531 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 August 10, 1998.
TRD-9812614
Marina S. Henderson
Executive Deputy Commissioner
Texas Health and Human Services Commission
Effective date: August 30, 1998
Proposal publication date: June 26, 1998
For further information, please call: (512) 424-6576

SUBCHAPTER C. Grants for Local Volunteer Guardianship Programs
1 TAC sec.sec.381.201-381.210
The new rules are adopted under the Texas Government Code, Chapter 531, 
sec.531.033, which authorizes the Commissioner of Health and Human Services to 
adopt rules necessary to carry out the Health and Human Services Commission's 
duties under Chapter 531.
The new rules affect Chapter 531 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 August 10, 1998.
TRD-9812613
Marina S. Henderson
Executive Deputy Commissioner
Texas Health and Human Services Commission
Effective date: August 30, 1998
Proposal publication date: June 26, 1998
For further information, please call: (512) 424-6576

TITLE 4. AGRICULTURE
PART I. Texas Department of Agriculture
CHAPTER 3.Boll Weevil Eradication Program
SUBCHAPTER E.Creation of Eradication Zones
4 TAC sec.3.115
The Texas Department of Agriculture (the department) adopts new sec.3.115, 
concerning the creation of a nonstatutory boll weevil eradication zone, without 
changes to the proposal published in the July 3, 1998, issue of the Texas 
Register (23 TexReg 6803). The new section is adopted to establish a new 
nonstatutory boll weevil eradication zone consisting of counties not currently 
located in a statutory zone created under Chapter 74, Subchapter D, sec.74.1021, 
in order to allow cotton producers in the new zone an opportunity to establish a 
more manageable, efficient eradication program that better meets the local needs 
of producers. New sec.3.115 establishes the El Paso/Trans-Pecos Boll Weevil 
Eradication Zone. A grower referendum will be conducted at a future date to 
determine whether or not a boll weevil eradication program and assessment will 
be approved for that zone. 
Comments generally in favor of the proposal were received by the Department from 
individual producers at public hearings held in El Paso and Pecos, Texas. 
Fourteen written comments were also received supporting the proposal. Comments 
generally supported the need for the program as a measure to prevent the spread 
of the boll weevil and to allow producers to maintain the low level of boll 
weevils that they currently enjoy. Also, producers expressed a need for a 
program that would meet their needs and be cost efficient and believe that 
establishing a small zone, such as that proposed, will allow them to keep costs 
down. In regards to the proposed boundaries, one comment was received 
specifically supporting the proposed boundaries. 
The department agrees with the comments received in support of the designation 
of the proposed zone and believes that enough grower support and justification 
has been demonstrated to adopt the designation of the El Paso/Trans- Pecos Boll 
Weevil Eradication Zone and provide the opportunity for growers to express their 
support by passing or defeating a referendum to establish a zone eradication 
program. 
The new section is adopted under the Texas Agriculture Code, sec.74.1042, which 
provides the commissioner of agriculture with the authority, by rule, to 
designate an area of the state as a proposed boll weevil eradication zone. 
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 August 6, 1998.
TRD-9812498
Dolores Alvarado Hibbs
Deputy General Counsel
Texas Department of Agriculture
Effective date: August 26, 1998
Proposal publication date: July 3, 1998
For further information, please call: (512) 463-7541

TITLE 7. BANKING AND SECURITIES
PART VII. State Securities Board
CHAPTER 105. Rules of Practice in Contested Cases
7 TAC sec.105.1
The State Securities Board adopts an amendment to sec.105.1, concerning rules of 
practice in contested cases. The rule was adopted with changes to the proposed 
text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 
3392). A clarification of the period involved and a typographical error were 
fixed in the fifth sentence and explanatory phrases were added in the last 
sentence. 
The rule notes the procedural rules and statutes applicable in contested cases. 
The rule will apprise interested persons of the administrative rules and 
statutes applicable to contested cases. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Civil Statutes, Article 581-28-1. Section 
28-1 provides the Board with the authority to adopt rules and regulations 
necessary to carry out and implement the provisions of the Texas Securities Act, 
including rules and regulations governing registration statements and 
applications; defining terms; classifying securities, persons, and matters 
within its jurisdiction; and prescribing different requirements for different 
classes. 

sec.105.1. Scope. 
These rules of practice are applicable to contested cases under the Texas 
Securities Act (the "Act"). A "contested case" means a proceeding in which the 
legal rights, duties, or privileges of a party are to be determined after an 
opportunity for adjudicative hearing. A "party" means an applicant for 
registration as a dealer or salesman under the Act, sec.15 or sec.18, applicant 
for registration of securities under the Act, sec.7, or a person named in an 
administrative action taken, or proposed to be taken by the Securities 
Commissioner. In a contested case, each party is entitled to an opportunity for 
hearing after reasonable notice of not less than 30 days and to respond and 
present evidence and argument on each issue involved in the case. In the case of 
a hearing called pursuant to the Act, sec.23.A, however, notice given less than 
30 days, but not less than 15 days, will be deemed sufficient. Such hearings 
shall be open to the public in accordance with the Public Information Act, Texas 
Government Code, Chapter 551, and conducted in accordance with the 
Administrative Procedure Act ("APA"), Texas Government Code, Chapter 2001, 
except as may be required by this Chapter. In a contested case filed at the 
State Office of Administrative Hearings ("SOAH"), the procedural rules of SOAH, 
described in 1 TAC Chapter 155 (Rules of Procedures), the APA, and Board rules 
shall apply. Procedure in a contested case is governed by the law in effect on 
the date of the filing of the Notice of Hearing. 
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 August 4, 1998.
TRD-9812311
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

CHAPTER 107. Terminology
7 TAC sec.107.2
The State Securities Board adopts an amendment to sec.107.2, concerning 
definitions. The rule was adopted with changes to the proposed text as published 
in the April 3, 1998, issue of the Texas Register (23 TexReg 3393). Citations to 
the Credit Union Act and the Savings and Loan Act were updated from those 
appearing in the published proposal. Also, "geologist" was retained in the 
exclusions contained in the definition of investment adviser. A related 
amendment to sec.115.1(i), concerning persons not required to register as 
investment advisers, is being concurrently adopted. 
The amendment changes the definitions of "investment adviser" and "rendering 
services as an investment adviser"; numbers the definitions in this section; and 
updates statutory citations. 
The amendment more closely aligns the Board's definition of investment adviser 
with the definition utilized by the federal government and by other states and, 
thereby, achieves greater uniformity with other securities regulators; 
incorporates the concept of notice filings by investment advisers as an 
authorization for rendering services as an investment adviser; and provides 
accurate statutory cross-references. 
One comment letter was received regarding the amendment. The commenter urged the 
Board not to remove "geologist" from the exclusions to the definition of 
investment adviser. The Board agreed and left the existing exclusion for 
geologists intact. 
The amendment is adopted under Texas Civil Statutes, Article 581-28-1. Section 
28-1 provides the Board with the authority to adopt rules and regulations 
necessary to carry out and implement the provisions of the Texas Securities Act, 
including rules and regulations governing registration statements and 
applications; defining terms; classifying securities, persons, and matters 
within its jurisdiction; and prescribing different requirements for different 
classes. 

sec.107.2. Definitions. 
The following words and terms, when used in Part VII of this title (relating to 
the State Securities Board), shall have the following meanings, unless the 
context clearly indicates otherwise. 
(1) Act or Securities Act or Texas Securities Act - The Texas Securities Act, 
Texas Civil Statutes, Article 581-1 et seq., as amended. 
(2) Affiliate - An "affiliate" of, or person "affiliated" with a specified 
person, is a person that directly, or indirectly through one or more 
intermediaries, controls or is controlled by, or is under common control with, 
the person specified. 
(3) APA or Administrative Procedure Act - The Administrative Procedure Act, 
Texas Government Code, Title 10, Chapter 2001, as amended.
(4) Applicant - A person who submits an application for registration of 
securities, documents in connection with the offer and sale of federal covered 
securities, or for registration as a dealer, investment adviser, or salesman, or 
who files an application for an order of the Securities Commissioner. 
(5) Board or Securities Board - The State Securities Board of the State of 
Texas. 
(6) Business days - For the purpose of filing Form 133.29 pursuant to the 
requirements of sec.109.13(l) of this title (relating to Limited Offering 
Exemptions), means ordinary business days and does not include Saturdays, 
Sundays, or state holidays. 
(7) Certified - In conjunction with the term "financial statement(s)," means 
financial statement(s) prepared in accordance with generally accepted accounting 
principles and examined in accordance with generally accepted auditing standards 
by independent certified public accountants or independent public accountants 
for the purposes of expressing an opinion thereon. Such opinion shall be one 
acceptable to the Securities Commissioner. 
(8) Code or Internal Revenue Code - The Internal Revenue Code of 1986, as 
amended. 
(9) Commissioner or Securities Commissioner - The State Securities Commissioner 
for the State of Texas. 
(10) Contested case - A proceeding in which the legal rights, duties, or 
privileges of a party are to be determined by the Securities Commissioner, or 
the Securities Board, after an opportunity for adjudicative hearing before an 
administrative law judge of the State Office of Administrative Hearings. 
(11) Control - The possession, direct or indirect, of the power to direct or 
cause the direction of the management and policies of a person or company, 
whether through the ownership of voting securities, by contract, or otherwise. 
(12) Credit union - For definition see the Texas Credit Union Act (Texas Finance 
Code, Chapter 121, as amended), which regulates such credit unions. 
(13) Detailed balance sheet - A balance sheet. 
(14) Detailed statement showing all assets and liabilities - A balance sheet. 
(15) Domestic corporation - A corporation incorporated under the laws of the 
State of Texas. 
(16) Employer - For purposes of the Texas Securities Act, sec.5.I(b), includes a 
general partner of a limited partnership with respect to a security sold or 
distributed by such limited partnership in a transaction otherwise meeting the 
requirements of sec.5.I(b). 
(17) Federal covered securities - Any security or securities described as a 
"covered security" or as "covered securities" in the Securities Act of 1933, 
sec.18(b), or rules or regulations promulgated thereunder. However, until 
October 11, 1999, or such other date Congress may authorize, federal covered 
securities for which a fee has not been paid and promptly remedied following 
written notification from the Securities Commissioner to the applicant of the 
nonpayment or underpayment of such fees required by the Texas Securities Act, 
shall be excluded from the definition of federal covered securities. 
(18) Financial statement(s) - Balance sheet and related statements of income, 
changes in stockholders' equity, and cash flows, all (consolidated, if 
applicable) prepared in accordance with generally accepted accounting 
principles. The information contained in the previously described statements may 
vary according to presentation and titles as they relate to specific entities, 
such as individuals, partnerships, and nonprofit organizations.
(19) Investment adviser - Any person who, for compensation, engages in the 
business of advising others, either directly or through publications or 
writings, as to the value of securities or as to the advisability of investing 
in, purchasing, or selling securities, or who, for compensation and as part of a 
regular business, issues or promulgates analyses or reports concerning 
securities; but does not include: 
(A) a bank, or any bank holding company as defined in the federal Bank Holding 
Company Act of 1956, which is not an investment company;
(B) any lawyer, accountant, engineer, teacher, or geologist, whose performance 
of such services is solely incidental to the practice of his or her profession; 
(C) any broker or dealer whose performance of such services is solely incidental 
to the conduct of his business as a broker or dealer and who receives no special 
compensation therefor; 
(D) the publisher of any bona fide newspaper, news magazine, or business or 
financial publication of general and regular circulation; or
(E) any person whose advice, analyses, or reports relate to no securities other 
than securities which are direct obligations of or obligations guaranteed as to 
principal or interest by the United States, or securities issued or guaranteed 
by corporations in which the United States has a direct or indirect interest 
which shall have been designated by the Secretary of Treasury, pursuant to the 
Securities Exchange Act of 1934, sec.3(a)(12), as exempted securities for the 
purposes of that Act. 
(20) Investment Advisers Act of 1940 - The federal statute of that name, as 
amended, 15 United States Code sec.80b-1, et seq.
(21) Investment Company Act of 1940 - The federal statute of that name, as 
amended, 15 United States Code sec.80a-1, et seq. 
(22) License - The whole or part of any registration as a dealer, salesman, or 
agent, or similar form of permission required by the Texas Securities Act to 
sell securities or render investment advice. 
(23) Licensing - The process respecting the granting, denial, renewal, 
revocation, suspension, annulment, withdrawal, or amendment of a license. 
(24) Managing agent or manager - One who is authorized to act generally for an 
organization within a particular locality. 
(25) NASD - The National Association of Securities Dealers, Inc., and NASD 
Regulation, Inc., a subsidiary of the National Association of Securities 
Dealers, Inc. 
(26) Officer - A president, vice president, secretary, treasurer, or principal 
financial officer, comptroller, or principal accounting officer, or any other 
person occupying a similar status or performing similar functions with respect 
to any organization or entity, whether incorporated or unincorporated. 
(27) Operating statement - An income statement. 
(28) Parent - A person controlling another person directly or indirectly. 
(29) Profit and loss statement - An income statement.
(30) Proposed plan of business - As used in the Texas Securities Act, those 
aspects and only those aspects of the business set-up (other than that done or 
proposed in respect to the pricing and selling of its securities) which would 
materially affect the business relationship between the prospective investor and 
those in control of the business as such relationship would exist after the sale 
to the public of the securities sought to be registered.
(31) Regulatory standards - All standards coming within the meaning of "rule" as 
defined herein. 
(32) Rendering services as an investment adviser - Any person coming within the 
designation cannot conduct such activity without first being registered as an 
investment adviser/dealer under the provisions of the Act or notice-filed under 
the provisions of sec.115.1(i) of this title (relating to General Provisions). 
Likewise, every person employed or appointed, or authorized by such person to 
render services which include the giving of investment advice cannot conduct 
such activities unless registered as a dealer/investment adviser, a salesman, or 
an agent under the provisions of the Act, or notice-filed as a dealer/investment 
adviser, a salesman, or an agent under the provisions of sec.115.1(i) of this 
title. 
(33) Rule - Any statement by the Board or the Securities Commissioner of general 
applicability that implements, interprets, or prescribes law or policy, or 
describes the procedure or practice requirements of the Board or Securities 
Commissioner. 
(34) Savings and loan association - For definition see the Texas Savings and 
Loan Act (Texas Finance Code, Chapter 61, as amended), which regulates such 
savings and loan associations. 
(35) SEC - The United States Securities and Exchange Commission. 
(36) Securities Act of 1933 - The federal statute of that name, as amended, 15 
United States Code sec.77a, et seq. 
(37) Securities Exchange Act of 1934 - The federal statute of that name, as 
amended, 15 United States Code sec.78a, et seq. 
(38) Security holders or purchasers of securities - As such terms are used in 
the Texas Securities Act, sec.5.I, do not include holders of any options granted 
pursuant to a plan which falls within the exemption for employee plans provided 
by the Texas Securities Act, sec.5.I(b). 
(39) Solicitor - Any person or entity who, for compensation, acts as an agent of 
an investment adviser in referring potential clients.
(40) Staff - Personnel of the Securities Board, excluding the members of the 
Board, the Securities Commissioner, and the Deputy Commissioner.
(41) State, territory, or insular possession of the United States - As used in 
the Texas Securities Act, includes a commonwealth. 
(42) Statement to reflect the financial condition - A balance sheet. 
(43) Telephone or telegram - For purposes of the Texas Securities Act, 
sec.7.C(2)(c), includes any means of electronic transmission such as, but not 
limited to, telephone, telegraph, wireless, graphic scanning, modem, or 
facsimile; provided, however, that the office of the State Securities Board has 
the necessary equipment to accept such a transmission. 
(44) Within this state - 
(A) A person is a "dealer" who engages "within this state" in one or more of the 
activities set out in the Texas Securities Act, sec.4.C, if either the person or 
the person's agent is present in this state or the offeree/purchaser or the 
offeree/purchaser's agent is present in this state at the time of the particular 
activity. A person can be a dealer in more than one state at the same time. 
(B) Likewise, a person is a "salesman" who engages "within this state" in one or 
more of the activities set out in the Texas Securities Act, sec.4.D, whether by 
direct act or through subagents except as otherwise provided, if either the 
salesman or the salesman's agent is present in this state or the 
offeree/purchaser or the offeree/purchaser's agent is present in this state at 
the time of the particular activity. A person can be a salesman in more than one 
state at the same time. 
(C) Offers and sales can be made by personal contact, mail, telegram, telephone, 
wireless, electronic communication, or any other form of oral or written 
communication. 
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 August 4, 1998.
TRD-9812312
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

CHAPTER 115. Dealers and Salesman
7 TAC sec.115.1
The State Securities Board adopts an amendment to sec.115.1, concerning notice 
filings and fee provisions for investment advisers covered by the National 
Securities Markets Improvement Act of 1996 ("NSMIA"). The rule was adopted with 
changes to the proposed text as published in the April 3, 1998, issue of the 
Texas Register (23 TexReg 3396). The language in subsection (i)(3) was changed 
to clarify that the filing made in these cases was a notice filing. 
The amendment conforms the applicability of the notice filings and fee provision 
for NSMIA-covered investment advisers to persons within the definition of 
investment adviser, contained in a concurrently adopted amendment to sec.107.2, 
and clarifies when an amendment fee is due. 
The amendment increases uniformity with federal and other states' laws and 
apprises notice filers of the applicable amendment fee. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Civil Statutes, Articles 581-28-1 and 581-
12.B. Section 28-1 provides the Board with the authority to adopt rules and 
regulations necessary to carry out and implement the provisions of the Texas 
Securities Act, including rules and regulations governing registration 
statements and applications; defining terms; classifying securities, persons, 
and matters within its jurisdiction; and prescribing different requirements for 
different classes. Section 12.B provides that the Board may prescribe 
dealer/agent registration exemptions by rule. 

sec.115.1. General Provisions.
(a)-(h) (No change.) 
(i) Persons not required to register as an investment adviser or an agent of an 
investment adviser on or after July 8, 1997, by act of Congress in Public Law 
Number 104-290, Title III. 
(1) Registration as an investment adviser is not required for the following: 
(A) an investment adviser registered under the Investment Advisers Act of 1940, 
sec.203; or 
(B) a person not registered under the Investment Advisers Act of 1940, sec.203, 
because such person is excepted from the definition of an investment adviser 
under the Investment Advisers Act of 1940, sec.202(a)(11)(F); or 
(C) (No change.) 
(2) (No change.) 
(3) Notice filing requirements and fees for investment advisers and agents 
exempted from registration pursuant to this subsection only. 
(A) (No change.) 
(B) Upon amendment to its Form ADV, the investment adviser or agent files: 
(i) (No change.) 
(ii) an amendment fee of $25, as provided in the Texas Securities Act, sec.35.C, 
if any information on the certificate of authorization is being amended. 
(C) (No change.) 
(j)-(k) (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 August 4, 1998.
TRD-9812313
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

7 TAC sec.115.2
The State Securities Board adopts an amendment to sec.115.2, concerning dealer 
applications. The rule was adopted with a change to the proposed text as 
published in the April 3, 1998, issue of the Texas Register (23 TexReg 3396). An 
unnecessary comma was removed in the second sentence of subsection (d)(2). 
The amendment to sec.115.2 formalizes an existing procedure permitting automatic 
withdrawal and abandonment of applications filed with the Dealer Registration 
Division when an applicant fails to meet registration requirements or fails to 
respond to deficiency letters from agency staff. 
The amendment apprises applicants of withdrawal and abandonment procedures 
applicable to pending incomplete applications. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Civil Statutes, Article 581-28-1. Section 
28-1 provides the Board with the authority to adopt rules and regulations 
necessary to carry out and implement the provisions of the Texas Securities Act, 
including rules and regulations governing registration statements and 
applications; defining terms; classifying securities, persons, and matters 
within its jurisdiction; and prescribing different requirements for different 
classes. 

sec.115.2. Application. 
(a)-(c) (No change.) 
(d) Withdrawal and abandonment of a dealer or agent initial application for 
registration. 
(1) Any initial application for dealer or agent registration that fails to meet 
registration requirements within six months of the filing date of the 
application will be considered withdrawn without prejudice. A copy of this 
subsection will be mailed to the applicant at least 30 days prior to the 
withdrawal of the application pursuant to this subsection. 
(2) If an applicant for registration with the Securities Commissioner as a 
dealer or agent fails to make any type of response to the most recent written 
request for information relating to an application that has been pending for six 
months, the application will be considered withdrawn. This withdrawal will occur 
automatically if the applicant fails to respond to the most recent written 
request for information sent by certified mail to the applicant's address as set 
forth in the application. This certified written request shall inform the 
applicant that the application will be considered withdrawn if a response to the 
request for information is not received within 30 days from the date of the 
certified letter. A copy of this subsection and the most recent written request 
for information will be included with the certified letter. 
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 August 4, 1998.
TRD-9812314
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

7 TAC sec.115.3
The State Securities Board adopts an amendment to sec.115.3, concerning dealer 
examinations. The rule was adopted without changes to the proposed text as 
published in the April 3, 1998, issue of the Texas Register (23 TexReg 3397). 
The amendment adds the Series 17 examination to the list of exams sufficient to 
satisfy the general securities exam requirement for a limited registration to 
deal in all securities except municipal securities. 
The amendment facilitates registration of dealers and agents from the United 
Kingdom. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Civil Statutes, Article 581-28-1. Section 
28-1 provides the Board with the authority to adopt rules and regulations 
necessary to carry out and implement the provisions of the Texas Securities Act, 
including rules and regulations governing registration statements and 
applications; defining terms; classifying securities, persons, and matters 
within its jurisdiction; and prescribing different requirements for different 
classes.
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 August 4, 1998.
TRD-9812315
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

7 TAC sec.115.4
The State Securities Board adopts an amendment to sec.115.4, concerning 
evidences of registration. The rule was adopted with changes to the proposed 
text as published in the April 3, 1998, issue of the Texas Register (23 TexReg 
3398). Non-substantive changes were made to subsection (f)(3) to conform the 
rule to current terminology.
The amendment deletes an obsolete subsection and renumbers the remaining 
subsections; clarifies that the renewal provisions include notice filings; 
clarifies that the fees for registration and the fees for notice filings are the 
same; updates a cross-reference; and makes other non-substantive changes. The 
amendment eliminates an obsolete reference and clarifies applicability of the 
rule to notice filings. 
No comments were received regarding adoption of the amendment.
The amendment is adopted under Texas Civil Statutes, Article 581-28-1.
Section 28-1 provides the Board with the authority to adopt rules and 
regulations necessary to carry out and implement the provisions of the Texas 
Securities Act, including rules and regulations governing registration 
statements and applications; defining terms; classifying securities, persons, 
and matters within its jurisdiction; and prescribing different requirements for 
different classes. 

sec.115.4. Evidences of Registration. 
(a)-(b) (No change.) 
(c) Cancellation. A securities dealer or investment adviser is required to 
notify the Securities Commissioner upon termination of any registered agent from 
its employ. Upon receipt of such notification, the Securities Commissioner shall 
cancel the registration. Dealers who are members of the NASD must file through 
the CRD a Form U-5, Uniform Termination Notice for Securities Industry 
Registration, to comply with this subsection. 
(d) Renewal. 
(1) Procedures for renewing expired and unexpired registrations are set forth in 
the Texas Securities Act, sec.19.C. 
(2) A notice of impending expiration of registration (renewal application) will 
be sent to a currently registered dealer or investment adviser at least 30 days 
before the expiration of its registration. The renewal application should be 
returned to the State Securities Board for processing, along with the 
appropriate fee. Each applicant fulfilling the renewal requirements set forth in 
the renewal application will be registered for the following calendar year. 
(3) If a person's registration is not renewed in a timely manner because such 
person is or was on active duty with the armed forces of the United States of 
America serving outside Texas, such person may renew the registration pursuant 
to this paragraph. 
(A) Renewal of the registration may be requested by such person, such person's 
spouse, or an individual having power of attorney from such person. The renewal 
application shall include a current address and telephone number for the 
individual requesting the renewal. 
(B) Renewal may be requested before or after expiration of the registration. 
(C) A copy of the official orders or other official military documentation 
showing that such person is or was on active duty serving outside Texas shall be 
submitted to the Securities Commissioner along with the renewal application. 
(D) A copy of the power of attorney from such person, if any, shall be filed 
with the Securities Commissioner along with the renewal application if the 
individual having the power of attorney executes any of the documents required 
in this paragraph. 
(E) A renewal application submitted to the Securities Commissioner pursuant to 
this paragraph shall be accompanied by the applicable renewal fee set out in 
subsection (e) of this section. 
(F) The State Securities Board will not assess any increased fee or other 
penalty against the person for failure to timely renew such person's 
registration if such person establishes to the satisfaction of the Securities 
Commissioner that all requirements of this paragraph have been met. 
(4) All procedures set forth in this subsection shall also apply to investment 
advisers and advisory agents who have submitted a notice filing and fee to the 
Securities Commissioner. 
(e) Registration and notice filing fees. Registration and notice filing fees are 
as follows: 
(1) Securities Dealer - $275 for original applications and $240 for renewal 
applications. 
(2) Investment Adviser - $275 for original applications and $240 for renewal 
applications. 
(3) Agent, Officer, Partner, or Salesman of Securities Dealer or Investment 
Adviser - $235 for original applications and $220 for renewal applications. 
(f) Reduced registration fees for certain persons registered in multiple 
capacities. 
(1) In general. A person may request reduced fees under paragraph
(2) of this subsection, provided they are registered or are seeking registration 
in Texas: 
(A) as either an agent of a securities dealer or as a sole proprietor securities 
dealer; and 
(B) as either an agent of an investment adviser that has less than five agents 
or as a sole proprietor investment adviser with less than five agents. 
(2) Procedure. Persons meeting the requirements of paragraph (1) of this 
subsection may request reduced registration fees by filing Form 133.36, Request 
for Reduced Fees for Certain Persons Registered in Multiple Capacities. Form 
133.36 must be filed at the time the original application for investment adviser 
agent or sole proprietor investment adviser registration is filed, or at least 
30 days before the person's existing investment adviser agent or sole proprietor 
investment adviser registration will expire. On review of Form 133.36, the 
Securities Commissioner may, in his or her discretion, grant or deny the request 
for reduced fees or direct the person to supply additional information. 
(3) Reduced fees. If the Securities Commissioner grants a person's request, the 
person must pay all applicable fees for securities agent or dealer registration 
as specified in the Texas Securities Act, sec.sec.35.A, 35.B, and 41(a), but is 
exempt from the fees specified in the Texas Securities Act, sec.41(a), in 
connection with original and renewal applications for investment adviser agent 
or sole proprietor investment adviser registration, as applicable at the time 
Form 133.36 is filed. The reduction in fees granted by the Securities 
Commissioner under this subsection shall continue in force, without any further 
filings, as long as a person remains registered in a multiple capacity status. 
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 August 4, 1998.
TRD-9812316
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

CHAPTER 139. Exemptions by Rule or Order
7 TAC sec.139.13
The State Securities Board adopts an amendment to sec.139.13, concerning resales 
of securities under SEC Rules 144 and 145(d). The rule was adopted with changes 
to the proposed text as published in the April 3, 1998, issue of the Texas 
Register (23 TexReg 3400). Reference to two SEC releases have been corrected.
The amendment adds references to SEC Releases that amended SEC Rule 144 and Rule 
145. 
The amendment harmonizes the rule and the corresponding federal exemptions for 
ease in use by persons seeking to make non-issuer sales. 
One comment letter was received regarding adoption of the amendment. That 
letter, from Thompson & Knight, supported adoption of the amendment. The Board 
agreed and adopted the amendment substantially as published. 
The amendment is adopted under Texas Civil Statutes, Articles 581-28-1 and 581-
5.T. Section 28-1 provides the Board with the authority to adopt rules and 
regulations necessary to carry out and implement the provisions of the Texas 
Securities Act, including rules and regulations governing registration 
statements and applications; defining terms; classifying securities, persons, 
and matters within its jurisdiction; and prescribing different requirements for 
different classes. Section 5.T provides that the Board may prescribe new 
exemptions by rule. 

sec.139.13. Resales under SEC Rule 144 and Rule 145(d). 
(a) Exemption from securities registration. Offers to resell and resales of any 
security by the owner thereof, or any person acting on behalf of the owner, 
shall be exempt from the securities registration requirements of the Texas 
Securities Act, sec.7, pursuant to sec.5.T, if the offers to resell and resales 
of securities are made in compliance with either:
(1) Rule 144 promulgated by the Securities and Exchange Commission (SEC) under 
the Securities Act of 1933, as amended (1933 Act), as made effective in SEC 
Release Number 33-5223, as amended in Release Numbers 33-5307, 33-5452, 33-
5452A, 33-5560, 33-5613, 33-5717, 33-5979, 33-5995, 33-6032, 33-6180, 34-16589, 
33-6286, 33-6389, 33-6488, 33-6768, 33-6862, 33-7285, and 33-7390; or 
(2) Rule 145(d) promulgated by the SEC under the 1933 Act as made effective in 
SEC Release Number 33-5316, as amended in Release Numbers 33-5932, 33-6508, 33-
6578, 33-6579, 33-6611, 33-6862, and 33-7390.
(b) (No change.)
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 4, 1998.
TRD-9812317
Denise Voigt Crawford
Securities Commissioner
State Securities Board
Effective date: August 24, 1998
Proposal publication date: April 3, 1998
For further information, please call: (512) 305-8300

TITLE 16. ECONOMIC REGULATION
PART VIII. Texas Racing Commission
CHAPTER 303.General Provisions
SUBCHAPTER B.Powers and Duties of the Commission
16 TAC sec.303.35
The Texas Racing Commission adopts new sec.303.35, concerning access to the 
commission's programs. This new rule is adopted without changes to the proposed 
text published in the June 5, 1998, issue of the Texas Register (23 TexReg 
5884). The Texas Racing Act was revised by sunset legislation effective 
September 1, 1997, and in that legislation, the Commission is required to 
develop a plan which describes how persons with disabilities or who do not speak 
English can have access to Commission programs. This rule implements the sunset 
legislation. 
No comments were received regarding the adoption of the new rule.
The new section is adopted under the Texas Civil Statutes, Article 179e, 
sec.3.02, which authorize the Commission to adopt rules for conducting racing 
with wagering and for administering the Texas Racing Act; and sec.2.22, which 
require a written plan to describe how persons with disabilities and who do not 
speak English can be provided reasonable access to the commission's programs and 
services.
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on August 3, 1998.
TRD-9812251
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

CHAPTER 305.Licenses for Pari-mutuel Racing
SUBCHAPTER B.Individual Licenses
Division 2. Specific Licenses
16 TAC sec.305.49
The Texas Racing Commission adopts an amendment to sec.305.49, concerning the 
issuance of an emergency license. This amendment is adopted without changes to 
the proposed text published in the June 5, 1998, issue of the Texas Register (23 
TexReg 5885). The amendment is adopted to establish a presumption that an 
incomplete application for an owner's license submitted to the Austin office for 
processing is also a request for an emergency license. This will ensure 
compliance with the three-day deposit requirement for license fees submitted to 
the Austin office and will streamline the licensing process. 
No comments were received regarding the adoption of the proposal.
The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for conducting racing with 
wagering and for administering the Texas Racing Act; sec.7.02, which authorizes 
the commission to adopt categories of occupational licenses and to establish the 
criteria for those licenses; and sec.7.09, which authorizes the commission to 
issue temporary licenses pending investigation of an applicant's qualifications.
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 August 3, 1998.
TRD-9812257
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

CHAPTER 309.Operation of Racetracks
SUBCHAPTER A.General Provisions
Division 2. Facilities and Equipment
16 TAC sec.309.28
The Texas Racing Commission adopts an amendment to sec.309.28, concerning 
photofinish equipment. This amendment is adopted without changes to the proposed 
text published June 5, 1998, issue of the Texas Register (23 TexReg 5886). The 
amendment is adopted to update the rule to keep pace with the new technology 
used at racetracks. The amendment clarifies how and where the public can view a 
copy of a photofinish. 
No comments were received regarding the adoption of the proposal. 
The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for conducting racing with 
wagering and for administering the Texas Racing Act; and sec.6.06, which 
authorize the Commission to adopt rules on all matters relating to the operation 
of racetracks.
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 August 3, 1998.
TRD-9812252
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

CHAPTER 313.Officials and Rules of Horse Racing
SUBCHAPTER E.Training Facilities
16 TAC sec.313.503
The Texas Racing Commission adopts an amendment to sec.313.503, concerning the 
physical plant of training facilities. This amendment is adopted without changes 
to the proposed text published in the June 5, 1998, issue of the Texas Register 
(23 TexReg 5886). The amendment is adopted to include the requirement that the 
training facility obtain approval from the commission or executive secretary for 
the composition of the racing surface. This will help determine if unsafe 
conditions exist at the training facility. The amendment adopted also changes 
the approval authority from commission staff to the executive secretary.
No comments were received regarding the adoption of the proposal. 
The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for conducting racing with 
wagering and for administering the Texas Racing Act; and sec.3.021, which 
authorize the Commission to protect the safety of race animals and adopt rules 
for the licensing and regulation of races and workouts at racetracks that do not 
offer pari-mutuel wagering.
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 August 3, 1998.
TRD-9812253
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

16 TAC sec.313.504
The Texas Racing Commission adopts an amendment to sec.313.504, concerning the 
operational requirements of training facilities. The amendment is adopted 
without changes to the proposed text published in the June 5, 1998, issue of the 
Texas Register (23 TexReg 5887). The amendment is adopted to include the 
determination of inappropriate or unsafe conditions at the training facility as 
grounds for the suspension of a training facility license. It allows the 
executive secretary to notify the pari-mutuel racetracks in this state and 
requires notification to the officials of the training facility 
No comments were received regarding the adoption of this proposal.
The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for administering the Texas Racing 
Act, and sec.3.021, which authorizes the commission to protect the safety of 
race animals and adopt rules for the licensing and regulation of races and 
workouts at racetracks that do not offer pari-mutuel wagering.
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 August 3, 1998.
TRD-9812254
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

CHAPTER 321.Pari-mutuel Wagering
SUBCHAPTER A.Regulation and Totalisator Operations
Division 3. Regulation of Wagering
16 TAC sec.321.70
The Texas Racing Commission adopts the repeal of sec.321.70, concerning tip 
sheets, as published in the June 5, 1998, issue of the Texas Register (23 TexReg 
5887). This rule was originally adopted before simulcasting was introduced. This 
rule is now unworkable with the number of races being offered for wagering run 
each day through simulcasting at the racetracks. The conflict of interest 
provision regarding horse ownership by a tip sheet vendor is also contained in 
sec.311.158. 
No comments were received regarding this repeal.
The repeal is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for conducting racing with 
wagering and for administering the Texas Racing Act; sec.6.06, which authorizes 
the Commission to adopt rules on all matters relating to the operation of 
racetracks; and sec.11.01, which authorizes the commission to adopt rules to 
regulate pari-mutuel wagering.
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 August 3, 1998.
TRD-9812255
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

SUBCHAPTER C.Simulcast Wagering
Division 1. General Provisions
16 TAC sec.321.210
The Texas Racing Commission adopts new sec.321.210, concerning the escrowed 
purse account. This new rule is adopted without changes to the proposed text 
published in the June 5, 1998, issue of the Texas Register (23 TexReg 5888). The 
rule establishes a procedure for distributing the escrowed purse account 
generated from simulcasts of horse races at greyhound racetracks. 
No comments were received regarding the adoption of the new rule.
The new section is adopted under the Texas Civil Statutes, Article 179e, 
sec.3.02, which authorize the Commission to adopt rules for conducting racing 
with wagering and for administering the Texas Racing Act; sec.6.06, which 
authorizes the commission to adopt rules on all matters relating to the 
operation of racetracks; sec.6.091, which authorizes the commission to 
distribute money accrued in the escrowed purse account; sec.11.01, which 
authorizes the commission to adopt rules to regulate pari-mutuel wagering; and 
sec.11.011, which authorizes the commission to adopt rules to regulate pari-
mutuel wagering on simulcast races.
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 August 3, 1998.
TRD-9812256
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

Division 2. Simulcasting at Horse Racetracks
16 TAC sec.321.234
The Texas Racing Commission adopts an amendment to sec.321.234, concerning the 
allocation of purses and funds for the Texas Bred Incentive Programs. This 
amendment is adopted without changes to the proposed text published in the June 
5, 1998, issue of the Texas Register (23 TexReg 5888). The amendment is adopted 
to provide a procedure for determining how purse revenues and Texas Bred 
Incentive money generated from simulcast wagering will be allocated among the 
various breeds of horses. The procedure allows all interested parties to have 
input into the determination and ensures fairness to all by requiring final 
approval from the Commission.
There was one written comment submitted in opposition to the adoption of the 
proposed rule. The comment asserted that it is the horsemen's organization and 
not the Commission, which has the authority to determine the allocation of money 
generated from simulcast wagering. After careful review by legal counsel, the 
Commission determined that it does have the authority to determine the 
allocation of money generated from simulcast wagering.
The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3.02, 
which authorize the Commission to adopt rules for conducting racing with 
wagering and for administering the Texas Racing Act; sec.3.021, which authorize 
the Commission to regulate all aspects of horse racing in this state; sec.6.06, 
which authorizes the commission to adopt rules on all matters relating to the 
operation of racetracks; sec.11.01, which authorizes the commission to adopt 
rules to regulate pari-mutuel wagering; and sec.11.011, which authorizes the 
commission to adopt rules to regulate pari-mutuel wagering on simulcast races.
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 August 3, 1998.
TRD-9812258
Roselyn Marcus
General Counsel
Texas Racing Commission
Effective date: September 1, 1998
Proposal publication date: June 5, 1998
For further information, please call: (512) 833-6699

TITLE 19. EDUCATION
PART VII. State Board for Educator Certification
CHAPTER 230.Professional Educator Preparation and Certification
SUBCHAPTER U.Assignment of Public School Personnel
19 TAC sec.230.601
The State Board for Educator Certification (SBEC) adopts an amendment to 
sec.230.601, concerning assignment of public school personnel without changes to 
the proposed text as published in the May 15, 1998, issue of the Texas Register 
(23 TexReg 4756) and will not be republished.
July 1997, the SBOE completed adoption of the Texas Essential Knowledge and 
Skills (TEKS). The TEKS set standards for the content and skills that Texas 
public school students must know and be able to do. School districts begin 
implementation of the TEKS September 1, 1998. The TEKS add new courses to the 
public school curriculum. Current SBEC rules do not contain requirements for 
assignment to the new TEKS courses. The criteria include requirements for 
assignment to teach American Sign Language, new technology applications courses, 
health science technology application courses, and new science and business 
education courses at the high school level and a new Home Economics course at 
the middle school. 
The amendment includes deletion of criteria for assignment to positions 
requiring certification or licensure by another state agency or national 
association. When the SBEC adopted the current assignment criteria in 1996, most 
positions requiring a credential issued by an appropriate state agency or 
national organization responsible for licensing that profession were deleted. 
These included Psychologists, Speech Pathologists, Music Therapists and 
Recreation Therapists. The rules still contain criteria for other positions such 
as Athletic Trainer, Art Therapist and Interpreter for the Deaf. SBEC does not 
issue certificates for assignment to these positions. The appropriate credential 
issued by a state agency or national organization that licenses these 
professions is the only requirement for assignment. 
The adopted assignment criteria will ensure that teachers of students who are 
deaf or hard of hearing have appropriate communication and skills. The method of 
communication used in the classroom for delivering instruction to students who 
are deaf or hard of hearing is a local decision. In most classrooms in Texas, 
sign communication is the method used. Other communication methods used in Texas 
classrooms are Oral/Aural and Cued Speech. 
The Texas Assessment of Sign Communication (TASC) was developed to assess 
communication proficiency within any one or a combination of the five sign 
communication systems. However, there is currently no instrument available that 
appropriately assesses proficiency in the Oral/Aural and Cued Speech methods. 
School district personnel who are appropriately certified and have the necessary 
skills and knowledge for the assignment can more effectively educate students. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Texas Education Code (TEC), sec.21.041(b)(2), 
which requires the State Board for Educator Certification to propose rules that 
specify the classes of certificates to be offered. 
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 August 10, 1998.
TRD-9812599
Dr. Mark Littleton
Executive Director
State Board for Educator Certification
Effective date: August 30, 1998
Proposal publication date: May 15, 1998
For further information, please call: (512) 469-3012

CHAPTER 232.General Requirements Applicable to All Certificates Issued
SUBCHAPTER M.Types and Classes of Certificates Issued
19 TAC sec.sec.232.500, 232.510, 232.520
The State Board for Educator Certification (SBEC) adopts new sec.sec.232.500, 
232.510, and 232.520, concerning types and classes of certificates issued. 
Section 232.500 is adopted with non substantive changes to the proposed text as 
published in the May 15, 1998, issue of the Texas Register (23 TexReg 4757). The 
language remains the same, however the format has changed. In subsection (a), 
the second sentence beginning with the language "Effective September 1, 
1999…" should have been formatted as a subsection (b). Therefore the 
existing subsection (b), which begins with the language "Pursuant to Section 
63(d)…" should have been formatted as a subsection (c). For 
clarification, the section is being republished. Section 232.510 and sec.232.520 
is adopted without changes and will not be republished.
Certificates of current educators which were issued prior to September 1, 1999, 
will be exempt from renewal and continuing professional education (CPE) 
requirements, but current educators may voluntarily choose to renew these 
certificates beginning September 1, 1999 (sec.232.810). 
Educators will benefit from periodic training that is relevant to their 
individual needs as well as to state, campus, and district priorities. Students 
will be taught by educators who continue throughout their careers to enhance 
their professional and content knowledge and skills. 
No comments were received regarding adoption of the new sections. 
The new sections are adopted under the TEC, sec.21.041(b)(2), which requires the 
SBEC to specify the classes of certificates to be issued, including emergency 
certificates; sec.21.041(b)(3) requires the SBEC to specify the period of 
validity for each certificate. 

sec.232.500. Types of Certificates.
(a) All provisional and professional lifetime educator certificates issued prior 
to September 1, 1999 shall be valid for the life of the individual unless 
suspended or revoked by lawful authority. 
(b) Effective September 1, 1999 the standard certificate shall be issued for all 
classes of certificates, except the emergency certificate, and shall be valid 
for no more than five years, subject to the requirements of Subchapter R of this 
title (relating to Certificate Renewal and Continuing Professional Education 
Requirements). 
(c) Pursuant to Section 63(d), Senate Bill 1 (74th Texas Legislature), and not 
later than September 1, 2001, the board shall issue to persons holding a valid 
Texas lifetime certificate issued prior to September 1, 1999, the appropriate 
certificate without requiring the person to pay a fee or meet any additional 
requirements for the initial reissuance. sec.232.510. Classes of Certificates. 
The following classes of certificates are listed in paragraphs (1)-(7) of this 
section: 
(1) superintendent; 
(2) principal; 
(3) classroom teacher; 
(4) learning resources specialist; 
(5) counselor; 
(6) educational aide; 
(7) emergency.

sec.232.520. Effective Date. 
This subchapter shall take effect January 1, 1999.
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 August 10, 1998.
TRD-9812600
Dr. Mark Littleton
Executive Director
State Board for Educator Certification
Effective date: January 1, 1999
Proposal publication date: May 15, 1998
For further information, please call: (512) 469-3012

SUBCHAPTER R.Certificate Renewal and Continuing Professional
Education Requirements
19 TAC sec.sec.232.800, 232.810, 232.820, 232.830, 232.840, 232.850, 232.860, 
232.870, 232.880, 232.890, 232.900
The State Board for Educator Certification (SBEC) adopts new sec.sec.232.800, 
232.810, 232.820, 232.830, 232.840, 232.850, 232.860, 232.870, 232.880, 232.890, 
and 232.900, concerning certificate renewal and continuing professional 
education requirements without changes to the proposed text as published in the 
May 15, 1998, issue of the Texas Register (23 TexReg 4758) and will not be 
republished.
The Texas Education Code (TEC) requires the SBEC to specify the period of 
validity for each certificate it issues and to establish requirements for 
continuing education and renewal of certificates. The board proposed rules at 
its October 31st SBEC meeting in order to satisfy requirements of Senate Bill 1, 
1995. These rules were published in the November 28, 1997, issue of the Texas 
Register (22 TexReg 11633). Since that time, the board amended the rules to 
exempt certificates issued prior to September 1, 1999 and further modified the 
proposal to allow current educators to voluntarily renew their certificates 
beginning September 1, 1999. The proposed rules published previously were 
withdrawn in the May 15, 1998, issue of the Texas Register.
Also, the board inserted language that prohibits a provider or sponsor from 
discriminating against potential participants in the provision of continuing 
professional education (CPE) activities and proposed a minimum number of CPE 
hours for each certificate being renewed. Educators will benefit from periodic 
training that is relevant to their individual needs as well as to state, campus, 
and district priorities. Students will be taught by educators who continue 
throughout their careers to enhance their professional and content knowledge and 
skills. 
No comments were received regarding adoption of the new sections.
The new sections are adopted under TEC, sec.21.041(b)(4), which requires the 
SBEC to specify the requirements for the renewal of a certificate; TEC, 
sec.21.041(b)(9) requires the SBEC to provide for continuing education 
requirements; TEC, sec.21.054 requires the SBEC to establish a process for 
identifying courses and programs that fulfill continuing education requirements; 
and TEC, sec.21.041(c) authorizes the board to propose rules adopting a fee for 
the issuance and maintenance of an educator certificate that is adequate to 
cover the cost of administration. 
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 August 10, 1998.
TRD-9812601
Dr. Mark Littleton
Executive Director
State Board for Educator Certification
Effective date: January 1, 1999
Proposal publication date: May 15, 1998
For further information, please call: (512) 469-3012

TITLE 22. EXAMINING BOARDS
PART XXI. Texas State Board of Examiners of Psychologists
CHAPTER 461.General Rulings
22 TAC sec.461.11
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.461.11, concerning Continuing Education, without changes to the proposed 
text as published in the May 29, 1998, issue of the Texas Register (23 TexReg 
5562).
The rule is being amended to clarify the requirements for all licensees in 
obtaining and documenting relevant and appropriate mandatory continuing 
education hours. 
The amended rule will ensure that all licensees obtain relevant and appropriate 
continuing education in a uniform manner. 
Comments were received regarding adoption of the amendment from an individual in 
the form of a single letter. Two identical copies of another letter were also 
received, one copy containing sixteen signatures, the other copy containing 
three signatures. 
Comment: The individual commented that the requirement that a specific activity 
may not be used for credit more than once was over broad and repressive. The 
commentor proposed that the rule be changed to allow the same activity to be 
repeated after one or two years. 
Response: The Board feels that as written the rule ensures that licensees seek 
out meaningful continuing education that will broaden and enhance their 
knowledge about their practice of psychology. The Board also found that the 
proposed changes could not be implemented by the staff given the limited 
resources available. 
Comment: The other comments proposed that the rule reflect that the same 
graduate level course taught by a licensee or presentation made by a licensee 
could be used to fulfill the mandatory continuing education requirement every 
three years. 
Response: The Board feels that as written the rule ensures that licensees seek 
out meaningful continuing education that will broaden and enhance their 
knowledge about their practice of psychology. The Board also found that the 
proposed changes could not be implemented by the staff given the limited 
resources available. 
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812546
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

CHAPTER 467.Announcements and Listings
22 TAC sec.467.1
The Texas State Board of Examiners of Psychologists adopts the repeal of 
sec.467.1, concerning Listings in Yellow Pages, without changes to the proposed 
text published in the May 29, 1998, issue of the Texas Register (23 TexReg 
5564).
This rule is being repealed because the requirement that only licensed 
psychologists may list themselves under psychologist in the yellow pages is 
already contained in a separate rule, and the rest of the rule is no longer 
necessary. 
The repeal of this rule will eliminate an unnecessary rule and make the rules 
easier to understand and follow. 
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 August 7, 1998.
TRD-9812547
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

CHAPTER 469.Specialty Certification
22 TAC sec.469.1
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.469.1, concerning Definition of Health Service Provider in Psychology, 
without changes to the proposed text as published in the May 29, 1998, issue of 
the Texas Register (23 TexReg 5564). 
The rule is being amended to clarify the definition of a Health Service Provider 
in Psychology as a specialty credential rather than a license. 
The amendment will clarify the definition of Health Service Provider in 
Psychology and ensure that the public understands that this is a specialty 
credential rather than a license. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812548
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

CHAPTER 471.Renewals
22 TAC sec.471.1
The Texas State Board of Examiners of Psychologists adopts an amendment to Board 
Rule sec.471.1, concerning Notification of Renewal, without changes to the 
proposed text as published in the May 29, 1998, issue of the Texas Register (23 
TexReg 5565).
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment.
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812549
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.471.2
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.471.2, concerning Renewal Forms, without changes to the proposed text 
published in the May 29, 1998, issue of the Texas Register (23 TexReg 5565).
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Revised Civil Statutes, 4512c, which 
provides 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 August 7, 1998.
TRD-9812550
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.471.3
The Texas State Board of Examiners of Psychologists adopts the repeal of 
sec.471.3, concerning Renewal Fees, without changes to the proposed text 
published in the May 29, 1998, issue of the Texas Register (23 TexReg 5566). 
This rule is being repealed in order to eliminate a duplicitous rule. Renewal 
fees are clearly set forth in another Board rule. 
The repeal of this rule will eliminate an unnecessary rule, making the rules 
easier to understand and follow. 
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 August 7, 1998.
TRD-9812551
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.471.4
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.471.4, concerning Guaranteed Student Loan Requirement, without changes to 
the proposed text published in the May 29, 1998, issue of the Texas Register (23 
TexReg 5566). 
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas Revised Civil Statutes, 4512c, which 
provides 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 August 7, 1998.
TRD-9812552
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.471.5
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.471.5, concerning Updated Information Requirements, without changes to the 
proposed text published in the May 29, 1998, issue of the Texas Register (23 
TexReg 5567). 
This rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
This amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment.
The amendment is adopted under Texas Revised Civil Statutes, 4512c, which 
provides 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 August 7, 1998.
TRD-9812553
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

CHAPTER 473.Fees
22 TAC sec.473.1
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.473.1, concerning Application Fees, without changes to the proposed text as 
published in the May 29, 1998, issue of the Texas Register (23 TexReg 5567).
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812554
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.473.2
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.473.2, concerning Examination Fees, to be effective October 22, 1998, 
without changes to the proposed text as published in the May 29, 1998, issue of 
the Texas Register (23 TexReg 5567). 
The rule is being amended in order to cover the cost of the examination, which 
has been increased by the owner and distributor of the examination from $250 to 
$350 as of the April 1999 examination. 
The amended rule will ensure that the fee charged by the Agency covers the exact 
cost of the examination to the Agency. The Agency retains none of the fees it 
collects for the examination. 
No comments were received regarding adoption of the amendment.
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812555
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.473.3
The Texas State Board of Examiners of Psychologists adopts an amendment to Board 
Rule sec.473.3, concerning Annual Renewal Fees, without changes to the proposed 
text published in the May 29, 1998, issue of the Texas Register (23 TexReg 
5568).
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment.
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812556
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.473.4
The Texas State Board of Examiners of Psychologists adopts an amendment to 
sec.473.4, concerning Late Fees for Renewals, without changes to the proposed 
text as published in the May 29, 1998, issue of the Texas Register (23 TexReg 
5568).
This rule is being amended in order to be consistent with the Psychologists' 
Licensing Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act.
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812557
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.473.5
The Texas State Board of Examiners of Psychologists adopts an amendment to Board 
Rule sec.473.5, concerning Miscellaneous Fees, without changes to the proposed 
text published in the May 29, 1998, issue of the Texas Register (23 TexReg 
5569). 
The rule is being amended to be consistent with the Psychologists' Licensing 
Act, which eliminated certification. 
The amended rule will ensure consistency with the Psychologists' Licensing Act. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Texas 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 August 7, 1998.
TRD-9812558
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

22 TAC sec.473.6
The Texas State Board of Examiners of Psychologists adopts the repeal of 
sec.473.6, concerning Reciprocity Fee, without changes to the proposed text 
published in the May 29, 1998, issue of the Texas Register (23 TexReg 5569). 
The rule is being repealed because the fee is set elsewhere in the Board rules, 
thereby making this rule unnecessary. 
The repeal of this rule will reduce unnecessary rules making the rules easier to 
understand and follow. 
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 August 7, 1998.
TRD-9812559
Sherry L. Lee
Executive Director
Texas State Board of Examiners of Psychologists
Effective date: August 27, 1998
Proposal publication date: May 29, 1998
For further information, please call: (512) 305-7700

TITLE 25. HEALTH SERVICES
PART I. Texas Department of Health
CHAPTER 29.Purchased Health Service
SUBCHAPTER F.Physician Services
25 TAC sec.29.502
On behalf of the State Medicaid Director, the Texas Department of Health (the 
department) adopts an amendment to sec.29.502, concerning authorized physician 
services, without changes to the proposed text as published in the April 24, 
1998, issue of the Texas Register (23 TexReg 3996), and therefore the section 
will not be republished. The Medical Practice Act (Texas Civil Statutes, Article 
4495b, sec.3.06(b)(6)) and the rules of the Texas Board of Medical Examiners 
(sec.185.2 "Definitions," and sec.sec.193.1-193.8 "Standing Delegation Orders") 
allow physician assistants (PAs) and advanced practice nurses (APNs) to perform 
an array of medical services pursuant to protocols jointly developed with the 
physician, without the physician's personal supervision. Prior to the current 
rule, Medicaid payment was made only when a physician provided personal 
supervision of PA and APN rendered medical services. This current rule allows 
for Medicaid reimbursement to physicians when PAs and APNs perform services, 
without a physician's personal supervision, pursuant to protocols jointly 
developed with the physician and in accordance with the scope of practice and 
state law governing PAs and APNs. The following comment was received concerning 
the proposal. Following the comment is the department's response. 
Comment: The commenter was generally in favor of the rule, but recommended the 
development of a system that will track services billed under authorized 
physician services, but which are actually provided by an APN or PA. The 
commenter suggested that this information would assist the state's efforts to 
provide educational funding which ensures an adequate supply of providers 
serving Medicaid patients. 
Response: The department disagrees with commenter's suggestion due to it being 
outside the intent of the proposal. No change was made as result of this 
comment. 
The comment was received from the Texas Coalition for Nurses in Advanced 
Practice (CNAP). The commenter was in favor of the rule, but suggested a 
recommendation regarding its implementation. 
This amendment is adopted under the Human Resources Code, sec.32.021 and 
Government Code 531.021, which provide the Health and Human Services Commission 
with authority to adopt rules to administer the state's medical assistance 
program and is submitted by the Texas Department of Health under it 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 Call 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 August 4, 1998.
TRD-9812345
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: August 24, 1998
Proposal publication date: April 24, 1998
For further information, please call: (512) 458-7236

SUBCHAPTER L.General Administration
25 TAC sec.29.1109
On behalf of the State Medicaid Director, the Texas Department of Health 
(department) adopts an amendment to sec.29.1109, concerning coordination of 
Title XIX with Parts A and B of Title XVIII for payment of 
deductible/coinsurance, with changes to the proposed text as published in the 
February 27, 1998, issue of the Texas Register (23 TexReg 1783). 
The Balanced Budget Act of 1997, (Public Law Number 105-33), sec.4714, 111 Stat. 
251, clarifies state liability for Medicare cost-sharing. The amendment allows 
the department to limit the Medicare Part A deductible/coinsurance for a 
crossover claim if the Medicare payment amount equals or exceeds the Medicaid 
payment rate. If the Medicare payment amount is less than the Medicaid payment 
rate, the department will be required to pay the Medicare Part A 
deductible/coinsurance for a crossover claim, but the amount of payment will be 
limited to the lesser of the deductible/coinsurance or the amount remaining 
after the Medicare payment amount is subtracted from the Medicaid payment rate. 
The department made the following minor changes due to staff comments, in order 
to clarify the intent and accuracy of the section. 
Change: Concerning sec.29.1109(c), the department clarified that by providing 
coverage of a Medicaid recipient's Medicare deductible and coinsurance 
liabilities, the department has met its obligation to provide coverage for 
services that it would have paid in the absence of Medicare coverage. 
The following comments were received concerning the proposed amendment. 
Following each comment is the department's response. 
Comment: Concerning sec.29.1109, several commenters believe the department 
should reconsider the rule amendment because it creates additional uncompensated 
health care for hospitals. One commenter stated that one of the recommendations 
included in the Texas Comptroller of Public Accounts' 1996 publication 
Disturbing the Peace, indicated that the department's proposal would not hurt 
providers of inpatient services since the provider could obtain federal 
compensation for the amount denied by the state through classifying this loss as 
bad debt. The commenter stated that a Health Care Financing Administration 
(HCFA) November 1997, guidance letter has indicated that the Medicaid concept of 
"payment in full" would apply to the Medicare program. This interpretation means 
that hospitals cannot claim a beneficiary's non-payment of Medicare cost-sharing 
amounts as Medicare bad debt. HCFA communicated this policy to its fiscal 
intermediaries in January 1998. Another commenter stated that since the bad debt 
is addressed in the Medicare section of the Balanced Budget Act (BBA), the 
commenter interprets the law to mean that Congress did not intend for the 
Qualified Medicare Beneficiary (QMB) provision to apply to bad debt, and that 
HCFA must continue to allow providers to claim unpaid cost-sharing amounts as 
Medicare "bad debt." 
Response: The department acknowledges the concerns of the commenters regarding 
the declaration of bad debt, however, policies established by HCFA are not 
within the control of the department. Further, it is the department's 
understanding that the Provider Reimbursement Review Board has reversed HCFA's 
disallowance of a provider's bad debt claims. No change was made as a result of 
this comment.
Comment: Concerning sec.29.1109, a commenter stated disagreement with the 
department's estimated savings of $5.5 million in state funds for each of the 
fiscal years 1999 through 2002. The commenter estimates that the proposal would 
cost Texas hospitals in excess of $20 million per year, and indicated that 
additional data has been requested by the commenter to allow further analysis of 
the costs that may be incurred by Texas hospitals. 
Response: The department's estimated savings of $5.5 million for each of the 
fiscal years 1999 through 2002 reflects the department's estimate of general 
revenue expenditures that will be saved during this period. The department 
acknowledges that estimated savings of both federal and state funds will be 
approximately $15 million, however, according to the requirements of the 
Administrative Procedures Act the department is only required to indicate 
estimated savings in state expenditures. No change was made as a result of this 
comment.
Comment: Concerning sec.29.1109, a commenter stated disagreement with the 
formula the department is proposing to use in determining their liability for 
deductible and co-insurance payments. The commenter's interpretation of the 
proposed amendment indicates that the Medicare Diagnosis Related Group (DRG) 
payments (including disproportionate share and indirect medical education 
payments) will be compared to Medicaid DRG payments (excluding disproportionate 
share payments) to determine whether the state will pay the deductible and co-
insurance amounts. The commenter states that the department must include a 
provision for all payments made to hospitals under the state plan, including 
Medicaid disproportionate share payments, or the disproportionate share payments 
paid by Medicare should be removed from the Medicare DRG payment amount. The 
commenter indicates that failure to account for this difference creates an 
inequity in the liability formula. 
The commenter also stated that Medicare disproportionate share and indirect 
medical education payments are paid on an interim or estimated basis. The 
hospital's fiscal intermediary will often update a hospital's disproportionate 
share and indirect medical education payment formula, which may result in a 
single hospital receiving three or four different Medicare interim payment 
amounts for the same DRG during the same period. Interim payments are therefore 
not final until adjusted by the hospital's fiscal intermediary during their 
audit of the Medicare cost report. The commenter stated that the department 
should address this issue in the amendment. 
Response: The department acknowledges and understands the commenter's concerns 
about the differences in Medicare and Medicaid reimbursement methodologies. The 
department compares the Medicare and Medicaid payment rates at the time the 
Medicare crossover claim is received by the department. This interpretation is 
consistent with references included in the provisions of the Balanced Budget Act 
and guidance received through letters from HCFA. No change was made as a result 
of this comment. 
Comment: Concerning sec.29.1109, a commenter stated that given the differences 
in reimbursement methodology between Medicare and Medicaid and differences in 
the types of patients covered (elderly versus children and pregnant women), it 
does not make sense to limit or not pay for Medicare deductibles and copayments 
based on the comparison of unrelated Medicare and Medicaid payment rates. The 
commenter indicated that the Medicaid base rates are lower for the more cost 
effective hospitals and for those that provide a high level of obstetric care. 
The commenter stated that these hospitals would therefore bear the financial 
brunt of the proposed change. 
Response: The department acknowledges and understands the commenter's concerns 
about the differences in Medicare and Medicaid reimbursement methodologies and 
the types of patients covered. However, the department disagrees with the 
commenter's assertion. 
The Medicaid base rate should not be used as a measure for comparing or ranking 
hospitals on cost effectiveness. The hospital base rate is more reflective of a 
facility's Medicaid cost, utilization, and case mix than the facility's economic 
efficiency and effectiveness. Those hospitals with lower Medicaid base rates 
will actually experience less impact when comparing the Medicare payment rate to 
the Medicaid payment rate. No change was made as a result of this comment. 
Comment: Concerning sec.29.1109, one commenter stated that the amendment does 
not indicate whether any unpaid Medicare deductible or copayment amounts could 
be billed to the patient knowing they could not pay. 
Response: The Balanced Budget Act prohibits billing the Medicaid client for 
coinsurance and deductible liabilities. No change was made as a result of this 
comment. 
Comment: Concerning sec.29.1109, a commenter stated that the amendment does not 
indicate if Medicare Part B deductible and copayment amounts would be impacted 
under the proposed change. 
Response: The amendment does not impact Medicare Part B deductible or 
copayments. No change was made as a result of this comment. 
Comment: Concerning sec.29.1109, a commenter stated that the amendment does not 
state how patients reaching the Medicaid-based 30-day spell of illness 
limitation would be considered in relation to the Medicare 60-day lifetime 
reserve days. 
Response: The department acknowledges the difference between the spell of 
illness limitations of Medicare and Medicaid. The amount, duration, and scope of 
services provided through the Medicaid program do not extend beyond the 30-day 
spell of illness. Therefore, coinsurance and deductibles for Medicare payments 
beyond this period would not be covered through the Medicaid program. No change 
was made as a result of this comment. 
Comment: Concerning sec.29.1109, a commenter stated that the proposed payment 
methodology of Medicaid payment of coinsurance is tied to a DRG model that does 
not adequately recognize outlier patients. As a result of this methodology, Long 
Term Acute Care (LTAC) hospitals are adversely affected by the proposed 
amendment as compared to short-term acute care hospitals. The commenter 
indicated that the amendment would result in the LTAC hospital losing over $1 
million in reimbursement on deductibles and coinsurance. 
Response: The department acknowledges that the rule may adversely affect LTAC 
hospitals due to differences in amount, duration, and scope of the Medicare and 
Medicaid programs. A lengthy stay in any type of hospital is treated the same 
regardless of the type of hospital. In addition, the BBA does not permit states 
to differentiate between types of hospitals. No change was made as a result of 
this comment. 
Comments were received from the Association of Texas Hospitals and Health Care 
Organizations, Santa Rosa Health Care, Plaza Specialty Hospital, and American 
Transitional Hospitals, Inc. All commenters expressed concerns and opposition to 
the adoption of the rule. 
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). 

sec.29.1109. Coordination of Title XIX with Parts A and B of Title XVIII.
(a) If a Medicaid recipient is eligible for Medicare coverage, the department or 
its designee pays the recipient's Medicare deductible and coinsurance 
liabilities as specified in this section. Payment of deductible and coinsurance 
liabilities is subject to the reimbursement limitations of the Texas Medical 
Assistance Program. 
(1)-(2) (No change.) 
(b) The payment of the Medicare Part A deductible and coinsurance is based on 
the following. 
(1) If the Medicare payment amount equals or exceeds the Medicaid payment rate, 
the department is not required to pay the Medicare Part A deductible/coinsurance 
on a crossover claim. 
(2) If the Medicare payment amount is less than the Medicaid payment rate, the 
department is required to pay the Medicare Part A deductible/coinsurance on a 
crossover claim, but the amount of payment is limited to the lesser of the 
deductible/coinsurance or the amount remaining after the Medicare payment amount 
is subtracted from the Medicaid payment rate. 
(c) Coverage of a recipient's deductible and/or coinsurance liabilities as 
specified in this section satisfies the department or its designee's obligation 
to provide coverage for services that would have been paid in the absence of 
Medicare coverage. 
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 August 4, 1998.
TRD-9812333
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: October 1, 1998
Proposal publication date: February 27, 1998
For further information, please call: (512) 458-7236

TITLE 30. ENVIRONMENTAL QUALITY
PART I. Texas Natural Resource Conservation Commission
CHAPTER 333. Brownfields Initiatives
SUBCHAPTER B. Innocent Owner/Operator Certification
30 TAC sec.sec.333.31-333.43
The Texas Natural Resource Conservation Commission (TNRCC or commission) adopts 
new sec.sec.333.31-333.43, concerning the certification of persons as innocent 
owner/operators who are immune from liability for contamination on their 
property from a source not located on or at the property. Section 333.40 is 
adopted with changes to the proposed text as published in the May 1, 1998, issue 
of the Texas Register (23 TexReg 4207). Sections 333.33-333.39, 333.41-333.43 
are adopted without changes and will not be republished. 
EXPLANATION OF THE ADOPTED RULES The commission is adopting the new rules for 
the Innocent Owner/Operator Program (IOP) created by new Health and Safety Code, 
Chapter 361, Subchapter V (IOP statute), passed by the 75th Texas Legislature. 
The new statute, which took effect on September 1, 1997, was created to provide 
an immunity from liability and a certification process for owners/operators of 
property that has become contaminated as a result of a release or migration of 
contaminants from an off-site source. To qualify for the immunity from 
liability, innocent owner/operators must grant reasonable access for purposes of 
investigation or remediation to persons designated by the agency. An agreement 
for reasonable access may provide for, among other things, reasonable 
compensation for access to the property. The IOP, and this reference to 
reasonable compensation, is not intended to address such issues as permanent 
damages including damages due to remaining contamination after remediation, 
damages incurred due to deed notice or recordation, or any other damage caused 
by the contamination. To be eligible for certification as an innocent 
owner/operator, a person must apply to the agency. If the agency determines that 
the person is an innocent owner/operator, the agency will issue a certificate 
acknowledging such. The certificate evidences the person's immunity from 
liability under the Texas Water Code and the Health and Safety Code for 
investigation, monitoring, remediation, or corrective or other response action 
regarding the contamination from the off-site source. Because the IOP statute 
took effect on September 1, the IOP is an operating program. The IOP application 
and draft certificate became available in September 1997. The commission is 
proposing these new rules to enhance the implementation of the IOP. 
New sec.333.31 states that the authority to issue, deny or revoke a certificate 
under the IOP is delegated by the commission to the executive director pursuant 
to Texas Water Code, sec.5.122. The commission did not receive any comments on 
this section, and the section is adopted as proposed. 
New sec.333.32 states that the requirements for the IOP are found in Subchapter 
B of this chapter and in the Texas Health and Safety Code, Chapter 361, 
Subchapter V. Two copies of all documents are required so that one copy may be 
on file in the agency's central records. The commission did not receive any 
comments on this section, and the section is adopted as proposed. 
New sec.333.33 contains terms and definitions for the IOP. Four definitions were 
proposed in this section to add clarity to the program: "Innocent owner/operator 
certificate;" "Portion of a tract;""Site;" and "Source of release of 
contamination." The commission did not receive any comments on this section, and 
the section is adopted as proposed. 
New sec.333.34 sets forth the eligibility requirements for an Innocent 
Owner/Operator Certificate. Persons eligible for the IOP are innocent 
owners/operators under Texas Health and Safety Code, sec.361.751 and 
sec.361.752(b). Section 361.751 defines innocent owners/operators as owners or 
operators of property that has become contaminated as a result of a release or 
migration of contaminants from a source or sources not located on or at the 
property and who did not cause or contribute to the source or sources of the 
contamination. Section 361.752(b) provides eligibility for a person that 
acquired a portion of a tract on which the source of a release of contaminants 
is located from the person that caused the release, if the person acquiring the 
portion of the tract did not know or have reason to know of the contamination 
after appropriate inquiry consistent with good commercial or customary practice. 
Under the new section, persons electing to participate in the IOP must submit an 
application and pay all agency costs associated with the review of the 
application and the issuance of an innocent owner/operator certificate. Persons 
are not required to be owners or operators of the site at the time they apply 
for a certificate; however, the executive director will not issue a certificate 
until proof of ownership or operation is provided. This will allow prospective 
owners/operators to participate in the IOP. The commission did not receive any 
comments on this section, and the section is adopted as proposed. 
New sec.333.35 contains the requirements for the application. All applications 
must be accompanied by a $1000 application fee. As noted earlier, the 
application form is currently available from the executive director. Along with 
the application form, applicants must submit general information concerning the 
owner/operator of the site, a site investigation report, a legal description of 
the site and the name of the site owner/operator, a statement affirming innocent 
owner/operator status, and other background information requested by the 
executive director. The section sets forth criteria for the site investigation, 
notably information that demonstrates that the applicant is an innocent 
owner/operator. Section 333.35 also contains requirements for applications in 
the event that the sale, transfer, or change in ownership/operation will occur 
during the application review period or in the event a certified innocent 
owner/operator will be selling, transferring, or changing operations to another 
person who desires to be certified as an innocent owner/operator (i.e., a future 
transaction). The section is adopted as proposed. 
New sec.333.36 requires the applicant to notify adjacent property owners within 
14 days of the submittal of the application. The notice will identify the 
applicant and will announce the availability of reports relating to the site. 
Adjacent property owners will have 14 days after receipt of the notice to submit 
additional information to assist the executive director in reviewing the 
application. Prior to reviewing any information supplied by adjacent owners, the 
executive director will notify the applicant and will give the applicant the 
opportunity to review the information. The applicant will be responsible for 
paying the costs incurred for agency review of the information unless the 
applicant notifies the executive director within 14 days of receiving the notice 
that it intends to withdraw the application. The commission did not receive any 
comments on this section, and the section is adopted as proposed.
New sec.333.37 allows the applicant to withdraw the application by giving 
advance written notice to the executive director. Application fees for expenses 
not already incurred or obligated will be refunded. The commission did not 
receive any comments on this section, and the section is adopted as proposed.
New sec.333.38 sets forth the standards for issuance of the Innocent 
Owner/Operator Certificate. Prior to issuance of the certificate, the applicant 
and any coapplicant must submit an affidavit affirming that they are innocent 
owners/operators. If the executive director determines that the applicant and/or 
coapplicants are innocent owners/operators, then the executive director will 
issue an innocent owner/operator certificate that acknowledges protection from 
liability provided by Texas Health and Safety Code, sec.361.752. The certificate 
shall specify the contaminants and environmental media for which the executive 
director has confirmed the person's innocent owner/operator status. If a 
prospective owner or operator applies for the certificate, the rule provides 
that the certificate will not be issued until the person submits written 
evidence of ownership or operation. If control measures are required, proposed 
sec.333.38(g) requires control measures to be described in a restrictive 
covenant to be filed with the real property records in the county in which the 
site is located. The executive director will issue a certificate only after 
receiving proof that the restrictive covenant has been filed. 
Section 333.38 also allows subsequent owners and operators to apply for a 
certificate in the event of a sale, transfer, or change in ownership or 
operation. The applicant and any co-applicant in such a case must demonstrate to 
the commission that the current certificate holder, since the issuance of the 
certificate, has not caused or contributed to the source of the off-site 
contamination and has not discharged or released to the site any contaminants 
covered by the certificate. This demonstration may be made either by affidavit 
from the current certificate holder or by other documentation if an affidavit 
cannot be obtained. The executive director, in its discretion, may require a 
site investigation report as part of this demonstration. Section 333.38 is 
adopted as proposed. 
New sec.333.39 sets forth the procedures for the executive director's denial of 
a certificate. The executive director may deny an Innocent Owner/Operator 
Certificate if the application is not complete; the applicant does not provide 
sufficient information for the executive director to determine that the person 
is an innocent owner/operator; information obtained since the application was 
filed, including information submitted by adjacent property owners, demonstrates 
that the applicant is not an innocent owner/operator; or the owner/operator does 
not provide reasonable access. If a certificate is denied, the executive 
director will state the reasons for denial. The commission did not receive any 
comments on this section, and the section is adopted as proposed. 
New sec.333.40 provides that the executive director may revoke the innocent 
owner/operator certificate if the person holding the certificate: acquired the 
certificate by fraud, misrepresentation, or knowing failure to disclose 
material; does not properly maintain institutional and/or engineering controls 
where placement of such controls was required for certificate issuance; or does 
not pay all commission costs within 180 days of certificate issuance. 
Additionally, the certificate may be revoked by the executive director if new 
information demonstrates that the certificate holder is not an innocent 
owner/operator. However, the commission, rather than the executive director, may 
revoke a certificate if reasonable access is denied. The commission did not 
receive any comments on this section, but did make a change to the section based 
on a comment regarding proposed sec.333.38. The final rule states that the 
certificate remains valid until revoked by the executive director or, when 
reasonable access is denied, by the commission. In addition, the section 
clarifies which circumstances may lead to revocation by the executive director 
and which circumstances may lead to revocation by the commission.
New sec.333.41 discusses access. The certificate holder must grant reasonable 
access to persons designated by the executive director for purposes of 
investigation and remediation of the site as provided by Texas Health and Safety 
Code, sec.361.752(c). In addition, the proposed section clarifies that the 
commission, its employees, contractors, and agents may access the site. This 
section is adopted as proposed.
New sec.333.42 states that the attorney general will bring an action to recover 
the state's cost associated with reviewing the application if the person has not 
paid the amount due within 31 days after the date that the person receives 
notice that the costs are due. The commission did not receive any comments on 
this section, and the section is adopted as proposed. 
New sec.333.43 states that the executive director will annually calculate the 
agency's costs to administer the IOP and determine a rate for cost recovery. The 
commission will publish the notice of the rate in the Texas Register on an 
annual basis. The commission did not receive any comments on this section, and 
the section is adopted as proposed. 
FINAL REGULATORY IMPACT ANALYSIS The commission has reviewed the rulemaking in 
light of the regulatory analysis requirements of Texas Government Code 
sec.2001.0225 and has determined that the rulemaking is not subject to 
sec.2001.0225 because: 1) it does not meet the definition of a "major 
environmental rule" as defined in the act, and 2) additionally, it does not meet 
any of the four applicability requirements listed in sec.2001.0225(a). While the 
rule does seek to protect the environment and reduce risks to human health from 
environmental exposure through the possible placement of institutional and other 
control measures, the specific intent of the rule is to exclude from liability 
owners and operators of property that has become contaminated from sources not 
located on the property. Any such placement will only be undertaken in 
conjunction with certification of immunity from liability issued at the request 
of the owner/operator. Accordingly, the rulemaking will not have a material, 
adverse effect on the economy. Moreover, the IOP removes liability for innocent 
owners/operators, which in turn encourages and expedites real estate 
transactions, and may also lead to brownfields redevelopment, which likewise 
could provide economic benefits.
TAKINGS IMPACT ASSESSMENT The commission has prepared a Takings Impact 
Assessment for these rules pursuant to Texas Government Code Annotated 
sec.2007.043. The specific purpose of the rules is to enhance the implementation 
of new Texas Health and Safety Code, Chapter 361, Subchapter V, which relates to 
the immunity from liability under the Texas Water Code and the Texas Health and 
Safety Code of innocent owners/operators. The rules will substantially advance 
this specific purpose by providing more detail for certain requirements and by 
establishing a clear administrative process for the preparation, submittal, and 
review of an Innocent Owner/Operator Application and issuance of an Innocent 
Owner/Operator Certificate. Promulgation and enforcement of these rules will not 
burden private real property which is the subject of the rules because the IOP 
will benefit owners/operators of private real property by providing immunity 
from liability under the Texas Water Code and the Texas Health and Safety Code 
for property contaminated by off-site sources. 
COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW Title 31 Texas Administrative Code 
sec.505.11, relating to Actions and Rules Subject to the Coastal Management 
Program (CMP), requires the commission to evaluate proposed rules to ensure 
consistency with the CMP. The commission has reviewed this rulemaking for 
consistency with the CMP goals and policies. The rulemaking does not consist of 
actions or rules subject to the CMP identified in sec.505.11(a)(6) and 
sec.505.11(b)(2) for the TNRCC; therefore, the proposed rule is not subject to 
the CMP. 
HEARINGS AND COMMENTERS The commission held a public hearing on the proposed 
rules on May 22, 1998 at 10:00 a.m. in TNRCC Building F, 2nd floor, Room 2210. 
No persons submitted comment on the proposed rules at the public hearing. The 
comment period for the proposed rules closed at 5:00 p.m. on June 1, 1998, and 
written comments were submitted by three commenters: Lloyd, Gosselink, Blevins, 
Rochelle, Baldwin, & Townsend, P.C. (Lloyd, Gosselink); Thompson & Knight; and 
the commission's Public Interest Counsel (PIC). 
ANALYSIS OF TESTIMONY 
GENERAL COMMENTS Lloyd, Gosselink and Thompson & Knight generally supported the 
proposed rules, and the commenters further noted that rules should enhance the 
commission's continued efforts to accomplish the goals of State and Federal 
Brownfields initiatives. Lloyd, Gosselink specifically commented that the rules 
are sensible and straightforward regulations. 
Concerning the concepts of "reasonable access" and "reasonable compensation," 
the PIC commented that it supports the statement in the preamble to the proposed 
rule that compensation for reasonable access is separate and distinct from such 
issues as permanent damages. 
Thompson & Knight commented that a statutory change should be made to harmonize 
the Voluntary Cleanup Program (VCP) with the IOP so that a party be allowed to 
address liability issues related to on-site and off-site contamination using 
both programs at once. 
The commission considers the programs to be harmonized so that on-site and off-
site liability issues can be addressed simultaneously through both the VCP and 
the IOP. For example, the executive director has already issued certificates in 
several instances where the contamination to the source property and adjacent 
properties was addressed through the VCP while the responsible party assisted 
off-site affected innocent owner/operators with their IOP applications. This has 
resulted in cases where the source property and affected adjacent properties 
receive a VCP certificate releasing future buyers and lenders from liability 
while the adjacent landowners receive IOP certificates. 

sec.333.35. APPLICATION. Proposed sec.333.35(d) and (e) established requirements 
for the application in the event of a sale, transfer, or change in operation. 
The commission proposed allowing prospective owners or operators to be 
coapplicants in the event the sale, transfer or change occurs during the 
application review period. If the sale, transfer, or change in operation occurs 
after the issuance of the certificate, the commission proposed that the 
prospective owner or operator submit an updated application. Thompson & Knight 
suggested that the certificate "run with the land" rather than be limited to an 
individual owner or operator so that the program is more attractive to potential 
applicants. In addition, this would reduce the administrative burden on the 
agency. 
The commission disagrees with the commenter. The statute on which the IOP is 
based, Health and Safety Code, Chapter 361, Subchapter V, relates to "persons" 
rather than "properties" or "sites" as the VCP statute does. Specifically, 
sec.361.751 states that an "Innocent owner or operator" means a person that is 
an owner or operator of property that has become contaminated as a result of a 
release or migration of contaminants from a source or sources not located on or 
at the property and did not cause or contribute to the source or sources of the 
contamination. Further, sec.361.753(a) states that, "a person may apply to the 
commission for a certificate confirming that the person is an innocent owner or 
operator." By contrast, certification under the VCP, Health and Safety Code 
sec.361.610(a)(2), is a certificate of completion confirming cleanup of the area 
of the site covered by the certificate. However, to the extent possible, the 
commission has attempted to address the issue of transferability of IOP 
certificates while ensuring that adequate information is available for the 
executive director to certify the innocence of a future owner or operator. This 
is done by allowing for coapplicants in sec.333.35(d) and providing for updated 
applications for subsequent owners or operators in sec.333.35(e). 

sec.333.38. INNOCENT OWNER/OPERATOR CERTIFICATE. In the preamble to the proposed 
rule, the commission requested comment on whether the rule should state that a 
certificate is valid until revoked. Both the PIC and Thompson & Knight submitted 
comment agreeing with the concept that the certificate is valid until revoked; 
however, the PIC does not agree that it needs to be stated in rule while 
Thompson & Knight argued that it should be in the rule to add certainty to the 
program. 
The commission agrees that adding language to the proposed rule will add 
certainty and has added the statement to the adopted rule. However, the 
commission considers the change to be more appropriate in the section addressing 
revocation of the certificate, proposed sec.333.40. The certificate may be 
revoked by the commission with regard to denial of reasonable access or by the 
executive director in the circumstances listed in proposed sec.333.40(a); 
therefore, the change to the proposed rule addresses revocation by both the 
commission and the executive director. 
Concerning proposed sec.333.38(g), Thompson & Knight commented that the rule 
should not require the filing of deed restrictions until after the IOP 
certificate has been issued. Rather, like the VCP, a certificate holder would be 
required to file the deed restrictions after the certificate is issued. The 
commission disagrees with the commenter because the commission is concerned that 
it would be difficult to ensure that the necessary restrictions are placed in 
the deed records subsequent to the issuance of a certificate. However, the 
commission understands the commenter's concern that the owner could place a deed 
restriction on the property and then discover that the agency denied the 
certificate. To address this concern, for sites that will receive a IOP 
certificate, the executive director, at the applicant's request, will prepare a 
letter stating the agency's intent to issue an IOP certificate to the applicant 
upon the placement of the restrictions on the deed record. 

sec.333.41. ACCESS. Proposed sec.333.41(a) required an owner or operator to 
grant reasonable access to the site for purposes of investigation and 
remediation to persons designated by the executive director. The PIC noted that 
although not specifically stated, it appears that revocation of certificate for 
denial of reasonable access would be sought in the context of an enforcement 
action initiated by the executive director. Therefore, the rules appear to allow 
the executive director and the commission flexibility in determining on a case-
by-case basis whether a landowner is acting reasonably with respect to granting 
access. The PIC seeks assurances that when negotiations between a responsible 
party and an innocent owner or operator are at an impasse, the innocent owner or 
operator will not automatically be deemed the "unreasonable" party. Through an 
interoffice memorandum, the commission has established a process to address 
claims that reasonable access has been denied. Under the first step, the person 
denied access must submit to the executive director a copy of the certified 
letter mailed to the owner or operator requesting access for purposes of 
investigation and/or remediation. In Step 2, the executive director will contact 
the owner or operator and attempt to persuade that person to allow access. If 
access is still denied, the executive director will notify the parties of the 
opportunity to use Alternative Dispute Resolution (ADR). At this point, the 
agency is attempting alternatives other than enforcement to encourage access, 
and the person denying access is not presumed to be the unreasonable party. If 
the owner or operator continues to deny access following discussions with the 
executive director and the parties refuse mediation or mediation has failed, the 
executive director will initiate Step 3 issuing a Notice of Violation (NOV) of 
Texas Water Code, sec.26.121. The NOV will require access within 30 days. If 
access is still denied after 30 days, the executive director will initiate an 
enforcement action under Step 4. With the issuance of the NOV, the agency is 
presuming that the owner or operator denying access is the unreasonable party. 
The owner or operator is considered the unreasonable party because the party 
seeking access is willing to remediate the contamination while the owner or 
operator is obstructing the remediation. Thus, the owner or operator is presumed 
to be "cause, suffering, or allowing" contamination. However, the commission 
wishes to emphasize that the owner or operator has the opportunity during the 
executive director's preparation of the enforcement case to argue the merits of 
their position that they have been reasonable, and the executive director 
retains the discretion to not pursue an enforcement action against the party 
denying access and instead bring an enforcement action against the responsible 
party. If the enforcement action is pursued in the form of an enforcement order 
before the commission, the commission retains discretion in determining whether 
the owner or operator is allowing reasonable access. Finally, the commission 
notes this process is set forth in a memorandum which is subject to amendment. 
As the agency gains experience implementing the IOP, it may become necessary to 
alter the process or the assumptions in the process. 
STATUTORY AUTHORITY The new rules are adopted under the Texas Water Code, 
sec.5.103 and sec.26.011, which provide the commission with authority to adopt 
any rules necessary to carry out its powers, duties, and policies and to protect 
water quality in the state. The new rules are also adopted under the Texas Solid 
Waste Disposal Act, Texas Health and Safety Code, sec.361.017, and sec.361.024, 
which provide the commission the authority to regulate industrial solid waste 
and municipal hazardous wastes and all other powers necessary or convenient to 
carry out its responsibilities. The Texas Solid Waste Disposal Act, Texas Health 
and Safety Code, Subchapter V, sets forth statutory requirements specific to the 
immunity from liability of innocent owners and operators.

sec.333.40. Revocation of Certificate. 
(a) The certificate shall remain valid until revoked. 
(b) The executive director may revoke the innocent owner/operator certificate 
if: 
(1) the certificate holder: 
(A) acquired the innocent owner/operator certificate by fraud, 
misrepresentation, or knowing failure to disclose material information; 
(B) does not properly maintain institutional and/or engineering controls where 
the placement of such controls were required for certificate issuance; or 
(C) does not pay all the agency costs described in sec.333.34(b)(2) of this 
title (relating to Eligibility for Innocent Owner/Operator Certificate) within 
180 days of certificate issuance; or 
(2) new information demonstrates that the certificate holder is not an innocent 
owner or operator. 
(c) Prior to revocation of a certificate by the executive director, the 
executive director will provide the certificate holder with a notice in writing 
of the facts alleged to warrant revocation. The certificate holder shall have 30 
days after receipt of notice to demonstrate to the executive director that they 
are in compliance with all requirements of law for the retention of the 
certificate. The executive director will make a determination whether to revoke 
the certificate and will provide such determination in writing to the 
certificate holder. A decision of the executive director to revoke a certificate 
is final and appealable under Chapter 361, Subchapter K, of the Texas Health and 
Safety Code. 
(d) The commission may revoke a certificate if the certificate holder 
unreasonably denies access as required by sec.333.41 of this title (relating to 
Access). The decision to revoke a certificate shall be made following a finding 
by the commission that reasonable access has been denied. Such finding shall be 
based on facts and/or evidence presented to the commission through an 
enforcement action.
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 August 10, 1998.
TRD-9812604
Margaret Hoffman
Director, Environmental Division
Texas Natural Resource Conservation Commission
Effective date: August 30, 1998
Proposal publication date: May 1, 1998
For further information, please call: (512) 239-6087

TITLE 40. SOCIAL SERVICES AND ASSISTANCE
PART III. Texas Commission on Alcohol and Drug Abuse
CHAPTER 143.Awards
SUBCHAPTER A.Funding Mechanisms
40 TAC sec.sec.143.1-143.12, 143.15, 143.18, 143.19, 143.31, 143.32
The Texas Commission on Alcohol and Drug Abuse adopts the repeal of 
sec.sec.143.1-143.12, 143.15, 143.18, 143.19, 143.31 and 143.32 concerning 
procedures for awarding funds for services without changes to the proposed text 
as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6162). 
These sections describe applicability, allocation of funds, selection criteria, 
advertisement, request for proposals, application, application information, 
application criteria, screening, peer review, funding decisions, cancellation or 
suspension of solicitation, noncompetitive renewal, the annual report card, 
application cycles, emergency purchase, and unsolicited proposals. 
These sections are repealed to allow the adoption of updated rules following a 
comprehensive review of the agency's funding processes. 
No comments were received regarding the adoption of the repeals. 
The repeal is adopted under the Texas Health and Safety Code, sec.461.012(15) 
which provides the Texas Commission on Alcohol and Drug Abuse with the authority 
to adopt rules governing the functions of the commission, including rules that 
prescribe the policies and procedures followed by the commission in 
administering any commission programs.
The code affected by the repeal is the Texas Health Safety Code, Chapter 461. 
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 August 5, 1998.
TRD-9812357
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

CHAPTER 143.Funding
40 TAC sec.sec.143.1, 143.2, 143.11-143.18, 143.21-143.24
The Texas Commission on Alcohol and Drug Abuse adopts new sec.sec.143.1, 143.2, 
143.11-143.18, and 143.21-143.24 concerning methods of funding. Sections 143.11 
and 143.15 are adopted with changes to the proposed text as published in the 
published in the June 12, 1998 issue of the Texas Register (23 Tex Reg 6162). 
Sections 143.1, 143.2, 143.12-143.14, 143.16-143.18, and 143.21-143.24 are 
adopted without changes and will not be republished. 
These new sections are adopted to update repealed rules. Section 143.11 was 
revised to clarify that selection criteria are designed to select applicants 
that will provide the best overall value to the state and the best outcome for 
clients. Section 143.15 has been revised to clarify that staff members of public 
or nonprofit entities are not to serve on their employer's governing board. 
These new sections describe applicability of the rules, the allocation of funds, 
selection criteria, advertisement, requests for proposal, application, 
application criteria, peer review, funding decisions, cancellation or suspension 
of solicitations, developmental funding, noncompetitive funding, emergency 
purchase, and noncompetitive renewal. 
Comments were received from the Jefferson County Council on Alcohol and Drug 
Abuse. The comments and responses are summarized below. 
Comment: A date by which the Regional Advisory Consortia (RAC) must be notified 
of estimated available funds should be included in sec.143.2. The date should 
allow for a timely, informed and unhurried response. 
Response: The process for the distribution of funds and the time available for 
distribution varies. No timeframe will be included in the rule. The commission 
will give the RACs as much time as possible in each situation. 
Comment: Please add the wording "and provide the best outcome for the client(s) 
to sec.143.11(a). 
Response: It was the commission's intent that the best overall value for the 
state include the benefit to the client. To ensure that this is clear, the 
sentence will be revised as suggested. 
Comment: Are the two items listed under the selection criteria in sec.143.11(b) 
prioritized? 
Response: The exact weight of each selection criteria is stated in the 
individual request for proposals. 
Comment: Add client outcomes as an item to be included as selection criteria in 
sec.143.11(b). 
Response: Program quality includes client outcomes and will not be added as a 
separate item. 
Comment: I am pleased to see the requirement that applicants must have a 
physical business location in Texas. I am also happy to see time frames included 
for notifications and responses in several sections.
Response: None required. 
Comment: The wording of sec.143.15(a)(5) suggests that staff members may not 
serve on governing boards of any public or nonprofit entity. Please reword to 
indicate that this applies only to the entity that employs them.
Response: The wording has been changed as requested.

sec.143.11.Selection Criteria. 
(a) The commission develops selection criteria for each request for proposals 
that reflect the identified goals and applicable state and federal mandates. 
Selection criteria are designed to select applications that provide the best 
overall value to the state and provide the best outcome for the client(s). 
(b) The selection criteria include: 
(1) program quality as determined by the peer review process; and 
(2) the cost of the proposed service. 
(c) The commission may consider additional factors in determining best value as 
specified in Texas Government Code sec.2155.144, including: 
(1) financial ability to perform services; 
(2) state investment in the applicant; 
(3) regional service needs and priorities; 
(4) access for underserved areas and populations; 
(5) ability to fit within a regional continuum of services; 
(6) past performance, outcomes, and compliance; and 
(7) results of on-site reviews. 
(d) Selection criteria include the scoring system(s) to be used, the weight 
assigned to each factor, and the minimum score required for funding. 

sec.143.15.Application Criteria.
(a) An application shall not be considered for competitive funding unless the 
applicant meets the following criteria on the application due date and continues 
to meet them throughout the selection and funding process. 
(1) The applicant shall be established as a legal entity under state or federal 
statutes and regulations. 
(2) Applicants seeking funding for treatment services shall be licensed to 
provide the requested services (detox, residential, or outpatient) to the 
proposed target population. 
(3) The applicant shall be in compliance with any commission agreed order. 
(4) The applicant shall be registered to do business in Texas and shall have a 
Texas address. A post office box address may be used when the application is 
submitted, but the applicant must be able to conduct business out of a physical 
location in Texas before funds will be released. 
(5) Staff members, including the executive director, of a public or nonprofit 
entity shall not serve on their employer's governing board. 
(6) The applicant shall be in good standing with any State or Federal agency 
that has a contracting relationship with the applicant. If a State or Federal 
agency has suspended or terminated an applicant's contract for deficiencies in 
performance of the contract, that applicant is not eligible to apply through a 
request for proposals unless all issues have been satisfactorily resolved as 
demonstrated by written documentation from the State or Federal agency. 
Additionally, an applicant is not eligible if it is debarred from participation 
in any federal assistance program. 
(7) Applicants who have previously been funded by the commission shall be in 
compliance with the following requirements: 
(A) if the applicant has been suspended or terminated by the commission at any 
time in the past all issues shall be satisfactorily resolved (demonstrated by 
written documentation from the commission); 
(B) if the applicant owes a refund to the commission, the applicant shall be on 
schedule with the terms of the repayment agreement;
(C) the applicant shall have submitted an annual audit as required by the grant 
agreement or contract and either corrected all deficiencies or submitted and 
maintained compliance with a corrective action plan that the commission has 
accepted. 
(b) The commission may establish additional eligibility standards in a request 
for proposals or other form of solicitation. 
(c) Providers shall continue to meet application criteria after funds are 
awarded or be subject to sanctions. 
(d) The commission may deny funding to an applicant if any person who has an 
ownership or controlling interest in the applicant organization, or who is an 
agent or managing employee of the applicant, has been convicted of a criminal 
offense related to involvement in any program established under Medicare, 
Medicaid, or the Title XX block grant. 
(e) The commission may refuse to fund an applicant who cannot demonstrate that 
the location where services will be provided is in compliance with all 
applicable local and state zoning, building, health, fire, and safety standards. 
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 August 5, 1998.
TRD-9812361
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

CHAPTER 144.Contract Requirements
SUBCHAPTER A.General Provisions
40 TAC sec.144.21
The Texas Commission on Alcohol and Drug Abuse adopts amendments to sec.144.21 
concerning general provisions for contract requirements. These amendments are 
adopted without changes to the proposed text as published in the June 12, 1998 
issue of the Texas Register (23 TexReg 6166) and will not be republished.
This section contains the definitions used in this chapter. These amendments are 
adopted to differentiate between the terms intervention and prevention by adding 
a definition for intervention and updating the definition of prevention.
No comments were received regarding adoption of these amendments. 
The amendments are adopted under the Texas Health and Safety Code, Title 6, 
Subtitle B, sec.461.012(15) which provides the Texas Commission on Alcohol and 
Drug Abuse with the authority to adopt rules governing the functions of the 
commission, including rules that prescribe the policies and procedures followed 
by the commission in administering any commission programs. The code affected by 
the amendments is the Texas Health and Safety Code, Title 6, Subtitle B, Chapter 
461. 
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 August 5, 1998.
TRD-9812362
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 5, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

SUBCHAPTER B.Contract Administration
40 TAC sec.sec.144.101, 144.104, 144.107, 144.121, 144.124, 144.125, 144.133, 
144.142
The Texas Commission on Alcohol and Drug Abuse adopts amendments to 
sec.sec.144.101, 144.104, 144.107, 144.121, 144.124, 144.133 and 144.142, and 
new 144.125, concerning contract administration. These amendments and the new 
section are adopted without changes to the proposed text as published in the 
June 12, 1998 issue of the Texas Register (23 TexReg 6168) and will not be 
republished.
These sections describe the contract acceptance process, matching prevention 
awards, reporting requirements, the application of federal and state 
regulations, requirements related to indirect costs, Medicaid requirements, 
allowable travel costs, and the subcontracting process. 
These amendments are adopted to expedite the contract acceptance process, 
incorporate intervention services, update the name of referenced federal 
publications, ensure compliance with federal requirements, add a new requirement 
regarding Medicaid services, and clarify which travel provisions apply to what 
type of entity. 
Comments were received from the Jefferson County Council on Alcohol and Drug 
Abuse and the Association of Substance Abuse Programs. Comments are summarized 
below. 
Comment: The change in sec.144.101(a) will be helpful, particularly the deletion 
of the requirement for minutes of board meetings. 
Response: None required. 
Comment: The wording in sec.144.107(e) is awkward. It should refer to an accrual 
accounting system. 
Response: Providers are not required to implement a full accrual accounting 
system. If another system is used, adjustments must be made so that reports 
submitted to the commission reflect all applicable costs as defined under an 
accrual system. 
Comment: Which services are currently eligible for Medicaid reimbursement as 
required in sec.144.125?
Response: Medicaid covers inpatient (hospital based) services for adults (21 
years and older) with a diagnosis of substance dependency, as well as inpatient 
(hospital based) and outpatient services for children/adolescents (under 21 
years) for diagnosis of substance dependency. Traditional Medicaid does not 
cover residential treatment, partial hospitalization, intensive outpatient. In 
the Medicaid Managed Care sites where an Health Maintenance Organization (HMO) 
and/or Behavioral Health Organization (BHO) is operating, the BHO can offer 
value added services to their enrolled Medicaid clients such as residential, 
outpatient detox, partial hospitalization (level II), intensive outpatient 
(level III) under the 1915b waiver. Therefore, Medicaid covered services will 
vary from one area to another. 
Comment: Guidance needs to be provided regarding which TCADA funded services are 
eligible Medicaid Services. Based on my understanding of what is covered under 
the Texas State Medicaid Plan, only a fairly narrow range of TCADA funded 
services are covered. 
Response: It is true that few TCADA-funded services fall under traditional 
Medicaid coverage. Please see the previous response for detailed information 
about which services are covered under Medicaid. As suggested, information about 
Medicaid coverage will be included in the Provider Handbook for TCADA funded 
providers. No change will be made to the proposed rule. 
Comment: How will sec.144.125 apply to the Dallas area providers who are 
participating under Northstar, the Dallas Medicaid service area integrated 
funding behavioral health pilot? 
Response: When the Northstar project is implemented, participating providers 
will operate under the subcontracts to the behavioral health organization(s). 
Comment: What responsibility will the provider have for determining Medicaid 
eligibility for clients not currently covered under Medicaid? 
Response: For services covered under Medicaid, providers will need to determine 
Medicaid eligibility for each applicant or have eligibility determinations 
provided by an outside source. 
Comment: Can a person who is eligible but not currently insured under Medicaid 
be served? 
Response: The individual should be served, but services are to be billed to 
Medicaid instead of the commission. TCADA will not pay for Medicaid-covered 
services provided to Medicaid-eligible clients. 
Comment: Section 144.133(c) states that alcoholic beverages are not allowable 
travel costs. Suggest that cigarettes be added to this statement. 
Response: The commission agrees that tobacco is not a reimbursable travel 
expense. However, the commission cannot propose a change which expands the scope 
of the rule without re-publishing the proposed rule. The current rule was 
written to reflect and clarify federal regulations. Travel costs include only 
meals and lodging, and tobacco products do not fit into either of those 
categories. Thus, the rule does not specifically reference tobacco. The 
suggestion will be considered during the next revision cycle. 
These amendments and new section are adopted under the Texas Health and Safety 
Code, Title 6, Subtitle B, sec.461.012(15) which provides the Texas Commission 
on Alcohol and Drug Abuse with the authority to adopt rules governing the 
functions of the commission, including rules that prescribe the policies and 
procedures followed by the commission in administering any commission programs.
The code affected by these amendments and new section is the Texas Health and 
Safety Code, Title 6, Subtitle B, Chapter 461. 
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 August 5, 1998.
TRD-9812353
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

SUBCHAPTER C.Audits
40 TAC sec.144.214
The Texas Commission on Alcohol and Drug Abuse adopts an amendment to 
sec.144.214 concerning submission of audits. This amendment is adopted with 
changes to the proposed text as published in the June 12, 1998 issue of the 
Texas Register (23 TexReg 6169). 
This section describes the process that providers must follow in submitting 
audits to the commission. Revisions were made to include the correct federal 
criteria for determining the amount of time allowed for completion of the audit. 
Also, the requirement that all audit documentation be submitted within 30 
calendar days after completion of the audit has been eliminated. 
This amendment is adopted to implement changes in applicable federal 
regulations. 
Comments were received from the Association of Substance Abuse Providers. A 
summary of the comments follows. 
Comment: Often the governing board reviews and approves the program audits. A 
board meeting may not take place within 30 days of an issued audit report. 
Please clarify what will be considered a completed audit process for purposes of 
the required 30 day time frame. 
Response: We have eliminated the requirement that audit documentation be 
submitted within 30 calendar days after completion of the audit. 
Comment: Many non-profits have their audits completed during the time that 
accounting firms offer off-season rates. Recommend retaining the 13 month period 
after the end of the fiscal year for completion of the audit to allow non-
profits to continue this money-saving practice. 
Response: The reduced time period is a federal requirement found in OMB Circular 
A-133. 
The amendment is adopted under the Texas Health and Safety Code, Title 6, 
Subtitle B, sec.461.012(15) which provides the Texas Commission on Alcohol and 
Drug Abuse with the authority to adopt rules governing the functions of the 
commission, including rules that prescribe the policies and procedures followed 
by the commission in administering any commission programs.
The code affected by the amendment is the Texas Health and Safety Code, Title 6, 
Subtitle B, Chapter 461. 

sec.144.214. Audit Submission. 
(a) (No change.) 
(b) Audits for fiscal years beginning on or after July 1, 1998 shall be 
completed and submitted no later than nine months after the provider's fiscal 
year end. Audits for fiscal years beginning on or before June 30, 1998 must be 
completed and submitted no later than 13 months after the provider's fiscal year 
end.
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 August 5, 1998.
TRD-9812354
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

SUBCHAPTER D.Organizational
40 TAC sec.sec.144.313, 144.322
The Texas Commission on Alcohol and Drug Abuse adopts amendments to 
sec.sec.144.313 and 144.322 concerning organizational requirements for 
providers. Section 144.313 is adopted with changes to the proposed text as 
published in the June 12, 1998 issue of the Texas Register (23 TexReg 6170). 
Section 144.322 is adopted without changes to the proposed text and will not be 
republished.
These sections describe requirements for the governing authority and record 
retention requirements. Section 144.313 has been revised to clarify that staff 
members of public and non-profit entities may not serve on their employer's 
governing board. 
The amendments are adopted to clarify which entities are prohibited from having 
a staff member on the governing board and to specify the record retention 
requirements for currently funded providers. 
A comment was received from the Jefferson County Council on Alcohol and Drug 
Abuse. 
Comment: The wording of sec.144.313(c) appears to prevent staff members from 
serving on the board of any non-profit or public entity. 
Response: The wording has been revised to clarify that the prohibition is 
against staff members serving on their employer's governing board. 
The amendments are adopted under the Texas Health and Safety Code, Title 6, 
Subtitle B, sec.461.012(15) which provides the Texas Commission on Alcohol and 
Drug Abuse with the authority to adopt rules governing the functions of the 
commission, including rules that prescribe the policies and procedures followed 
by the commission in administering any commission programs. The code affected by 
the amendments is the Texas Health and Safety Code, Title 6, Subtitle B, Chapter 
461.

sec.144.313. Governing Authority.
(a)-(b) (No change.) 
(c) Staff members, including the executive director, of a public or nonprofit 
entity shall not serve on their employer's governing board.
(d)-(f) (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 August 5, 1998.
TRD-9812355
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

SUBCHAPTER E.Prevention and Intervention
40 TAC sec.sec.144.401, 144.411-144.416, 144.433, 144.447
The Texas Commission on Alcohol and Drug Abuse adopts amendments to 
sec.sec.144.401, 144.411-144.415, 144.433 and 144.447, and new 144.416 
concerning requirements for funded prevention and intervention programs. These 
amendments and new section are adopted without changes to the proposed text as 
published in the June 12, 1998 issue of the Texas Register (23 TexReg 6170) and 
will not be republished.
These sections describe applicability of these rules, program design and 
implementation, program self-evaluation, performance and activity measures, the 
performance measure review process, participant rights, requirements related to 
smoking, prevention resource centers and additional services that may be 
offered. 
These sections are adopted to incorporate intervention programs throughout; to 
clarify which entities must complete a program self-evaluation and the 
difference in requirements for first and subsequent years; to update 
terminology; to clarify the performance measure review process; to make the 
smoking policy requirements for treatment providers apply to prevention and 
intervention programs as well; to indicate that environmental social policy is 
optional for prevention resource centers; and to emphasize the importance of 
family services in these programs. 
Comments were received from the Jefferson County Council on Alcohol and Drug 
Abuse and the Association of Substance Abuse Providers. A summary of the 
comments follows. 
Comment: In their first year, prevention/intervention programs encounter many 
unforeseen obstacles which often affect the key performance measures included in 
the original application. Suggest that first year prevention/intervention 
program performance measures reflect more of a developmental content and the 
second year focus more on numbers relating to clients, etc.
Response: Factors such as how many years the program has received funding and 
whether the program is developmental are taken into account in the performance 
review. The performance review includes the process of identifying key measures 
and goals for those measures. This process helps TCADA and program staff clarify 
expectations about the program (program content, staffing patterns, and 
outputs). TCADA recognizes some programs may experience more challenges during 
start-up. The performance review process is one mechanism that helps TCADA 
become informed of problems so they can be resolved. 
Comment: Notification regarding performance measures must be timely in order to 
be relevant and useful. Suggest a time limitation for notifying providers 
regarding performance measures be added. 
Response: The commission will try to provide notification within 30 days, but no 
time limitation will be added to the rule. 
Comment: What will be the response time from TCADA on approval of the corrective 
action plan? Will it allow the agency enough time to implement the plan and 
successfully meet key measures? 
Response: The commission will try to provide feedback within 30 days. No 
timeframe will be added to the rule. 
The amendments and new section are adopted under the Texas Health and Safety 
Code, Title 6, Subtitle B, sec.461.012(15) which provides the Texas Commission 
on Alcohol and Drug Abuse with the authority to adopt rules governing the 
functions of the commission, including rules that prescribe the policies and 
procedures followed by the commission in administering any commission programs.
The code affected by these amendments and new section is the Texas Health and 
Safety Code, Title 6, Subtitle B, Chapter 461.
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 August 5, 1998.
TRD-9812358
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

SUBCHAPTER F.Treatment
40 TAC sec.sec.144.532, 144.542, 144.543, 144.545, 144.551, 144.552, 144.554
The Texas Commission on Alcohol and Drug Abuse adopts amendments to 
sec.sec.144.532, 144.542,144.543, 144.551, 144.552 and 144.554, and new 144.545 
concerning treatment services. Section 144.542 is adopted with changes to the 
proposed text as published in the June 12, 1998 issue of the Texas Register (23 
TexReg 6173). Sections 144.532, 144.543, 144.545, 144.551, 144.552 and 144.554 
are adopted without changes to the proposed text and will not be republished.
These sections describe general treatment services, court commitment services, 
pharmacotherapy services, family services, the performance measure review 
process, select performance measure definitions, and Client Oriented Data 
Acquisition Process (CODAP) reports. Section 144.542 has been reworded to more 
closely reflect the wording of the statute on court commitment services. 
These amendments are adopted to clarify the limit on clients in group counseling 
sessions, strengthen court commitment requirements to ensure appropriate 
services are provided for suicidal and other high risk patients and that 
reporting related to these is more accurate, to ensure continuity of services 
for pharmacotherapy services, to develop requirements for family services which 
is a newly funded service, to clarify the performance measure review process, to 
revise the definition of abstinence for adults to be consistent with that used 
for adolescents, to add definitions of measures for pharmocotherapy programs, 
and to eliminate the duplication of instructions found in the CODAP manual. 
Comments regarding the adoption of these amendments were received from the 
Association of Substance Abuse Providers and the Jefferson County Council on 
Alcohol and Drug Abuse. A summary of the comments follows. 
Comment: One response included the following concerns about sec.144.542 which 
states that programs that provide court commitment services must serve suicidal 
and homicidal clients. Providing such services requires a locked facility and a 
psychologist who has been trained to treat emotional and mental disorders. 
Licensed Chemical Dependency Counselors (LCDC) are not allowed to treat any 
problem that is not alcohol and drug related. Some court-committed clients would 
be suffering from disorders such as clinical depression that are not alcohol and 
drug related. This rule appears to be asking LCDCs to perform services that they 
are not qualified to perform and which places them, the program and the client 
in jeopardy.
Response: The commission will revise the rule to more closely track the statute. 
According to statute, a chemically dependent individual cannot be committed to 
treatment through the civil court commitment process unless the individual: a) 
is likely to cause serious harm to self; b) is likely to cause serious harm to 
others; or c) will continue to suffer abnormal mental, emotional, or physical 
distress and to deteriorate in ability to function independently if not treated 
and is unable to make a rational and informed choice as to whether or not to 
submit to treatment. 
A individual cannot be placed in emergency detention unless: a) the person is 
chemically dependent; b) the person evidences a substantial risk of serious harm 
to self or others; c) the risk of harm is imminent unless the person is 
immediately restrained; and d) the necessary restraint cannot be accomplished 
without emergency detention. 
A program designated to accept court commitments cannot refuse admission to 
individuals who are eligible for commitment. Most court-committed clients do not 
require a locked facility, but these programs do need special procedures and 
adequate staffing. A physician should provide consultation and oversight 
regarding clients who are a danger to themselves or others, and appropriate 
mental health evaluation should be obtained for clients when clinical depression 
is suspected. The commission is not suggesting that an LCDC practice beyond the 
scope of the LCDC license. Programs should not seek approval to provide court 
commitment services unless they are prepared to accept any individual eligible 
for court commitment. 
Comment: In regard to sec.144.542, another response included the following 
concerns. Most providers are not equipped with lock down units or reimbursed at 
a rate to make the accommodations necessary to treat individuals with these 
problems. Many will have to drop serving court-committed clients completely if 
this requirement remains. This would result in a shortage of programs that 
provide court commitment services. This set of comments included the 
recommendation that the commission not adopt this rule. 
Response: As stated in our response to the previous set of concerns, this rule 
will be reworded to be more consistent with the statute. 
Comment: Notification regarding performance measures must be timely in order to 
be relevant and useful. Suggest a time limitation be included for notifying 
providers regarding performance measure reviews in sec.144.551.
Response: The commission will try to provide notification within 30 days, but no 
time limitation will be added to the rule. 
Comment: Thank you for providing written recognition that families also need 
assistance to enhance treatment outcomes for the primary client. Family services 
currently supplement most treatment programs to the extent possible with current 
staff. Will the additional documentation requirements for family services in 
sec.144.545 be enacted without providing funding for these services?
Response: Under current rules, programs are required to provide some level of 
service to families as necessary and appropriate. That requirement is unchanged. 
The additional requirements will only apply to services paid for by the 
commission. The commission has developed unit cost rates for family services. A 
provider who bills for family service reimbursement must have the appropriate 
documentation to support the charge 
The amendments are adopted under the Texas Health and Safety Code, Title 6, 
Subtitle B, sec.461.012(15) which provides the Texas Commission on Alcohol and 
Drug Abuse with the authority to adopt rules governing the functions of the 
commission, including rules that prescribe the policies and procedures followed 
by the commission in administering any commission programs.
The code affected by these amendments is the Texas Health and Safety Code, Title 
6, Subtitle B, Chapter 461.

sec.144.542. Court Commitment Services. 
(a) (No change.) 
(b) The program shall comply with federal and state statutory and regulatory 
provisions that relate to the care and custody of court committed clients. These 
provisions include: 
(1) Code of Federal Regulations, Title 42, Part 2-Confidentiality of Alcohol and 
Drug Abuse Patient Records; 
(2) Texas Health and Safety Code, Chapter 462; and 
(3) Texas Administrative Code, Title 40, Chapter 148, as applicable, and Chapter 
149. 
(c) The program's admission criteria shall not exclude individuals who meet the 
criteria for emergency detention or court ordered chemical dependency treatment, 
including individuals who are likely to cause serious harm to themselves or 
others. 
(d) The program shall accept all chemical dependency clients brought to the 
facility under emergency detention, order of protective custody, or court-
ordered treatment. A general pre-screening and assessment of the individual 
seeking a civil court commitment for chemical dependency may be used to 
determine whether the client may be appropriate for chemical dependency 
treatment. A formal screening and assessment is not required before admission. 
(e) The program shall adopt a policy authorizing use of special treatment 
procedures and implement procedures that conform with sec.148.183 (relating to 
Special Treatment Procedures) and sec.148.184 (relating to Documenting Special 
Treatment Procedures) of this title. 
(f) The program shall adopt protocols for the stabilization and management of 
suicidal clients. 
(g) For reporting purposes, only clients brought to the facility pursuant to an 
emergency detention or court order will be counted as court commitment clients. 
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 August 5, 1998.
TRD-9812356
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794

CHAPTER 145.Faith Based Chemical Dependency Programs
40 TAC sec.145.22
The Texas Commission on Alcohol and Drug Abuse adopts an amendment to sec.145.22 
concerning registration for exempt faith-based programs. This amendment is 
adopted without changes to the proposed text as published in the June 12, 1998 
issue of the Texas Register (23 TexReg 6175) and will not be republished.
This section contains the requirements for a religious organization to register 
for its exemption from facility licensure. This amendment is adopted to provide 
an alternate method to document the organization's purpose as a religious 
organization. 
No comments were received regarding adoption of these amendments. 
The amendment is adopted under the Texas Health and Safety Code, Title 6, 
Subtitle B, Chapter 464, which provides the Texas Commission on Alcohol and Drug 
Abuse with the authority to adopt rules and standards for licensure of chemical 
dependency treatment facilities.
The code affected by this amendment is the Texas Health and Safety Code, Title 
6, Subtitle B, Chapter 464. 
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 August 5, 1998.
TRD-9812360
Mark S. Smock
Deputy for Finance and Administration
Texas Commission on Alcohol and Drug Abuse
Effective date: August 25, 1998
Proposal publication date: June 12, 1998
For further information, please call: (512) 349-6794