PROPOSED RULES Before an agency may permanently adopt a new or amended section or repeal an existing section, a proposal detailing the action must be published in the Texas Register at least 30 days before action is taken. The 30-day time period gives interested persons an opportunity to review and make oral or written comments on the section. Also, in the case of substantive action, a public hearing must be granted if requested by at least 25 persons, a governmental subdivision or agency, or an association having at least 25 members. Symbology in proposed amendments. New language added to an existing section is indicated by the code. [Brackets] indicate deletion of existing material within a section. TITLE 4. AGRICULTURE PART II. Texas Animal Health Commission CHAPTER 34.Veterinary Biologics 4 TAC sec.34.1, sec.34.2 The Texas Animal Health Commission proposes amendments to sec.34.1 and sec.34.2, concerning veterinary biologics. The sections are being amended to keep the rules in harmony with the currently utilized vocabulary. Also, the rules will be more readily understood and the intent of the rules will be clarified. Kathryn A. Reed, General Counsel, has determined for the first five-year period the rules are in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the rules. Ms. Reed also has determined that for each year of the first five years the rules are in effect, the public benefit anticipated as a result of enforcing the rules will be more readily understood and clarified rules. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the rules as proposed. Comments regarding the proposed amendments may be submitted to Edith Smith, Executive Assistant, 2105 Kramer Lane, Austin, Texas 78745. The amendments are proposed under the Texas Agriculture Code, Chapter 161, sec.161.041(b) and sec.161.042, which authorizes the Commission to promulgate rules in accordance with the Texas Agriculture Code. No other statutes, articles, or codes are affected by the amendments. sec.34.1. Definitions. The following words and terms, when used in these sections, shall have the following meanings, unless the context clearly indicates otherwise. (1)
    Commission--Texas Animal Health Commission (TAHC). (2)
      Executive director--The executive director of the commission. (3)
        Recognized laboratory--A laboratory recognized by the executive director for purposes of this chapter. (4)
          USDA, APHIS, VS--The United States Department of Agriculture, Animal and Plant Health Inspection Service, Veterinary Services. (5)
            Veterinary biologics include, but are not limited to
              -- (A) viruses, serums, toxoids, allergins,
                toxins (excluding substances that are selectively toxic to microorganisms, e.g. antibiotics)
                  , and analogous products of natural or synthetic origin; (B) products synthesized or
                    prepared from any type of genetic manipulation
                      [engineering], such as diagnostics, reagents,
                        antitoxins, vaccines, bacterins,
                          live microorganisms, [and] killed microorganisms, and genes or genetic sequences
                            ; and (C) the antibodies, antitoxins, immunostimulants, and
                              antigenic or immunizing components of microorganisms, intended for use in the diagnosis, treatment, or prevention of diseases in animals. sec.34.2. General Requirements. (a) Importation. Veterinary biologics produced under a regular license issued by the USDA, APHIS, VS may be imported into the State of Texas[.], however, prior
                                [Prior] to initial
                                  importation of any [newly] licensed veterinary biologic for sale, use, or distribution within the state, written approval of the executive director is
                                    [shall be] required. The executive director may allow the importation of unlicensed or conditionally licensed veterinary biologics when it is determined necessary for the protection of humans or domestic animals or for research purposes. (b) Restriction of biologics for disease control. (1)
                                      Rabies vaccines shall be sold, distributed, and administered as prescribed by Chapter 826, Health and Safety Code, and rules adopted by the Texas Board of Health.
                                        (2)
                                          [(1)] All veterinary biologics used to control or diagnose any of the following diseases listed in subparagraphs (A)-(K) of this paragraph
                                            are restricted: (A) brucellosis; (B) equine infectious anemia; (C) equine viral arteritis; (D) hog cholera; (E) laryngotracheitis; (F) Mycoplasma gallisepticum (MG); (G) paratuberculosis; (H) pseudorabies; (I) Salmonella arizonae; (J) tuberculosis; (K) vesicular stomatitis. (3)
                                              [(2)] Restricted veterinary biologics may be purchased, administered, or otherwise used under the following conditions listed in subparagraphs (A)-(D) of this paragraph
                                                . (A) Laryngotracheitis (LT) chick embryo origin vaccine may be used upon tentative or confirmed diagnosis by a recognized laboratory and pursuant to a written agreement between the commission and the flock owners in a designated area. (B) Salmonella arizonae bacterin may be used upon confirmed diagnosis by a recognized laboratory, and where a written permit for its use has been issued by the commission. (C) Mycoplasma gallisepticum (MG) attenuated vaccine may be used upon confirmed diagnosis by a recognized laboratory, and where a written permit for its use has been issued by the commission. MG vaccine may be used without restriction following approval outlined in subsection (a) of this section. (D) Other restricted veterinary biologics may be purchased, administered, or otherwise used: (i) under the direct supervision of licensed veterinarians; (ii) by employees of the commission or USDA; (iii) by research agencies or laboratories as authorized by the commission; (iv) in emergency disease control programs as authorized by the commission; or (v) for other limited purposes authorized by the commission and not likely to pose a threat to public health or to the health of animals. (c) Solicitation of information. The commission may solicit information and recommendations on the following topics listed in paragraphs (1)-(4) of this subsection prior to approving a veterinary biologic for sale, use, or distribution within the state
                                                  [recommendations. Recommendations for the sale and distribution of veterinary biologics may be solicited by the commission to ascertain the following information]: (1)-(4) (No change.) (d)-(f) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812992 Kathryn A. Reed General Counsel Texas Animal Health Commission Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 719-0714 TITLE 16. ECONOMIC REGULATION PART II. Public Utility Commission of Texas CHAPTER 25.Substantive Rules Applicable to Electric Service Providers SUBCHAPTER B.Customer Service and Protection 16 TAC sec.25.27 The Public Utility Commission of Texas (PUC) proposes new sec.25.27, relating to Retail Electric Service Switchovers. The rule will address the procedures and charges for switching retail electric service for a consuming facility from one utility to another in areas where more than one utility has the right to provide service. The rule will replace existing sec.23.44(c)(1). Section 25.27 will provide more specificity for the procedures and charges for switchovers than sec.23.44(c)(1). In addition, the section will provide a new switchover option that involves the connecting utility obtaining transmission service from the disconnecting utility for delivery of the connecting utility's power to the consuming facility. Project Number 18876 has been assigned to this proceeding. Keith Rogas, assistant general counsel, Office of Regulatory Affairs, has determined that for each year of the first five-year period that the proposed section is in effect there should be a reduction in the cost to the PUC of enforcing its policies on retail electric service switchovers, because the proposed section will provide more specificity for the procedures and charges for retail electric service switchovers than existing sec.23.44(c)(1). Mr. Rogas has also determined that there may be a similar reduction in cost to municipalities exercising original jurisdiction over electric utilities. In addition, Mr. Rogas has determined that there should be no other cost increases or decreases, or any loss or increase in revenue, to the state and to local governments as a result of enforcing or administering the proposed section. Mr. Rogas has determined that, for each year of the first five years the proposed section is in effect, the public benefit resulting from adoption of the proposed section should be more clarity for procedures and charges for retail electric service switchovers and a new switchover option that costs less than the existing option. In addition, Mr. Rogas has determined that there should be no adverse effect on small businesses as a result of enforcing the section. Mr. Rogas has also determined that there should be a reduction in economic cost to persons who are required to comply with the section, because it will better inform them of the procedures and charges that are appropriate for retail electric service switchovers. Mr. Rogas has also determined that for each year of the first five years the proposed section is in effect there should be no adverse impact on employment in the geographic areas affected by implementing the requirements of the proposed new section. The PUC is particularly interested in comments on the following issues. Whether, pursuant to sec.25.27(e), the partial switchover option is worthwhile at this time. Whether it would be appropriate to mandate the partial switchover option where underground facilities are used to provide electric service to the consuming facility being switched. Whether the PUC should first establish by rule standards for the setting of rates for transmission service to effectuate partial switchovers or whether the PUC should proceed directly to establish rates for such transmission service on a utility by utility basis. If the PUC should first establish rate-setting standards by rule, what should those standards be? Whether, pursuant to sec.25.27(f)(1), a switchover fee should apply regardless of whether the consumer requesting the full switchover has ever received service from the disconnecting utility at the consuming facility. Whether, pursuant to sec.25.27(f)(1)(B)(i), a consumer should be allowed to purchase idle facilities or whether the sale of idle facilities should be limited to the connecting utility because of liability concerns. Whether, pursuant to sec.25.27(f)(2)(E), the disconnection requirements imposed on the connecting utility for the consumer's failure to pay the disconnecting utility or remove idle facilities are necessary. Comments on the proposed new rule (16 copies) may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 N. Congress Avenue, PO Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Reply comments may be submitted within 45 days after publication. All comments should refer to Project Number 18876. This new section is proposed under the Public Utility Regulatory Act (PURA), Texas Utilities Code Annotated sec.14.002 (Vernon 1998), which provides the PUC with the power to adopt and enforce rules reasonably required in the exercise of its powers and jurisdiction; PURA sec.14.001, which provides the PUC with the general power to regulate and supervise the business of electric utilities; PURA sec.31.002(7), which defines transmission service to include transmission over distribution facilities; PURA sec.35.004, which requires that a utility provide transmission service to eligible transmission service customers; PURA sec.35.005, which gives the PUC the power to require a utility to provide transmission service; PURA sec.35.006, which requires the PUC to adopt rules relating to transmission service; PURA sec.36.001, which provides the PUC with the power to establish and regulate the rates of electric utilities; PURA sec.36.003, which requires that the PUC ensure that rates are just and reasonable; PURA sec.37.151, which requires that a utility must serve every consumer in the utility's certificated service area; PURA sec.37.152, which describes the circumstances in which service can be discontinued; PURA sec.38.002, which provides the PUC with the power to adopt just and reasonable standards, rules, and practices that an electric utility must follow; PURA sec.38.021, which prohibits an electric utility from subjecting a consumer to an unreasonable prejudice or disadvantage; and PURA sec.38.022, which prohibits an electric utility from engaging in a practice that tends to restrict or impair competition between the electric utility and others who are in competition with the electric utility. Cross index to statutes: Public Utility Regulatory Act sec.sec.14.001, 14.002, 31.002(7), 35.004, 35.005, 35.006, 36.001, 36.003, 37.151, 37.152, 38.002, 38.021, and 38.022. sec.25.27.Retail Electric Service Switchovers. (a) Right to switchover. A consumer has the right to switch retail electric service to any electric or municipally owned utility that has the right to provide service in the area in which the consumer's consuming facility is located, subject to the terms of any contract for electric service entered into pursuant to the disconnecting utility's tariff. Because a consuming facility for which a switchover is sought can obtain electric service from the disconnecting utility prior to the switchover, an electric utility shall give a switchover a lower priority than the elimination of outages and requests for service to consuming facilities that do not have service. Nevertheless, a switchover shall be performed as soon as reasonably possible, and the disconnecting and connecting utilities shall strive to take the actions required below more quickly than the deadlines listed below. In addition, the disconnecting and connecting utilities shall minimize any outages related to making a switchover. This section provides two switchover options: partial switchover or full switchover. The partial switchover option is not available until such time as the disconnecting utility has an approved tariff for transmission service at the transmission and primary and secondary distribution voltage levels. Until the disconnecting utility has such an approved transmission tariff, subsections (d) and (e) of this section do not apply. (b) Definitions. As used in this section, the following terms have the following meanings. (1) Idle facilities - The disconnecting utility's facilities that are used to serve only the consuming facility being switched. Idle facilities do not include facilities that were installed or are being used to serve more than one consuming facility, including: facilities that were designed with a capacity greater than necessary to serve the consuming facility being switched in order that additional consuming facilities could be served using the facilities in the future; and upgrades that were made to common facilities in order to serve the consuming facility being switched. (2) Common facilities - The disconnecting utility's facilities that are used, installed, or designed to serve more than one consuming facility. (c) Documentation. The notices, offers, agreements, and switchover requests provided for in this section must be in writing, unless otherwise indicated. (d) Notice of switchover options. Upon receiving a verbal switchover request, the disconnecting utility shall at that time verbally describe the two switchover options, including stating that there is no charge for a partial switchover, stating that there will be a switchover fee for a full switchover, stating that switchover requests must be in writing, stating that written information on switchover fees will be provided within one working day, and providing a facsimile number and mailing address to send the switchover request. Within one working day of a verbal switchover request or within two working days of a written switchover request that does not specify whether a partial or full switchover is being requested, the disconnecting utility shall provide the consumer a document describing the two switchover options, including a statement that there is no charge for a partial switchover, specifying for a full switchover the base charge and base charge adder and stating that the facilities recovery charge will vary depending on the circumstances, and providing the deadlines prescribed in subsection (f)(2)(C) of this subsection for the disconnecting utility to notify the connecting utility after payment of the switchover fee that the full switchover can proceed. (e) Partial switchover. (1) Description. The disconnecting utility shall provide the connecting utility transmission service to the same point of delivery that the disconnecting utility provided electricity to the consuming facility prior to the switchover. Except where necessary or where the connecting utility requests it, all of the disconnecting utility's facilities needed to serve the consuming facility prior to the switchover shall remain in place. The disconnecting utility may not charge a fee for a partial switchover, except that it may charge the connecting utility a cost-based fee where the connecting utility requests that the disconnecting utility remove facilities that were needed by the disconnecting utility to serve the consuming facility prior to the switchover. (2) Procedure for partial switchover. The disconnecting utility shall contact the connecting utility within three working days of receiving a request for a partial switchover in order to coordinate the switchover. The switchover shall occur within eight working days of the disconnecting utility's receipt of the request, unless the consumer agrees to a longer schedule or unless good cause exists for not completing the switchover within eight working days. If the switchover will not be completed within eight working days, then the disconnecting utility must notify the consumer, with copies to the commission's Office of Customer Protection and to the connecting utility, providing the reasons why the switchover has been delayed and when the switchover will be completed. This notice must be provided as soon as possible, by facsimile transmission to the commission's Office of Customer Protection and the connecting utility, and by facsimile transmission to the consumer if a facsimile machine is available to the consumer. (f) Full switchover. A full switchover involves the disconnecting utility disconnecting its facilities and the connecting utility installing transmission and/or distribution facilities to serve the consuming facility. If the consumer is a tenant, the consumer must obtain the agreement of the owner to switch over the consuming facility and must provide it to the disconnecting utility as an attachment to a notarized affidavit stating that the consumer has obtained the owner's agreement. (1) Switchover fee. The switchover fee applies regardless of whether the consumer requesting the switchover has ever received service from the disconnecting utility at the consuming facility. The fee consists of a base charge and, where applicable, a base charge adder and facilities recovery charge. The disconnecting utility may not charge for general administrative expenses related to closing the consumer's account. Where the disconnecting utility is allowed to charge for the original cost of facilities, it must deduct contributions in aid of construction that apply to those facilities. Accumulated depreciation shall be calculated using the depreciation rates that were used for setting the base rates that applied during the period that the idle facilities were in service. Upon the payment of the switchover fee or purchase, or refusal of an offer to purchase, under the circumstances described in subsection (f)(1)(B)(i) of this section, any construction charges owed by the consumer for idle facilities used to provide service to the consuming facility being switched are extinguished. (A) Base charge and base charge adder. The base charge is equal to the cost of removing any meter and drop line used to serve the consuming facility, and shall be specified in the disconnecting utility's tariff. The switchover fee shall not include the original cost less depreciation and gross salvage of the meter and drop line. It is permissible to have base charges that vary by voltage level. A base charge adder that is less than the base charge must also be specified in the tariff to cover the situation where a consumer switches more than one consuming facility on the same premises at the same time. (B) Facilities recovery charge. The purpose of the facilities recovery charge is to recover certain costs related to idle facilities, other than costs related to any meter and drop line. Where average original cost information is used, the average original cost information shall be determined using the information for the operating division in which the consuming facility to be switched is located, if the disconnecting utility maintains original cost information by division. (i) Availability of facilities recovery charge. The disconnecting utility may not impose a facilities recovery charge if: the connecting utility purchases the idle facilities at a price equal to net book value and signs an agreement indemnifying the disconnecting utility from liability for the facilities after the purchase of the facilities; or if the consumer purchases the idle facilities at a price equal to net book value, signs an indemnity agreement, and, at the request of the disconnecting utility, agrees to remove the facilities within 60 days of the switchover. Where more than one consumer requests a switchover, the disconnecting utility may not impose a facilities recovery charge if the connecting utility purchases the idle facilities and the common facilities used to serve the consuming facilities being switched, but not used to serve any consuming facilities not being switched, at a price equal to a replacement cost less depreciation and signs an indemnity agreement. Replacement cost is equal to the average original cost of like facilities installed in the most recent full calendar year for which information is available. The disconnecting utility also may not impose a facilities recovery charge if it refuses an offer to purchase under the conditions described in this subsection. (ii) Components of facilities recovery charge. The facilities recovery charge consists of a reasonable estimate of the cost of removing the idle facilities and the net book value of the facilities. In determining the net book value of the facilities, the original cost of the specific facilities should be used. If the original cost of the specific facilities is not available, the installation date of the facilities shall be determined or estimated and the average original cost of like facilities installed by the disconnecting utility in that year shall be used. If average original cost information is not available for the year in which the idle facilities were installed, then the average original cost of like facilities installed in the most recent full calendar year for which information is available shall be used and shall be deflated to the installation date of the idle facilities. (C) Labor charges. Labor charges for removing facilities are limited to a reasonable estimate of the direct labor cost (salary, insurance, pension, payroll taxes, etc.) for the time of persons needed to remove the facilities. No allocation of general overhead labor is allowed, but any necessary supervisory or engineering labor may be included. (D) Quantification of charges. The calculation of the base charge, base charge adder, and facilities recovery charge may involve the making of estimates. To the extent that there is a range of reasonable estimates for a particular charge, the estimate at the low end of the range should be used, so that the amount of the switchover fee will be minimized, but still be reasonable and in conformance with this section. Unless the consumer agrees otherwise, there will be no refund or surcharge if the actual cost of performing the switchover is less than or greater than the switchover fee. Instead of a utility-specific base charge and base charge adder, the commission may, through the issuance of an order, establish a single base charge and a single base charge adder to be used by all electric utilities. Likewise, the commission may, through the issuance of an order, establish fixed dollar charges for components of the facilities recovery charge. (E) Payment of switchover fee and other charges. Before the connecting utility provides service, the disconnecting utility has the right to receive payment of the switchover fee and any other outstanding charges. The connecting utility has the option to pay the switchover fee. If the consumer agrees, the connecting utility can receive reimbursement of the switchover fee from the consumer through a payment plan. The connecting utility may not recover the cost of the switchover fee from its other customers. (2) Procedure for full switchover. (A) Notice of switchover fee and procedure. Upon receiving a request for a full switchover, the disconnecting utility must provide the consumer a document that quantifies the switchover fee within 15 working days. The text of the document that the disconnecting utility provides in response must be in 12 point, non- bold type and must itemize the base charge, base charge adder, and the facilities recovery charge of the switchover fee. In addition, the document must itemize the components of the facilities recovery charge, including a description of the idle facilities, the installation dates of the idle facilities, the original cost of the idle facilities, the accumulated depreciation associated with the idle facilities, the depreciation rates used to calculate the accumulated depreciation, transportation charges for removing the idle facilities, labor rates, and labor hours for removing the idle facilities. The document must also state immediately below these itemizations, in bold, and in not less than 12 point type: "(Disconnecting utility) may not impose a facilities recovery charge under the circumstances described in Public Utility Commission of Texas Substantive Rule sec.25.27(f)(1)(B)(i). On request, you will be provided a copy of Rule sec.25.27." (B) Sale of facilities. Where more than one consumer has requested a switchover, within 15 working days of receipt of a request by the connecting utility, the disconnecting utility must provide the connecting utility by facsimile transmission and mail a detailed, reasonable estimate of replacement cost less depreciation for the idle facilities and the common facilities used to serve the consuming facilities to be switched, but not used to serve any consuming facilities not being switched. Within five working days of receipt of an offer to purchase idle and/or common facilities under the conditions described in subsection (f)(1)(B)(i) of this section, the disconnecting utility must notify the connecting utility by facsimile transmission, with copies by mail or facsimile transmission to the consumers, whether it accepts or rejects the offer. If the disconnecting utility rejects the offer, it must also provide revised switchover fees that delete the facilities recovery charge, at the same time that it provides notice of rejection of the offer. (C) Payment of switchover fee and outstanding balances. Until the switchover fee and all outstanding balances are paid to the disconnecting utility, neither the disconnecting utility nor the connecting utility is under any obligation to take steps to make the switchover, and the connecting utility must not provide service to the consuming facility being switched until it receives notice from the disconnecting utility that the switchover can proceed. The disconnecting utility must notify the connecting utility by facsimile transmission that the switchover can proceed within the following deadlines from the receipt of payment: two working days for payment by cash, money order, cashier's check, or, if accepted by the disconnecting utility for bill payment, credit card, and five working days for payment by personal check or other forms of payment. (D) Deadline for full switchover. Once the disconnecting utility notifies the connecting utility by facsimile transmission that the switchover can proceed and once the connecting utility notifies the disconnecting utility by facsimile transmission that the consumer has satisfied the conditions for service from the connecting utility, the switchover must be completed within ten working days unless the consumer agrees to a longer schedule or unless good cause exists for not completing the switchover within ten working days. If the switchover will not be completed within ten working days of when the conditions for the switchover have been met or the date that the consumer agreed to, then the disconnecting utility must notify the consumer, with copies to the commission's Office of Customer Protection and the connecting utility, providing the reasons why the switchover has been delayed and when the switchover will be completed. This notice must be provided as soon as possible, by facsimile transmission to the commission's Office of Customer Protection and the connecting utility, and by facsimile transmission to the consumer if a facsimile machine is available to the consumer. (E) Consumer's failure to pay or remove idle facilities. The consumer might continue to incur charges for retail electric service from the disconnecting utility after the consumer pays the switchover fee and outstanding balances. The disconnecting utility has the right to payment of these charges. If the consumer has not paid the charges during the time allotted for payment through the disconnecting utility's normal billing procedures or if the consumer purchased the disconnecting utility's idle facilities and agreed to remove the facilities within 60 days but failed to do so, the disconnecting utility may notify the connecting utility of the consumer's failure and request that the consumer be disconnected, and must at the same time provide a copy of the notice to the consumer, by facsimile transmission if possible. Upon receipt of such notification and request and upon receipt from the disconnecting utility of an agreement indemnifying the connecting utility from liability for improper cause for disconnection of service, the connecting utility must disconnect the consumer's service in compliance with the procedures in sec.23.46 of this title (relating to Discontinuance of Service). Immediately upon verification of the consumer's correction of its failure, the disconnecting utility must notify the connecting utility by facsimile transmission that the consumer's failure has been corrected, and the connecting utility must immediately reconnect service. (g) Complaint concerning a switchover. A consumer complaint concerning a switchover shall be handled according to sec.23.41(c) of this title (relating to Customer Relations), with the following modification. The commission will forward a complaint that it receives to both the disconnecting utility and the connecting utility, and both utilities must provide an initial response within 30 days after the complaint is forwarded by the commission. (h) Compliance tariffs. The commission will by order establish deadlines for the filing of tariffs to comply with this section, including tariffs to address both the partial and full switchover options. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 13, 1998. TRD-9812854 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 936-7308 CHAPTER 26.Substantive Rules Applicable to Telecommunications Service Providers SUBCHAPTER B.Customer Service and Protection 16 TAC sec.26.45 The Public Utility Commission of Texas (PUC or commission) proposes new sec.26.45, relating to Truth in Telecommunications Billing; Avoidance of Unauthorized Billing Charges ("Cramming"). The proposed new rule will prevent telecommunications utility customers from being billed ("crammed") on their telecommunications bill for products and/or services they have not authorized. Project Number 19516 has been assigned to this proceeding. The authority for promulgation of this rule derives from the stated policy in sec.52.001 of the Public Utility Regulatory Act (PURA) for the PUC "to protect the public interest in having ... just, fair, and reasonable {telecommunications} rates." The proposed rule implements the commission's continuing mandate to "protect the public interest." Further, sec.52.002 of PURA grants the commission "exclusive original jurisdiction over the business and property of a telecommunications utility in this state subject to the limitations imposed by this title." The commission specifically requests comments on the commission's authority to revoke certificates of service provider certificate of operating authority (SPCOA) holders pursuant to subsection (h)(4) of this proposed rule. Ms. Jo Alene Kirkel, assistant director, Office of Customer Protection, has determined that for each year of the first five-year period the proposed section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Ms. Kirkel has determined that for each year of the first five years the proposed section is in effect the public benefit anticipated as a result of enforcing the section will be to prevent unfair, fraudulent, and deceptive practices in telecommunications utility billing for miscellaneous products and/or service charges. There will be no net effect on small businesses as a result of enforcing this section. There may be an anticipated economic cost to persons who are required to comply with the section as proposed. Ms. Kirkel has also determined that for each year of the first five years the proposed section is in effect there will be no impact on employment in the geographic area affected by implementing the requirements of the section. Comments on the proposed section (16 copies) may be submitted to the Filing Clerk, Public Utility Commission of Texas, 1701 N. Congress Avenue, P. O. Box 13326, Austin, Texas 78711-3326, within 30 days after publication. Reply comments may be submitted within 45 days after publication. The commission invites specific comments regarding the costs associated with, and benefits that will be gained by, implementation of the proposed section. The commission will consider the costs and benefits in deciding whether to adopt the section. All comments should refer to Project Number 19516. This section is proposed under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA), which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction. Cross Index to Statutes: Public Utility Regulatory Act sec.sec.14.002, 52.001 and 52.002. sec.26.45.Truth in Telecommunications Billing; Avoidance of Unauthorized Billing Charges ("Cramming"). (a) Purpose. The provisions of this section are intended to ensure that all customers in this state are protected from any unauthorized charges on a customer's telecommunications utility bill. (b) Application. This section applies to all "telecommunications utilities," as that term is defined in sec.26.5 of this title (relating to Definitions) or the Public Utility Regulatory Act. (c) Definitions. The following words and terms, when used in this section, shall have the following meaning, unless the context clearly indicates otherwise: (1) Billing agent - Any entity that submits charges to the billing telecommunications utility on behalf of any provider of a product or service. (2) Billing telecommunications utility - Any telecommunications utility that issues a bill directly to a customer for any telecommunications products and/or services. (3) Customer - Any person in whose name telephone service is billed. (d) Authorized charges billed by a telecommunications utility. No person, corporation, telecommunications utility, or any billing agent shall submit charges for any product or service to be billed on any customer's telephone bill unless all of the following have occurred: (1) The person, corporation, or telecommunications utility offering the product or service has thoroughly informed the customer of the product or service being offered, including all associated charges, and has explicitly informed the customer that the associated charges for the product or service will appear on the customer's telephone bill. (2) The customer has clearly and explicitly consented to obtaining the product or service offered and to have the associated charges appear on the customer's telephone bill. Such consent must be verified by the person, corporation, or telecommunications utility offering the product or service by written authorization from the customer in a form that meets the requirements of subsection (e) of this section. A record of such consent, including verification, must be maintained by the person, corporation, or telecommunications utility offering the product or service and any billing agent for such person, corporation, or telecommunications utility for a period of at least 12 months immediately after the consent and verification have been obtained. (3) The person, corporation, or telecommunications utility offering the product or service and any billing agent for such person, corporation, or telecommunications utility has provided the customer with a toll-free telephone number for the customer to call and an address for the customer to write to resolve any billing dispute and to answer questions. (4) The person, corporation, or telecommunications utility, other than the billing telecommunications utility, offering the product or service and any billing agent for such person, corporation, or telecommunications utility has provided the billing telecommunications utility with its name, business address, business telephone number, and a list with accurate descriptions of the products and services for which it intends to charge on any customer's telephone bill so that any product or service being charged can clearly and easily be identified on the customer's telephone bill. (5) The person, corporation, or telecommunications utility offering the product or service and any billing agent for such person, corporation, or telecommunications utility has obtained the billing telecommunications utility's written consent to bill for a product or service on the billing telecommunications utility's telephone bill. Record of this consent shall be maintained by: (A) the person, corporation, or telecommunications utility offering the product or service, (B) any billing agent for such person, corporation, or telecommunications utility, and, (C) the billing telecommunications utility for as long as the billing for such product or service continues and for the 12 months immediately following the permanent discontinuation for such billing. (e) Letters of Agency (LOA). A person, corporation, or telecommunications utility offering a product or service shall obtain written authorization from a customer for an order for a product or service as specified in subsection (d)(2) of this section using a letter of agency (LOA) as specified in this subsection. (1) The LOA shall be a separate document containing only the authorizing language described in paragraph (3) of this subsection for the sole purpose of authorizing the charges for a product or service to be placed on a customer's telephone bill. The LOA must be signed and dated by the customer whose telephone bill is to be charged for the product or service and the customer must fill in the telephone number that is to be billed. (2) The LOA shall not be combined with inducements of any kind on the same document. (3) LOA language. (A) The entire LOA must be produced clearly and legibly in twelve point or larger print and use only the following language: Figure: 16 TAC sec.26.45(e)(3)(A) (B) In any LOA as set out by subparagraph (A) of this paragraph, the person, corporation, or telecommunications utility offering the product or service and seeking authorization for the billing of such product or service shall replace, in bold type, the words: (i) "(name of the billing telecommunications utility)," with the corporate name of the billing telecommunications utility; (ii) "(name of the person, corporation, or telecommunications utility offering the product or service)," with its corporate name; and (iii) "( a clear and explicit description of the product(s) or service(s) that will be provided to the customer)," with the type of product(s) or service(s) that it will be providing to the customer. (4) If any portion of a LOA is translated into another language, then all portions of the LOA must be translated into that language. Every LOA must be translated into the same language as any promotional materials, oral descriptions, or instructions provided with the LOA. (f) Unauthorized charges. (1) Responsibilities of the billing telecommunications utility for unauthorized charges to a customer's telephone bill. (A) If a customer's telephone bill is charged for any product or service and the charge or charges for such product or service were not made or verified consistent with this section, the telecommunications utility that billed the customer, upon its knowledge or notification of any unauthorized charge, shall promptly, but in no event later than forty-five days after such knowledge or notification of such charge: (i) remove any unauthorized charge from the customer's bill; (ii) refund or credit, at the customer's sole option, all money to the customer that has been paid by the customer for any unauthorized charge; (iii) provide the customer with all billing records related to any unauthorized charge within ten business days of the removal of any unauthorized charge from the customer's telephone bill; and, (iv) maintain a record of all customers who have experienced any unauthorized charge for a product or service on the customer's telephone bill. Such record shall contain: (I) the name of the person, corporation, or telecommunications utility that offered the product or service; (II) the telephone number(s) that were affected by any unauthorized charge; (III) the date each customer requested that the billing telecommunications utility remove any unauthorized charge from the customer's telephone bill; (IV) the date any unauthorized charge was removed from the customer's telephone bill; and, (V) the date the customer was refunded any money that the customer paid for the unauthorized charges. (B) The record required by subparagraph (A)(iv) of this paragraph shall be maintained for at least 12 months following the completion of all steps required by this paragraph. (C) Except as provided in sec.23.45(j)(3) of this title (relating to Rendering and Form of Bills) concerning disputed bills and sec.23.46(k) of this title (relating to Discontinuance of Service) concerning resolution of disputes, no billing telecommunications utility shall disconnect nor terminate telecommunications service of any customer who disputes any billing charge pursuant to this section. (2) Responsibility of the person, corporation, or telecommunications utility offering a product or service to be billed to a customer's telephone bill. The person, corporation, or telecommunications utility offering a product or service for which unauthorized charges have been placed on a customer's telephone bill shall maintain a record of all customers for which it has placed any unauthorized charge for a product or service on the customer's telephone bill. Such record shall contain: (A) the telephone number(s) that were affected by any unauthorized charge; (B) the date each customer requested that the billing telecommunications utility remove any unauthorized charge from the customer's telephone bill; (C) the date any unauthorized charge was removed from the customer's telephone bill; and, (D) the date the customer was refunded any money that the customer paid for the unauthorized charges. (E) The record required by this paragraph shall be maintained for at least 12 months following the completion of all steps required by paragraph (1)(A)-(C) of this subsection. (g) Notice of customer rights. (1) Each notice provided as set out in paragraph (3) of this subsection shall also contain the name, address and toll-free telephone number(s) where a customer can contact the billing telecommunications utility. (2) Customer notice. The notice shall state: Figure: 16 TAC sec.26.45(g)(2) (3) Distribution and timing of notice. (A) Each billing telecommunications utility shall mail the notice as set out in paragraph (2) of this subsection to each of its residential and business customers within 30 days of the effective date of this section. In addition, each billing telecommunications utility shall send the notice to new customers at the time service is initiated, and upon customer request. (B) Every telecommunications utility which prints its own telephone directories shall print the notice in the white pages of such directories, in ten point print or larger, beginning with the first publication of such directories subsequent to the effective date of this section; thereafter, the notice must appear in the white pages of each telephone directory published for the telecommunications utility. (4) Any bill sent to a customer from a telecommunications utility must provide the notice and information contained in paragraph (2) of this subsection in legible, bold, ten point or larger type. (5) Each billing telecommunications utility shall make available to its customers the notice set out in paragraph (2) of this subsection in both English and Spanish as necessary to adequately inform the customer; however, the commission may exempt a billing telecommunications utility from the requirement that the information be provided in Spanish upon application and a showing that 10% or fewer of its customers are exclusively Spanish-speaking, and that the billing telecommunications utility will notify all customers through a statement in both English and Spanish, in the notice, that the information is available in Spanish from the telecommunications utility, both by mail and at the utility's offices. (h) Compliance and enforcement. (1) Records of customer verifications. A billing telecommunications utility shall provide a copy of records maintained under the requirements of subsections (d) and (e) of this section to the commission staff upon request. (2) Records of unauthorized charges. A billing telecommunications utility shall provide a copy of records maintained under the requirements of subsection (f) of this section to the commission staff upon request. (3) Administrative penalties. If the commission finds that a billing telecommunications utility has engaged in any violation of this section, the commission shall order the utility to take corrective action as necessary, and the utility may be subject to administrative penalties pursuant to the Public Utility Regulatory Act sec.15.023 and sec.15.024. For purposes of sec.15.024(b) and (c), there shall be a rebuttable presumption that a single incident of an unauthorized charge on a customer's telephone bill ("cramming") is not accidental or inadvertent if subsequent incidents of cramming by the same utility occur any time after the 30-day remedy period following a first penalty notice from the commission. (4) Certificate revocation. If the commission finds that a billing telecommunications utility is repeatedly and recklessly in violation of this section, and if consistent with the public interest, the commission may suspend, restrict, or revoke the registration or certificate of the telecommunications utility, thereby denying the telecommunications utility the right to provide service in this state. For purposes of this section, a single incident of cramming may be deemed reckless if any incident of cramming by the same telecommunications utility occurs subsequent to the 30-day remedy period following a first penalty notice from the commission. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 13, 1998. TRD-9812933 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 936-7308 PART IV. Texas Department of Licensing and Regulation CHAPTER 76. Water Well Drillers and Water Well Pump Installers 16 TAC sec.sec.76.1, 76.10, 76.200-76.206, 76.220, 76.300, 76.600-76.602, 76.650, 76.700-76.707, 76.800, 76.900, 76.910, and 76.1000-76.1009 The Texas Department of Licensing and Regulation proposes new rules sec.sec.76.1, 76.10, 76.200-76.206, 76.220, 76.300, 76.600-76.602, 76.650, 76.700-76.707, 76.800, 76.900, 76.910, and 76.1000-76.1009 concerning the licensing and regulation of water well drillers and water well pump installers. The Texas Water Code, Chapters 32 and 33 (1997) and Texas Revised Civil Statutes Annotated, article 9100 (Vernon 1991) provide the department with the authority to license and regulate water well drillers and water well pump installers who operate in this state. These rules are necessary to implement SB1955, Acts of the 75th Legislature, Regular Session 1997 and establish procedures and requirements necessary for the licensing and regulation of water well drillers and water well pump installers. Jimmy G. Martin, Manager, Consumer Protection Section, has determined that for the first five-year period these rules are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering these new rules. Mr. Martin has also determined that for each year of the first five years these rules are in effect the public benefit as a result of enforcing these sections will be to ensure the quality of the state's groundwater for the safety and welfare of the public. The anticipated economic effect on small businesses and persons required to comply with these sections as proposed will be $225 for the exam and license with an annual renewal fee of $125 for each type of license. A combination exam and license is available for $375 with a renewal of $175. The cost of compliance on the average is approximately $10 per well for the driller and $8 for the pump installer. In accordance with the requirements of Government Code sec.2001.0225, Regulatory Analysis of Major Environment Rules which applies only to a major environmental rule adopted by a state agency, the result of which is to: (1) exceed a standard set by federal law, unless the rule is specifically required by state law; (2) exceed an express requirement of state law, unless the rule is specifically required by federal law; (3) exceed a requirement of a delegation agreement or contract between the sate and an agency or representative of the federal government to implement a state and federal program; or (4) adopt a rule solely under the general powers of the agency instead of under a specific state law, the Department has determined that these proposed rules do not meet any of the four results applicable to sec.2001.0225, therefore a regulatory impact analysis is not required. Comments on the proposal may be submitted to Jimmy G. Martin, Manager, Consumer Protection Section, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711. Fax. (512) 475-2872 The new rules are proposed under the Texas Water Code, Chapters 32 and 33 (1997) which authorizes the Texas Department of Licensing and Regulation to promulgate and enforce a code of rules and take all action necessary to assure compliance with the intent and purpose of the Code. The Code and Article affected by the new rules is Texas Water Code, Chapters 32 and 33 (1997) and Texas Revised Civil Statutes Annotated, article 9100 (Vernon 1991). sec.76.1. Purpose of Rules. To provide procedural and substantive requirements for the licensing, complaint procedures, continuing education, and technical standards for well drillers and pump installers, and to ensure the quality of the State's ground water for the safety and welfare of the public under the Texas Water Code, Chapters 32 and 33. sec.76.10. Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise: (1) Abandoned well - A well that has not been used for six consecutive months. A well is considered to be in use in the following cases: (A) a non-deteriorated well which contains the casing, pump, and pump column in good condition; or (B) a non-deteriorated well which has been capped. (2) Annular space - The space between the casing and borehole wall. (3) Atmospheric barrier - A section of cement placed from two feet below land surface to the land surface when using granular sodium bentonite as a casing sealant or plugging sealant in lieu of cement. (4) Bentonite - A sodium hydrous aluminum silicate clay mineral (montmorillonite) commercially available in powdered, granular, or pellet form which is mixed with potable water and used for a variety of purposes including the stabilization of borehole walls during drilling, the control potential or existing high fluid pressures encountered during drilling below a water table, and to provide a seal in the annular space between the well casing and borehole wall. (5) Bentonite grout - A fluid mixture of sodium bentonite and potable water mixed at manufacturers' specifications to a slurry consistency which can be pumped through a pipe directly into the annular space between the casing and the borehole wall. Its primary function is to seal the borehole in order to prevent the subsurface migration or communication of fluids. (6) Capped well - A well that is closed or capped with a covering capable of preventing surface pollutants from entering the well and sustaining weight of at least 400 pounds and constructed in such a way that the covering cannot be easily removed by hand. (7) Casing - A watertight pipe which is installed in an excavated or drilled hole, temporarily or permanently, to maintain the hole sidewalls against caving, advance the borehole, and in conjunction with cementing and/or bentonite grouting, to confine the ground waters to their respective zones of origin, and to prevent surface contaminant infiltration. (A) Plastic casing - National Sanitation Foundation (NSF-WC) or American Society of Testing Material (ASTM) F-480 minimum SDR 26 approved water well casing. (B) Steel Casing - ASTM A-53 Grade B or better and have a minimum weight and thickness of American National Standards Institute (ANSI) schedule 10. (C) Monitoring wells may use other materials, such as fluoropolymer (Teflon), glass-fiber-reinforced epoxy, or various stainless steel alloys. (8) Commission- The Texas Commission of Licensing and Regulation. (9) Cement - A neat portland or construction cement mixture of not more than seven gallons of water per 94-pound sack of dry cement. (10) Chemigation - A process whereby pesticides, fertilizers or other chemicals, or effluent from animal wastes is added to irrigation water applied to land or crop, or both, through an irrigation distribution system. (11) Complainant - A person who has filed a complaint with the Department against any party subject to the jurisdiction of the Department. The Department may be the complainant. (12) Completed monitoring well - A monitoring well which allows water from a single water-producing zone to enter the well bore, but isolates the single water-producing zone from the surface and from all other water-bearing zones by proper casing and/or cementing procedures. The single water-producing zone shall not include more than one continuous water-producing unit unless a qualified geologist or a groundwater hydrologist has determined that all the units screened or sampled by the well are interconnected naturally. (13) Completed to produce undesirable water - A completed well which is designed to extract water from a zone which contains undesirable water. (14) Completed water well - A water well which has sealed off access of undesirable water to the well bore by proper casing and/or cementing procedures. (15) Constituents - Elements, ions, compounds, or substances which may cause the degradation of the soil or ground water. (16) Dry litter poultry facility - Fully enclosed poultry operation where wood shavings or similar material is used as litter. (17) Easy access - Access is not obstructed by other equipment and the fitting can be removed and replaced with a minimum of tools without risk of breakage of the attachment parts. (18) Edwards aquifer - That portion of an arcuate belt of porous, water bearing, predominantly carbonate rocks known as the Edwards and Associated Limestones in the Balcones Fault Zone trending from west to east to northeast in Kinney, Uvalde, Medina, Bexar, Hays, Travis, and Williamson Counties; and composed of the Salmon Peak Limestone, McKnight Formation, West Nueces Formation, Devil's River Limestone, Person Formation, Kainer Formation, Edwards Formation and Georgetown Formation. The permeable aquifer units generally overlie the less- permeable Glen Rose Formation to the south, overlie the less-permeable Comanche Peak and Walnut formations north of the Colorado River, and underlie the less- permeable Del Rio Clay regionally. (19) Environmental soil boring - An artificial excavation constructed to measure or monitor the quality and quantity or movement of substances, elements, chemicals, or fluids beneath the surface of the ground. The term shall not include any well which is used in conjunction with the production of oil, gas, or any other minerals. (20) Flapper - The clapper, closing, or checking device within the body of the check valve. (21) Foreign substance - Elements, ions, compounds, or substances which may cause the degradation of ground water. Includes recirculated tailwater and open- ditch water when a pump discharge pipe is submerged in the ditch. (22) Freshwater - Water whose bacteriological, physical, and chemical properties are such that it is suitable and feasible for beneficial use. (23) Granular sodium bentonite - Sized, coarse ground, untreated, sodium based bentonite (montmorillonite) which has the specific characteristic of swelling in freshwater. (24) Groundwater conservation district - Any district or authority created under Article III, Section 52, or Article XVI, Section 59 of the Texas Constitution or under the provisions of Chapters 35 and 36 of the Texas Water Code that has the authority to regulate the spacing or production of water wells. (25) Installer - An individual who installs or repairs water well pumps and equipment for hire or compensation. (26) Irrigation distribution system - A device or combination of devices having a hose, pipe, or other conduit which connects directly to any water well or reservoir connected to the well, through which water or a mixture of water and chemicals is drawn and applied to land. The term does not include any hand held hose sprayer or other similar device which is constructed so that an interruption in water flow automatically prevents any backflow to the water source. (27) Monitoring well - An artificial excavation constructed to measure or monitor the quality and/or quantity or movement of substances, elements, chemicals, or fluids beneath the surface of the ground. Included within this definition are environmental soil borings, piezometer wells, observation wells, and recovery wells. The term shall not include any well which is used in conjunction with the production of oil, gas, coal, lignite, or other minerals. (28) Mud - A relatively homogenous; viscous fluid produced by the suspension of clay-size particles in water. (29) Piezometer - A device so constructed and sealed as to measure hydraulic head at a point in the subsurface. (30) Piezometer well - A well of a temporary nature constructed to monitor well standards for the purpose of measuring water levels or used for the installation of piezometer resulting in the determination of locations and depths of permanent monitor wells. (31) Plugging - An absolute sealing of the well bore. (32) Pollution - The alteration of the physical, thermal, chemical, or biological quality of, or the contamination of, any water that renders the water harmful, detrimental, or injurious to humans, animals, vegetation, or property, or to public health, safety, or welfare, or impairs the usefulness or the public enjoyment of the water for any or reasonable purpose. (33) Public water system - A system supplying water to a number of connections or individuals, as defined by current rules and regulations of the Texas Natural Resource Conservation Commission 30 TAC Chapter 290. (34) Recharge zone - Generally, that area where the stratigraphic units constituting the Edward Aquifer crop out, including the outcrops of other geologic formations in proximity to the Edwards Aquifer, where caves, sinkholes, faults, fractures, or other permeable features would create a potential for recharge of surface waters into the Edwards Aquifer. The recharge zone is identified as that area designated as such in official maps in the appropriate regional office of the Texas National Resource Conservation Commission. (35) Recovery well - A well constructed for the purpose of recovering undesirable groundwater for treatment or removal of contamination. (36) Sanitary well seal - A water tight device to maintain a junction between the casing and the pump column. (37) Undesirable water - Water that is injurious to human health and the environment or water that can cause pollution to land or other waters. (38) Water or waters in the state - Groundwater, percolating or otherwise, lakes, bays, ponds, impounding reservoirs, springs, rivers, streams, creeks, estuaries, marshes, inlets, canals, the Gulf of Mexico inside the territorial limits of the state, and all other bodies of surface water, natural or artificial, inland or coastal, fresh or salt, navigable or nonnavigable, and including the beds and banks of all watercourses and bodies of surface water, that are wholly or partially inside or bordering the state or inside the jurisdiction of the state. (39) Well - A water well, injection well, dewatering well, monitoring well, piezometer well, observation well, or recovery well. (40) State well report (Well Log) - A log recorded on forms prescribed by the Department, at the time of drilling showing the depth, thickness, character of the different strata penetrated, location of water-bearing strata, depth, size, and character of casing installed, together with any other data or information required by the Executive Director. sec.76.200. Licensing Requirements-General. It shall be unlawful for any person to act as, or to offer to perform services as a driller or pump installer without first obtaining a license pursuant to the Texas Water Code Chapters 32 and 33 and this chapter. sec.76.201. Requirements for Issuance of a License. (a) An application, accompanied by the required examination fee, must be submitted by each person desiring to obtain a water well driller's or pump installer's license. (b) Within 90 days after approval, each applicant must pass an examination. (c) Upon passing the examination, an applicant must submit the required license fee to the Department. (d) A licensee, not licensed to perform all types of well drilling and pump installation, may apply for designation for additional types of well drilling or pump installation. Applications for additional designations shall be accompanied by the appropriate application fee and shall contain all information required by these rules for an initial license. Upon examination of the applicant's qualifications, the Executive Director, with advice of the Council, shall deny or grant additional grades of licensure. (1) An applicant who has demonstrated competency in water well drilling shall be deemed qualified for licensing for Dewatering, Injection, and Monitoring drilling which are regulated under these rules. (2) An applicant who has demonstrated competency in all types of pump installation shall be deemed qualified for a master pump installer's license. sec.76.202. Applications for Licenses and Renewals. (a) Application shall be made on forms provided by the Department. (b) Application shall include: (1) a sworn letter of reference from a licensed water well driller or pump installer, as applicable, who has at least two years licensed experience in water well drilling/pump installing; (2) letters of reference from two water well drilling or pump installer customers, as applicable, who are not related within the second degree of consanguinity to the applicant (i.e., may not be the applicant's spouse, or related to the applicant or applicant's spouse, as a child, grandchild, parent, sister, brother, or grandparent); (3) the applicant's sworn statement that he has drilled water wells or installed pumps under the supervision of a driller or pump installer licensed under the Texas Water Code, Chapters 32 and 33 for two years or that he has other comparable water well drilling or pump installing experience; and (4) the applicant's sworn statement that he has read and will adhere to the requirements of the Texas Water Code, Chapters 32 and 33 and this chapter. (c) The application must be received by the Department at least 28 days before a Council meeting in order to be scheduled for consideration at the next meeting. (1) The Department will send written notice to the applicant informing the applicant that the application is administratively complete and accepted for filing, or that the application is deficient in specific areas and the applicant has 30 days to submit additional information to correct the deficiency or deficiencies. (2) If the required information is not forthcoming from the applicant within 30 days of the date of mailing of the deficiency notice, the Department shall return the incomplete application to the applicant. (3) If the applicant disagrees that the application is deficient, the applicant may file a motion for reconsideration of the Department's action. (d) A license issued by the Department will expire annually from the date of issuance. (e) Intentionally misstating or misrepresenting a fact on an application, renewal application, state well report, plugging report, or with any other information or evidence furnished to the Department in connection with official Departmental matters shall be grounds for assessing penalties and/or sanctions. sec.76.203. Examinations. (a) Examinations shall be designed to determine if the applicant possesses the requisite knowledge of pump installation techniques, well drilling, completion, and plugging methods and techniques, and of groundwater formations to ensure that the licensee will not present a serious risk of pollution of a groundwater source. (b) Examinations shall be offered on a regular basis at a time and place designated by the Executive Director. (c) Additional examinations shall be offered if more than ten applicants petition the Executive Director in writing. (d) An applicant may only take the examination twice within any 12-month period. (e) Each time an applicant applies to retake the Department's examination, an applicant must submit the examination fee. sec.76.204. License Renewal. (a) On or before the expiration date of the license, the licensee shall pay an annual renewal fee to the Department and submit an application for renewal. (b) To renew a license, the licensee is required to show proof of four hours of continuing education. (c) If a person's license is expired 90 days or less, the person may renew the license by paying the Department the required renewal fee and a late fee equal to one-half the examination fee. (d) If a person's license is expired for more than 90 days but less than two years, the person may renew the license by paying all renewal fees and a late fee that is equal to the examination fee. (e) If a person's license has been expired for two years or more, the person may not renew the license, but may apply for a new license. sec.76.205. Registration for Driller or Pump Installer Apprenticeship. (a) A person who wishes to undertake an apprentice program under the supervision of a licensed driller or a licensed pump installer who has been licensed for a minimum of two years, must submit a registration form to the department and provide proof that the licensed driller or pump installer has agreed to accept the responsibility of supervising the training. A driller or pump installer may not supervise more than three apprentices at any one time. (b) The Department, with advice of the Council, shall review driller and pump installer apprentice registration forms. (c) Registration forms shall include: (1) the name, business address, and permanent mailing address of the apprentice in training; (2) the name, business address, and license number of the licensed driller or pump installer who will supervise the training; (3) a brief description of the training program; (4) the effective commencement and termination date of the training program; (5) a statement by the licensed driller or pump installer accepting financial responsibility for the activities of the apprentice associated with the training program or undertaken on behalf of the licensed driller or pump installer; and (6) the signatures of the apprentice and the licensed driller or pump installer and the sworn statement of both that the information provided is true and correct. (d) If the application conforms to the rules and the apprentice program meets Department requirements, the Department will notify the apprentice and the supervising driller or pump installer that the apprentice has been accepted as a registered driller or pump installer apprentice and that the registration form shall remain in the Department's files for the stated duration of the apprentice period. (e) If the application and apprentice program do not conform to the rules and the registration is not approved, the apprentice and the licensed pump installer shall be notified by the Department. sec.76.206. Responsibilities of the Apprentice. (a) A registered driller apprentice shall: (1) represent his supervising driller during operations at the well site; (2) co-sign state well reports with the supervising driller; and (3) perform services associated with drilling, deepening, or altering a water well under the direct supervision of the supervising driller. (b) A registered driller apprentice may not perform, or offer to perform, any services associated with drilling, deepening, or altering a water well except under the direct supervision of a licensed driller and/or according to the supervising driller's express directions. A driller apprentice's registration may be revoked for engaging in prohibited activities. (c) Upon completion of a training program of at least one year, an apprentice may apply to obtain a water well driller's or pump installer's license or renew the status as an apprentice. The supervising driller, pump installer, or apprentice may terminate the training program by written notice to the Department. A reason for termination is not required. Upon receipt of the notice, the Department shall terminate the apprentice's status as a registered apprentice. (d) The licensed driller or licensed pump installer shall be present at the well site at all times during all operations or may be represented by an apprentice capable of immediate communication with the licensed driller or pump installer at all times, provided that the licensed driller is less than one hour from the well site and visits the well site at least once each day of operation to direct the manner in which the operations are conducted. (e) The supervising licensed driller or licensed pump installer is responsible for compliance with the Texas Water Code, Chapters 32 and 33 (relating to Water Well Drillers and Water Well Pump Installers) and this chapter. sec.76.220. Continuing Education. (a) Competence in the performance of services by a licensee requires that the licensee's knowledge and skill encompass the current knowledge of drilling, completion, pump installation, and plugging techniques, and of the occurrence and availability of groundwater, to the extent that the performance of services by the driller or pump installer will not create a risk of polluting waters. Therefore, licensees must maintain proficiency in the field of water well drilling and pump installation. (b) A licensed driller or licensed pump installer is required to have four hours of continuing education annually by a provider that is approved by the Department. This section is effective beginning with the 1999 renewal period. sec.76.300. Exemptions. The following are not required to obtain a license under Chapters 32 and 33 of the Texas Water Code: (1) any person who drills, bores, cores, or constructs a water well on his property for his own use. (2) any person who assists in the construction of a water well under the direct supervision of a licensed water well driller and is not primarily responsible for the drilling operation; (3) pursuant to 30 TAC, Chapter 334, Subchapter I: Underground Storage Tank Contractor Registration and Installer Licensing, any person who possesses a Class A or Class B Underground Storage Tank (UST) Installers' license who drills observation wells within the backfill of the original excavation for UST's, including associated piping and pipe trenches (tank plumbing and piping), to a depth of no more than two feet below the tank bottom. However, if the total depth exceeds 20 feet below ground surface, a licensed driller is required to drill the well; (4) any person who drills environmental hand auger soil borings no more than 10 feet in depth; (5) any person who installs or repairs water well pumps and equipment on his own property, or on property that he has leased or rented, for his own use; (6) any person who assists in the procedure of pump installation under the direct supervision of a licensed installer and who is not primarily responsible for the installation; (7) any person who is a ranch or farm employee whose general duties include installing or repairing a water well pump or equipment on his employer's property for his employer's use, but who is not employed or in the business of installation or repair of water pumps or equipment; or, (8) any registered water well driller apprentice or pump installer apprentice. (9) Pump manufacturers and sellers of new and used pumps and/or pump equipment including pump distributors and pump dealers who do not install pumps and/or pump equipment. sec.76.600. Responsibilities of the Department - Certification by the Executive Director. (a) The Department, with advice of the Council, shall review and pass upon each applicant's qualifications. (b) In assessing an applicant's qualifications, the Department and the Council shall examine the letters of reference submitted, the applicant's experience and competence in water well drilling or pump installing and related fields, and any other relevant information which may be presented including, but not limited to, compliance history. (c) An applicant, at the discretion of the Department, may not be certified for up to one-year following the revocation of the applicant's license or a finding that the applicant operated without a license. (d) After assessing the qualifications of an applicant, the Department, with advice of the Council, shall determine the type(s) of well drilling or pump installation, the applicant is competent to perform. Types of drilling include water well, monitoring well, injection well, and dewatering well. Types of pump installation include: windmills, hand pumps, and pump jacks; fractional to five horsepower; submersible five horsepower and over; and line-shaft turbine pumps. (e) The Executive Director may waive any applicant requirements stated herein. sec.76.601. Responsibilities of the Department - General. The Department may initiate field inspection and investigation of well drilling, capping, plugging, or completion operations. sec.76.602. Responsibilities of the Department - Undesirable water. (a) The Department shall determine whether undesirable water or constituents have been encountered. If undesirable water or constituents are encountered, the Department shall determine whether the person having the well drilled, deepened, or altered intends to have the well plugged or completed within 30 days; (b) Where a person having a well drilled, deepened, or altered does not intend to have the well plugged or completed as required by this chapter, or where he or she does not have the well plugged or completed within the prescribed time period, the Department shall direct that the person having the well drilled, deepened, or altered appear at a hearing and show cause why the well should not be plugged or completed. sec.76.650. Advisory Council. (a) Officers of the Council shall be elected at the first meeting of each fiscal year. (b) All notices of regular or special meetings of the Council shall be directed to the official residence of the members of the Council as they are recorded on the official records of the Council and Department. (1) The chairman shall preside at all Council meetings and shall not vote except to break a tie vote. (2) In the absence of the chairman or vice chairman of the Council, the members present shall choose one member to act as chairman. (3) The permanent or temporary chairman may appoint any member of the Council present to act for any other officer of the Council who is not present. (c) The Executive Director appoints Council members. sec.76.700. Responsibilities of the Licensee - State Well Reports. Every well driller who drills, deepens, or alters a well, within this state shall cause to be made and kept, a legible and accurate State Well Report on forms supplied by the Department. Each copy of a State Well Report, other than a Department copy, shall include the name, mailing address, and telephone number of the Department. (1) Every well driller shall deliver or transmit by certified mail the original of the State Well Report to the Department and a copy to the owner or person for whom the well was drilled, within 60 days from the completion or cessation of drilling, deepening, or otherwise altering a well. (2) The person that plugs a well described in sec.76.702(a), (b), or (d) of this title (relating to Responsibilities of the Licensee and Landowner - Well Drilling, Completion, Capping and Plugging) shall, within 30 days after completion or plugging is complete, submit a State Well Report or Plugging Report to the Department on forms supplied by the Department and mail a copy of the report to the local groundwater conservation district if applicable. sec.76.701. Responsibilities of the Licensee - Reporting Undesirable Water or Constituents. Each well driller shall inform, within 24 hours, the landowner or person having a well drilled, deepened, or otherwise altered or their agent when undesirable water or constituents have been encountered. The well driller shall submit, within 30 days of encountering undesirable water or constituents to the Department, the local groundwater conservation district if required by the local authority, and the landowner or person having the well drilled, deepened, or altered, on forms supplied by the Department, a statement signed by the well driller indicating that the landowner or person having the well drilled, deepened, or altered, has been informed that undesirable water or constituents have been encountered. sec.76.702. Responsibilities of the Licensee and Landowner - Well Drilling, Completion, Capping and Plugging. (a) All well drillers and persons having a well drilled, deepened, or altered shall adhere to the provisions of this chapter prescribing the location of wells and proper drilling, completion, capping, and plugging. (1) Where a landowner, or person having the well drilled, deepened, or altered, denies a licensed well driller access to the well to complete the well to established standards and thereby precludes the driller from performing his or her duties under the Texas Water Code, Chapters 32 and 33 and this chapter, the well driller shall file with the Department a statement to that effect within five days of the denial. The landowner or person authorizing the well work must complete the well to established standards within ten days of notification by the Department. (2) It is the responsibility of the landowner or person having the well drilled, deepened, or otherwise altered, to cap or have capped, under standards set forth in sec.76.1004 of this title (relating to Technical Requirements - Standards for Capping and Plugging of Wells and Plugging Wells that Penetrate Undesirable Water or Constituent Zones), any well which is open at the surface. (3) It is the responsibility of the landowner or person having the well drilled, deepened, or otherwise altered to plug or have plugged a well which is abandoned under standards set forth in sec.76.1004 of this title. (b) It shall be the responsibility of each licensed well driller to inform a landowner or person having a well drilled, deepened, or altered that the well must be plugged by the landowner, a licensed driller, or a licensed pump installer if it is abandoned. (c) It is the responsibility of the licensed well driller to see that any well which encounters undesirable water or constituents is plugged or is converted into a monitoring well and under the standards set forth in sec.76.1004 of this title. For class V injection wells which encounter undesirable water or constituents, the driller must comply with applicable requirements of the Texas Natural Resource Conservation Commission rules under 30 TAC, Chapter 331. (d) It shall be the responsibility of the driller of a newly drilled well or the pump installer responsibility of a newly drilled well to place a cover over the boring or casing of any well that is to be left unattended with the pump removed. (e) A licensed well driller is responsible for assuring that a well which encounters undesirable water or constituents is plugged or completed forthwith pursuant to the following: (1) Where a person or landowner having the well drilled, deepened, or altered denies a licensed driller access to a well which requires plugging or completion or otherwise precludes the driller from plugging or completing a well which has encountered undesirable water or constituents, the driller shall immediately file a signed statement to that effect with the Department and provide a copy of the statement to the local groundwater conservation district. The statement shall indicate that: (A) The driller, or person under his or her supervision, encountered undesirable water or constituents while drilling the well; (B) The driller has informed the person having the well drilled, deepened, or otherwise altered that undesirable water or constituents were encountered and that the well must be plugged or completed pursuant to the Texas Water Code sec.32.017; (C) The person or landowner having the well drilled, deepened, or altered has denied the driller access to the well; (D) The reason, if known, for which access has been denied and, (E) if known, whether the person having the well drilled, deepened, or otherwise altered intends to have the well plugged or completed. (2) For class V wells which encounter undesirable water or constituents, the driller must comply with applicable requirements of the Texas Natural Resource Conservation Commission rules under 30 TAC, Chapter 33. (f) Each licensed well driller shall ensure that all wells are plugged, repaired, or properly completed pursuant to this chapter and Texas Water Code sec.32.017 (Plugging of Water Wells) each pump installer shall install or repair pumps pursuant to this title and Texas Water Code sec.33.014 (Completion, Repair, and Plugging of Water Wells). (g) A licensed driller or licensed pump installer shall notify the Department, the local underground water conservation district if required by the local authority, and the landowner or person having a well drilled or pump installed when he encounters water injurious to vegetation, land, or other water, and inform the landowner that the well must be plugged, repaired, or properly completed in order to avoid injury or pollution. (h) A licensed driller or licensed pump installer who knows of an abandoned or deteriorated well, as defined by Texas Water Code sec.32.017 (Plugging of Water Wells) and sec.33.014 (relating to Completion, Repair, and Plugging of Water Wells), and sec.76.1005(a) of this title (relating to Technical Requirements- Standards for Water Wells drilled before June 1, 1983) shall notify the landowner or person possessing the well that the well must be plugged or capped in order to avoid injury or pollution. sec.76.703. Responsibilities of the Licensee - Standards of Completion for Public Water System Wells. A licensed water well driller shall complete a well supplying a public water system in accordance with plans approved by the Texas Natural Resource Conservation Commission under 30 TAC, Chapter 290 (Water Hygiene). (1) The licensed water well driller shall to the best of his or her abilities, ascertain whether a well which is to be drilled, deepened, or altered is intended for use as part of a public water system and shall comply with all applicable rules and regulations of the Texas National Resource Conservation Commission under 30 TAC, Chapter 290 and any other local or regional regulations. (2) The licensed water well driller shall inform the Department of the well's intended use, by submitting a State Well Report. (3) The person or landowner having the well drilled, deepened, or altered is responsible for ensuring that a well intended for use as a part of a public water system meets the current rules and regulations of the Texas National Resource Conservation Commission under 30 TAC, Chapter 290 and any other local or regional regulations. sec.76.704. Responsibilities of the Licensee -Marking Vehicles and Equipment. Licensee shall mark their water well rigs and pump installer vehicles used by them or their employees in the water well drilling or pump installer business with legible and plainly visible identification numbers. (1) The identification number to be used on rigs and vehicles shall be the licensee's license number. (2) License numbers shall be printed, upon each side of every water well rig or pump installer vehicle, not less than two inches high and in a color sufficiently different from the color of the vehicle or equipment so that the license number shall be plainly visual. (3) A licensee shall have 30 days from the date a license is issued to see that all water well rigs or pump installer vehicles used by him or his employees are marked as provided in paragraphs (1) and (2) of this section. sec.76.705. Responsibilities of the Licensee - Representations. (a) No licensee shall offer to perform services unless such services can be competently performed. (b) A licensee shall accurately and truthfully represent to a prospective client his qualifications and the capabilities of his equipment to perform the services to be rendered. (c) A licensee shall neither perform nor offer to perform services for which he is not qualified by experience or knowledge in any of the technical fields involved. (d) A licensee shall not enter into a partnership or any agreement with a person, not legally qualified to perform the services to be rendered, or who has control over the licensee's equipment and/or independent judgment as related to construction, alteration, or plugging of a water well or installation of pumps or equipment in a water well. (e) A licensee shall not make false, misleading, or deceptive representations. (f) A licensee shall make known to prospective clients, all adverse, or suspicions of adverse conditions concerning the quantity or quality of groundwater in the area. If there is any uncertainty regarding the quality of water in any water well, the licensee shall recommend that the client have the suspected water analyzed. sec.76.706. Responsibilities of the Licensee - Unauthorized Practice. (a) A licensee shall inform the Department of any unauthorized well drilling or pump installation practice of which the licensee has personal knowledge. (b) A licensee shall not aid or abet an unlicensed person to unlawfully drill or offer to drill water wells or install pump equipment. (c) A licensee shall, upon request of the Department, furnish any information the licensee possesses concerning any alleged violation of the Texas Water Code, Chapters 32 and 33 (Water Well Drillers or Water Well Pump Installers) or this title. (d) A licensee shall have the following information on all proposals and invoices given to consumers: Regulated by The Texas Department of Licensing and Regulation, P.O. Box 12157, Austin Texas 78711, 1-800-803-9202, 512-463-7880. sec.76.707. Responsibilities of the Licensee - Adherence to Statutes and Codes. A licensee shall comply with Texas Revised Civil Statutes Annotated, article 9100 (Vernon 1991), Chapter 60; the Texas Water Code, Chapters 32 and 33; and sec.76.1000 of this title (relating to Technical Requirements - Locations and Standards of Completion for Wells) in connection with all water well drilling or pump installation services rendered. sec.76.800. Fees. (a) Exam Fees. (1) Driller and Installer application exam fees are $125 per exam. (2) Re-exam fee is $100 for each exam. (b) License Fees. (1) Driller's license is $125. (2) Installer's license is $125. (3) A combination Driller and Installer license is $175. (4) Apprentice registration is $50. (c) License Renewal Fees. (1) Driller's renewal license is $125. (2) Installer's renewal license is $125. (3) A combination Driller and Installer license is $175. (4) Apprentice renewal registration is $50. (d) Lost, revised, or duplicate license $25. (e) Late Fees. (1) Up to 90 days after expiration is $50. (2) After 90 days $100. (f) Variance request fee is $100. sec.76.900. Disciplinary Actions. (a) The Executive Director may assess an administrative penalty, reprimand a licensee, suspend or revoke a license, and the Texas Commission of Licensing and Regulation may assess administrative penalties or take any appropriate action described in 16 TAC, Chapter 60 (Vernon 1994), Texas Revised Civil Statutes Annotated, article 9100 (Vernon 1991), or the Texas Water Code, Chapters 32 and 33 (Vernon 1997) (relating to Water Well Drillers and Pump Installers) for violations of the statutes or this chapter. (b) If a person violates the Texas Water Code, Chapters 32 and 33 (Vernon 1997), or a rule or order, of the Executive Director or Commission relating to the Code, proceedings may be instituted to impose administrative sanctions and/or recommend administrative penalties in accordance with the Code or Texas Revised Civil Statutes Annotated, article 9100 (Vernon 1991) and 16 TAC, Chapter 60 (Vernon 1994) of this title (relating to the Texas Department of Licensing and Regulation). sec.76.910. Disciplinary Actions - Disposition of Application. The Department shall mail notice to each applicant as to the disposition of their application within 10 days of the final decision. An applicant who disagrees with the Department's final decision may request a hearing. sec.76.1000. Technical Requirements - Locations and Standards of Completion for Wells. (a) Wells shall be completed in accordance with the following specifications and in compliance with the local groundwater conservation district or incorporated city ordinances: (1) The annular space to a minimum of ten feet shall be three inches larger in diameter than the casing and filled from ground level to a depth of not less than ten feet below the land surface or well head with cement slurry or eight feet solid column of granular sodium bentonite topped with a two foot cement atmospheric barrier, except in the case of monitoring, dewatering, piezometer, and recovery wells when the water to be monitored, recovered, or dewatered is located at a more shallow depth. In that situation, the cement slurry or bentonite column shall only extend down to the level immediately above the monitoring, recovery, or dewatering level. Unless the well is drilled within the Edwards Aquifer, the distances given for separation of wells from sources of potential contamination in subsection (b)(2) of this section may be decreased to a minimum of 50 feet provided the well is cemented with positive displacement technique to a minimum of 100 feet to surface or the well is tremie pressured filled to the depth of 100 feet to the surface provided the annular space is three inches larger than the casing. Except in cases of wells which are subject to completion standards of the Texas Natural Resource Conservation Commission under 30 TAC, Chapter 331 for class V injection wells. (2) A well is cemented with positive displacement technique to a minimum of 100 feet to surface or the well is tremie pressured filled to the depth of 100 feet to the surface provided the annular space is three inches larger than the casing may encroach up to five feet of the property line. (b) Water wells located within public water supply system sanitary easements must be constructed to public well standards 30 TAC, Chapter 290. (1) A well shall be located a minimum horizontal distance of 50 feet from any water-tight sewage and liquid-waste collection facility, except in the case of monitoring, dewatering, piezometer, and recovery wells which may be located where necessity dictates. (2) Except as noted in subsection (a)(1) of this section, a well shall be located a minimum horizontal distance of 150 feet from any concentrated sources of potential contamination such as, but not limited to, existing or proposed livestock or poultry yards, cemeteries, pesticide mixing/loading facilities, and privies, except in the case of monitoring, dewatering, piezometer, and recovery wells which may be located where necessity dictates. A well shall be located a minimum horizontal distance of 100 ft. from an existing or proposed septic system absorption field, septic systems spray area, a dry litter poultry facility and 50 feet from any property line provided the well is located at the minimum horizontal distance from the sources of potential contamination. (3) A well shall be located at a site not generally subject to flooding; provided, however, that if a well must be placed in a flood prone area, it shall be completed with a watertight sanitary well seal, so as to maintain a junction between the casing & pump column, and a steel sleeve extending a minimum of 36 inches above ground level and 24 inches below the ground surface. (4) The following are exceptions to the property line distance requirement where: (A) groundwater district rules are in place regulating the spacing of wells; (B) platted or deed restriction subdivision spacing of wells and on-site sewage systems are part of planning; and (C) public wastewater treatment is provided and utilized by the landowner. (c) In all wells where plastic casing is used, except when a steel or polyvinyl chloride (PVC) sleeve or pitless adapter, as described in paragraph (3) of this subsection, is used, a concrete slab or sealing block shall be placed above the cement slurry around the well at the ground surface. (1) The slab or block shall extend at least two feet from the well in all directions and have a minimum thickness of four inches and should be separated from the well casing by a plastic or mastic coating or sleeve to prevent bonding of the slab to the casing. (2) The surface of the slab shall be sloped to drain away from the well. (3) The top of the casing shall extend a minimum of 12 inches above the land surface except in the case of monitoring wells when it is impractical or unreasonable to extend the casing above the ground. Monitoring wells shall be placed in a waterproof vault the rim of which extends two inches above the ground surface and a sloping cement slurry shall be placed 18 inches around and two feet below the base of the vault between the casing and the wall of the borehole so as to prevent surface pollutants from entering the monitoring well. The well casing shall have a locking cap that will prevent pollutants from entering the well. The annular space of the monitoring well shall be sealed with an impervious bentonite or similar material from the top of the interval to be tested to the cement slurry below the vault of the monitoring well. (4) The well casing of a temporary monitoring well shall have a locking cap and the annular space shall be sealed 0 to 1 foot below ground level with an impervious bentonite or similar material; after 48 hours, the well must be completed or plugged in accordance with this section and sec.76.1004 of this title (relating to Technical Requirements - Standards for Capping and Plugging of Wells and Plugging Wells that Penetrate Undesirable Water or Constituent Zones). (5) The annular space of a closed loop injection well used to circulate water or other fluids shall be backfilled to the total depth with impervious bentonite or similar material, closed loop injection well where there is no water or only one zone of water is encountered you may use sand, gravel or drill cuttings to back fill up to 30 feet from the surface. The top 30 feet shall be filled with impervious bentonite or similar materials and meets the standards pursuant to Texas Natural Resource Conservation Commission 30 TAC, Chapter 331. (d) In wells where a steel or PVC sleeve is used: (1) The steel sleeve shall be a minimum of 3/16 inches in thickness and/or the plastic sleeve shall be a minimum of Schedule 80 sun resistant and 24 inches in length, and shall extend 12 inches into the cement, except when steel casing or a pitless adapter as described in paragraph (2) of this subsection is used. The casing shall extend a minimum of 12 inches above the land surface, and the steel/plastic sleeve shall be two inches larger in diameter than the plastic casing being used; or (2) A slab or block as described in subsection (c)(1) and (2) of this section is required above the cement slurry except when a pitless adapter is used. Pitless adapters may be used in such wells provided that: (A) the adapter is welded to the casing or fitted with another suitably effective seal; (B) the annular space between the borehole and the casing is filled with cement to a depth not less than 20 feet below the adapter connection; and (C) in lieu of cement, the annular space may be filled with a solid column of granular sodium bentonite to a depth of not less than 20 feet below the adapter connection. (e) All wells, especially those that are gravel packed, shall be completed so that aquifers or zones containing waters that differ in chemical quality are not allowed to commingle through the borehole-casing annulus or the gravel pack and cause quality degradation of any aquifer or zone. (f) The well casing shall be capped or completed in a manner that will prevent pollutants from entering the well. (g) Each licensed well driller drilling, deepening, or altering a well shall keep any drilling fluids, tailings, cuttings, or spoils contained in such a manner so as to prevent spillage onto adjacent property not under the jurisdiction or control of the well owner without the adjacent property owners written consent. (h) Each licensed well driller drilling, deepening, or altering a well shall prevent the spillage of any drilling fluids, tailings, cuttings, or spoils into any body of surface water. (i) Unless waived by written request from the landowner, a new, repaired, or reconditioned well or pump installation or repair on a well used to supply water for human consumption shall be properly disinfected. The well shall be properly disinfected with chlorine or other appropriate disinfecting agent under the circumstances. A disinfecting solution with a minimum concentration of 50 milligrams per liter (mg/l) (same as parts per million), shall be placed in the well as required by the American Water Works Association (AWWA), pursuant to ANST/AWWA C654-87 and the United States Environmental Protection Agency (EPA). (j) Unless waived in writing by the landowner, after performing an installation or repair, the licensed installer shall disinfect the well by: (1) treating the water in the well casing to provide an average disinfectant residual to the entire volume of water in the well casing of 50 mg/l. This may be accomplished by the addition of calcium hypochlorite tablets or sodium hypochlorite solution in the prescribed amounts; (2) circulating, to the extent possible, the disinfected water in the well casing and pump column; and (3) pumping the well to remove disinfected water for a minimum of 15 minutes. (4) If calcium hypochlorite (granules or tablets) is used, it is suggested that the installer dribble the tablets of approximately five-gram (g) size down the casing vent and wait at least 30 minutes for the tablets to fall through the water and dissolve. If sodium hypochlorite (liquid solution) is used, care should be taken that the solution reaches all parts of the well. It is suggested that a tube be used to pipe the solution through the well-casing vent so that it reaches the bottom of the well. The tube may then be withdrawn as the sodium hypochlorite solution is pumped through the tube. After the disinfectant has been applied, the installer should surge the well at least three times to improve the mixing and to induce contact of disinfected water with the adjacent aquifer. The installer should then allow the disinfected water to rest in the casing for at least twelve hours, but for not more than twenty-four hours. Where possible, the installer should pump the well for a minimum of 15 minutes after completing the disinfection procedures set forth above until a zero disinfectant residual is obtained. In wells where bacteriological contamination is suspected, the installer should inform the well or property owner that bacteriological testing may be necessary or desirable. sec.76.1001. Technical Requirements - Standards of Completion for Water Wells Encountering Undesirable Water or Constituents. If a water well driller knowingly encounters undesirable water or constituents and the well is not plugged or made into a completed monitoring well, the licensed well driller shall see that the well drilled, deepened, or altered is forthwith completed in accordance with the following: (1) When undesirable water or constituents are encountered in a water well, the undesirable water or constituents shall be sealed off and confined to the zone(s) of origin. (2) When undesirable water or constituents are encountered in a zone overlying fresh water, the driller shall case the water well from an adequate depth below the undesirable water or constituent zone to the land surface to ensure the protection of water quality. (3) The annular space between the casing and the wall of the borehole shall be pressured cemented an adequate depth below the undesirable water or constituent zone to the land surface to ensure the protection of groundwater. (4) When undesirable water or constituents are encountered in a zone underlying a fresh water zone, the part of the wellbore opposite the undesirable water or constituent zone shall be filled with pressured cement to a height that will prevent the entrance of the undesirable water or constituents into the water well. (5) For class V injection wells which encounter undesirable water or constituents, the driller must comply with applicable requirements of the Texas Natural Resource Conservation Commission under 30 TAC, Chapter 331. sec.76.1002. Technical Requirements - Standards for Wells Producing Undesirable Water or Constituents. (a) Wells completed to produce undesirable water or constituents shall be cased to prevent the mixing of water or constituent zones. (b) The annular space between the casing and the wall of the borehole shall be pressured cemented to the land surface. (c) Wells producing undesirable water or constituents shall be completed in such a manner that will not allow undesirable fluids to flow onto the land surface except when the Department's authorization is obtained by the landowner or the person(s) having the well drilled. sec.76.1003. Technical Requirements - Re-completions. The landowner shall have the continuing responsibility of insuring that a well does not allow the commingling of undesirable water or constituents with fresh water through the wellbore to other porous strata. (1) If a well is allowing the commingling of undesirable water or constituents and fresh water or the unwanted loss of water, and the casing in the well cannot be removed and the well re-completed in accordance with the applicable rules, the casing in the well shall be perforated and squeeze cemented in a manner that will prevent the commingling or loss of water. If such a well has no casing then the well shall be cased and cemented, or plugged in a manner that will prevent such commingling or loss of water. (2) The Executive Director may direct the landowner to take proper steps to prevent the commingling of undesirable water or constituents and fresh water, or the unwanted loss of water. sec.76.1004. Technical Requirements - Standards for Capping and Plugging of Wells and Plugging Wells that Penetrate Undesirable Water or Constituent Zones. (a) If a well is abandoned or deteriorating, all removable casing shall be removed from the well and the entire well pressure filled via a tremie pipe with cement from bottom up to the land surface. (b) In lieu of the procedure in subsection (a) of this section, the well shall be pressure filled via a tremie tube with a bentonite grout (ten pounds per gallon mud or more with a marsh funnel viscosity of 50 seconds or equivalent) followed by a cement plug extending from land surface to a depth of not less than two feet, or if the well to be plugged has 100 feet or less of standing water the entire well may be filled with a solid column of 3/8 inch or larger granular sodium bentonite hydrated at frequent intervals while strictly adhering to the manufacturers recommended rate and method of application. If a bentonite grout is used, the entire well from not less than two feet below land surface may be filled with the bentonite grout. The top two feet above any bentonite grout or granular sodium bentonite shall be filled with cement as an atmospheric barrier. (c) Undesirable water or constituents, or the fresh water zone(s) shall be isolated with cement plugs and the remainder of the wellbore filled with bentonite grout (nine and half pounds per gallon mud or more with a marsh funnel viscosity of 50 seconds or equivalent) followed by a cement plug extending from land surface to a depth of not less than ten feet. (d) Drillers may petition the Executive Director in writing for a variance from the methods stated in subsection (a) of this section. The variance should state in detail, an alternative method proposed and all conditions applicable to the well that would make the alternative method preferable to those methods stated in subsection (a) and (b) of this section. (e) A non-deteriorated well which contains casing in good condition and is beneficial to the landowner can be capped with a covering capable of preventing surface pollutants from entering the well and sustaining weight of at least 400 pounds and constructed in such a way that the covering cannot be easily removed by hand. sec.76.1005. Technical Requirements - Standards for Water Wells (drilled before June 1, 1983). (a) Wells drilled prior to June 1, 1983, shall be grand fathered from this chapter without further modification unless the well is found to be a threat to public health and safety or to water quality. The following will be considered a threat to public health and safety or to groundwater quality: (1) Annular space around the well casing is open at or near the land surface; (2) An unprotected opening into the well casing that is above ground level; (3) Top of well casing below known flood level and not appropriately sealed; (4) Deteriorated well casing allowing commingling of aquifers or zones of water of different quality. (b) If the annular space around the well casing is not adequately sealed as set forth in this section, it shall be the responsibility of each licensed driller or licensed pump installer to inform the landowner that the well is considered to be a deteriorated well and must be recompleted when repairs are made to the pump or well in accordance with this chapter, and the following specifications: (1) The well casing shall be excavated to a minimum depth of four feet and the annular space shall be filled from ground level to a depth of not less than four feet below the land surface with cement. In areas of shallow, unconfined groundwater aquifers, the cement need not be placed below the static water level. In areas of shallow, confined groundwater aquifers having artesian head, the cement need not be placed below the top of the water bearing strata. (2) A cement slab or sealing block shall be placed above the cement around the well at the ground surface except when a pitless adapter as described in sec.76.1000(d)(2) of this title (relating to Technical Requirements - Locations and Standards of Completion for Wells) or a steel or plastic sleeve as described in sec.76.1000(d)(1) of this title is used. (A) The slab or block shall extend at least two feet from the well in all directions and have a minimum thickness of four inches. (B) The surface of the slab shall be sloped to drain away from the well. (C) The top of the casing shall extend a minimum of 12 inches above ground level or two feet above known flood level and unprotected openings into the well casing that is above ground shall be sealed water tight. (3) If deteriorated well casing is allowing commingling of aquifers or zones of water of different quality and causing degradation of any water including groundwater, the well shall be plugged according to sec.76.1004 of this title (relating to Technical Requirements - Standards for Capping and Plugging of Wells and Plugging Wells that Penetrate Undesirable Water or Constituent Zones) or repaired. Procedures for repairs shall be submitted to the Department for approval prior to implementation. (c) If a licensed well driller or pump installer finds any of the procedures described by this section to be inapplicable, unworkable, or inadequate, alternative procedures may be employed provided that the proposed alternative procedures will prevent injury and pollution and that the procedures shall be submitted to the Executive Director for approval prior to their implementation, except for class V injection wells pursuant to 30 TAC, Chapter 331. (d) Well covers shall be capable of supporting a minimum of 400 pounds and constructed in such a way that they cannot be easily removed by hand. (e) This section shall not apply to a public water supply system well. sec.76.1006. Technical Requirements - Water Distribution and Delivery Systems. (a) The licensee shall inform the land owner and well owner that the land owner and well owner are responsible for complying with the rules and regulations under the standards set forth in this chapter. (b) A buried discharge line between the pump discharge and the pressure tank or pressure system in any installation, including a deep well turbine or a submersible pump, shall not be under negative pressure at any time. With the exception of jet pumps, a check valve or an air gap shall be installed in a water line between the well casing and the pressure tank. Either a check valve or an air gap, as applicable, shall be required on all irrigation well pumps whenever a pump is installed or repaired. All wells shall have either a check valve, or an air gap as applicable. (c) Wells shall be vented with watertight joints except as provided by subsection (b) of this section. (1) Watertight joints, where applicable pursuant to the provisions of this rule, shall terminate at least two feet above the regional flood level or one foot above the established ground surface or the floor of a pump room or well room, whichever is higher. (2) The casing vent shall be screened and point downward. (3) Vents may be offset provided they meet the provisions of this rule. (4) Toxic or flammable gases, if present, shall be vented from the well. The vent shall extend to the outside atmosphere above the roof level at a point where the gases will not produce a hazard. sec.76.1007. Technical Requirements - Chemical Injection, Chemigation, and Foreign Substance Systems. (a) All irrigation distribution systems or water distribution systems into which any type of chemical (except disinfecting agents) or other foreign substances will be injected into the water pumped from water wells shall be equipped with an in-line, automatic quick-closing check valve capable of preventing pollution of the ground water. The required equipment shall be installed on all systems whenever a pump is installed or repaired or at the time of a chemical injection, Chemigation or foreign substance unit is added to a water delivery system or not later than January 1, 2000, if the well has a chemical injection, Chemigation, or foreign substance unit in the delivery system. The type of check valve installed shall meet the following specifications: (b) The body of the check valve shall be constructed of cast iron, stainless steel, cast aluminum, cast steel, or of a material and design that provides a sturdy integrity to the unit and is resistant to the foreign substance being injected. All materials shall be corrosion resistant or coated to prevent corrosion. The valve working pressure rating shall exceed the highest pressure to which the valve will be subjected. (c) The check valve shall contain a suitable automatic, quick-closing and tight- sealing mechanism designed to close at the moment water ceases to flow in the downstream or output direction. The device shall, by a mechanical force greater than the weight of the closing device, provide drip-tight closure against reverse flow. Hydraulic back pressure from the system does not satisfy this requirement. (d) The check valve construction should allow for easy access for internal and external inspection and maintenance. All internal parts shall be corrosion resistant. All moving parts shall be designed to operate without binding, distortion, or misalignment. (e) The check valve shall be installed in accordance with the manufacturer's specifications and maintained in a working condition during all times in which any fertilizer, pesticide, chemical, animal waste, or other foreign substance is injected into the water system. The check valve shall be installed between the pump discharge and the point of chemical injection or foreign substance injection. (f) A vacuum-relief device shall be installed between the pump discharge and the check valve in such a position and in such a manner that insects, animals, floodwater, or other pollutants cannot enter the well through the vacuum-relief device. The vacuum-relief device may be mounted on the inspection port as long as it does not interfere with the inspection of other anti-pollution devices. (g) An automatic low pressure drain shall also be installed between the pump discharge and the check valve in such a position and in such a manner that any fluid which may seep toward the well around the flapper will automatically flow out of the pump discharge pipe. The drain must discharge away from rather than flow into the water supply. The drain must not collect on the ground surface or seep into the soil around the well casing. (1) The drain shall be at least three-quarter inch in diameter and shall be located on the bottom of the horizontal pipe between the pump discharge and the check valve. (2) The drain must be flush with the inside surface of the bottom of the pipe unless special provisions, such as a dam made downstream of the drain, forces seepage to flow into the drain. (3) The outside opening of the drain shall be at least two inches above the grade. (h) An easily-accessible inspection port shall be located between the pump discharge and the check valve, and situated so the automatic low pressure drain can be observed through the port and the flapper can be physically manipulated. (1) The port shall allow for visual inspection to determine if leakage occurs past the flapper, seal, seat, and/or any other components of the checking device. (2) The port shall have a minimum four-inch diameter orifice or viewing area. For irrigation distribution systems with pipe lines too small to install a four- inch diameter inspection port, the check valve and other anti-pollution devices shall be mounted with quick disconnects, flange fittings, dresser couplings, or other fittings that allow for easy removal of these devices. (i) Any check valve not fully meeting the specifications set forth in this section may on request to the Executive Director be considered for a variance. sec.76.1008. Technical Requirements - Pump Installation. (a) During any repair or installation of a water well pump, the licensed installer shall make a reasonable effort to maintain the integrity of ground water as to prevent contamination by elevating the pump column and fittings, or by other means suitable under the circumstances. (b) This section shall include every type of connection device, including but not limited to, flange connections, hose-clamp connections, and other flexible couplings. Except as provided by this chapter, a pump shall be constructed so that no unprotected openings into the interior of the pump or well casing exist. (1) A hand pump, hand pump head, stand, or similar device shall have a spout, directed downward. (2) A power driven pump shall be attached to the casing or approved suction or discharge line by a closed connection. For the purposes of this section a closed connection is defined to be a sealed connection. (c) The provisions of this section relating to the requirement of closed connections shall not apply to the following types of pumps and pumping equipment: (1) sucker rod pumps and windmills; and (2) hand pumps. (d) A new, repaired, or reconditioned well, or pump installation or repair on a well used to supply water for human consumption shall be properly disinfected. The landowner may waive the disinfection process by submitting a written request to the driller or pump installer. sec.76.1009. Technical Requirements - Alternative Standards. (a) If the party having the well drilled, deepened or altered, the licensed well driller, or the party, landowner or person drilling or plugging the well, finds any of the procedures prescribed by sec.76.1004 of this title (relating to Technical Requirements - Standards for Capping and Plugging of Wells and Plugging Wells that Penetrate Undesirable Water or Constituent Zones and sec.76.1000 of this title (relating to Technical Requirements - Locations and Standards of Completion for Wells) inapplicable, unworkable, or inadequate, combinations of the prescribed procedures or alternative procedures may be employed, provided that the proposed alternative procedures will prevent injury and pollution. (b) Proposals to use combinations of prescribed procedures or alternative procedures shall be considered application for a variance and must be submitted to the Executive Director for approval prior to their implementation. (c) This section shall not apply to a public water system well. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 10, 1998. TRD-9812646 Rachelle A. Martin Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-7348 PART VI. Texas Motor Vehicle Board CHAPTER 105.Advertising 16 TAC sec.105.4, sec.105.32 The Texas Motor Vehicle Board proposes amendments to sec.105.4, Definitions, and new sec.105.32, concerning enforcement of its advertising rules. Proposed new definitions in sec.105.4 define "balloon payment" a term used in sec.105.25 of this title (relating to Sales Payment Disclosures), and add definitions to clarify the language of new sec.105.32. The "Code" is defined as the Texas Motor Vehicle Commission Code. The relationship of an "advertising provision" to the Code and rules is clarified. "Board" is defined as the Texas Motor Vehicle Board. "Subsequent violation", a term created in new sec.105.32, is defined as conduct that is the same or substantially the same as alleged in a prior action. The definitions have been numbered in accordance with Texas Register requirements and for ease of reference. New sec.105.32 is proposed pursuant to action taken by the 75th Legislative Session, House Bill 1595, which, effective June 11, 1997, mandates notice of and an opportunity to cure an alleged advertising rule violation before an administrative complaint may be filed. The new section sets forth the procedures for providing notice of an alleged violation and provides that publication of a retraction notice may be required as part of the cure procedure. Brett Bray, director, Motor Vehicle Division, has determined that for the first five-year period the sections are in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the sections. Mr. Bray has also determined that for each year of the first five years the sections are in effect, the anticipated public benefit of the amendments to sec.105.4 will be to provide a clearer understanding of the advertising rules and conserve the time and resources of the agency and entities appearing before it. The public benefit of new sec.105.32 will be to provide guidance to the agency and those who allegedly violate advertising rules by providing a procedure for due process notice and at least one cure option, that of publishing an retraction notice. There will be no effect on small businesses and no anticipated economic cost to persons who are required to comply with the sections as proposed. Mr. Bray has also certified that there will be no impact on local economies or overall employment as a result of enforcing or administering the sections. Comments may be submitted to Brett Bray, Director, Motor Vehicle Division, Texas Department of Transportation, P. O. Box 2293, Austin, Texas 78768, (512) 416- 4910. The Motor Vehicle Board will consider adoption of the proposals at its meeting on November 12, 1998. The deadline for receipt of comments on the proposed amendments is 5:00 p.m. on October 23, 1998. The amendments and new section are proposed under the Texas Motor Vehicle Commission Code, sec.3.06, which provides the Board with authority to adopt rules as necessary and convenient to effectuate the provisions of the Act and to govern practice and procedure before the agency. Motor Vehicle Commission Code, sec.3.05(b) is affected by the proposed amendments and new section. sec.105.4.Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1)
                                                    Advertisement--An oral, written, graphic, or pictorial statement made in the course of soliciting business, including, without limitation, a statement or representation made in a newspaper, magazine, or other publication, or contained in a notice, sign, poster, display, circular, pamphlet, or letter, or on radio, the Internet, or via an on-line computer service, or on television. The term does not include an in-person oral communication by a dealer's employee with a prospective purchaser. (2)
                                                      Advertising provision-- (A)
                                                        a provision of the Code relating to the regulation of advertising; or (B)
                                                          a rule relating to the regulation of advertising adopted pursuant to the authority of the Code. (3)
                                                            Bait advertisement--An alluring but insincere offer to sell or lease a product of which the primary purpose is to obtain leads to persons interested in buying or leasing merchandise of the type advertised and to switch consumers from buying or leasing the advertised product in order to sell or lease some other product at a higher price or on a basis more advantageous to the advertiser. (4)
                                                              Balloon payment--Any scheduled payment made as required by a consumer credit transaction that is more than twice as large as the average of all prior scheduled payments except the down payment.
                                                                (5)
                                                                  Board--The Texas Motor Vehicle Board.
                                                                    (6)
                                                                      Buyers guide--A form as required by the Federal Trade Commission under 16 Code of Federal Regulations, Part 455. This form is to be completed and displayed on the side window of a vehicle that has been driven more than the limited use necessary in moving or road testing a new vehicle prior to delivery to a consumer. (7)
                                                                        Clear and conspicuous--The statement, representation, or term being disclosed is of such size, color, contrast,and audibility and is presented so as to be readily noticed and understood. All language and terms, including abbreviations, shall be used in accordance with their common or ordinary usage and meaning. (8)
                                                                          Code--The Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas Civil Statutes).
                                                                            (9)
                                                                              Dealership addendum--A form which is to be displayed on a window of a motor vehicle when the dealership installs special features, equipment, parts or accessories, or charges for services not already compensated by the manufacturer or distributor for work required to prepare a vehicle for delivery to a buyer. The addendum is to disclose: (A) that it is supplemental; (B) any added feature, service, equipment, part, or accessory charged and added by the dealership and the retail price therefore; (C) any additional charge to the selling price such as additional dealership markup; and (D) the total dealer selling price. The dealership addendum form shall not be deceptively similar in appearance to the manufacturer's label, which is required to be affixed by every manufacturer to the windshield or side window of each new motor vehicle under the Automobile Information Disclosure Act. (10)
                                                                                Demonstrator--A new motor vehicle that is currently in the inventory of the automobile dealership and used or has been used primarily for test drives by customers and other dealership purposes and so designated by the dealership. (11)
                                                                                  Disclosure--Required information that is clear, conspicuous, and accurate. (12)
                                                                                    Factory executive/official vehicle--A new motor vehicle that has been used exclusively by an executive or official of the dealer's franchising manufacturer, distributor, or their subsidiaries. (13)
                                                                                      Internet--A system that connects computers or computer networks. (14)
                                                                                        Licensee--Any person required to obtain a license from the Texas Motor Vehicle Board
                                                                                          [Commission]. (15)
                                                                                            Manufacturer's label--The label required by the Automobile Information Disclosure Act, 15 United States Code 1231-1233, to be affixed by the manufacturer to the windshield or side window of each new automobile delivered to the dealer. (16)
                                                                                              On-line service--A network that connects computer users. (17)
                                                                                                Rebate or cash back--A sum of money refunded to a purchaser or for the benefit of the purchaser after full payment has been rendered. The purchaser may choose to reduce the amount of the purchase price by the sum of money or the purchaser may opt for the money to be returned to himself or for his benefit subsequent to payment in full. (18)
                                                                                                  Subsequent violation--Conduct that is the same or substantially the same as conduct the Board has previously alleged to be a violation of an advertising provision.
                                                                                                    sec.105.32.Enforcement. (a) The Board may file a complaint against a licensee alleging a violation of an advertising provision pursuant to Section 3.05(b) of the Code only if the Board can show: (1) that the licensee who allegedly violated an advertising provision has received from the Board a notice of an opportunity to cure the violation by certified mail, return receipt requested, in compliance with subsection (b) of this section relating to effectiveness of notice; and (2) that the licensee committed a subsequent violation of the same relevant advertising provision within the period beginning 6 days and ending 12 months after the licensee has received the notice required by paragraph (1) of this subsection. (b) An effective notice issued under subsection (a)(1) of this section must: (1) state that the Board has reason to believe that the licensee violated an advertising provision and identify the relevant provision; (2) set forth the facts upon which the Board bases its allegation of a violation; and (3) state that if the licensee commits a subsequent violation of the same relevant advertising provision within the time set forth in subsection (a)(2) of this section, the Board will formally file a complaint. (c) As a part of the cure procedure, the Board may require a licensee, who allegedly violated an advertising provision, to publish a retraction notice to effect an adequate cure of the alleged violation. An adequate retraction notice must: (1) appear in a newspaper of general circulation in the area in which the alleged violation occurred; (2) appear in that portion of the newspaper, if any, devoted to motor vehicle advertising; (3) identify the date and the medium of publication, print, electronic or other, in which the advertising alleged to be a violation appeared; and (4) identify the alleged violation of the advertising provision and contain a statement of correction. (d) Performance of a cure is made solely for the purpose of settling an allegation and is not an admission of a violation of these rules, the Code, or other law. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812977 Brett Bray Director, Motor Vehicle Division Texas Motor Vehicle Board Proposed date of adoption: November 12, 1998 For further information, please call: (512) 416-4899 TITLE 19. EDUCATION PART I. Texas Higher Education Coordinating Board CHAPTER 5. Program Development SUBCHAPTER H. Approval of Distance Learning for Public Colleges and Universities 19 TAC sec.sec.5.151-5.159 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Higher Education Coordinating Board or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Higher Education Coordinating Board proposes the repeal of sec.sec.5.151 - 5.159 concerning Approval of Distance Learning for Public Colleges and Universities. The repeal of the rules will provide guidance to all Texas public institutions of higher education in the delivery of distance learning courses and programs. The repeal of the rules would retain the Board's ultimate authority over the delivery of courses and programs and would require accurate reporting of all activities by the location of the students receiving instruction. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the repeal of the rules is in effect there will be no fiscal implications as a result of enforcing or administering the rule. Dr. Barron also has determined that for the first five years the rule is in effect the public benefit will be that the repeal of the rules will ensure the quality of Texas-based distance learning courses at the highest level possible and will provide the broadest possible opportunity for Texas residents to meet their educational needs through access to the distance learning programs enabled by these revisions and delivered by Texas institutions of higher learning. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the repealed rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The repeal of the rules is proposed under Texas Education Code, Sections 61.051(j) and 61.027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Approval of Distance Learning for Public Colleges and Universities. There were no other sections or articles affected by the proposed amendments. sec.5.151. Terminology. sec.5.152. General Provisions. sec.5.153. Standards and Criteria for Distance Learning. sec.5.154. Institutional Plan for Instructional Telecommunications. sec.5.155. Annual Plan for Distance Learning. sec.5.156. Procedures for Review and Approval of Lower-Division Distance Learning. sec.5.157. Procedures for Review and Approval of Upper-Level and Graduate Distance Learning. sec.5.158. Approval of State-Funded Out-of-State and Foreign Courses. sec.5.159. Non-State-Funded Out-of-State and Foreign Classes. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812873 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 19 TAC sec.sec.5.151-5.161 The Texas Higher Education Coordinating Board proposes new sec.sec.5.151 - 5.161 concerning Approval of Distance Learning for Public Colleges and Universities. The new rules will provide guidance to all Texas public institutions of higher education in the delivery of distance learning courses and programs. The new rules would retain the Board's ultimate authority over the delivery of courses and programs and would require accurate reporting of all activities by the location of the students receiving instruction. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the rule is in effect there will be no fiscal implications as a result of enforcing or administering the rule. Dr. Barron also has determined that for the first five years the rule is in effect the public benefit will be that the new rules will ensure the quality of Texas-based distance learning courses at the highest level possible and will provide the broadest possible opportunity for Texas residents to meet their educational needs through access to the distance learning programs enabled by these revisions and delivered by Texas institutions of higher learning. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the amendments to the rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The new rules are proposed under Texas Education Code, Sections 61.051(j) and 61.027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Approval of Distance Learning for Public Colleges and Universities. There were no other sections or articles affected by the proposed new rules. sec.5.151. Purpose. This subchapter provides guidance to all public institutions of higher education in Texas regarding the delivery of distance learning courses and programs. The goals are to ensure the quality of Texas-based distance learning courses and programs and to provide residents with access to distance learning programs that meet their needs. The rules are designed to assure the quality of courses and programs as well as the adequacy of the technical and managerial infrastructures to support those courses and programs. sec.5.152. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise: (1) Instruction Plan - An institution's listing by location of live distance learning courses and programs planned to be taught during an academic period. (2) Board or Coordinating Board - The Texas Higher Education Coordinating Board. (3) Commissioner - The Commissioner of Higher Education. (4) Distance learning - Instruction delivered by any means to any single or multiple location(s): (A) other than the "main campus" of a senior institution (or "on campus"), where the primary office of the chief executive officer of the campus is located; (B) outside the boundaries of the service area of a community/junior college district; or (C) via instructional telecommunications to any other distance location. (5) Instructional Telecommunications - Distance learning instruction delivered primarily by telecommunications technology. (6) Live - Distance learning provided by face-to-face instruction in which the instructor and student are in the same physical setting, (7) Program - Any certificate or degree program offered by a public institution of higher education. (8) Regional Council - A cooperative arrangement among representatives of all public and independent higher education institutions within a State Uniform Service Region. (9) Remote - Distance learning instruction provided where the instructor is located in one physical setting and the student is located in another physical setting. (10) Senior institution - Public universities, health science centers and health-related institutions. (11) Service area - The territory served by a community/junior college district as defined in Subchapter J, Texas Education Code (relating to Junior College District Service Areas). sec.5.153. Certification. (a) Prior to offering any distance learning course or program for the first time via telecommunications technology, a public community/junior college, technical college, university, or health-related institution must have approved by the Board an Institutional Plan for Distance Learning as required by sec.5.156 of this title (relating to Institutional Plans for Distance Learning). (b) An institution offering a full degree or certificate program is responsible for complying with relevant procedures and rules of the appropriate regulatory or accrediting agency, such as the Southern Association of Colleges and Schools (SACS), and professional certification boards. (c) No graduate degree program may be offered via distance learning without express prior notification by the institution to the Commission on Colleges of the Southern Association of Colleges and Schools. sec.5.154. General Provisions. (a) The provisions of this subchapter are in accordance with Texas Education Code 61.051 and 130.086, and apply to all distance learning instruction provided live or remote for academic credit by a public community/junior college outside of the boundaries of its service area, or by a technical college, university, or health-related institution at a site other than the main campus where the primary office of the chief executive officer of the campus is located. The subchapter also applies to instruction offered at out-of-state or foreign locations by public institutions of higher education. (b) Distance learning may occur in one or both of the following forms: (1) live face-to-face instruction in which the instructor and student(s) are in the same physical setting; or (2) via any combination of remote synchronous or asynchronous correspondence- or telecommunications-based delivery systems. (c) To be identified as a live distance learning course, a student must receive one-half or more of the instruction in the same physical setting as the instructor. (d) A program is understood to be offered via distance learning if a student may complete the program without taking any courses on the main campus of the senior institution responsible for providing the instruction, or without physically attending classes within the boundaries of the service area of the community/junior college district responsible for providing the instruction. (e) Notice of each course and program offered via distance learning under the provisions of this subchapter, except to individual students, must be submitted to the Coordinating Board prior to its being offered in accordance with provisions and schedules determined by the Commissioner and the Board's uniform reporting system. The Board may also request special reports on distance learning courses and programs for inclusion in institutional and statewide reports. (f) State-funded distance learning instruction which is not reported in accordance with the Board's uniform reporting system will be disallowed for funding. (g) Following approval of its Institutional Plan for Distance Learning as required by sec.5.156 of this title, (relating to Institutional Plan for Distance Learning), the governing board of the institution may give final approval for delivering courses and programs via distance learning, with the following conditions and exceptions: (1) Each course and program offered under the provisions of this subchapter must be within the role and mission of the institution responsible for offering the instruction. (2) Prior approval may be required before an institution may offer courses and programs in certain subject area disciplines or under other conditions specified by the Board. (3) Each institution or system must have in place a process for the review and approval of distance learning plans for that entity. (4) Before initiating a program delivered by distance learning, an institution must affirm in writing its commitment to offer the program in accordance with the Principles of Good Practice for Academic Degree and Certificate Programs and Credit Courses Offered Electronically, as adopted by the Board, and the quality standards and criteria identified in this subchapter. (5) All distance education courses and programs to be offered live by a public senior institution or by a community/junior college outside its service area must be reviewed by the appropriate regional council(s) and/or peer institutions, and must be approved by the Commissioner before they are offered. (6) No distance learning doctoral degree programs may be offered without specific prior approval by the Board. (h) A class offered both on-campus and through distance learning instruction is subject to the reporting provisions of this subchapter if any student receives more than one-half of the instruction via a distance learning delivery system. (i) If an institution offers an array of courses by distance learning that would permit a student to complete a program in accordance with the definition in this subchapter, the array of courses will be considered to be a program. (j) The Board shall periodically review Institutional Plans for Distance Learning and courses and programs offered by distance learning and may disallow the offering of such courses and programs if such action is deemed to be in the interests of students, the institution or the state. (k) The Board retains final authority under statute for the offering of classes, courses, programs, and degrees, and may take whatever action it deems appropriate to comply with the Texas Education Code or to maintain a high quality and cost effective system of distance learning instruction for the state. sec.5.155. Standards and Criteria for Distance Learning. (a) Distance learning instruction offered by any combination of live and/or remote telecommunications delivery systems must meet the quality standards which an institution requires of similar instruction offered on-campus to regularly enrolled students. (b) A distance learning course which offers either regular college credit or Continuing Education Units must do so in accordance with the standards of the Commission on Colleges of the Southern Association of Colleges and Schools. (c) Students enrolled in distance learning must satisfy the same requirements for admission to the institution, to the program of which the course is a part, and to the class/section itself, as are required of on-campus students. (d) Faculty providing distance learning instruction must be selected and evaluated by the same standards, review, and approval procedures used by the institution to select and evaluate faculty responsible for on-campus instruction. Institutions must provide training and support to enhance the added skills required of faculty teaching classes via instructional telecommunications. (e) The instructor of record must participate in the delivery of instruction and evaluation of student progress. (f) Providers of graduate-level distance learning instruction must be approved by the graduate faculty of the institution. (g) All distance learning instruction must be administered under the authority of the same office or person administering the corresponding on-campus instruction. The supervision, monitoring, and evaluation processes for instructors must be comparable to those for on-campus instruction. (h) Students must be provided academic support services -- including academic advising, counseling, library and other learning resources, tutoring services, and financial aid -- that are comparable to those available for on-campus students. (i) Facilities for distance learning instruction (other than homes as instructional telecommunications reception sites) must be adequate for the purpose of delivering instruction which is comparable in quality to on-campus instruction. sec.5.156. Institutional Plan for Distance Learning. (a) Each institution seeking first-time authority to offer distance learning instruction via telecommunications technology must submit an Institutional Plan for Distance Learning for approval by the Board before offering such instruction. The plan must describe how the institution will ensure that: (1) Institutional academic and administrative policies reflect a commitment to maintain the quality of distance learning programs in accordance with the provisions of this subchapter. (2) The institution has an internal evaluation and approval process for distance learning courses and programs. (3) Courses and programs provide for timely and appropriate interaction between students and faculty, and among students. (4) The institution's faculty has responsibility for and exercises oversight over distance learning, ensuring both the rigor of programs and the quality of instruction. (5) The institution ensures that the technology used is appropriate to the nature and objectives of the programs. The institution ensures the currency of materials, programs and courses. (6) The institution's distance learning policies are clear concerning ownership of materials, faculty compensation, copyright issues, and the utilization of revenue derived from the creation and production of software, telecourses or other media products. (7) The institution provides appropriate faculty support services specifically related to distance learning. (8) The institution provides programs for faculty training and development that address both the technological and the instructional issues encountered in distance teaching. (9) The institution assesses student capability to succeed in distance learning programs and applies this information to admission and recruitment policies and decisions. (10) The institution evaluates the educational effectiveness of its distance learning programs (including assessments of student learning outcomes, student retention, and student satisfaction) to ensure comparability to campus-based programs. (11) The institution has an evaluation plan for courses or programs with regard to the effectiveness of the technology chosen to deliver the courses. (12) The institution ensures the integrity of student work and the credibility of the degrees and credits it awards. (13) The institution ensures that students have access to and can effectively use appropriate library and learning resources. (14) The institution monitors whether students make appropriate use of learning resources. (15) The institution provides laboratories, facilities, and equipment appropriate to the courses or programs. (16) If clinical or lab courses are planned, the means to facilitate those labs should be described in detail with regard to location and oversight by appropriate personnel. (17) The institution provides adequate access to the range of student services appropriate to support the programs, including admissions, financial aid, academic advising, delivery of course materials, and placement and counseling. (18) The institution provides an adequate means for resolving student complaints. (19) The institution provides to students advertising, recruiting, and admissions and financial aid information that adequately and accurately represents the programs, requirements, and services available. (20) The institution ensures that students admitted possess the knowledge and equipment necessary to use the technology employed in the program, and provides aid to students who are experiencing difficulty using the required technology. (21) The institution possesses the equipment and technical expertise required for distance learning. (22) The institution's long range planning, budgeting, and policy development processes reflect the facilities, staffing, equipment and other resources essential to the viability and effectiveness of its distance learning program. (23) The institution has a plan for the administration, operation, and use of technology to deliver distance learning which addresses the capability of the institution to provide the technology required. If the institution plans to utilize technology housed at a separate location, this information must be provided as well. (24) The institution has developed a proposed budget for delivery of distance learning courses or programs. This budget is critical in degree programs where students are dependent upon availability of courses to complete their degree. (b) An Institutional Plan for Distance Learning should be accompanied by a proposal for approval of the initial courses to be offered by the institution which addresses applicable requirements in the Institutional Plan. (c) Prior to Board consideration of an Institutional Plan, the Commissioner may approve a one-time offering of a limited number of distance learning courses for experimental purposes. sec.5.157. Instruction Plan for Live Distance Learning. (a) Unless specifically exempted by the Board, all live distance learning instruction taught for credit and which will be reported for formula funding must be submitted for review by appropriate higher education Regional Councils or peer institutions as provided in this subchapter. Non-credit adult and continuing education courses offered at a distance by universities and health science centers do not fall under the purview of this subchapter. (b) The Commissioner may exempt from live instruction review procedures the following types of live distance education courses and programs: (1) courses offered by one public institution on the campus of another public institution; at multi-institution teaching centers and university system centers, universities and at other sites designated by the Board; (2) courses taught on military bases or in correctional institutions; (3) courses offered as part of approved distance learning certificates or degree programs; and (4) courses pertaining to student teaching, internships, clinical instruction, practica, cooperative education work stations, and field classes (when limited to campus-based students). (c) Instruction offered under all such exemptions, however, must still be reported in accordance with the Board's uniform reporting system and will be subject to monitoring for quality. sec.5.158. Procedures for Review and Approval of Live Lower-Division Distance Learning. (a) Each institution must submit for review by all affected Regional Councils an Instruction Plan in accordance with sec.5.157 of this title (relating to Instruction Plan for Live Distance Learning) which lists by location all proposed live lower-division distance learning instruction. Requests for new locations and/or substantially different classes or programs at previously approved locations must be submitted on application forms provided by the Commissioner for that purpose. (b) Proposed live lower-division distance learning instruction must be reviewed by the Regional Council of the Uniform Service Region containing each proposed site for the receiving of instruction in accordance with the provisions of this subchapter. (c) The Coordinating Board recognizes Regional Councils in each of the ten state Uniform Service Regions. The presidents -- or designated representatives of each public and independent institution of higher education with its main campus in the Region comprise the Council membership. A Council Chair shall be elected by the members, with term of service to be determined by the respective Council. (d) Each Regional Council has the following responsibilities: (1) Develop and file with the Universities and Community & Technical College Divisions of the Coordinating Board its procedures and guidelines for reviewing Instruction Plans for proposed live lower-division distance learning classes, programs, and locations in the Region. (2) Facilitate inter-institutional cooperation in the conduct of distance learning instruction, assure that each institution in the Region has notification in advance of all live lower-division classes, programs, and locations proposed to be offered in the Region by any other institution, and provide each institution in the Region full opportunity to review and comment on the plans of other institutions. (3) Make recommendations to the Commissioner regarding Instruction Plans for Live Distance Learning proposed to be offered within its Uniform Service Region in accordance with the consensus views of Council members. (4) Advise the Commissioner on appropriate policies and procedures for effective state-level administration of lower-division distance learning. (5) Encourage excellence in the conduct of lower-division distance learning instruction. (6) Study cooperatively the various methods of providing lower-division distance learning instruction, and promote the use of those methods which support quality and promise the most effective and efficient use of state resources. (e) Procedures for submitting applications to the Board for authorization to offer live lower-division distance learning classes are as follows: (1) Live distance learning instruction proposed by an institution must be reviewed by the Regional Council and forwarded to the Coordinating Board by a deadline set by the Commissioner, together with the Council's recommendations for approval or disapproval. (2) If proposed live classes could affect an institution which is a member of another Regional Council, the Instruction Plan must also be sent to that institution and to the Council to which it belongs. The full membership of that Council must review the proposal and return a recommendation to the originating Council. This recommendation and that of the originating Council must both be sent to the Commissioner. (3) Recommendations of the Regional Councils must be submitted in a time frame determined by the Commissioner to permit consideration by the Board at its appropriate quarterly meeting. (4) The Commissioner will consider the recommendations of Regional Councils as well as any dissenting report filed by an institution. Subject to the following section, the Commissioner has the authority to approve or disapprove courses and Instruction Plans, and to resolve disputes between or among institutions which cannot be resolved by the Councils. The Commissioner shall devise a procedure to encourage and assist Regional Councils in the resolution of such disputes. The Commissioner will report to all affected institutions on approvals and disapprovals of classes proposed under each Instruction Plan at least two weeks before the scheduled April Board meeting, at which time the Board may hear appeals to approvals and disapprovals made by the Commissioner. (f) During the passage of the year it may be necessary for an institution to request approval of live lower-division distance learning activities not submitted as part of its Instruction Plan. Such proposed amendments to a Plan must be submitted to affected Regional Councils prior to the teaching of any additional classes. Each Council Chair will forward recommendations to the Commissioner regarding the appropriateness of such instruction. sec.5.159. Procedures for Review and Approval of Live Upper-Level and Graduate Distance Learning. (a) Senior institutions must notify all other potentially affected institutions of their plans to offer upper-level or graduate courses or programs by live distance learning for the next instructional period within the time frame prescribed by the Commissioner, and must seek to eliminate any conflicts or duplication. (b) The Commissioner has the authority to resolve disputes between or among institutions, and has the authority to approve or disapprove the offering of courses or programs. (c) The Commissioner will report to all affected institutions on approvals and disapprovals of proposed live distance learning activities at least two weeks before a regularly scheduled Board meeting, at which time the Board may hear appeals to approvals and disapprovals made by the Commissioner. sec.5.160. Approval of State-Funded Out-of-State and Foreign Courses. (a) State-funded out-of-state and foreign courses offered by Texas public institutions of higher education or by an approved consortium composed of Texas public institutions must have prior approval by the Commissioner in order for the semester credit hours or contact hours to be used for formula reimbursement. The following procedures shall apply: (1) An institution or consortium must submit to the Commissioner a form which certifies that the course meets the standards and criteria set forth in subsection (b) of this section. (2) A course that has been previously approved to be offered at an out-of-state or foreign location need not be resubmitted if the course is the same as that previously approved. (3) State-funded courses taught out of Texas are intended for students who are currently enrolled on campus at a Texas institution. Faculty should not teach courses out of state for state funding unless the faculty member is accompanying a cohort of students from a Texas institution. (4) Institutions may enroll students who reside at the out-of-state locations provided the credit hours generated by the out-of-state students are not submitted for formula funding. (b) State-funded out-of-state and foreign courses are subject to the following standards and criteria: (1) All students enrolled must meet all institutional standards for admission and must be actually admitted to the institution or one of the participating institutions in an approved consortium. All students enrolled must pay the appropriate tuition and fees for their residency category for the total number of credit hours earned. Financial aid must be available to students registering in foreign classes on the same basis as it would be for such students seeking financial aid for on-campus instruction. Additional financial aid may be furnished by the institution as appropriate. (2) Instruction must be provided by faculty of the institution or one of the consortium institutions and be supervised and evaluated according to appropriate institutional policies. Exceptions may be made by the Commissioner to take advantage of uniquely qualified instructors at an out-of-state or foreign location if the institution provides for individual justification and approval by the appropriate faculty or institutional officials. (3) Individual courses must meet the following standards and criteria: (A) Each course must be on the approved course inventory of the main campus of the institution or a consortium institution, must be a part of an approved degree or certificate program, and must be justified in terms of academic, cultural, or other resources available at the specific location(s). (B) Instruction must conform to all relevant academic policies of the institution. All classes must conform to the institution's workload and enrollment requirements, contact hour/credit ratio, and similar matters. (C) Courses may not offer credit for activities undertaken primarily for travel, recreation, or pleasure. (D) Minimum class enrollments must conform to the same standards applicable were the class to be offered on-campus. (4) Multi-course offerings must meet the following standards and criteria: (A) A group of courses taught by an individual faculty member and offered in the same time period and in the same out-of-state or foreign location may be considered as an aggregate for approval purposes. (B) Some courses may be approved within an aggregate request without satisfying paragraph (3)(A) of this subsection; however, the Commissioner may approve a multi-course aggregate only if at least one-half of the classes (making up at least one-half of the combined credit hours) comply with paragraph (3)(A) of this subsection. All other criteria in this subsection must be fully met by all courses that make up a multi-course aggregate. (5) Advertising or marketing for out-of-state and foreign classes should emphasize the instructional nature of the classes, and may not emphasize or create the impression that the classes are primarily credit-for-travel experiences. (6) Faculty and staff may not realize unusual perquisites or unusual financial gain for teaching out-of-state or foreign classes. (7) Except for funds specifically appropriated for international activities (e.g. state incentive programs, scholarships, etc.), state funds may not be used for faculty or student travel, meals and lodging, or other incidental expenses associated with out-of-state or foreign instruction. (8) Any free tickets for travel, accommodations, or other expenses provided by travel agents, carriers, or hotels must be used in direct support of the instructional program and may not be made as gifts to faculty or staff members or their families. (9) No state funding will be provided for courses or credits delivered by Instructional Telecommunications (see sec.5.152(5) of this title (relating to Definitions)) to reception sites outside state boundaries. (10) Out-of-state and foreign courses are subject to reporting in accordance with the uniform reporting system. Out-of-state and foreign courses that are not reported by location will be disallowed for funding. sec.5.161. Non-State-Funded Out-of-State and Foreign Classes. (a) In-state-non-funded credit courses are governed by the same rules and regulations as regular funded courses; non-state-funded credit courses need not be included in the live instruction plan requests. Requests for authorization to offer non-state-funded credit courses may be submitted for approval as the need arises. Non-credit adult and continuing education courses offered at a distance by universities and health science centers do not fall under the purview of this subchapter. (b) Out-of-state and foreign courses offered by public universities and health related institutions, for which no state funds are expended, may be taught without prior approval of the Board. However, prior Board approval is required for full degree programs offered under these circumstances. Institutions are expected to ensure that all such instruction meets the quality standards expected of Texas higher education institutions. (c) Community and technical colleges proposing to offer out-of-state or foreign courses for which no state funds are expended are subject to the provisions of Chapter 9, Subchapter I of this title (relating to Distance Education). This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812872 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 SUBCHAPTER K. Private and Out-of-State Public Degree-Granting Institutions Operating in Texas 19 TAC sec.5.217 The Texas Higher Education Coordinating Board proposes amendments to sec.5.217 concerning Off-Campus Operations, Changes of Level at Exempt Institutions, and Out-of-State Public Institutions. The amendments to the rules would grant an institution state authorization to seek accreditation for a higher-level degree after notifying the Commissioner of the new degree(s). This would result in less duplication of effort while allowing the accreditation process, which is the ultimate goal of certification oversight, to work. The amendments to the rules would simplify the procedures by which exempt institutions obtain state authorization to add an advanced degree level, while continuing the Board's responsibilities under law. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the rule is in effect there will be no fiscal implications as a result of enforcing or administering the rule. Dr. Barron also has determined that for the first five years the rule is in effect the public benefit will be that the interests of the state would be protected by an agreement (currently being negotiated) with the accrediting agencies to allow the staff to work directly with those agencies in reviewing the degree-level changes. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the amendments to the rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The amendment to the rule is proposed under Texas Education Code, Chapter 61, Subchapters G and H, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Off-Campus Operations, Changes of Level at Exempt Institutions, and Out-of-State Public Institutions. There were no other sections or articles affected by the proposed amendment. sec.5.217. Off-Campus Operations, Changes of Level at Exempt Institutions, and Out-of-State Public Institutions. (a)-(c) (No change.) (d) Changes of level for exempt private institutions. An institution which is exempt by accreditation from a recognized agency and which has established stability by being so accredited for the previous ten years and which wishes to expand to a different degree level not covered by its existing accreditation [may submit a description of its plans, including such information as provided for on an application form furnished by the board, instead of seeking a certificate of authority. If the plan is found to be acceptable, the institution will be granted state authorization by the commissioner to seek the change in level with the] shall, by submission of a letter to the Commissioner outlining the degree or degrees to be offered at the higher level, be granted state authorization to seek accreditation at the higher level with the recognized
                                                                                                      accrediting agency. If the recognized accrediting agency does not extend accreditation to the higher level or if the institution has not been accredited for ten or more years,
                                                                                                        [plan is found to be unacceptable ] the institution may seek a certificate of authority by the procedures listed in sec.5.215 of this title (relating to Certificate of Authority To Grant Degrees and Offer Courses at Nonexempt Institutions). (e) (No change.) This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812874 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 SUBCHAPTER L. Operation of Off-Campus Educational Units of Senior Colleges and Universities 19 TAC sec.sec.5.241-5.243 The Texas Higher Education Coordinating Board proposes amendments to sec.sec.5.241 - 5.243 concerning Operation of Off-Campus Educational Units of Senior Colleges and Universities. The amendments to the rules will provide for the creation of university system centers as well as describe their role, structure, degree programs, and other essential characteristics and they would provide for the supply/demand pathway by which public higher education could respond to areas of the state with limited or no access to public higher education. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the rule is in effect there will be no fiscal implications as a result of enforcing or administering the rule. Dr. Barron also has determined that for the first five years the rule is in effect the public benefit will be that it will provide a method for communities to demonstrate the need for educational services in a way that does not over or under-commit state resources. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the amendments to the rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The amendments to the rules are proposed under Texas Education Code, Sections 61.051 and 61.027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Operation of Off-Campus Educational Units of Senior Colleges and Universities. There were no other sections or articles affected by the proposed amendments. sec.5.241. Purpose. The provisions of this subchapter define off-campus educational units, [and] establish criteria and procedures applicable to the classification, authorization, operation, and reclassification of these units and establish the supply/demand pathway as a developmental approach to providing access which allows for the gradual increase of resources as demand grows
                                                                                                          . The provisions of this subchapter are applicable to all units which offer courses of instruction for resident credit at a public senior college or university, but are geographically separate from that college or university sec.5.242. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1)
                                                                                                            Off-campus educational unit - A subdivision under the management and control of an existing public university or central administration (hereinafter referred to as the parent institution) in a geographic setting separate from the parent institution. It exists for a specific purpose which is directly related to the teaching of courses for resident credit at the parent institution, or for providing administrative support which facilitates the teaching of such courses. An off-campus unit, as used herein, is not a separate general academic institution and therefore does not have completely independent life within itself as regards academic, administrative, and fiscal matters, but has dependence upon the parent institution in such matters. Off-campus educational units include upper-level centers such as the Rio Grande College
                                                                                                              [Uvalde Center] of Sul Ross State University. (2)
                                                                                                                Separate general academic institution - A degree-granting public university established by the Texas Legislature as an independent educational unit under the direct authority of a statutory governing board. Within the limits of the policies and regulations established by appropriate state authority and its governing board, an operationally separate institution is autonomous in academic, administrative, and fiscal matters. It is located on its own individual campus; is accredited by the Southern Association of Colleges and Schools; and has degree-granting authority. The minimum enrollment level which must be met before the Coordinating Board will consider recommending that the legislature establish an existing off-campus educational unit as a separate general academic institution is established as 3,500
                                                                                                                  [1,500] full-time student equivalents (FTSE) enrolled on the campus. Off- campus enrollments may not be counted in reaching these enrollment levels. (3)
                                                                                                                    Multi-Institution - Teaching Center An "off-campus educational unit" or an "auxiliary location" administered under a formal agreement between two or more public higher education institutions. It may also involve one or more private institutions. It exists for the purpose of providing credit instruction from several "parent institutions" in a common geographic setting. It is not a separate general academic institution and does not have independence regarding academic, administrative, or fiscal matters. Each signatory to the agreement may offer credit courses and, with prior Coordinating Board approval, may also offer degree programs by and in the name of the parent institution. (4)
                                                                                                                      University System Center - An "off-campus educational unit" of a designated existing general academic institution and created by a university system with Coordinating Board approval. It is not a separate general academic institution and does not have independence regarding academic, administrative, or fiscal matters. (5)
                                                                                                                        Upper-Level General Academic Institution - An upper-level general academic institution is established for the primary purpose of expanding baccalaureate and degree opportunities to Texas citizens in certain geographic areas in relation to one or more local public community junior colleges. An upper-level general academic institution offers junior, senior, and certain graduate level courses in programs approved by the Coordinating Board. It is restricted to accepting students eligible for upper division classification and may not offer freshman and sophomore level courses. (6)
                                                                                                                          Supply/Demand Pathway - The Supply/Demand pathway is a developmental approach to providing access which allows for the gradual increase of resources as demand grows, operating under the principle of avoiding over-commitment as well as under- commitment of state resources. sec.5.243. Supply/Demand Pathway
                                                                                                                            [Upper Level Centers]. (a) The proposed Supply/Demand Pathway shall be used as the model to address higher education needs in areas without ready geographic access to existing public higher education institutions.
                                                                                                                              [Role and scope. An upper level center is an off-campus educational unit established for the primary purpose of expanding baccalaureate and degree opportunities to Texas citizens in certain geographic areas in relation to one or more local public community junior colleges. It must have a role and scope statement, approved by the Coordinating Board, which further defines its purpose and will control the programs, courses, and organizational structure of the center. It is normally located on the campus of an existing public community junior college, thereby providing these educational opportunities at the lowest possible cost by not duplicating facilities and programs already available in the junior college. An upper level center offers junior, senior, and certain graduate level courses in programs approved by the Coordinating Board. It is restricted to accepting students eligible for upper division classification at the parent institution and may not offer freshman and sophomore level courses. Its initial classification, continued operation, and, if necessary, reclassification will be guided by the conditions and constraints contained in subsections (b)--(i) of this section.] (b) The supply/demand pathway incorporates three categories: (1)
                                                                                                                                Category A. Test the market both in terms of demand and lasting power by providing off-campus courses and/or programs by one or more institutions. Should demand decrease or not materialize, courses and programs can be discontinued and resources moved to areas of greater demand. (2)
                                                                                                                                  Category B. As demand increases, offerings may be organized through a multi- institution teaching center or as a university system center. The MITC can be housed in a shopping center, a high school, a community college, or some other type of space on loan or for a nominal cost. Alternatively, a university system may request that the Coordinating Board authorize the establishment of a university system center. The system would designate a parent institution to provide leadership for the center and would facilitate the provision of programs and resources from other institutions in the system. In either case, the system and parent institution must commit to providing a program long enough for a student to have a reasonable opportunity to graduate before the resource is withdrawn. (3)
                                                                                                                                    Category C. At least five years after a university system center is established and the center has attained a full-time equivalent enrollment of 3,500 for four fall semesters (approximating the headcount enrollment included in the current university funding formula as the minimum size needed to achieve economies of scale), the parent institution and its Board of Regents may request that the Coordinating Board review the status of the center and recommend that the Legislature reclassify the university center as an upper-level general academic institution -- a university. [(b) Authority. To be designated as an upper level center, a unit must be authorized by the Texas Legislature or by action of the Coordinating Board, based upon a request from the governing board of the parent institution. An essential feature of the authority is that it establishes the unit concerned as an element of an existing senior institution, but at a different location.] [(c) Enrollment criteria. To be designated an upper level center, a unit must meet both of the following enrollment standards, with the exception of those currently designated centers listed in subsection (i) of this section, which have been authorized by legislature or Coordinating Board authority prior to the effective date of this subchapter.] [(1) The minimum headcount enrollment on the campus of the center for the most recent fall semester is established as 1,500 students.] [(2) The minimum number of semester credit hours completed in approved resident credit courses offered on the campus of the center during the most recent academic year (fall semester, spring semester, and combined summer sessions) must be at least 30,000.] [(d) Course and program approval. An upper level center is not authorized to award degrees. Course and program offerings are subject Coordinating Board approval, and must be based upon careful surveys of need, availability of qualified faculty, and other resources. They may be offered subject to the following conditions:] [(1) Courses may lead to the fulfillment of requirements of degrees, which must be granted by and in the name of the parent institution.] [(2) Programs must be developed with the assistance and counsel of the parent institution.] [(3) Some special need courses and programs may be offered by the center subject to demonstrated need and prior approval of the parent institution and the Coordinating Board.] [(4) A center, upon approval of the parent institution and the Coordinating Board, may seek accreditation as an operationally separate unit by the Southern Association of Colleges and Schools.] [(5) Student records will distinguish between courses taken at the center and at the parent institution.] [(6) Subject to compliance with policies established by the parent institution, admissions requirements, and procedures; course approval, content, and numbering; faculty recruitment, promotion, and tenure; and other policy decisions may be under the administration and supervision of the center. If the parent institution so desires, approval and supervision in these matters may be retained by appropriate authorities or departments within the parent institution.] [(e) Administration and staffing. The upper level center will be under the general management and control of the parent institution; however, certain administrative functions may be delegated to the center. Personnel adequate in number and type to provide for student needs and to insure smooth functioning of the center should be maintained. The organizational structure will be simple compared with that of a separate institution. The size and structure of the administrative organization are subject to approval by the Coordinating Board. In determining the size and composition of the administrative and support staff the following guidelines will apply:] [(1) The parent institution shall provide for assistance to the center in business affairs, including accounting, auditing, purchasing, and budget preparation; personnel administration; admissions and maintenance of student records; data processing; and processing of library material.] [(2) With approval of the parent institution and after compliance with state regulations, the center may enter into contracts with local institutions, agencies, organizations, and firms for the delivery of administrative and support services.] [(3) To avoid unnecessary duplication, every effort should be made to obtain services from or share services with, other educational institutions where the role and scope or physical location of the center or both provide the opportunity for doing so. The following are examples of areas considered appropriate for such cooperative arrangements: student services such as health, recreation, and extra class activities; auxiliary services such as bookstore and food service; counseling and guidance; data processing, if not provided by the parent institution; safety and security; library facilities and service; audiovisual and other learning resources not provided by the parent institution; maintenance; and custodial services.] [(f) Funding. An upper level center is eligible to request funding as a "general academic institution" as defined in the Texas Legislative Appropriations Act; however, funding under this designation does not constitute recognition as a separate institution in other respects. Appropriation requests will be based on the formulas designated by the Coordinating Board for the public senior colleges and universities for those elements of institutional cost appropriate to the operation of the center.] [(g) Facilities. The acquisition of real property establishes a permanency inconsistent with the nature of such centers. Facilities should be shared with another educational institution and in most situations should be leased from the public junior college on whose campus the center is located.] [(h) Reclassification.] [(1) The Coordinating Board may consider upper level center for recommendation to the legislature as a separate general academic institution, provided all the following criteria have been met:] [(A) the role and scope of the center provides justification for consideration as a separate institution;] [(B) the standards of an upper level center have been maintained for at least five consecutive years, and the need for and support of its approved courses and programs have been demonstrated;] [(C) full-time student equivalent enrollment on the campus of the center has reached 1,500 and has been maintained for not less than two consecutive fall semesters;] [(D) enrollment projections indicate that 2,500 or more full-time student equivalents can be expected within the next five years; and] [(E) the governing board of the parent institution recommends and requests such action.] [(2) The Coordinating Board may discontinue an upper level center when:] [(A) its total headcount enrollment falls below 500 for two consecutive fall semesters and there is an absence of conclusive evidence that enrollment will increase to this level by the next fall semester;] [(B) its total on-campus semester credit hours in approved courses falls below 10,000 for an academic year and there is an absence of conclusive evidence that semester credit hours will rise to this level during the next academic year; or] [(C) the governing board of the parent institution recommends such action.] [(i) Currently designated centers. The upper level centers recognized at the time of adoption of the provisions of this subchapter and subject to all the foregoing provisions governing such centers, with the exception of subsection (c) of this section on enrollment criteria, are as follows:] [(1) Texas A&I University at Laredo. By action of the 61st Legislature (House Bill 607, May 27, 1969), and the 63rd Legislature (Senate Bill 106, May 12, 1973), Texas A&I University at Laredo is also exempt from subsection (d)(first sentence) of this section and subsection (d)(1) of this section, in that it may award degrees in its own name.] [(2) University of Houston Victoria Center. [(3) East Texas State University Center at Texarkana.] [(4) Pan American University Brownsville Center.] [(5) Sul Ross State University Uvalde Study Center.] This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812875 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 19 TAC sec.5.246 The Texas Higher Education Coordinating Board proposes new sec.5.246 concerning Operation of Off-Campus Educational Units of Senior Colleges and Universities. The new section to the rules will provide for the creation of university system centers as well as describe their role, structure, degree programs, and other essential characteristics and they would provide for the supply/demand pathway by which public higher education could respond to areas of the state with limited or no access to public higher education. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the rule is in effect there will be no fiscal implications as a result of enforcing or administering the rule. Dr. Barron also has determined that for the first five years the rule is in effect the public benefit will be that it will provide a method for communities to demonstrate the need for educational services in a way that does not over or under-commit state resources. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the new section to the rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The new section to the rule is proposed under Texas Education Code, Sections 61.051 and 61.027, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Operation of Off-Campus Educational Units of Senior Colleges and Universities. There were no other sections or articles affected by the proposed new rule. sec.5.246. University System Centers. (a) Role and Mission. University system centers are off-campus educational units of a designated existing public university and created by a university system with Coordinating Board approval. The centers are intended to respond to the academic needs of local regions and provide greater access to students who are location bound. The strength of a university system center is the quality of its teaching and its focus on student-learning outcomes. (b) Funding. State funding for university centers shall be provided through the parent institution's formula appropriation. (c) Course and program approval. University system centers shall focus on teaching and emphasize a limited range of baccalaureate programs. Additional programs may be offered by other institutions within the university system. (1) Upon review and approval of the Coordinating Board, the parent university shall be authorized to offer high-demand degrees at the university system center. (2) A limited range of master's programs in such areas will also be allowed. (3) Additional criteria for courses and programs shall include the following: (A) Programs offered by the university system center's own faculty should have average enrollments of at least 75 students. (B) Programs no longer meeting adequate enrollment levels shall be continued long enough for a student to have a reasonable opportunity to graduate. (C) Degrees shall be awarded by the parent institution or the institution offering the degree. (D) Additional baccalaureate and master's degree programs may be delivered by telecommunications or on-site by the parent institution and by other universities as arranged by the university system, which will provide support in the delivery of programs to meet local needs. Programs offered by this method must be recommended by the system and reviewed and approved by the Coordinating Board in compliance with its rules. (d) Technology. University centers shall take full advantage of technological advances that promise to improve quality of learning, access to programs, and efficient use of existing resources. Libraries shall be models of the effective use of technology in libraries and depend heavily on the TexShare electronic resource sharing efforts. (e) Administrative and Academic Support. The university system center shall be headed by a dean or executive director as determined by the parent university and system. The number of local administrators and faculty shall be less than that at a free standing general academic institution of comparable size. Additional administrative and academic program support shall be provided by both the parent institution and the system. (f) University system centers: (1) Shall use locally provided facilities, located on or near community or technical college campuses whenever possible. (2) Shall develop articulation agreements and partnerships with local community and technical colleges and other universities. (3) Shall generate formula appropriations for semester credit hours taught. Appropriations shall be made to the parent university and to other universities that provide courses at the center. (4) Shall develop flexible scheduling and course options, credit and non-credit course and program offerings, distance education opportunities, and support services for traditional and non-traditional students from diverse backgrounds. (5) Shall meet the Coordinating Board's Technology Standards. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812876 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 CHAPTER 9. Program Development in Public Community/Junior College Districts and Technical Colleges SUBCHAPTER H. Partnerships Between Secondary Schools and Public Two-Year Associate Degree-Granting Institutions 19 TAC sec.sec.9.141-9.146 The Texas Higher Education Coordinating Board proposes new sec.sec.9.141 - 9.146 concerning Partnerships Between Secondary Schools and Public Two-Year Associate Degree- Granting Institutions. The new rules will explain the types of partnerships between high schools and public two-year colleges; list required elements to be included in partnership agreements; and establish criteria to ensure quality instruction at the college-level in courses offered for concurrent credit. Glenda Barron, Assistant Commissioner for Community and Technical Colleges has determined that for the first five-year period the rules are in effect there will be no fiscal implications as a result of enforcing or administering the rules. Dr. Barron also has determined that for the first five years the rules are in effect the public benefit will be that there will be clarification of the different kinds of courses which the partnership agreements allow and will establish criteria to be covered in partnership agreements to ensure and promote quality instruction at the college level for all students. There will be no effect on state or local government or small businesses. There is no anticipated economic costs to persons who are required to comply with the rules as proposed. Comments on the new rules may be submitted to Dr. Don W. Brown, Commissioner of Higher Education, Texas Higher Education Coordinating Board, P.O. Box 12788, Capitol Station, Austin, Texas 78711. The new rules are proposed under Texas Education Code, Sections 130.001(b)(3)- (4), 130.008, 130.090, and 135.06(d), which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Partnerships Between Secondary Schools and Public Two-Year Associate Degree-Granting Institutions. There were no other sections or articles affected by the proposed new rules. sec.9.141. Purpose. (a) The Coordinating Board encourages and supports partnerships between secondary schools and public two-year associate degree-granting institutions, including such initiatives as Tech-Prep and concurrent course credit which allow secondary students to receive both high school and college-level credit for college-level courses. (b) The purpose of this subchapter shall be to provide rules and regulations for public community/junior and technical colleges in partnership initiatives with secondary schools. sec.9.142. Authority. Texas Education Code, Sections 130.001(b)(3)-(4), 130.008, 130.090, and 135.06(d), authorize the Coordinating Board to adopt policies, enact regulations, and establish rules for public community/junior colleges to enter into agreements with secondary schools to offer courses which grant credit toward the student's high school academic requirements and/or college-level credit in cooperation with a public two-year associate degree-granting institution. sec.9.143. Types of Partnerships. (a) Partnerships for Award of High School Credit Only. Contractual agreements between public school districts and public two-year associate degree-granting institutions in which the latter provides instruction in courses to high school students for award of high school credit only. Rules for these agreements are located in Subchapter G, sec.9.125 of this title (relating to Contractual Agreements). (b) Partnerships for Award of Concurrent Course Credit. Partnerships between secondary schools and public two-year associate degree-granting institutions in which the latter provides instruction to high school students for immediate award of both high school credit and college associate degree credit. (c) Partnerships for Tech-Prep Programs. Partnerships between public school districts and public two-year associate degree-granting institutions to allow for the articulation of high school technical courses taught by the high school to high school students for immediate high school credit and later college credit, to be awarded upon enrollment of the students in a community or technical college in an associate degree or certificate program. (d) Partnerships for Remedial Developmental Instruction for High School Graduates. Partnerships between public school districts and public two-year associate degree-granting institutions to provide instruction by the latter to high school students for either remedial course work to prepare students to pass the Texas Assessment of Academic Skills (TAAS) test or developmental course work to prepare the students to pass the Texas Academic Skills Program (TASP) test. sec.9.144. Partnership Agreements. (a) Need For Partnership Agreement. For any instructional partnership between a secondary school and a public two-year associate degree-granting institution, an agreement must be approved by the governing boards or designated authorities of both the public school district or private secondary school and the public two- year associate degree-granting institution prior to the offering of courses. (b) Elements of Partnership Agreements. Any partnership agreement as described in sec.9.143 of this title (relating to Types of Partnerships) must address the following elements: (1) student eligibility requirements; (2) faculty qualifications; (3) location and student composition of classes; (4) provision of student learning and support services; (5) eligible courses; (6) grading criteria; (7) transcripting of credit; and (8) funding provisions. sec.9.145. Concurrent Course Credit. (a) Student Eligibility Requirements. (1) To be eligible for enrollment in a concurrent credit course in an associate degree or level two certificate (TASP-eligible) program, the high school student must present a passing score on the Texas Academic Skills Program (TASP) test or a Board-approved alternative assessment instrument in at least one area (mathematics, reading, writing) as deemed applicable by the college for the intended concurrent course in which the student shall enroll. Students who are exempt from taking the TASP test or the alternative assessment are also exempt for purposes of concurrent course credit. Concurrent course credit students must comply with the rules and regulations of Chapter 5, Subchapter P of this title (relating to Testing and Developmental Education). (2) To be eligible for enrollment in a concurrent credit course in a TASP-waived college certificate program, the high school student must have passed all sections of the exit-level TAAS test. (3) Students who are home-schooled or enrolled in private or non-accredited secondary schools must satisfy paragraph (1) of this subsection. (4) The class load of a high school student shall not exceed two college credit courses per semester. However, under special circumstances that indicate a student with exceptional academic abilities is capable of college-level work, based on such factors as grade-point average, ACT or SAT scores, and other assessment indicators, the chief academic officer of a community or technical college may grant exceptions to this requirement. (b) Faculty Qualifications. (1) All instructors must meet the minimal requirements as specified by the Commission on Colleges of the Southern Association of Colleges and Schools. (2) The college shall select, supervise, and evaluate instructors for courses which result in the award of concurrent credit. (3) Instructors teaching courses which result in the award of concurrent credit must be regularly employed faculty members or must meet the same standards, review, and approval procedures used by the college to select faculty responsible for teaching the same courses at the main campus of the college. (4) Official transcripts of instructors must be kept on file at the college. (c) Location and Student Composition of Classes for Concurrent Course Credit. Concurrent credit courses must be taught on the college campus or in classes composed solely of concurrent, advanced placement (AP), and/or college credit students. (d) Student Services. (1) Students must be given access to the college library, accorded appropriate privileges, and have adequate library resources convenient for use at the site where concurrent course credit is offered. (2) Students enrolled in concurrent course credit must be provided adequate academic support services including academic advising and counseling. (e) Eligible Courses. (1) Courses offered for concurrent course credit must be identified as college- level academic courses in the current edition of the Community College General Academic Course Guide Manual or as college-level technical courses in an approved Tech-Prep or Associate of Applied Science (AAS) degree program. (2) Instruction and materials for concurrent course credit must be at the equivalent level of the instruction and materials used for the identical course taught on the main campus of the college. (f) Grading Criteria. For technical and academic concurrent credit courses, grading criteria should be devised to allow faculty the opportunity to award high school only or high school and college credit depending upon student performance. (g) Transcripting of Credit. For technical and academic concurrent credit courses, high school as well as college credit should be transcripted immediately upon a student's successful completion of the performance required in the course. (h) Funding. (1) The state funding for concurrent credit courses will be available to both public school districts and public two-year associate degree-granting institutions based upon the current agreement between the Commissioner of Education and the Commissioner of Higher Education. (2) The college may claim funding for all students enrolled in concurrent course credit. (3) Only a public community/junior college may waive tuition and fees for a Texas public high school student enrolled in a course for which the student may receive concurrent course enrollment credit. Public technical colleges may not waive tuition and fees. sec.9.146. Remedial and Developmental Instruction for High School Students. (a) As outlined under Chapter 9, Subchapter G, sec.9.125 of this title, (relating to Contractual Agreements for Instruction with Public Secondary Schools) community/junior and technical colleges may contract with public secondary school districts to provide remedial courses for students enrolled in public secondary schools in preparation for graduation from high school. Such courses are not eligible for state formula funding. (b) High school students who have passed all sections of the exit-level TAAS test may be permitted to enroll in state-funded developmental courses offered by a college at the college's discretion if a need for such course work is indicated by student performance on the TASP test or an approved alternative assessment instrument. (c) Remedial and developmental courses may not be offered for concurrent course credit. (d) Only a public community/junior college may waive tuition and fees for a Texas public high school student enrolled in a remedial course or a developmental course. Public technical colleges may not waive tuition and fees. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 13, 1998. TRD-9812877 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Proposed date of adoption: October 23, 1998 For further information, please call: (512) 483-6162 TITLE 22. EXAMINING BOARDS PART X. Texas Funeral Service Commission CHAPTER 203. Licensing and Enforcement - Specific Substantive Rules 22 TAC sec.203.17 The Texas Funeral Service Commission proposes an amendment to sec.203.17, concerning clarification of other facilities necessary in a preparation room. The section is being amended to delete subsection (a) and the language contained in subsections (b) and (c). Eliza May, Executive Director, has determined that for the first five-year period the section is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the section. Ms. May also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be deletion of language no longer applicable to the rule. There will be no effect on small businesses. There is no anticipated economic cost for persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Eliza May, Executive Director, Texas Funeral Service Commission, 510 South Congress Avenue, Suite 206, Austin, Texas 78704-1716. The amendment is proposed under Texas Civil Statutes, Article 4582b, sec.5, which authorizes the Texas Funeral Service Commission to adopt rules to administer the statute. No other statute, code, or article is affected by the proposed amendment. sec.203.17. Clarification of Other Facilities Necessary in a Preparation Room. [(a)] The commission will approve only those preparation rooms which meet the requirements of Texas Civil Statutes, Article 4582b, sec.4(C)(4), and the following minimum standards listed in paragraphs (1)-(12) of this section
                                                                                                                                      prescribed by the commission: (1) must be of sufficient size and dimensions to accommodate an operating table, a sink with water connections, and an instrument table, cabinet, or shelves: (A) the operating table must have a rust proof metal or porcelain top, with edges raised at least 3/4 inch around the entire table and a drain opening at the lower end; (B) the sink must have hot and cold running water and drain freely; (C) the faucet must be equipped with an aspirator; (2) must contain an injection/embalming machine and sufficient supplies and equipment for normal operations; (3) must be clean, sanitary, and not used for other purposes; (4) must not have defective construction which permits the entrance of rodents; (5) must not have evidence of infestation of insects or rodents; (6) must be private and have no general passageway through it; (7) must be properly ventilated with an exhaust fan that provides at least five room air exchanges per hour; (8) must not have unenclosed or public restroom facilities located within the room; (9) must have walls which run from floor to ceiling and be covered with tile, or by plaster or sheetrock painted with washable paint; (10) must have floors of concrete with a glazed surface, or tiled in order to provide the greatest sanitary condition possible; (11) must have doors, windows, and walls constructed to prevent odors from entering any other part of the building; (12) must have all windows and openings to the outside screened. [(b) The majority owner or designated agent of record of a funeral establishment may submit a written petition to the commission requesting an exemption to subsection (a) of this section. Each petition shall clearly state:] [(1) each location's name and address;] [(2) that the exempt establishment is located within 50 miles of the facility at which embalming services are to be performed;] [(3) that no embalming services will be performed at the exempt funeral establishment location.] [(c) Upon receipt of the petition and the determination by the executive director that the criteria listed in subsection (b) of this section have been met, the executive director will notify the petitioner that the exemption has been granted and will remain in effect so long as the criteria listed in subsection (b) of this section remain unchanged.] This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 10, 1998. TRD-9812649 Eliza May, M.S.S.W. Executive Director Texas Funeral Service Commission Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 479-7222 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 1.General Administration SUBCHAPTER C.Maintenance Taxes and Fees 28 TAC sec.1.406, sec.1.407 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.1.406 and sec.1.407, concerning assessment of maintenance taxes and fees. The repeal of these sections is necessary to eliminate provisions which have become obsolete. Section 1.406 adopted the maintenance tax rates for 1988 and sec.1.407 adopted the maintenance tax rates for 1989. Those taxes have been assessed and the sections are no longer necessary. Karen A. Phillips, Chief Financial Officer, has determined that for each year of the first five-year period the repeal is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal. There will be no effect on local employment or local economy as a result of the repeal. Ms. Phillips has determined that for each year of the first five years the repeal is in effect, the public benefit anticipated as a result of the repeal of the sections will be more efficient regulation of insurance. There will be no effect on small businesses as a result of the repeal of the sections. There is no anticipated economic cost to persons as a result of repealing the sections. Comments on the proposal must be submitted in writing within 30 days after publication of the proposed repeal in the Texas Register to Lynda Nesenholtz, General Counsel and Chief Clerk, Mail Code #113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. A copy of the comments should be submitted to Karen A. Phillips, Chief Financial Officer, Mail Code #108-3A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714- 9104. The repeals are proposed under the Insurance Code, Articles 4.17, 5.12, 5.24, 5.49, 5.68, 9.46, 20A.33, 21.07-6, sec.21, and 1.03A, which authorizes the commissioner of insurance to assess maintenance taxes and fees on lines of insurance and related activities. Article 4.17 establishes a maintenance tax based on insurance premiums for life, accident, and health coverage and the gross considerations for annuity and endowment contracts. Article 5.12 establishes a maintenance tax based on insurance premiums for motor vehicle coverage. Article 5.24 establishes a maintenance tax based on insurance premiums for casualty insurance and fidelity, guaranty and surety bonds coverage. Article 5.49 establishes a maintenance tax based on insurance premiums for fire and allied lines coverage, including inland marine. Article 5.68 establishes a maintenance tax based on insurance premiums for workers' compensation coverage. Article 9.46 establishes a maintenance fee based on insurance premiums for title coverage. Article 20A.33 establishes an annual tax based on the gross amounts of revenues collected for the issuance of health maintenance certificates or contracts. Article 21.07-6, sec.21 establishes a maintenance tax based on the gross amount of administrative or service fees for third party administrators. Article 1.03A authorizes the commissioner of insurance to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The following articles of the Insurance Code are affected by these rules: Articles 4.17, 5.12, 5.24, 5.49, 5.68, 9.46, 20A.33, 21.07-6, sec.21, 21.46, and 21.54. sec.1.406.Assessment of Maintenance Taxes and Fees, 1988. sec.1.407.Assessment of Maintenance Taxes and Fees, 1989. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812995 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 CHAPTER 5.Property and Casualty Insurance SUBCHAPTER B.Insurance Code, Chapter 5, Subchapter B Rules to Implement the Omnibus Health Care Rescue Act's Reduction in Certain Professional Liability Insurance Premiums 28 TAC sec.sec.5.1301-5.1309 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.sec.5.1301-5.1309, relating to the reduction in certain medical professional liability insurance premiums in accordance with Article 5.15-4. Article 5.15-4 was enacted by the 71st Legislature in 1989 to provide a reduction in professional liability insurance premiums for health care professionals and health clinics who were providing charity care or services in 10% or more of their patient encounters. Sections 5.1301- 5.1309 were adopted to implement the provisions of Article 5.15-4 and to provide orderly and efficient procedures for determining which health care professionals and health clinics qualify for health care liability insurance premium reductions. These sections specify the filing requirements with the department that participating insurers must fulfill and they address the amount of premium discount that health care providers may receive. These sections also specify the qualifications that health care professionals and health clinics must meet to be entitled to a discount and specify the requirements for requesting a discount. These sections further provide audit procedures, penalties for failure to meet the statutory requirements, provisions governing the insurers' right to cancel or non renew policies, data collection and reporting requirements, and an expiration date for the program. Article 5.15-4 of the Insurance Code, concerning the reduction in certain medical professional liability insurance premiums expired on September 1, 1997. Repeal of sec.sec.5.1301-5.1309 is necessary because the statutory authority that formed the basis for the implementation of these sections has expired. Marilyn Hamilton, deputy commissioner for the commercial property/casualty group has determined that for the first five-year period the repeal will be in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal and that there will be no effect on local employment or the local economy. Ms. Hamilton has also determined that for each year of the first five years the proposed repeal is in effect the public benefit anticipated as a result of administering the repeal will be to clarify the administrative rules regulating professional liability insurance by deleting sections that no longer have a statutory basis for implementation and that might otherwise result in confusion to the public. There is no anticipated adverse economic effect on persons who are required to comply with the repeal as proposed. Comments on the proposal to be considered by the Department must be submitted within 30 days after publication of the proposed section in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Texas Department of Insurance, P. O. Box 149104, Mail Code 113-2A, Austin Texas 78714-9104. An additional copy of the comment should be submitted to Marilyn Hamilton, Deputy Commissioner for the Commercial Property/Casualty Group, Texas Department of Insurance, P. O. Box 149104, MC 104-PC, Austin Texas 78714-9104. A request for public hearing on the proposed repeal must be submitted separately to the Office of the Chief Clerk. The repeals are proposed under the Insurance Code, Articles 5.15-4, 5.98, and 1.03A; and the Government Code sec.sec.2001.004 et seq. Article 5.15-4 provided that the department shall administer this article and shall adopt necessary rules, forms, endorsements, and procedures to carry out this article. Article 5.98 provides that the Commissioner of Insurance may adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5, Texas Insurance Code entitled Rating and Policy Forms, and which contains statutes governing medical professional liability insurance. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code sec.sec.2001.004 et seq. (Administrative Procedures Code) authorizes and requires each state agency to adopt rules of practice stating the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. The following articles of the Insurance Code are affected by these repeals: Insurance Code, Article 5.15-4. sec.5.1301.Definitions. sec.5.1302. Insurer Filing Requirements. sec.5.1303.Determination of Premium Discount Amount. sec.5.1304.Qualifications for Premium Discount. sec.5.1305.Request for Premium Discount. sec.5.1306.Audit and Penalty Provisions. sec.5.1307.Prohibitions and Sanctions on Insurers. sec.5.1308.Data Collection and Reporting Requirements. sec.5.1309.Expiration. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813015 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER D.Fire and Allied Lines Insurance Prohibited Practices by Insurers Subject to the Insurance Code, Article 5.26 28 TAC sec.sec.5.3001-5.3004 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.sec.5.3001-5.3004, relating to the prohibition against regulated and nonregulated insurers entering into guaranty agreements, indemnity agreements, or reinsurance agreements designed to circumvent the application of Article 5.26 to regulated insurers. Sections 5.3001 and 5.3002 describe certain practices that insurers were engaging in to circumvent the promulgated rating system established by Article 5.26. These sections focused on the practice of nonregulated insurers issuing policies at rates less than those authorized for use by regulated insurers and these blocks of policies were being assumed by the rate regulated insurers through guaranty, indemnity, or reinsurance agreements. Through these arrangements, the regulated insurers were charging rates that were inadequate and not actuarially sound and the board was concerned that such practices could lead to insurer insolvency. The board was particularly concerned with the practice of regulated insurers establishing affiliated Lloyds companies and reciprocal exchanges expressly for the purpose of writing policies below the promulgated rate and then ceding those policies to the regulated affiliate. Section 5.3002 specified these practices to be in violation of Articles 5.26 and 5.41, issued a mandate to insurers to cease and desist from such practices, and issued a directive to the commissioner to investigate insurers engaging in such practices. Sections 5.3003 and 5.3004 included multi-peril policies under the prohibitions described in sec.sec.5.3001 and 5.3002 if the multi-peril policy included coverage that was regulated under Article 5.26. In 1991, Articles 5.26 and 5.41 were amended to reflect that a new benchmark rating system, outlined in Subchapter M, would be used to regulate residential property insurance rates instead of the promulgated rating system. Simultaneous with these amendments to Articles 5.26 and 5.41, Article 5.101 was enacted to establish the benchmark rating system. The effect of these legislative changes was that the benchmark rating system supplanted the promulgated rating system for residential property insurance rates. The repeal of sec.sec.5.3001 through 5.3004 is necessary because the department may not enforce these sections since their enforcement was dependent upon a promulgated rating system. Since the promulgated rating system no longer has a function in the present benchmark rating system, sec.sec.5.3001 through 5.3004 need to be repealed to remove sections which no longer serve a purpose. David Durden, deputy commissioner for the automobile and homeowners group has determined that for the first five-year period the repeal will be in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal and there will be no effect on local employment or the local economy. Mr. Durden has also determined that for each year of the first five years the proposed repeal is in effect, the public benefit anticipated as a result of administering the repeal will be to clarify the administrative rules regulating fire insurance and allied lines of insurance by deleting an unnecessary section that might otherwise result in confusion to the public. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. Comments on the proposal to be considered by the Department must be submitted within 30 days after publication of the proposed section in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Texas Department of Insurance, P. O. Box 149104, Mail Code 113-2A, Austin Texas 78714-9104. An additional copy of the comment should be submitted to David Durden, Deputy Commissioner for the Automobile and Homeowners Group, Texas Department of Insurance, P. O. Box 149104, MC 104-5A, Austin Texas 78714-9104. A request for public hearing on the proposed repeal must be submitted separately to the Office of the Chief Clerk. The repeals are proposed under the Insurance Code, Articles 5.98 and 1.03A; and the Government Code sec.sec.2001.004 et seq. Article 5.98 provides that the Commissioner of Insurance may adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5, Texas Insurance Code entitled Rating and Policy Forms, and which contains statutes governing fire insurance and allied lines. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code sec.sec.2001.004 et seq. (Administrative Procedures Code) authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. The following articles of the Insurance Code are affected by these repeals: Insurance Code, Articles 5.26 and 5.41. sec.5.3001.Purpose, Scope, Findings, and History. sec.5.3002. Prohibited Practices, Specifications of Illegal Acts. sec.5.3003. Purpose and Scope. sec.5.3004. Prohibited Practices. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813009 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 Rate Deviations and the Payment of Dividends to Policyholders for Fire and Allied Lines Insurance 28 TAC sec.5.3101 (Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.5.3101, concerning commercial and residential property insurance rate deviations, policy form deviations, and dividend payments. Article 5.25 established a promulgated rating system which specified that any insurer writing commercial or residential property insurance in Texas was required to issue policies at the premium rates fixed, determined, and promulgated by the board. Article 5.26 specified that any insurer desiring to write commercial or residential property insurance at rates different from those promulgated by the board was required to make application to the board requesting permission to file a rate deviation of a uniform percentage on a statewide basis. Section 5.3101 was adopted to regulate insurers seeking to make any deviation on a commercial or residential property insurance rate or premium, seeking to change the promulgated policy provisions, or seeking to pay a policy dividend in a manner that would circumvent the rates promulgated by the board. Section 5.3101 placed a general prohibition on rate deviations, changes to the promulgated policy forms, and payment of dividends except those made under the authorization of statute. In 1991, Articles 5.25, 5.26, and 5.41 were amended to reflect that a new benchmark rating system, outlined in Subchapter M, would be used to regulate residential property insurance rates instead of the system of promulgated rates with rate deviation filings. Additionally, Article 5.25, 5.26, and 5.41 were amended to reflect that commercial property insurance rates would no longer be promulgated but would be placed under the file and use regulatory scheme in Article 5.13-2. Simultaneous with these amendments to Articles 5.25, 5.26, and 5.41, Article 5.101 was enacted to establish the benchmark rating system. The effect of these legislative changes was that the benchmark rating system supplanted both the promulgated rating system in Article 5.25 for residential property insurance rates and the provisions for rate deviation filings in Article 5.26. The repeal of sec.5.3101 is necessary because rate deviation filings have no function in the rate setting process and bear no relationship to the benchmark rating system which is currently used for residential property rate regulation. Since rate deviation filings no longer have a function in the present residential or commercial property rating system, it is necessary to repeal sec.5.3101 to remove a section which no longer serves a purpose. David Durden, deputy commissioner for the automobile and homeowners group has determined that for the first five-year period the repeal will be in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal and that there will be no effect on local employment or the local economy. Mr. Durden has also determined that for each year of the first five years the proposed repeal is in effect, the public benefit anticipated as a result of administering the repeal will be to clarify the administrative rules regulating residential and commercial property insurance by deleting an unnecessary section that might otherwise result in confusion to the public. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. Comments on the proposal to be considered by the Department must be submitted within 30 days after publication of the proposed section in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Texas Department of Insurance, P. O. Box 149104, Mail Code 113-2A, Austin Texas 78714-9104. An additional copy of the comment should be submitted to David Durden, Deputy Commissioner for the Automobile and Homeowners Group, Texas Department of Insurance, P. O. Box 149104, MC 104-5A, Austin Texas 78714-9104. A request for public hearing on the proposed repeal must be submitted separately to the Office of the Chief Clerk. The repeal is proposed under the Insurance Code, Articles 5.98 and 1.03A; and the Government Code sec.sec.2001.004 et seq. Article 5.98 provides that the Commissioner of Insurance may adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5, Texas Insurance Code entitled Rating and Policy Forms, and which contains statutes governing commercial and residential property insurance. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code sec.sec.2001.004 et seq. (Administrative Procedures Code) authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. The following articles of the Insurance Code are affected by this repeal: Insurance Code, Articles 5.25, 5.26, and 5.41. sec.5.3101.General Prohibition. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813008 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 Mitigation of Residential Property Insurance Losses 28 TAC sec.5.3600 (Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.5.3600 relating to the Residential Property Insurance Loss Mitigation Advisory Committee (Advisory Committee). Commissioner's Order Number 94-1029 created the Advisory Committee and appointed the members. The purpose of the Advisory Committee is to advise and make recommendations, including proposals for rules and legislation, to the Commissioner of Insurance on reducing residential property insurance losses. The purpose of this section is to specify the purpose, tasks, reporting requirements, membership composition, and duration of the Advisory Committee. Subsection (d) specifies that the Advisory Committee is authorized to operate until December 31, 1995, at which time, the Advisory Committee shall be automatically abolished unless continued in existence by order of the commissioner. Since the Advisory Committee was not continued in existence by order of the commissioner, then it was automatically abolished by operation of this rule on December 31, 1995 making the repeal of this section necessary with the purposes and objectives of the Advisory Committee having been fulfilled. David Durden, deputy commissioner for the automobile and homeowners group has determined that for the first five-year period the repeal will be in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal and that there will be no effect on local employment or the local economy. Mr. Durden has also determined that for each year of the first five years the proposed repeal is in effect the public benefit anticipated as a result of administering the repeal will be to clarify the administrative rules regulating residential property insurance by deleting an unnecessary section that might otherwise result in confusion to the public. There is no anticipated economic cost to persons who are required to comply with the repeal as proposed. Comments on the proposal to be considered by the Department must be submitted within 30 days after publication of the proposed section in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Texas Department of Insurance, P. O. Box 149104, Mail Code 113-2A, Austin Texas 78714-9104. An additional copy of the comment should be submitted to David Durden, Deputy Commissioner for the Automobile and Homeowners Group, Texas Department of Insurance, P. O. Box 149104, MC 104-5A, Austin Texas 78714-9104. A request for public hearing on the proposed repeal must be submitted separately to the Office of the Chief Clerk. The repeal is proposed under the Insurance Code, Articles 5.98 and 1.03A; and the Government Code sec.sec.2001.004 et seq. Article 5.98 provides that the Commissioner of Insurance may adopt reasonable rules that are appropriate to accomplish the purposes of Chapter 5, Texas Insurance Code entitled Rating and Policy Forms, and which contains statutes governing residential property insurance. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code sec.sec.2001.004 et seq. (Administrative Procedures Code) authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. The following articles of the Insurance Code are affected by this repeal: Insurance Code, Articles 5.25, and 5.33. sec.5.3600.Residential Property Insurance Loss Mitigation Advisory Committee. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813014 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 CHAPTER 7.Corporate and Financial Regulation The Texas Department of Insurance proposes the repeal of sec.sec.7.14, 7.63- 7.64, 7.301-7.309, 7.631-7.636, and 7.901. The repeal of these sections is necessary to eliminate provisions which have become obsolete, unnecessary or redundant of other statutes or rules. Section 7.14 concerns the annual credit insurance privilege fee. Insurance Code, Article 4.09, which authorized the fee has been repealed. Sections 7.63 and 7.64 concern the adoption by reference of annual statement blanks, instructions, and other forms used by insurers and certain other entities regulated by the Texas Department of Insurance to report their financial condition and business operations and activities. Those documents have been filed with the department and the sections are no longer necessary. Sections 7.301-7.309 concern the regulation and reporting of securities lending transactions. Insurance Code, Article 3.33 now governs these transactions. Sections 7.631-7.636 concern the withdrawal from the state by the use of reinsurance agreements. Insurance Code, Article 21.49-2C now governs this activity. Section 7.901 concerns insider trading and proxy solicitation. Insurance Code, Article 21.49-1 no longer requires the department to protect the interests of shareholders in transactions governed by the article, therefore section 7.901 is unnecessary. Jose Montemayor, associate commissioner for the financial program, has determined that for each year of the first five-year period the repeal of the sections as proposed is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal of the sections. There will be no effect on local employment or local economy as a result of the repeal of the sections. Mr. Montemayor has determined that for each year of the first five years the repeal of the sections as proposed is in effect, the public benefit anticipated as a result of the repeal will be more efficient regulation of insurance. There will be no effect on small businesses as a result of the repeal of the sections. There is no anticipated economic cost to persons as a result of repealing the sections. Comments on the proposal must be submitted in writing within 30 days after publication of the proposal in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comments should be submitted to Jose Montemayor, Associate Commissioner- Financial Program, Mail Code 305-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. SUBCHAPTER A.Examination and Financial Analysis 28 TAC sec.7.14, sec.7.63, sec.7.64 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The repeal of the sections is proposed under the Insurance Code, Articles 1.11, 3.33, 3.53, 21.49-1, 21.49-2C and 1.03A. Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business. Article 3.33 governs investments for life insurance companies, including securities lending transactions, and authorizes the commissioner to adopt rules to implement the article. Article 3.53 authorizes the commissioner to adopt rules to regulate credit life insurance. Article 21.49-1 authorizes the commissioner to adopt rules to implement the provisions of this article (The Insurance Holding Company System Regulatory Act). Article 21.49-2C now governs the withdrawal of an insurer from the state, by reinsurance or otherwise. Article 1.03A authorizes the commissioner to adopt rules for the conduct and execution of the duties of the department as authorized by statute. The following are the articles of the Insurance Code that are affected by the repeal of these sections: Articles 1.11, 3.33, 3.53, 21.49-2C, 21.49-1. sec.7.14.Annual Credit Insurance Privilege Fee under the Insurance Code, Article 3.53. sec.7.63.Requirements for Filing the 1993 Annual and 1994 Quarterly Statements, Other Reporting Forms and Diskettes. sec.7.64.Requirements for Filing the 1994 Annual and 1995 Quarterly Statements, Other Reporting Forms and Diskettes. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812996 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER C.Transfer of Securities Under Certain Agreements 28 TAC sec.sec.7.301-7.309 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The repeal of the sections are proposed under the Insurance Code, Articles 1.11, 3.33, 3.53, 21.49-1, 21.49-2C and 1.03A. Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business. Article 3.33 governs investments for life insurance companies, including securities lending transactions, and authorizes the commissioner to adopt rules to implement the article. Article 3.53 authorizes the commissioner to adopt rules to regulate credit life insurance. Article 21.49-1 authorizes the commissioner to adopt rules to implement the provisions of this article (The Insurance Holding Company System Regulatory Act). Article 21.49-2C now governs the withdrawal of an insurer from the state, by reinsurance or otherwise. Article 1.03A authorizes the commissioner to adopt rules for the conduct and execution of the duties of the department as authorized by statute. The following are the articles of the Insurance Code that are affected by the repeal of these sections: Articles 1.11, 3.33, 3.53, 21.49-2C, 21.49-1. sec.7.301. Purpose. sec.7.302. Definitions. sec.7.303. Securities Lending Agreement. sec.7.304. Investment of Collateral. sec.7.305. Maintenance of the Collateral (Marking-to-Market). sec.7.306. Reporting of Securities Lending Transactions. sec.7.307. Availability of Records. sec.7.308. Noncompliance with These Sections. sec.7.309. Severance Clause. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812997 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER F.Reinsurance Foreign Insurers' Withdrawal From State By Virtue of Reinsurance Agreements 28 TAC sec.sec.7.631-7.636 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The repeal of the sections are proposed under the Insurance Code, Articles 1.11, 3.33, 3.53, 21.49-1, 21.49-2C and 1.03A. Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business. Article 3.33 governs investments for life insurance companies, including securities lending transactions, and authorizes the commissioner to adopt rules to implement the article. Article 3.53 authorizes the commissioner to adopt rules to regulate credit life insurance. Article 21.49-1 authorizes the commissioner to adopt rules to implement the provisions of this article (The Insurance Holding Company System Regulatory Act). Article 21.49-2C now governs the withdrawal of an insurer from the state, by reinsurance or otherwise. Article 1.03A authorizes the commissioner to adopt rules for the conduct and execution of the duties of the department as authorized by statute. The following are the articles of the Insurance Code that are affected by the repeal of these sections: Articles 1.11, 3.33, 3.53, 21.49-2C, 21.49-1. sec.7.631.Application of Foreign and Alien Insurers to Withdraw from the State by Reinsuring the Total Business. sec.7.632.Policyholder Obligations. sec.7.633.Reinsurance of Business. sec.7.634.Conclusion of Business. sec.7.635.Statutory Deposit. sec.7.636. Outstanding Proceedings. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812998 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER I.Insider Trading and Proxy Solicitation 28 TAC sec.7.901 (Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The repeal of the section is proposed under the Insurance Code, Articles 1.11, 3.33, 3.53, 21.49-1, 21.49-2C and 1.03A. Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business. Article 3.33 governs investments for life insurance companies, including securities lending transactions, and authorizes the commissioner to adopt rules to implement the article. Article 3.53 authorizes the commissioner to adopt rules to regulate credit life insurance. Article 21.49-1 authorizes the commissioner to adopt rules to implement the provisions of this article (The Insurance Holding Company System Regulatory Act). Article 21.49-2C now governs the withdrawal of an insurer from the state, by reinsurance or otherwise. Article 1.03A authorizes the commissioner to adopt rules for the conduct and execution of the duties of the department as authorized by statute. The following are the articles of the Insurance Code that are affected by the repeal of this section: Articles 1.11, 3.33, 3.53, 21.49-2C, 21.49-1. sec.7.901.Insider Trading and Proxy Solicitation. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812999 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 CHAPTER 15.Surplus Lines Insurance SUBCHAPTER A.General Regulation of Surplus Lines Insurance 28 TAC sec.15.15, sec.15.28 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.15.15 and sec.15.28. Section 15.15 concerns reports of unauthorized insurance. Section 15.28 concerns the use of surplus lines insurance under the Private Investigators and Private Security Agencies Act. The repeal of these sections is necessary to eliminate provisions which have become obsolete, unnecessary and redundant of other statutes or rules. These sections duplicate and/or conflict with the provisions of Insurance Code, Article 1.14-2, the surplus lines law. Jose Montemayor, associate commissioner for the financial program, has determined that for each year of the first five-year period the repeal of the sections as proposed is in effect, there will be no fiscal implications for state or local government as a result of enforcing or administering the repeal of the sections. There will be no effect on local employment or local economy as a result of the repeal of the sections. Mr. Montemayor has determined that for each year of the first five years the repeal of the sections as proposed is in effect, the public benefit anticipated as a result of the repeal will be more efficient regulation of insurance. There will be no effect on small businesses as a result of the repeal of the sections. There is no anticipated economic cost to persons as a result of repealing the sections. Comments on the proposal must be submitted in writing within 30 days after publication of the proposal in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance. P.O. BOX 149104, Austin, Texas 78714-9104. A copy of the comments should be submitted to Jose Montemayor, Associate Commissioner-Financial Program, Mail Code 305-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. The repeal of the sections are proposed under the Insurance Code, Article 1.14- 2. Article 1.14-2, which governs surplus lines insurance, authorizes the commissioner to adopt rules to enforce the article. The following are the articles of the Insurance Code that are affected by the repeal of these sections: 1.14-2. sec.15.15.Reports of Unauthorized Insurance. sec.15.28.Use of Surplus Lines Insurance Under the Private Investigators and Private Security Agencies Act. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813000 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 17, 1998 For further information, please call: (512) 463-6327 CHAPTER 19.Agents Licensing The Texas Department of Insurance proposes repeal of sec.sec.19.101 - 19.104, 19.205 - 19.210, and 19.305 - 19.310 concerning examinations for applicants for certain types of agent licenses. Repeal of these sections is necessary because TDI no longer administers agent examinations. These examinations are provided through an independent testing service under authority of Insurance Code Article 21.01-1. If TDI resumes administering the examinations, new rules will be necessary, and the department will follow the proper rulemaking process for the new rules. Matt Ray, Deputy Commissioner, Licensing Group, has determined that during the first five years that the proposed repeal is in effect, there will be no fiscal impact on state or local government as a result of enforcing or administering the sections. There will be no measurable effect on local employment or the local economy as a result of the proposal. Mr. Ray has also determined that for each year of the first five years the repeal of the sections is in effect, the public benefit anticipated as a result of the proposed repeal will be the removal of unnecessary rules. There is no anticipated economic cost to persons who are required to comply with the proposed repeal. There is no anticipated difference in cost of compliance between small and large businesses. Comments on the proposal must be submitted within 30 days after publication of the proposed sections in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. An additional copy of the comment must be submitted to Matt Ray, Deputy Commissioner, Licensing Group, MC 107-1A, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104. SUBCHAPTER B.Examinations of Legal Reserve Life Insurance Agent Applicants and Health Insurance Agent Applicants 28 TAC sec.sec.19.101-19.104 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) Repeal of sec.sec.19.101 - 19.104 are proposed pursuant to the Insurance Code Articles 21.01-1, 21.07, sec.13, and 1.03A. Insurance Code Article 21.01-1 gives the commissioner the authority to adopt rules and regulations necessary to administer agents licensing examinations. Insurance Code Article 21.07, sec.13 provides broad authority to the commissioner to establish rules for the proper administration of insurance laws. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The proposed repeals affect regulation pursuant to the following statutes: The Insurance Code Articles 21.07-1 and 21.07. sec.19.101.Study material. sec.19.102.Place and Time of Examinations. sec.19.103.Conduct of Examination. sec.19.104.Written Request to Take Examinations. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813010 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER C.Written Examination for Applicants for License to Write Insurance Upon Any One Life in Excess of $10,000, Under Insurance Code, Article 21.07, sec.4A 28 TAC sec.sec.19.205-19.210 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) Repeal of sec.sec.19.205 - 19.210 are proposed pursuant to the Insurance Code Articles 21.01-1, 21.07, sec.13, and 1.03A. Insurance Code Article 21.01-1 gives the commissioner the authority to adopt rules and regulations necessary to administer agents licensing examinations. Insurance Code Article 21.07, sec.13 provides broad authority to the commissioner to establish rules for the proper administration of insurance laws. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The proposed repeals affects regulation pursuant to the following statutes: The Insurance Code Articles 21.07-1 and 21.07. sec.19.205.Study Materials. sec.19.206.Admission to the Examination. sec.19.207.Format. sec.19.208.Grading. sec.19.209.Failures. sec.19.210. Notice of Results. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813011 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 SUBCHAPTER D.Written Examination for Applicants for Accident and Health Insurance Agents License Under the Insurance Code sec.21.07-1, sec.16 28 TAC sec.sec.19.305-19.310 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) Repeal of sec.sec.19.305 - 19.310 are proposed pursuant to the Insurance Code Articles 21.01-1, 21.07, sec.13, and 1.03A. Insurance Code Article 21.01-1 gives the commissioner the authority to adopt rules and regulations necessary to administer agents licensing examinations. Insurance Code Article 21.07, sec.13 provides broad authority to the commissioner to establish rules for the proper administration of insurance laws. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by statute. The proposed repeals affects regulation pursuant to the following statutes: The Insurance Code Articles 21.07-1 and 21.07. sec.19.305. Study Materials. sec.19.306.Admission to the Examination. sec.19.307.Format. sec.19.308.Grading. sec.19.309.Failures. sec.19.310.Notice of Results. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813012 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 CHAPTER 21.Trade Practices SUBCHAPTER J.Prohibited Trade Practices 28 TAC sec.21.1000, sec.21.1003 (Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Insurance or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.) The Texas Department of Insurance proposes the repeal of sec.21.1000, relating to the prohibition against an insurer's refusal to insure based on the underwriting decision of another company, and sec.21.1003, relating to the prohibition against using the number of vehicles insured or number of policies purchased in the issuing or pricing of automobile insurance. Repeal of these sections is necessary because the department may not enforce the current adoption of either, as a result of their invalidation by the Texas Supreme Court on July 12, 1996. Section 21.1000 prohibits an insurer from using the fact that another insurer canceled, nonrenewed, or refused to insure an applicant as its own reason to refuse to insure such applicant for personal automobile or residential property coverages. The Supreme Court invalidated the rule because it found the department failed to explain in its reasoned justification why an insurer's consideration of previous denial of insurance as one of perhaps several factors determining refusal to insure is unacceptable. Section 21.1003 prohibits an insurer from conditioning issuance, price, and limits of coverage of personal automobile insurance on the number of vehicles to be insured or the purchase of another policy or policies. The Supreme Court invalidated the rule because it found the department failed to provide a rationale explaining why such practices are unfairly discriminatory or what effect the rule will have on consumers and the insurance market. Mary F. Keller, Senior Associate Commissioner, Legal and Compliance Division, has determined that for the first five-year period the proposed repeal will be in effect there will be no fiscal implications for state or local government, or for small businesses, resulting from enforcement or administration of the repeal, and that there will be no effect on local employment or the local economy. Ms. Keller also has determined that for each year of the first five years the repeal is in effect the public benefit anticipated as a result of enforcing the repeal will be greater clarity in Chapter 21 of this title by removing provisions that may otherwise result in confusion to the public. There is no anticipated economic cost to individuals who are required to comply with the proposed repeal. Comments on the proposal must be submitted in writing within 30 days after publication of the proposal in the Texas Register to Lynda H. Nesenholtz, General Counsel and Chief Clerk, P.O. Box 149104, MC 113-2A, Austin, Texas 78714-9104, within 30 days following the date of this publication. An additional copy of comments should be submitted to Mary F. Keller, Senior Associate Commissioner, Legal and Compliance, P.O. Box 149104, MC 110-1A, Austin, Texas 78714-9104. A request for public hearing on the proposed repeal must be submitted separately to the Office of the Chief Clerk. The repeals are proposed pursuant to the Insurance Code, Articles 21.21 and 1.03A, and the Government Code, sec.2001.004. The Insurance Code, Article 21.21, sec.13, provides that the department is authorized to promulgate and enforce reasonable rules and regulations and order such provision as is necessary in the accomplishment of the purposes of Article 21.21, relating to unfair competition and unfair practices. Article 1.03A provides that the commissioner may adopt rules for the conduct and execution of the duties and function of the department only as authorized by a statute. The Government Code, sec.2001.004 authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures, and prescribes the procedure for adoption of rules by a state administrative agency. The proposed repeals affects regulation pursuant to the following statutes: Insurance Code, Article 21.21. sec.21.1000.Prohibition against Insurer's Refusal to Insure Based on the Underwriting Decision of Another Company. sec.21.1003.Prohibition against Using Number of Vehicles Insured or Number of Policies Purchased in Issuing, Renewing, or Pricing Personal Auto Insurance. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on, 1998. TRD-9812994 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 463-6327 TITLE 34. PUBLIC FINANCE PART V. Texas County and District Retirement System CHAPTER 103.Calculations or Types of Benefits 34 TAC sec.103.6 The Texas County and District Retirement System proposes the adoption of new sec.103.6, concerning the recalculation of a retirement annuity to take into account those contributions that were based on compensation for services performed during membership in the retirement system but which were deposited with the system after the member's effective retirement date. This section lists those post-retirement deposits that will cause a recalculation of the retirement annuity, sets forth factors to be used in the recalculation process, and limits the application of the annuity increase to future payments only. Terry Horton, director of the Texas County and District Retirement System, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Horton also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be the payment of a retirement annuity that is based on all of a member's contributions attributable to compensation for services performed during membership. There will be no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Terry Horton, Director, Texas County and District Retirement System, P.O. Box 2034, Austin, TX 78768-2034. The rule is proposed under the Government Code, Chapter 845, Subchapter B, sec.845.102 which provides the board of trustees with the authority to promulgate rules necessary or desirable for the effective administration of the system. The Government Code, Chapter 844, sec.sec.844.103, 844.104, 844.304 and 844.305 are affected by this proposed rule. sec.103.6.Recalculation of Retirement Annuities to Include Post-Retirement Deposits. (a) If a contribution that would otherwise be credited to the member's individual account in the System is deposited after the member's effective retirement date, the retirement annuity shall be recalculated. (b) The following deposits shall be treated as additional accumulated contributions for purposes of recalculating the retirement annuity: (1) employee contributions attributable to compensation for services performed while a member of the System but deposited after the effective retirement date of the member; (2) employee contributions attributable to compensation for services performed while a member of the System but deposited after the effective retirement date of a deceased member; and, (3) employee contributions deposited as a result of a correction of a reporting error made in accordance with the Government Code, sec.842.112. (c) A retirement annuity subject to this section will be recalculated as of the effective retirement date by taking into account the additional accumulated contributions and the related increases in current service credit and matching credit. The recalculated retirement annuity will be based on the age of the retiree (and the age of the beneficiary in the case of a joint and survivor option) as of the effective retirement date. (d) The recalculated retirement annuity is payable only prospectively beginning with the month following the month in which the retirement system receives the deposit. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812973 Terry Horton Director Texas County and District Retirement System Proposed date of adoption: September 30, 1998 For further information, please call: (512) 328-8889 34 TAC sec.103.7 The Texas County and District Retirement System proposes the adoption of new sec.103.7, concerning the manner of determining the amount of reestablished current service credit and multiple matching credit that is to be credited to the account of the member when the amount originally withdrawn plus a withdrawal charge is paid into the system in accordance with a subdivision order under the Government Code, Section 843.003 authorizing the reestablishment of such credit. This proposed rule provides that for purposes of determining the amount of current service credit and multiple matching credit of the member under the Government Code, sec.843.403, the amount deposited less the withdrawal charge is considered to be accumulated contributions made by the member to the retirement system during the calendar year of deposit. The multiple matching credit percentage with respect to such deposit is that percentage in effect during the month in which the deposit is made. This proposed rule is effective with respect to those deposits made after December 31, 1998 to reestablish credit in the retirement system. Terry Horton, director of the Texas County and District Retirement System, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Horton also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be consistency in the crediting of all deposits of the member, as well as all deposits of all members of the subdivision, that are paid to the system during the calendar year. There will be no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Terry Horton, Director, Texas County and District Retirement System, P.O. Box 2034, Austin, TX 78768-2034. The rule is proposed under the Government Code, Chapter 845, Subchapter B, sec.845.102 which provides the board of trustees with the authority to promulgate rules necessary or desirable for the effective administration of the system. The Government Code, Chapter 843, sec.843.003 and sec.843.403 are affected by this proposed rule. sec.103.7.Determination of Reestablished Credit. (a) For purposes of determining the current service credit and multiple matching credit of the member under the Government Code, sec.843.403, the amount deposited by the member (excluding the withdrawal charge) after December 31, 1998 to reestablish credit in the retirement system pursuant to sec.843.003 of that code shall be considered to be accumulated contributions made by the member to the retirement system during the calendar year of deposit. The percentage to be used for the determination of the multiple matching credit of the member with respect to such deposit is that percentage adopted by the governing board of the authorizing subdivision and in effect during the month in which the deposit is made. The multiple matching credit percentage may be increased by the governing board on the terms provided by the Government Code, Chapter 844, Subchapter H. (b) This section shall apply to those deposits made after December 31, 1998 to reestablish credit in the retirement system in accordance with the Government Code, sec.843.003(c). This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813235 Terry Horton Director Texas County and District Retirement System Proposed date of adoption: September 30, 1998 For further information, please call: (512) 328-8889 34 TAC sec.103.8 The Texas County and District Retirement System proposes the adoption of new sec.103.8, concerning the determination of the monthly amount of the retirement annuity payable with respect to a retiree during the limitation year. The limitation year of the system is the calendar year. Section 415 of the Internal Revenue Code establishes a limit on the annual benefit which may be paid with respect to a participant during a limitation year. This proposed rule clarifies that the monthly amount of a retirement annuity will be the lesser of the amount determined under the provisions of the Government Code, Chapter 844 (excluding the limitations of sec.844.008), or the amount determined by dividing the annual limit for the limitation year with respect to the retiree by the number of monthly payments scheduled to be paid during the limitation year. The operation of this proposed rule will cause the scheduled monthly annuity payments to be of equal amounts during the limitation year; and, in the event of an effective retirement date other than December 31st, this rule will cause the Section 415 limit to be prorated over the number of scheduled payments during the calendar year in which retirement occurs. Terry Horton, director of the Texas County and District Retirement System, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Horton also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be the equalization of monthly annuity amounts payable with respect to a retiree during the limitation year. There will be no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Terry Horton, Director, Texas County and District Retirement System, P.O. Box 2034, Austin, TX 78768-2034. The rule is proposed under the Government Code, Chapter 845, Subchapter B, sec.845.102 which provides the board of trustees with the authority to promulgate rules necessary or desirable for the effective administration of the system. The Government Code, Chapter 844, sec.sec.844.103, 844.104, 844.304 and 844.305 are affected by this proposed rule. sec.103.8.Limit on Payments During the Limitation Year. (a) The limitation year used by the retirement system for determining the maximum annual benefit which may be paid under Section 415 of the Internal Revenue Code is the calendar year. (b) The maximum monthly amount of the retirement annuity payable with respect to the retiree during the limitation year shall be the lesser of: (1) the amount determined under the provisions of the Government Code, Chapter 844 (excluding the limitations of Section 844.008); or (2) the amount determined by dividing the annual limit for the limitation year (as determined in accordance with Section 415 of the Internal Revenue Code) by the number of monthly payments scheduled to be paid with respect to the retiree during the limitation year. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9813234 Terry Horton Director Texas County and District Retirement System Proposed date of adoption: September 30, 1998 For further information, please call: (512) 328-8889 CHAPTER 107.Miscellaneous Rules 34 TAC sec.107.5 The Texas County and District Retirement System proposes the adoption of new sec.107.5, concerning the date upon which a membership in the retirement system terminates by the withdrawal of contributions. This proposed rule provides clarification that membership terminates under the Government Code, sec.842.109(a)(3) on the date the retirement system mails or electronically transfers payment of any portion of the accumulated contributions credited to the member's individual account in the employees saving fund. The proposed rule also allows for the reinstatement of membership and restoration of the person's account if the payment by the retirement system was made by check or checks and all such checks are returned to and received by the retirement system within 30 days of the date of termination. Terry Horton, director of the Texas County and District Retirement System, has determined that for the first five-year period the rule is in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the rule. Mr. Horton also has determined that for each year of the first five years the rule is in effect the public benefit anticipated as a result of enforcing the rule will be the uniform and consistent treatment of membership terminations resulting from withdrawals of contributions, and the establishment of clear and definite guidelines under which terminations may be rescinded and memberships reinstated. There will be no effect on small businesses. There are no anticipated economic costs to persons who are required to comply with the rule as proposed. Comments on the proposal may be submitted to Terry Horton, Director, Texas County and District Retirement System, P.O. Box 2034, Austin, TX 78768-2034. The rule is proposed under the Government Code, Chapter 845, Subchapter B, sec.845.102 which provides the board of trustees with the authority to promulgate rules necessary or desirable for the effective administration of the system. The Government Code, Chapter 842, Subchapter B, sec.842.109 is affected by this proposed rule. sec.107.5.Date of Termination of Membership upon Payment of Refund. The date on which the retirement system mails, or electronically transfers in the event of an electronic funds transfer, payment of any portion of the accumulated contributions credited to a member's individual account in the employees saving fund pursuant to the Government Code, sec.842.108 is the date on which the person's membership in the retirement system terminates under sec.842.109 of that code as a result of that payment. However, if the payment by the retirement system was made by check or checks and all such checks are returned to and received by the retirement system within 30 days of such date, together with the person's written request to be reinstated as a member, the person's account shall be reopened to the same effect as if the payment to the member had not been made. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State, on August 17, 1998. TRD-9812974 Terry Horton Director Texas County and District Retirement System Proposed date of adoption: September 30, 1998 For further information, please call: (512) 328-8889 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART II. Texas Rehabilitation Commission CHAPTER 106. Contract Administration SUBCHAPTER A. Acquisition of Client Goods and Services 40 TAC sec.106.3 The Texas Rehabilitation Commission proposes an amendment to sec.106.3, concerning acquisition of client goods and services. The section is being amended to rearrange language in subsections (b) and (c). The subsections contain paragraphs that currently have language at the end that applies to the entire subsection. Therefore, the language contained in paragraph (2) of subsection (b) and paragraph (6) of subsection (c) is being moved into the subsection area so that the language will apply to the entire subsection. Charles E. Harrison, Jr., Deputy Commissioner for Financial Services, has determined that for the first five-year period the section is in effect, there will be no fiscal implications for state or local government. Mr. Harrison also has determined that for each year of the first five years the section is in effect the public benefit anticipated as a result of enforcing the section will be clarification on language contained in subsections (b) and (c). There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the section as proposed. Comments on the proposal may be submitted to Roger Darley, Assistant General Counsel, Texas Rehabilitation Commission, 4900 North Lamar Boulevard, Suite 7300, Austin, Texas 78751. The amendment is proposed under the Texas Human Resources Code, Title 7, Chapter 111, sec.111.018 and sec.111.023, House Bill Number 1, Article IX, sec.167, which provides the Texas Rehabilitation Commission with the authority to promulgate rules consistent with Title 7, Texas Human Resources Code. No other statute, article, or code is affected by this proposal. sec.106.3. Criteria for Determining When a Contract Is Required. (a) (No change.) (b) If the business relationship with the other party involves purchase of client goods or services and if both of the conditions listed in paragraphs (1) and (2) of this subsection are met, then the appropriate instrument to establish the relationship with the other party is a purchase order, and no additional express contract is required.
                                                                                                                                        [:] (1) [and the] The
                                                                                                                                          services are allowed by state or federal law .
                                                                                                                                            [;] (2) The
                                                                                                                                              [and the] services are available to the general public [then the appropriate instrument to establish the relationship with the other party is a purchase order, and no additional express contract is required]. (c) If the business relationship with the other party involves purchase of client goods or services and one of the following conditions listed in paragraphs (1)-(6) of this subsection
                                                                                                                                                is met , then the appropriate instrument to establish the relationship with the other party is an express contract.
                                                                                                                                                  [:] (1) [a] A
                                                                                                                                                    contract is required by state or federal law .
                                                                                                                                                      [;] (2) Special
                                                                                                                                                        [special] or technical goods or services are to be
                                                                                                                                                          provided by another state agency .
                                                                                                                                                            [;] (3) The
                                                                                                                                                              [the] goods or services are provided according to Commission designated standards and criteria .
                                                                                                                                                                [;] (4) The
                                                                                                                                                                  [the] need exists to provide special protection to the Commission or Commission clients .
                                                                                                                                                                    [(5) The
                                                                                                                                                                      [the] need exists to clearly differentiate employee versus independent contractor status .
                                                                                                                                                                        [; then the appropriate instrument to establish the relationship with the other party is an express contract;] (6) Defined
                                                                                                                                                                          [defined] high risk factors, or other conditions, exist that would make the establishment of an express contract in the best interests of the Commission [; then the appropriate instrument to establish the relationship with the other party is an express contract]. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt. Filed with the Office of the Secretary of State on August 10, 1998. TRD-9812647 Charles Schiesser Chief of Staff Texas Rehabilitation Commission Earliest possible date of adoption: September 27, 1998 For further information, please call: (512) 424-4050