ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE PART I. Texas Department of Agriculture CHAPTER 3.Boll Weevil Eradication Program SUBCHAPTER H.Use of Bio-Intensive Controls in Active Boll Weevil Eradication Zones 4 TAC sec.sec.3.400-3.405 The Texas Department of Agriculture (the department) adopts new sec.3.400-3.405, concerning the use of bio-intensive controls in active boll weevil eradication zones, with changes to the proposal published in the July 10, 1998, issue of the Texas Register (23 TexReg 7160). The new sections are adopted to provide procedures and requirements to allow a cotton grower in an active boll weevil eradication program to use bio-intensive controls as pest control methods, in accordance with the Texas Agriculture Code, Chapter 74, Subchapter D, sec.74.130. Sections 3.400, 3.401 and 3.403 are adopted with changes. Sections 3.402, 3.404 and 3.405 are adopted without changes and will not be republished. The definition of "Bio-intensive control" in sec.3.400 has been changed to clarify that bio-intensive controls do not include traditional chemical control methods. Section 3.401(a) has been changed to clarify that approval is not required for use of traditional cultural practices such as delayed planting or early stalk destruction. Section 3.401(d)(4) has been changed to state that the Texas Boll Weevil Eradication Foundation (Foundation) shall consider how the use of alternative methods would impact cotton in the eradication zone in question. Section 3.401(f) has been changed to require that the appeal process for a denial of a request to use bio-intensive control methods be completed prior to traditional planting dates. Section 3.403 has been changed to add a new subsection (a) which provides that upon approval for use of bio-intensive control methods, treatment must be made within 48 hours of notification or be subject to withdrawal of approval, and the time to appeal the withdrawal of certification has been changed from 10 to 5 days at subsection (d). Other subsections in sec.3.403 have been redesignated to allow for new subsection (a). New sec.sec.3.400-3.405 provide a definition of bio-intensive control, procedures for requesting to use bio-intensive controls, items to be considered by the Foundation in reviewing requests, recordkeeping and treatment requirements, procedures for appeals of denial of a request or withdrawal of approval once given, and requirements for payment of costs of bio-intensive controls. Comments on the proposal were received from the South Texas Cotton and Grain Association, Inc., the Texas Agricultural Extension Service and the Foundation. The South Texas Cotton and Grain Association and the Foundation expressed concern with the amount of time allowed for the grower to appeal a withdrawal of certification and recommended that the time be shortened to reduce the time a field would go untreated. The department agrees that the time can be shortened to 5 days and still provide adequate time for the grower's appeal, and has incorporated this change into sec.3.403(d). The Texas Agricultural Extension Service and the Foundation expressed concern that the definition of bio- intensive controls is too broad as proposed and , although not intended, could be interpreted to include practices that have become standard production practices for Texas cotton producers. The Department agrees that this was not the intent of the regulation and has changed sec.3.400 accordingly. The Foundation also recommended that the Foundation be required to consider how the use of alternative methods would impact cotton in eradication zones, that the appeal process for denial of a request to use bio- intensive control methods be completed prior to planting and that once approval has been given for use of bio-intensive control methods, that the requester be required to treat as approved. The department agrees with these recommendations and has incorporated these into the sections as adopted. The new sections are adopted under the Texas Agriculture Code, sec.74.130, which directs the commissioner of agriculture to develop and adopt rules to allow a cotton grower in an eradication program to use biological, botanical, or other non- synthetic pest control methods. sec.3.400.Definitions. The following words and terms when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Bio-intensive control -- the use of biologically based pest control tactics, rather than traditional chemical control methods. Biologically based pest control tactics include biological controls, resistant host plants, cultural controls, botanical insecticides or sterile insect techniques that cause little or no detrimental effect on non-target organisms. (2) Department -- Texas Department of Agriculture. (3) Foundation -- Texas Boll Weevil Eradication Foundation. (4) Work unit -- That area of cotton within a boll weevil eradication zone overseen by a Foundation Field Unit Supervisor. sec.3.401.Request for Approval to Use Bio-intensive Control Method(s). (a) Any cotton producer who wishes to use a bio-intensive control method in an active boll weevil eradication zone shall request approval in writing from the Foundation at least 90 days prior to traditional cotton planting dates in the area in which he farms. Exceptions are: (1) for the use of traditional cultural practices like delayed uniform planting or early stalk destruction; and (2) for fields on which a grower has certified organic production. (b) The request shall be considered by the Foundation and shall be granted or denied in writing at least 30 days prior to traditional planting time, and if approved, certification issued designating the time period for which the approval is valid. (c) In the request for use of bio-intensive controls, the grower must state: (1) the specific locations of the cotton fields; (2) the alternative control(s) to be used and its source and availability; (3) the expected date of crop planting; (4) the duration and timing expected in using the control method(s); (5) any scientific or field study trials relevant to the request; (6) the expected cost for using the alternative method; (7) the plan for coordinating the monitoring methods between the Foundation and the grower; (8) the grower's name, address and phone numbers; and (9) other pertinent information the grower wishes to be used in determining approval for the use of alternative controls. (d) In making its decision to grant approval for bio-intensive control methods in an active boll weevil eradication program, the Foundation shall consider: (1) any and all scientific or field study trials relevant to the requested alternative method, giving special attention to studies conducted in similar growing regions; (2) whether the grower has the fiscal means to pay for the alternative control method and pay any assessment; (3) the overall progress of the boll weevil eradication program in the area and the location of the cotton on which alternative methods are proposed to be used; (4) how the use of alternative methods would impact cotton in the eradication zone in question; and (5) the recommendation from the Foundation technical committee. (e) If a bio-intensive control method is approved by the Foundation in accordance with subsection (b) of this section, the grower shall document treatment dates and outcomes, and make the records available to the Foundation at a pre-determined time, and stay in weekly contact with the Foundation's Field Unit Supervisor for his area for updates on weevil numbers trapped and area weevil infestation counts. (f) If the Foundation disapproves the request to use bio-intensive control methods in accordance with subsection (b) of this section, the grower may appeal the decision in writing, within 10 days of receipt of the notification of disapproval, to the Department and furnish any additional information the grower wants considered. The Department shall determine whether the Foundation complied with this subchapter in making its decision and rule on the appeal within 15 days of the receipt of the grower's filing of an appeal. This process must be completed prior to traditional planting dates. sec.3.403.Withdrawal of Approval to Use Bio-Intensive Control Methods. (a) Fields meeting Foundation pest thresholds, and approved for bio-intensive control methods, must be treated within 48 hours of the Foundation's notification to the grower or his designee, or the Foundation will withdraw approval in writing. (b) If weevil numbers in traps or field infestations monitored by the Foundation in the field(s) approved for bio-intensive control methods exceed those in a majority of fields within the Foundation's work unit by 25 percent for any period of time during mid-season spraying, the Foundation shall notify the grower of this event. (c) If, after discussion between the grower and the Foundation, no other alternative is available, the grower's approval to use a bio-intensive control method shall be withdrawn by the Foundation and notice of withdrawal provided to the grower in writing. (d) A grower may appeal the withdrawal of the certification to the Department within 5 days of receipt of the notice of withdrawal. The grower shall provide a notice of the appeal to the Foundation. The Foundation shall not treat the grower's field while TDA reviews the appeal. In making its decision on the appeal, the Department shall consider the impact the decision will have on the overall success of the eradication program in the zone. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813114 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: September 7, 1998 Proposal publication date: July 10, 1998 For further information, please call: (512) 463-7541 CHAPTER 17.Marketing and Development Division SUBCHAPTER C.TAP, Taste of Texas, Vintage Texas, Texas Grown and Naturally Texas Promotional Mark 4 TAC sec.sec.17.51, 17.52, 17.54 The Texas Department of Agriculture (the department) adopts amendments to sec.sec.17.51, 17.52, and 17.54 concerning the department's marketing programs promoting Texas agricultural products. Section 17.52 is adopted with changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6108). Sections 17.51 and 17.54 are adopted without changes and will not be republished. The department adopts the amendments to clarify the qualifications for membership in the programs, to limit restaurant membership to those food service companies that process packaged products for resale, and to give the department additional discretion in determining program eligibility. Section 17.52 is adopted with changes. An additional change was made to sec.17.52(b)(2) so that the last two sentences now read: "A food service company, including a restaurant, is not eligible for membership unless it processes a packaged product for resale, in which case, the mark may only be used to promote the specific program-eligible products. Food service companies or restaurants may not use the mark in any general fashion to promote the business or its services." This change was made to clarify this section as it relates to food service companies and restaurants. Amendments to sec. 17.51 define the word "processed" for purposes of the programs and add language to reflect trademark registration for the programs and to make that language consistent throughout the section. Amendments to sec.17.52 clarify requirements for Taste of Texas program membership. Specifically, amended sec.17.52(b)(2) excludes any food service company, including a restaurant, from program eligibility, unless it processes a packaged product for resale, and prohibits the use of the mark by a company or restaurant to generally promote a business or its services . The amendment to sec.17.54(5) grants the department additional discretion in determining program eligibility. One comment on the proposal was received from Last Place in Texas, Inc. d/b/a Taste of Texas restaurant expressing concern that proposed sec.17.52(b)(2) could be interpreted to mean that a restaurant or food service company could use the program mark in any manner so long as the restaurant or food service company also processes a packaged food product for resale. Adopted sec. 17.52(b)(2) has been changed from the proposed language to address this concern. As noted previously, the change made to the proposal further clarifies the permitted uses of the Taste of Texas mark, as it relates to food service companies and restaurants. The amendments are adopted under the Texas Agriculture Code sec. 12.016, which provides that the department may adopt rules as necessary for the administration of its powers and duties under the Texas Agriculture Code; and sec. 12.017, which authorizes the department to regulate the use of the term "Texas Agricultural Product" by rule. sec.17.52.Application for Registration To Use the TAP, Taste of Texas, Vintage Texas, Texas Grown, or Naturally Texas Promotional Mark. (a) (No change.) (b) Unless permission is otherwise granted by the department: (1) (No change.) (2) the Taste of Texas promotional mark may only be utilized by Taste of Texas program members. The Taste of Texas program is a program established by the department to promote the retail sale and wholesale of agricultural food products processed in Texas, regardless of origin, and unprocessed agricultural food products grown in Texas. A food service company, including a restaurant, is not eligible for membership unless it processes a packaged product for resale, in which case, the mark may only be used to promote the specific program- eligible products. Food service companies or restaurants may not use the mark in any general fashion to promote the business or its services. (3)-(5) (No change.) (c)-(n) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813113 Dolores Alvarado Hibbs Deputy General Counsel Texas Department of Agriculture Effective date: September 7, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 463-7541 TITLE 7. BANKING AND SECURITIES PART I. Finance Commission of Texas CHAPTER 1. Consumer Credit Commissioner SUBCHAPTER A. Regulated Loan Licenses Division 1. General Provisions 7 TAC sec.1.12 The Finance Commission of Texas (the commission) adopts the repeal of sec.1.12. This repeal is necessary as the section relates to allowable charges and terms of loans under Chapter 3, Texas Civil Statutes, Article 5069-3.01 et seq., which was repealed by the 75th Legislature. Moreover, they are being replaced by a new set of rules for Chapter 3A, a new chapter of the Texas Credit Title which encompasses old Chapters 3 through 5. This repeal is adopted without changes to the proposal as published in the July 3, 1998, issued of the Texas Register (23 TexReg 6815). The agency received no comments on the proposal. The repeal is adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. The repeal will not be adopted until the proposed replacement sections are adopted. The statutory provisions (as currently in effect) affected by the proposed repeal are Texas Civil Statutes, Article 5069, Chapter 3A, Subchapters E and F. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813037 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 Division 2. Application for License and Transfer of License 7 TAC sec.1.35, sec.1.42 The Finance Commission of Texas (the commission) adopts the repeal of sec.1.35 and sec.1.42. This repeal is necessary as the sections relate to the issuance and display of licenses under Chapter 3, Texas Civil Statutes, Article 5069-3.01 et seq., which was repealed by the 75th Legislature. Moreover, they are being replaced by a new set of rules for Chapter 3A, a new chapter of the Texas Credit Title which encompasses old Chapters 3 through 5. This repeal is adopted without changes to the proposal as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6815). The agency received no comments regarding the proposal. The repeal is adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. The repeal will not be adopted until the proposed replacement sections are adopted. The statutory provisions (as currently in effect) affected by the proposed repeal are Texas Civil Statutes, Article 5069, Chapter 3A, Subchapter D. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813030 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 Division 6. Deferment Charges 7 TAC sec.sec.1.111-1.116 The Finance Commission of Texas (the commission) adopts the repeal of sec.sec.1.111 - 1.116. This repeal is necessary as the sections relate to allowable charges and terms of loans under Chapter 3, Texas Civil Statutes, Article 5069-3.01 et seq., which was repealed by the 75th Legislature. Moreover, they are being replaced by a new set of rules for Chapter 3A, a new chapter of the Texas Credit Title which encompasses old Chapters 3 through 5. This repeal is adopted without changes to the proposal as published in the July 3, 1998, issued of the Texas Register (23 TexReg 6816). The agency received no comments on the proposal. The repeal is adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. The repeal will not be adopted until the proposed replacement sections are adopted. The statutory provisions (as currently in effect) affected by the proposed repeal are Texas Civil Statutes, Article 5069, Chapter 3A, Subchapters E and F. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813038 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 SUBCHAPTER D. License 7 TAC sec.sec.1.401-1.407 The Finance Commission of Texas (the commission) adopts new sec.sec.1.401 - 1.407, concerning the provisions related to license issuance. The sections are adopted without changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6816). Section 1.401 discusses the authorized activities of licensed lenders operating multiple branches. Section 1.402 explains the requirement for displaying licenses. Section 1.403 describes the agency's procedure for providing delinquent notices to licensees who have failed to pay an annual license fee. Section 1.404 details the effect of a license revocation upon the authority to collect existing contracts. Section 1.405 prescribes the process for a new application after a former licensee has had a license revoked. Section 1.406 clarifies the procedure for a licensee to surrender a license. Section 1.407 provides the procedure for returning license certificates upon the reissuance of a license. The rule adoption is necessary in order to provide basic procedures concerning licenses and correspond with the adoption of the new statute. Most of the provisions have been in effect as standard procedures and are simply modern revisions of existing rules. The proposed 7 TAC sec.1.401 will enhance portability of operations for licensed lenders operating multiple branches. The agency received no comments regarding the proposal. The new sections are adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. Texas Civil Statutes, Article 5069-3A, Subchapter D is affected by these proposed new sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813039 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 SUBCHAPTER E. Interest Charges in Loans 7 TAC sec.sec.1.501, 1.502, 1.504, 1.505 The Finance Commission of Texas (the commission) adopts new sec.sec.1.501, 1.502, 1.504, and 1.505, concerning the methods for calculating maximum interest charges, additional interest for default and deferment under Subchapter E, Chapter 3A, Texas Civil Statutes, Article 5069. Additionally, the rules prescribe appropriate procedures for these transactions. The sections are adopted with nonsubstantive changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6817). The only change is the modification of the subchapter heading. Section 1.501 describes the manner for determining the maximum rate or amount of interest by type of transaction. Section 1.502 details the treatment of odd periods of time, generally those less than a full month, for calculating interest. Section 1.503 clarifies the procedures for assessing and collecting default charges in connection with a Subchapter E loan. Section 1.504 explains the method and procedures for calculating and collecting a deferment charge on a Subchapter E loan. These rules are necessary due to the repeal of the former Article 5069-3.15 and the adoption of new Article 5069-3A.001 et seq. Generally, these procedures are well established and are commonly used throughout the regulated industry. These rules should serve, however, to clarify the calculations and procedures. The agency received no comments regarding the proposal. The new sections are adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. Texas Civil Statutes, Article 5069-3A, Subchapter E is affected by these proposed new sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813043 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 SUBCHAPTER F. Alternate Charges for Consumer Loans 7 TAC sec.sec.1.601, 1.603, 1.604 The Finance Commission of Texas (the commission) adopts new sec.sec.1.601, 1.603, and 1.604, concerning the methods for calculating maximum interest charges and additional interest for default and deferment under Subchapter F, Chapter 3A, Article 5069. Additionally, the rules prescribe appropriate procedures for these transactions. The sections are adopted without changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6819). Section 1.601 describes the manner for determining the maximum rate or amount of interest for this type of transaction. Section 1.603 clarifies the procedures for assessing and collecting default charges in connection with a Subchapter F loan. Section 1.604 explains the method and procedures for calculating and collecting a deferment charge on a Subchapter F loan. These rules are necessary due to the repeal of the former Article 5069-3.16 and the adoption of new Article 5069-3A.001 et seq. Generally, these procedures are well established and are commonly used throughout the regulated industry. These rules should serve, however, to clarify the calculations and procedures. The agency received no comments regarding the proposal. The new sections are adopted under Texas Civil Statutes, Article 5069-3A.901, which authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. Texas Civil Statutes, Art. 5069-3A, Subchapter F is affect by these proposed new sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813040 Leslie L. Pettijohn Commissioner Finance Commission of Texas Effective date: September 6, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 936-7640 TITLE 10. COMMUNITY DEVELOPMENT PART I. Texas Department of Housing and Community Affairs CHAPTER 80.Manufactured Housing Codes and Standards 10 TAC sec.80.1 The Texas Department of Housing and Community Affairs (Department) Manufactured Housing Division adopts repeal of sec.80.1, sec.sec.80.21 - 80.29, sec.sec.80.36 - 80.41, sec.sec.80.51 - 80.65, sec.80.67, sec.80.118, sec.80.121, sec.sec.80.123 - 80.126, sec.sec.80.129 - 80.132, sec.80.135, sec.sec.80.181 - 80.186, sec.sec.80.201 - 80.208, the Manufactured Housing Rules. The repeal is adopted without changes. The sections are repealed to allow for adoption of new sections that will update the rules substantially in order to comply with the Texas Manufactured Housing Standards Act, Article 5221f, effective on September 1, 1997. The installation standards in sec.sec.80.51 - 80.63 and sec.80.121 will become effective 60 days after the date of publication of the notice as required by the Texas Manufactured Housing Standards Act, Article 5221f, sec.9(g). All other rules will become effective 20 days after filing as specified by Chapter 2001, Government Code. No comments were received regarding adoption of the repeal. The repealed section is adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed section. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813296 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 Fee Structure 10 TAC sec.sec.80.21-80.29, 80.36-80.41 The repealed sections are adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813297 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 Standards and Requirements 10 TAC sec.sec.80.51-80.63, 80.64, 80.65, 80.67 The repealed sections are adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813298 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: November 3, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 General Requirements 10 TAC sec.sec.80.118, 80.121, 80.123-80.126, 80.129-80.132, 80.135 The repealed sections are adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813301 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 Consumer Notice Requirements 10 TAC sec.sec.80.181-80.186 The repealed sections are adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813302 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 Titling 10 TAC sec.sec.80.201-80.208 The repealed sections are adopted under the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the repealed sections. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813303 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER A.Codes and Standards 10 TAC sec.80.10 The Texas Department of Housing and Community Affairs ("TDHCA") adopts new sec.sec.80.10, 80.11, 80.20, 80.50-80.56, 80.62-80.64, 80.66, 80.119-80.123, 80.125-80.128, 80.130-80.132, 80.135, 80.180, and 80.202-80.208, Manufactured Housing Rules, 10 Texas Administrative Code, Chapter 80, without changes to the proposed text as published in the May 8, 1998, issue of the Texas Register (23 TexReg 4451). A public hearing was held on Tuesday, June 24, 1998. The following interested groups or associations presented comments: Texas Manufactured Housing Association ("TMHA"), and the Manufactured Housing Citizens Advisory Commission ("Advisory Commission"). A public hearing was held on Tuesday, June 24, 1998. Some parties that offered comments at the public hearing also filed written comments addressing some of the issues they addressed at the hearing. All comments, both oral and written, are discussed together infra. Following a summary of the comments is a statement of the reasons why the department disagrees with the party submissions or proposals. GENERAL COMMENTS ON THE RULES: The following comments were received regarding the proposed new rules in general, rather than any specific section: The Manufactured Housing Citizens' Advisory Commission, a group of industry and consumer representatives that met for nine months to consider changes to the current rules of the Manufactured Housing Division, stated their unanimous support for the proposed rules. Texas Manufactured Housing Association (TMHA) also stated its support. TMHA Rio Grande Chapter also spoke in support of the rules, and asked that their enforcement be done with common sense and not with a zero tolerance policy. These were the only groups or organizations that expressed an opinion either for or against the rules. Additionally, ten individual commenters supported the adoption of the proposed rules as published in the Texas Register on May 8, 1998 (Volume 23, Number 19). One commenter believed the rules will cause prices to increase and manufactured housing will no longer be affordable housing. Another commenter said that manufactured housing should be deregulated, that caveat emptor should be the rule, and banks should enforce requirements rather than the state. One commenter said labor costs will increase because of the need to hire more experienced workers to conform to the installation standards. TDHCA believes that the rise in cost will be partially offset by probable reductions in cost as a result of the concurrent repealing of sec.sec.80.28(a), 80.64(g), 80.123, 80.129, 80.186, and 80.203. As for the cost of workers, TDHCA responds that the proposed rules contain detailed drawings that will facilitate installations and will not necessarily mean that only experienced workers can install the homes. Concerning enforcement, as stated in sec.2 of Article 5221f, Texas Manufactured Housing Standards Act, the Texas Legislature has determined that it is the responsibility of the state to provide for the protection of its citizens who desire to purchase housing by imposing certain regulations on the construction and installation, to provide economic stability of manufactured housing manufactured manufacturers, retailers, installers, and brokers, and to provide fair and effective consumer remedies. One commenter said that TDHCA could eliminate the problem of not being able to locate unlicensed installers by requiring that proof be submitted to the utility companies prior to the hook-up of the electricity and plumbing. If a certification is not provided to the utility companies, the homeowner will have to find someone to inspect and certify their installation before the utilities are operational. Another commenter said that homeowners cannot obtain wind zone insurance if they install their own home without a license or hire an unlicensed installer to install their home. To qualify for insurance, they need to hire a licensed installer to approve or correct the installation. TDHCA agrees that requiring proof of proper installation procedures in order to have utilities hooked up would help eliminate the problem of unlicensed installers, but because of complicated jurisdictional issues raised by such a solution, it will require more study. The Texas Windstorm Insurance Association has the authority to adopt procedures concerning the insurability of manufactured homes. One commenter said there are installation inspections performed on homes that have been installed for over a year. The soil can change and people have been known to take the piers out from under their home and use them for some other purpose. He suggested that TDHCA should guarantee that a home will be inspected 30 or 40 days after installation, or else the installer won't be liable if something changes. Another commenter said the diagrams and charts are more explicit than the old rules and easier to understand. One commenter said that the new installation rules are a scam to the public and will cost more money than what it should. A commenter said that all retailers should be licensed as retailers, brokers and installers. TDHCA responds that it performs installation inspections as soon as possible, given budget restraints, and under the Act it is only required to inspect 25% of homes unless there is a consumer complaint, which can come later than 30 or 40 days after installation. TDHCA agrees that the charts and diagrams are more explicit than the old rules, and disagrees that the rules are a scam. As stated above, the Texas Legislature has determined that it is the responsibility of the state to provide for the protection of its citizens who desire to purchase housing by imposing certain regulations on the construction and installation, to provide economic stability of manufactured housing manufacturers, retailers, installers, and brokers, and to provide fair and effective consumer remedies. COMMENTS ON SPECIFIC SECTIONS OF THE RULES: There were no comments on sec.80.10 (Codes and Standards), sec.80.11 (Definitions), or sec.80.20 (Fee Structure). There were general and specific comments on Subchapter D, sec.sec.80.50 to 80.66 (Standards and Requirements). First to be addressed are the general comments on this subchapter. The Manufactured Housing Citizens' Advisory Commission stated that the proposed generic installation standards are better and safer procedures for both the consumer and the installer than those set out in the present rules. A member of the Advisory Commission's Subcommittee on Installations said the costs to install a manufactured home under the new proposed rules may increase slightly (estimated increase: Wind Zone I to increase an additional amount between $125 to $175 for a single section home, $385 to $425 for a multi-section and Wind Zone II to increase an additional amount between $265 to $315 for a single section and $475 to $515 for a multi-section). One commenter asked that the installation requirements be simplified, because there are too many different manufacturer specifications. He suggested one state code for all manufacturers and all secondary installations. Another commenter stated that some of the installation standards appear to apply to new homes, but the standards are also required on used homes (secondary installations). There is not enough difference between new home and used home generic installation standards. TDHCA responds that the proposed generic rules could be used in lieu of the various manufacturers' installation instructions. COMMENTS ON sec.80.50: A commenter asked if Wind Zone I homes can be sold and installed in Wind Zone II if built prior to September 1, 1997. TDHCA responds that yes, that is the current state law. COMMENTS ON sec.80.51: One commenter stated that a number of manufacturers are not pleased about having to send out their amended installation manuals or installation instructions 30 days in advance of the effective date for the new modification or changes. Another commenter asked for clarification regarding the "notification of changes" procedure when manufacturers make modifications to the installation instructions. If a manufacturer makes changes and wants to inform their retailers, can the manufacturer do it the next week? TDHCA responds that the manufacturer can notify its retailers immediately, but before the change is effective (and thus enforceable), the retailer would have 30 days to implement it. COMMENTS ON sec.80.52 (Permanent Foundation Criteria): A commenter objected to a lender being able to certify a foundation as permanent, and also pointed out that an engineer's design may or may not meet the criteria for a permanent foundation. TDHCA responds that proposed sec.sec.80.52(a)(7) and 80.52(b) are substantively identical to current sec.80.52, which describes permanent foundations. The provision was enacted in the late 1980's at the request of mortgage lenders who wanted to reduce the cost of regulation of permanent foundations by eliminating the necessity for an additional inspection and approval beyond the one required by the lender. The system has worked well, so the provisions were kept. There were no comments on sec.80.53 (Manufacturer's Design Requirements). COMMENTS ON sec.80.54: Concerning the site preparation notice, the following comments were made: Several commenters agreed with the rule requiring notice of site preparation to be given to the consumer. Several also commented on the need to educate the homeowner further about the consequences of placing their home on an improperly prepared site. One commenter stated that he thought many consumers would sign the site preparation notice without reading it, that it was wrong to absolve the industry of any responsibility, and sometimes the retailer ought to tell the consumer to wait until the soil dries up before installing the home. Several commenters said that they thought it was the responsibility of the consumer to prepare the site. One commenter expressed his opinion that the issue was one of policy: should the State tell an individual he or she cannot buy a home and install it on a particular piece of property because it's not suitable from the standpoint of site preparation. He pointed out that the Advisory Commission fought through these issues for several days and came up with probably the best compromise that could be achieved at this time. TDHCA agrees with the last commenter. The Advisory Commission, with input from both TMHA and department staff, discussed the site preparation notice extensively. Existing rules and the proposed rules hold the retailer responsible for the proper installation of a new home, and the contracting installer for the proper installation of a used home. Except in a rental community, site preparation is the responsibility of the homeowner. The proposed rule tries to ensure that the homeowner makes an informed decision when deciding where to locate the home. A commenter noted that the site preparation notice states "... the installer must give the homeowner the notice prior to any agreement for the secondary installation of the home." She noted that often the agreement to install a used home is made over the phone, and questioned whether "any agreement" means any written or verbal agreement. She asks whether the consumer could sign the notice immediately before the installation agreement and the home installation. TDHCA responds that the wording of the site preparation notice assumes that the sales or installation agreement is in writing. Even though the consumer needs time after the notice to prepare the site, the proposed rule does not require a time period between the date of the notice and the installation agreement or home installation. A commenter suggested that a paragraph be added to the site preparation notice which stated "The retailer and/or the installer should notify you, the purchaser, in writing (prior to the installation of the home) if the designated site does not meet the above mentioned requirements and give you recommendations to properly prepare the site. If this is not done, they are to be held accountable for any problems with your home related to improper site preparations." TDHCA responds that this suggestion would constitute a substantive change to the previously posted proposed rules in that it would impose more onerous requirements on retailers and installers. The Advisory Commission and staff believe that the wording of the proposed site preparation notice is appropriate at this time. Concerning the vapor barrier requirement, the following comments were made: Many retailers and installers did not believe the vapor barrier is necessary in areas where the climate is semi-arid. One commenter said that the cost would be closer to $100 per home, rather than $33.60 per section. Another commenter stated that putting a vapor barrier over wet ground causes a mildew situation underneath the home and creates a place where insects, fire ants, and other pests can get under the house. If there is a water leak under the house, water will just stand in a puddle, breeding mosquitoes and causing odors. Another said the vapor barrier will tear when putting blocks underneath and moving axles and other materials. The commenter thinks this requirement is creating a problem that is going to be bad for the consumer. One commenter said a site that is well-drained does not need the vapor barrier because the water will not stand and moisture will not be a problem. There will be a problem if the site is not well-drained and it ponds water with a vapor barrier installed. On the other hand, another commenter wanted the vapor barrier to be taken into consideration for every site because of a concern that excessive moisture, particularly after a dry spell, will cause the house to shift. A member of the Advisory Commission commented that the commission addressed the issue because most manufacturers' instructions required the use of vapor barriers. TDHCA responds that the Advisory Commission discussed this provision extensively, both in the Installation Subcommittee and as a group of the whole. In spite of initial disagreement, the commission voted unanimously to support the inclusion of the vapor barrier in the generic installation requirements. According to many manufacturers, moisture under the home can be a problem regardless of whether the home is located in an arid or semi-arid location because the problem is caused by moisture percolating up through the soil rather than coming from rain or run-off. Nearly all manufacturers currently recommend the use of vapor barriers at all times. Another commenter said the vapor barrier requirements will drive up skirting costs and it may cause some people not to skirt their home. Most of the skirting manufacturers are supplying fully vented panels, which equate to probably within the 10% range of ventilation underneath the house. With this level of ventilation, a vapor barrier would not be necessary. Another commenter said it is important to properly prepare the site and the drainage around the house, while another commenter, representing a manufacturer, recommended a vapor barrier when necessary, but suggested that it not be required for each home. TDHCA responds that manufacturers caution about loss of warranty protection if homes are not installed properly, and they recommend the use of a vapor barrier. If the technology in skirting eliminates the need for a vapor barrier, the requirement should be revisited. One commenter said the vapor barrier will be an added expense to the consumer, and another thought the cost would be close to $100 per section. A manufacturer's engineer commented that they recommend some type of vapor barrier, especially when the home is skirted with vinyl skirting. A vapor barrier is not required if the ground under the house is properly drained and the crawl space is properly ventilated. The engineer states that there are some environments where the hot, dry nature of the climate makes the expense of installing a vapor barrier unnecessary. Another commenter believed it would be impossible to use a vapor barrier in wooded areas where the consumer couldn't afford to get a bulldozer in to clear all the stumps. There would be too many tears in the vapor barrier after running a truck over the plastic and pulling a house over it. The commenter said they thought the underside of manufactured homes was a vapor barrier. A member of the Advisory Commission's Installation Subcommittee commented that you can put a vapor barrier over stumps eight inches high, that you can have tears up to 18 inches, and about 80% coverage is what the rules call for. Robert Thompson, chair of the Advisory Commission, described the debate surrounding the discussion of allowing 18 inch tears in the vapor barrier. He suggested that the industry take the document, put it in place, work with it, and get back together in a year or so to make changes that should be made. TDHCA responds that according to the department's estimates based on the best information available, the cost per section would be approximately $36.60. Retailers and installers are only required to install the vapor barrier if the retailers and installers provide or install the skirting. The department agrees with the Advisory Commission's recommendation that the vapor barrier requirement should be retained in the rules. Concerning determining soil conditions, the following comments were made: One commenter said he opposed the use of the pocket penetrometer because the soil is unpredictable and may have sand for a foot down before hitting solid sandstone, so the penetrometer wouldn't give an accurate picture. Another commenter wanted to know whether the seven readings for the pocket penetrometer testing procedures should be taken within a square foot area or must a person take readings in seven different areas of one square foot. Further, he asked whether there is a violation if an installer or retailer uses the presumptive bearing capacities from a local building code, but the state inspector uses a pocket penetrometer to get a different reading. TDHCA responds that the pocket penetrometer is just one of several alternative ways to determine the load bearing capacity of the soil. If the installer does not want to use it, he or she can use another of the listed methods. sec.80.54(d)(1)(A)(i) says "test a typical area," meaning that the installer should take an area that's typical of the site, dig down to undisturbed soil so that there's an area of one square foot for testing. Then take seven readings from this square foot area. If the installer has used one of the approved methods properly, there is no violation even if the result conflicts with the state inspector's reading from a pocket penetrometer. Concerning load-bearing supports or devices, the following comments were made: One commenter noted that there is a provision that states that load-bearing supports or devices shall be listed by an independent testing laboratory, nationally recognized inspection agency, or other nationally recognized organization. There is no definition for load-bearing supports or devices, although there is a definition for stabilizing components. He asked whether this conflicts with sec.80.62, which refers to approval of stabilizing devices (particularly in terms of base pads and piers). Another commenter, referring to sec.80.54(d)(6), asked if a wood shim can be placed on top of an 8x8x16 hollow concrete block (relating to the Pier Design). TDHCA responds that sec.80.62(a) states that installers shall only use prefabricated or site built stabilizing components and systems approved by the department, specified by the home manufacturer's DAPIA approved installation instructions, or specified for one or more homes in a particular area by a Texas licensed engineer or architect. The definition of "stabilizing components" in sec.80.11(38) includes all components of the anchoring and support system such as piers, footings, and any other equipment which supports the manufactured home and secures it to the ground. These provisions can thus be read consistently with each other and with sec.80.54(d)(5)(C). Finally, a wood shim must be placed on a concrete or wood cap, and cannot be placed directly onto a hollow concrete block. COMMENTS ON sec.80.55: Concerning sec.80.55 relating to in-line anchors, a commenter questioned the accuracy of tests run showing that in-line anchors are stronger than ones that are bent to 15 degrees. Another commenter noted that sec.80.55(f)(6)(D) specifies that units less than 60 feet in box length requires at least two ties per end per section, but there is no provision for units more than 60 feet. He asked if the longer units only had to have one tie per end. TDHCA responds that it has reviewed test results from several anchor pull tests and they all show that soil auger anchors installed in the near vertical position, not severely pre-tensioned, and without a stabilizer plate, will not provide the restraint required by federal standards. As to longitudinal ties, TDHCA states that longitudinal ties are required for all Wind Zone II installations under sec.80.55(f)(6)(A), and although there is no rule that defines the number of longitudinal ties for a unit or 60 feet or more in length, they should have at a minimum two ties per end. Because the requirements for the longer units will depend on the size and design of the home, a more specific requirement has not been included. A manufacturer commented that the blocking and anchoring standards are very specific as the rules are written and the engineering on those is quite substantial. The commenter said that according to their engineers, the blocking requirements are engineered at 300% of what is required to hold the home, according to their engineers, while the anchoring standards are at 150% of capacity, with no tolerances factored in. The commenter encouraged the department to recommend plus and minus tolerances for the spacing on the blocking, for the tie-downs, the amount of anchor in the ground, the spacing on those anchors, et cetera. TDHCA responds that the generic standards are based on home manufacturers' specifications. The proposed rule sec.80.54(d)(5)(A) allows pier spacing to exceed tabulated values up to 30%, so long as the total pier count remains the same. There is a similar tolerance for anchor spacing in sec.80.55(d) and (e). Further, the anchor manufacturers provide any applicable tolerances in their anchor instructions. A commenter noted that requiring installers to do electric, plumbing, and testing of connections makes the installer liable for service often beyond their experience. Should an installer hire a licensed contractor or specialized technician to perform these connections? The consumer will have to pay for the increased cost. Another commenter asked if multi-section connection standards apply to new and used homes, because it seems inappropriate on secondary installations whose age might preclude strict adherence to these generic standards. Likewise, another commenter wanted the rules to differentiate between new and used home requirements when plumbing has previously been installed. One commenter noted that there is a reference in the generic standards that an installer should install the plumbing connections, bring it to the single source according to the manufacturers' design or DAPIA design. If a manufacturer is out of business and the manufacturer's design or DAPIA design is not available, installers will have to use their best discretion with regard to installation of drain lines underneath the home to the source of the sewer connection. TDHCA responds that with regard to connecting and testing electric and plumbing connections, carrying out these functions is critical to the proper set up of the home, but the proposed rules include detailed drawings to help. A licensed installer should have the expertise to perform these tasks without having to hire specialized technicians. For the time being, the multi-section connection standards apply to both new and used homes. There have not been any major changes to the Federal Manufactured Homes Construction and Safety Standards since 1994. Since new and late model used homes may have similar construction details, the generic installation requirements for new and used homes must be similar. The rules differentiate between new and used homes with respect to plumbing in sec.80.56. At the same time, however, the department recognizes that there may be instances where because of the age of the home some accommodation must be made, but these will be addressed on a case by case basis, with exceptions made when common sense demands. If it appears that different standards need to be developed for older homes, this rule will be revisited. COMMENTS ON sec.80.56 (Multi-Section Connection Standards): A commenter suggested that testing of secondary homes is not feasible due to the fact that most home rule cities require the services of contractors licensed within their jurisdiction. Furthermore, the home installation must be completed before utilities are turned-on, thus creating a time lapse that would require a second trip to the home site. TDHCA responds that testing would be an additional cost, but it is feasible. Since the gas line crossovers must be tested with air pressure (between 6 and 8 ounces per square inch of pressure), the home connection to a gas supply is not required. All electrical tests (except the operational tests) can be conducted without connection to electrical power. The proposed rules do not mention plumbing tests. For plumbing lines, all incomplete systems and multi-section crossover connections must be assembled and tested in accordance with the DAPIA approved instructions or the Federal Manufactured Home Construction and Safety Standards. There were no comments on sec.sec.80.62 (Approval of Stabilizing Components and Systems), 80.63 (Other Materials and Methods for Manufactured Homes), and 80.64 (Procedures for Alterations). COMMENTS ON sec.80.66 (Rebuilding or Repairing a "Salvaged" Manufactured Home): One commenter stated that an additional cost of $1,000 would be incurred in the rebuilding of a salvaged home. TDHCA disputes the additional cost in complying with this section. Section 80.66 asks that the rebuilder provide initial information about the condition of the home and the extent of the rebuilding necessary, and then notify the department at certain times during the rebuilding process. When more than one home is built in a one month period, the rebuilder must provide a quality assurance manual describing the rebuilder's procedures. There is nothing in the rule that indicates that these reporting requirements would add $1,000 to the cost of rebuilding a home. This is the end of comments regarding Subchapter D, Standards and Requirements. COMMENTS ON sec.80.119 (Installation Responsibilities): One commenter opposed requiring retailers obtain an installers license in conjunction with renewing or obtaining a new retailers license. Several commented that they would like to see the installers held responsible for installation violations instead of the retailers. Echoing a concern of others that retailers often have to pay for mistakes of licensed installers they have hired, a commenter requested the rule be reworded to hold the retailer responsible for the installation only if the retailer hired an unlicensed installer. One person asked who is responsible for correcting a deviation that would not have been one at the time the home was initially installed. In response to the concerns about retailer liability for installations, an advisory commission member commented that the rule was changed to make the subcontractor installer jointly and severally liable for the portion of the installation that the subcontractor performed. The installer will have to go out and correct the home, not the retailer. TDHCA responds that retailers are required to obtain an installer's license because the law requires the retailer to give the installation warranty for a new home. Further, under the Manufactured Housing Standards Act, an installer is anyone, including a retailer or manufacturer, that contracts to perform or performs installation functions on manufactured housing. The rules are a recognition of the retailer's accountability for the proper installation of all new homes and other homes if the installation is part of the retail sales contract. The industry and the Advisory Commission have supported holding the retailers accountable for all new home installation and other installations included in the retail sales contract, but recognize, too, the responsibility of the installer to perform properly. One commenter agrees with the rule change on the responsibility for the installation, but would like the department to hold licensed installers accountable. Another commenter said the retailer needs to be responsible. A commenter suggested notifying the installer of deviations to the installation first (before holding the retailer responsible), copying the retailer, because the installer is ultimately responsible. Then the retailer should only be ordered to correct the installation if the installer does not correct the deviations. Several commenters said installers should be notified along with the retailer when deviations are found so that they can send their qualified employees to correct the installation. TDHCA responds that licensed installers are presently held accountable for installations, as outlined above. The department disagrees with the suggestion that the installer should first be ordered to make the corrections and only if the installer does not do so the retailer be ordered to do so. This would entail an unacceptable time lag for the consumer, whose house is improperly installed. The department agrees with the idea of notifying installers along with the retailer when deviations are found. A commenter asked if the department can furnish computer specifications for forms that are provided by the department. Another commenter said they will have to hire an additional secretary to comply with the revised rule. Previously the rule required the retailer and installers to submit installation reports on a monthly basis, but now the rule states the installer will submit an installation inspection report within ten days of every installation. TDHCA responds that forms can be downloaded from the TDHCA Web Page. Concerning the ten-day requirement, the department supports the recommendation of the Advisory Commission. One commenter requested that the Department guarantee that the installation inspections will be done within 30 or 40 days. Another asked what was the "appropriate field office." TDHCA responds that by law it must inspect 25% of home on a sample basis. Inspections will be done as quickly as possible with the inspection staff available. The location of the home determines which TDHCA field office gets the report. TDHCA will furnish license holders a list of field office addresses, phone numbers, and FAX numbers. With respect to sec.80.119(g)(5), a commenter said he thought his home would be installed on a permanent foundation since it was being certified as part of his real estate. He later found that it was not on a permanent foundation, but is considered permanently affixed to real estate when certified. He recommends deleting this section from the rules. In response, TMHA stated that the Certification Documentation form used in such a transaction has a statement at the bottom that says "We understand the State will not perform an installation inspection for verification of this certification." The provision was an attempt to eliminate unnecessary inspections and thus additional expense to consumers involved in real estate transactions. TDHCA responds that according to industry representatives, FHA and VA do not feel that dual inspections and dual approvals are required. The existing rule has worked well over the years. COMMENTS ON sec.80.121: One commenter was of the opinion that an additional cost will be incurred by retailers because the new rules increase the amount of information that is required to be maintained in the sales files. TDHCA responds that it supports the recommendation of the Advisory Commission. COMMENT ON sec.80.130: One commenter noted that the requirement to deliver the warranty at the time the retail installment sales contract is signed creates a hardship for the retailer. In many instances, the warranty is part of the consumer manual that is located in the home. If the sale falls through after the customer has signed, there will not be a consumer manual for the next customer that actually purchases the home. Manufacturers will have to make sure there are adequate supplies of warranty documents available. TDHCA responds that this provision tracks sec.14(d) of the Manufactured Housing Standards Act, so there is no leeway for the rule. The department believes the retailers and manufacturers will be able to establish a process whereby retailers are provided adequate copies of manufacturers warranties in a timely manner. COMMENT ON sec.80.132: A commenter complained that rule requiring service or work orders to be received by the department within ten days after the expiration of the warranty order issued by the department will force the respondent to send them by certified mail. This is an additional cost factor because of the increased postage and increased labor to prepare for certified mail. TDHCA responds that respondents are given at least 40 days to complete the necessary repairs, with further time if an extension is requested. There should be enough time to mail the orders by regular mail, if the respondent completes the warranty service within the allotted time given. COMMENTS ON sec.80.124: One commenter asked if they can use their computers to recreate the titling forms required by the department, and if they must use exactly the same format as the TDHCA. TDHCA responds that the rules require that the department's forms be used. The forms can be retrieved from the department's web site. The following is a restatement of the rules' factual bases: TDHCA established a Manufactured Housing Citizens Advisory Commission in the winter of 1997 in order to review and suggest changes to existing rules regulating manufactured housing. The Advisory Commission was composed of representatives from different sectors affected by the rules: consumers of new homes and used homes, retailers, manufacturers of homes and of anchors, and an attorney. After meeting for over nine months, the Advisory Commission presented their suggestions to department staff, which reviewed them and offered suggested changes. The Advisory Commission then met with department staff to reach agreement on the final draft of the rules. This final draft was presented to the TDHCA Board, which authorized its publication in the Texas Register. Comments were received in written form and at the public hearing on June 24, 1998. The following describes the reasons for the rules. New sec.80.10 describes the historical record for standards adopted for manufactured housing in accordance with the Texas Manufactured Housing Standards Act (Act), Article 5221f, and clarifies the identity of the standards adopted. New sec.80.11 concerns definitions related to manufactured housing. Definition sections previously existed in several locations throughout the repealed rules. To allow the reader a way to easily reference the definitions, the separate sections previously in the repealed rules have been combined into one section and alphabetized in Subchapter B named "Definitions." New sec.80.20 concerns required fees to the department for services rendered for inspections, issuance of Texas Seals, licensing, educational instruction, training and administrative costs. New sec.80.50 concerns wind zone regulations that require homes manufactured on or after September 1, 1997, to meet the U.S. Department of Housing and Urban Development standards for Wind Zone II in order to be installed in Wind Zone II. Homes constructed prior to September 1, 1997, will be allowed to be installed in Wind Zone I and II without restriction. The selling retailer of a home constructed on or after September 1, 1997 to Wind Zone I standards must give a written notice to the buyer that states the home was not designed nor constructed to withstand hurricane force winds, and is not permitted to be installed in Wind Zone II counties in Texas, and there may be restrictions in other states prohibiting installation in Wind Zone II or III areas. This rule reflects changes in the Manufactured Housing Standards Act effective September 1, 1997. New sec.sec.80.51-80.56, 80.62-80.64, and 80.66 concern standards and requirements for installation of manufactured homes, stabilizing system requirements, procedures for retailer alterations, and rebuilding or repairing "salvaged" manufactured homes for purposes of issuance of a manufactured home document of title. The new rules clarify and organize installation inspection requirements, wind zone installation requirements, and stabilizing system requirements; ensure that homes are installed in a safe and proper manner for the general public and the consumers protection; enhance the durability of manufactured homes; and establish generic installation standards for use statewide. New sec.sec.80.119-80.123, 80.125-80.128, 80.130-80.132, and 80.135, concern responsibilities for the installation of manufactured homes; requirements for correcting deviations to a manufactured home installation; responsibilities of the manufacturer, retailer, and installer; security, license, and advertising requirements; procedures for hearings and arbitrations; delivery of warranties; consumer complaint handling procedures; correction requirements pertaining to consumer complaints; and manufactured housing auctions. The new rules explain various types of administrative actions related to licensing, and reference new and revised sections in the Act, Article 5221f. The new rules update procedures for handling consumer complaints to include the federal requirements and clarify the consumer complaint inspection process. New sec.sec.80.119 - 80.123 concern the requirements for installers, manufacturers, retailers, security, and licensing. These rules do the following: encourage use of knowledgeable installers, protect the general public, consumers, and license holders by allowing better detection of unauthorized and unlawful activities; effectively administer the Act by requiring up-to-date reports and installation manuals from the manufacturers; require the retailers to provide proof to the department that the consumers receive the required information; assure that license holders conform to security requirements; clarify licensing terminology and requirements; assure that manufactured homes are rebuilt according to standards; and protect the general public and consumers by ensuring review and analysis of pertinent documents before issuing a license. The new rule sec.80.128 concerning arbitration requirements establishes procedures to comply with the requirements in sec.13A(h) of the Act, Article 5221f. New sec.80.135 clarifies requirements for manufactured housing auctions to protect consumers and give homeowners authority to auction their own home. New sec.80.180 concerns notice to the consumer of formaldehyde emissions in manufactured homes. The notice must be posted in the home as outlined in the Federal Manufactured Home Construction and Safety Standards. Retailers shall deliver a copy of the "Important Health Notice" prescribed by the U.S. Department of Housing and Urban Development to the consumer before the execution of any mutually binding sales agreement. New sec.sec.80.202-80.208 concern the method and requirements in obtaining a title or filing a tax lien, and instructions regarding required reports from the manufacturer and retailer. The new rules do the following: clarify the requirements and procedures for issuance of a title; provide information that will assist license holders, consumers, and the general public in conforming with the requirements in the Act, Article 5221f; clarify the procedures for filing a lien; and assist the department in data entry of information. The installation standards in sec.sec.80.50-80.63 and sec.80.119 will become effective 60 days after the date of publication of the notice as required by the Texas Manufactured Housing Standards Act, Article 5221f, sec.9(g). All other rules will become effective 20 days after filing as specified by Chapter 2001, Government Code. The new section is adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rule. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813304 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER B.Defintions 10 TAC sec.80.11 The new section is adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rule. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813305 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER C.Fee Structure 10 TAC sec.80.20 The new section is adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rule. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813306 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER D.Standards and Requirements 10 TAC sec.sec.80.50-80.56, 80.62, 80.63, 80.64, 80.66 The new sections are adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813307 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: November 3, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER E.General Requirements 10 TAC sec.sec.80.119, 80.120-80.123, 80.125-80.128, 80.130-80.132, 80.135 The new sections are adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813310 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER F.Consumer Notice Requirements 10 TAC sec.80.180 The new section is adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rule. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813311 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 SUBCHAPTER G.Titling 10 TAC sec.sec.80.202-80.208 The new sections are adopted under the authority of the Texas Manufactured Housing Standards Act, Article 5221f, sec.9, which provides the department with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the department. No other statute, code, or article is affected by the new rules. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813312 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 475-3726 TITLE 13. CULTURAL RESOURCES PART I. Texas State Library and Archives Commission CHAPTER 1.Library Development 13 TAC sec.1.21 The Texas State Library and Archives Commission adopts an amendment to 13 TAC sec.1.21, without change to the proposed text as published in April 3, 1998, issue of the Texas Register (23 TexReg 3402). The amendment reflects the change in the federal administrative agency to the Institute of Museum and Library Services under new federal legislation, the Library Services and Technology Act. Under the Institute of Museum and Library Services, the requirement to submit a plan to the federal government has changed from every year to every five years. The Commission will no longer adopt by reference an annual plan that contains specific grant guidelines. It will adopt grant guidelines as separate rules and adopt a plan for library services by reference when required by the Institute of Museum and Library Services. The purpose of the amendment is to adopt by reference the State Plan for the Library Services and Technology Act in Texas FFY 1998-2002, and to qualify Texas for federal assistance to improve library services. No comments were received concerning the adoption of the amendment The amendment is adopted under Government Code sec.441.006, sec.441.009, and sec.441.0091, which provide the Commission with authority to govern the Texas State Library, adopt a state plan for library services, and adopt rules on various subjects. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813020 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 6, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 463-5440 Standards for Accreditation of a Major Resource System of Libraries in the Texas Library System 13 TAC sec.1.68 The Texas State Library and Archives Commission repeals sec.1.68, without change to the proposed repeal as published in June 5, 1998, issue of the Texas Register (23 TexReg 5873). The repealed sec.1.68 removes an outdated policy for library materials and equipment purchased with grant funds and brings the commission policy into compliance with statutory changes that require the commission to conform to the Uniform Grant Management Standards, 1 TAC sec.sec.5.141-5.167. The new policy for library materials and equipment purchased with grant funds is found in the Uniform Grant Management Standards 1 TAC sec.sec.5.141-5.167 which will be adopted by the commission in sec.2.118. This policy has two distinctions from the repealed sec.1.68. First, Uniform Grant Management Standards sets the capitalization level for equipment at $1,000 rather than $300 as set in sec.1.68. Second, Uniform Grant Management Standards require that title to equipment purchased with grant funds be retained by the grant recipient, and that the grant recipient follow regulations about safeguarding and reporting the equipment. sec.1.68 required title to equipment purchased with grant funds be retained by the commission. Both of the distinctions between Uniform Grant Management Standards and sec.1.68 are effective retroactively. The repeal of sec.1.68 will lessen the amount of time taken to maintain and report equipment inventory, and the commission will no longer hold title to property that is categorized as equipment. No comments were received concerning the repeal. The repeal is adopted under the Government Code sec.441.006, sec.441.136, and sec.441.0091 which provides the Commission with authority to govern the Texas State Library and adopt rules necessary to the administration of the program of state grants. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813042 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 6, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 463-5440 13 TAC sec.1.93, sec.1.101 The Texas State Library and Archives Commission repeals 13 TAC sec.1.93 and sec.1.101 without change to the proposed repeals as published in April 3, 1998, issue of the Texas Register (23 TexReg 3402). The repeals remove outdated policies for grants. The repeal of sec.1.93 removes an outdated policy for grants to establish public libraries. The repeal of sec.1.101 removes an outdated policy and standards for grants to connect libraries to the Internet. No comments were received concerning the adoption of the repeals. The sections are adopted under Government Code sec.441.006 and sec.441.0091, which provide the Commission with authority to govern the Texas State Library and adopt rules on various subjects. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813021 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 6, 1998 Proposal publication date: April 3, 1998 For further information, please call: (512) 463-5440 SUBCHAPTER F.System Advisory Council 13 TAC sec.1.121 and sec.1.122 The Texas State Library and Archives Commission repeals sec.1.121 and sec.1.122. The repealed rules are replaced with new procedures for resolving disputes and complaints in Chapter 2 General Policies and Procedures. The repealed rules were published in the April 17, 1998 issue of the Texas Register (23 TexReg 3784- 3785). The repealed rules established different procedures depending on the subject matter of the dispute. A single procedure is adopted concurrently with this repeal to cover all areas of dispute with the exception of disciplinary actions against county librarians. Disputes involving the award of bids, grants, contracts, membership in the Texas Library System, and other subjects under commission authority will be resolved using these new procedures. The adopted procedures conform to General Services Commission procedures for resolution of procurement disputes as required by Senate Bill 1752, Government Code sec.2155.076. No public comment was received regarding this repeal. The Library Systems Act Advisory Board reviewed and recommended the repeal. The rules are repealed under the Government Code sec.441.006. The adopted amendment affects Senate Bill 1752, sec.2156.005(c) and sec.2155.076. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813078 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 7, 1998 Proposal publication date: April 17, 1998 For further information, please call: (512) 463-5440 CHAPTER 2.General Policies and Procedures The Texas State Library and Archives Commission adopts new sec.2.1, which defines terms used in Chapter 2. New Subchapter C, Grant Policies, pertaining to grants policies is adopted with changes to the proposed text as published in May 8, 1998, issue of the Texas Register (23 TexReg 4484). Editorial changes to correct spelling and grammar errors are made in sec.2.112, sec.sec.2.120 - 2.125, sec.2.130, sec.sec.2.132 - 2.134, sec.2.150, sec.2.153 and sec.2.154 which are adopted with changes. Sections 2.1, 2.111, 2.113 - 2.119, 2.126 - 2.129, 2.131, 2.135, 2.151, 2.152, and 2.155 are adopted without changes to the proposed text as published in May 8, 1998, issue of the Texas Register (23 TexReg 4484) and will not be republished. The new section sec.2.1 replaces sec.2.11 which is being repealed concurrently. Subchapter C, Grant Policies establishes Commission policy for administration of specific grants programs. The grant programs will assist communities to improve library services. The policy details the process for obtaining grants, the criteria on which grants will be awarded, and how the grants will be administered once awarded. New sec.2.1 defines the terms Commission, Library, Loan Period, Over-size Paper Copy, and State Archives. Sections 2.111-2.119, 2.120-2.125, 2.130-2.135, 2.150-2.155 set the general conditions and criteria for grant awards that maintain and foster cooperative library services with other communities, provide outreach services for populations with special needs, and provide interlibrary loan services. The new sections will assist communities to seek financial assistance from the commission and to carry out successful grant programs. No comments were received concerning the adoption of the new sections. SUBCHAPTER A.Principles and Procedures of the Commission 13 TAC sec.2.1 The new section is adopted under the Government Code sec.441.006 and sec.441.091 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects including grants. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813259 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 SUBCHAPTER C.Grant Policies Division 1. General Grant Guidelines 13 TAC sec.sec.2.111-2.119 The new sections are adopted under the Government Code sec.441.006 and sec.441.091 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects including grants. sec.2.112.General Selection Criteria. (a) Grants shall be awarded based on guidelines that reflect applicable state and federal mandates. Selection criteria are designed to select applications that provide the best overall value to the state. (b) The award criteria include: (1) program quality as determined by a peer review process; and (2) the cost of proposed service. (c) The commission may consider additional factors in determining best value, including: (1) financial ability to perform services; (2) state and regional service needs and priorities; (3) improved access for poorly served areas and populations; (4) ability to continue services after grant period; and (5) past performance and compliance. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813260 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 2. Library Services and Technology Act, Library Cooperation Grants-Part A, Technology, Guidelines for Public Libraries 13 TAC sec.sec.2.120-2.125 The new sections are adopted under the Government Code sec.441.006 and sec.441.091 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects including grants. sec.2.120.Goals and Purposes. (a) This grant program promotes access to learning and information resources in all types of libraries for individuals of all ages; and promotes library services that provide all users access to information through state, regional, national, and international electronic networks; and provides linkages among and between libraries. (b) Programs may be in one of the following categories: (1) Establish or enhance electronic linkages among or between libraries -- to establish a new network or update the electronic technology in an existing one by providing better or enhanced access to library resources and materials in more than one system member public library or with multi-type libraries; or (2) Encourage libraries in different areas, and encourage different types of libraries to establish consortia and share resources -- to encourage public libraries to participate in public library consortia or participate in multi- type library consortia that include a public library (which is a member of the Texas Library System) and to share among themselves the technology-based resources of all libraries within the consortium. sec.2.121.Eligible Applicants. (a) Texas Library System member public libraries, Major Resource Systems, and regional library systems through their governing authority (city, county, or corporation) are eligible to apply for funds. These funds are awarded to public libraries but may be used with all types of libraries as defined in the Library Services and Technology Act (LSTA), P.L. 104-208, and that are members of a consortium as defined by the LSTA. (b) Successful applicants are eligible to apply for grant funds for the two years following the initial grant year. The second and third application will be evaluated with the same criteria as new applications. No applicant will be eligible for a fourth year of funding for the same project. sec.2.122.Eligible Expenses. (a) This grant program will fund costs for staff, equipment, capital expenditures, materials, and professional services needed to: (1) create a new, or enhance an existing, network of system member public libraries; (2) create a multi-type library network that includes a system member public library; (3) create linkages between system member public libraries and educational, social, or cultural information services; (4) create linkages between system member public libraries separated by geographical barriers. (b) This grant program will not fund the following costs: (1) building construction or renovation; (2) food, beverages, or gifts; (3) equipment or technology not specifically needed to carry out the goals of the grant; (4) transportation/travel for participants or non-grant funded personnel; (5) programs to enhance service within existing library structures, e.g. branch libraries; (6) dumb terminals; (7) American Standard Code for Information Interchange (ASCII) connections; or (8) databases currently offered or similar to ones offered by the Texas State Library and Archives Commission (i.e., a magazine index database may not be purchased since one is already provided by the Texas State Electronic Library). sec.2.123.Criteria for Award. The Library Services and Technology Act Advisory Council will score proposals on nine criteria. The maximum number of points for each category is as follows: (1) Community Profile. (15 points) The applicant describes the greater community to be served by the grant. Identifies a service that might be used if it were available; and includes demographic statistics, library records, or surveys to support these statements. Attaches letters of cooperation showing their commitment to the project from agencies to be involved in the shared service. The applicant thoroughly describes services, programs, activities; describes the location where they will be offered; and explains how these services will attract shared library users. (2) Shared Services. (15 points) The application should show details of the existing technology plan of the system member public library, Major Resources System, or regional library system and how the shared service is designed to mesh with technology purchased or to be purchased with Telecommunications Infrastructure Fund (TIF) grants, the service provided by Universal Service Fund Education Rate discounts, and House Bill 2128. (3) Personnel. (5 points) List who will administer the funds. List which positions will provide the services. List how much time will be spent in each position on assigned duties. List how the qualifications of each person relate to their job duties. Full job descriptions are required for new hires. (4) Timetable. (5 points) The applicant presents a timetable for project activities within the fiscal year (i.e., a list of actions with a date by which they will be accomplished); provides verification that facilities will be available, equipment and materials delivered; and explains how the staff will be hired and trained in time to carry out the services as planned. (5) Objectives. (10 points) The applicant sets achievable, measurable outcomes; describes how the outcomes will demonstrate expanded library services; and presents a reasonable method to collect data. (6) Reaching a Shared Target Area. (10 points) The applicant submits a plan for introducing the shared library services to targeted users; the plan uses a variety of communication techniques and includes verbal communication. (7) Expenses Justified. (15 points) The applicant fully justifies the budget by describing how budgeted items will contribute to the shared services; quotes a source for the stated costs (e.g., city pay classification for staff, catalog or city/county bid list for equipment); the costs are reasonable to achieve project objectives. (8) Adequacy of Resources. (15 points) The applicant describes the joint resources which will be used to support this expansion of services during the grant year; submits estimated costs for continuing the expanded services next year, with a plan for how the library or group of libraries will assume those costs in the future. A written commitment of future support from governing bodies is desirable, but not required. (9) Evaluation. (10 points) The applicant presents a method to count users of the shared services as well as the effectiveness of the service. Provides a method to identify any new library users. sec.2.124.Grant Review and Award Process. (a) Commission staff will review each application for the following: (1) legal eligibility of the institution to participate in a grant program and appropriate authorizing signature; (2) conformance to the federal and state regulations pertaining to grants; (3) inclusion of unallowable costs; (4) errors in arithmetic or cost calculations; (5) submission of all required forms; and (6) whether the application arrived at the Texas State Library and Archives Commission by the required date and time. (b) Commission staff will raise issues and questions regarding the needs, methods, staffing and costs of the applications. Staff comments will be sent to the LSTA Council with the applications for consideration by the council. (c) Applicants will be sent a copy of the staff comments to give applicants an opportunity to respond in writing. Applicants may not modify the proposal in any way; however, applicants' responses to staff comments will be distributed to the council. (1) Applications with significant errors, omissions, or eligibility problems will not be rated. (2) Commission staff will be available to offer technical assistance to council members. (d) Applications will be scored using the following process: (1) The Library Services and Technology Act Advisory Council will review all complete and eligible grant applications forwarded to them by commission staff and complete a rating form for each. Each member will evaluate the proposal in relation to the specific requirements of the criteria and will mark a weighted rating, ranging from 0-15 points depending on the points assigned to each criterion. (2) No council member who is associated with an applicant or with an application, or who stands to benefit directly from an application will evaluate that application. Any council member who feels unable to fairly evaluate a particular application may choose not to review that application. (3) Council members will consider and assess the strengths and weaknesses of any proposed project only on the basis of the documents submitted. Considerations of geographical distribution, demographics, type of library, or personality will not influence the assessment of a proposal by the council. (4) Council members may not discuss proposals with any applicant before the proposals are reviewed. Commission staff is available to provide technical assistance to council members. Commission staff will conduct all negotiations and communication with the applicants. (5) Council members may offer a motion to set conditions for funding a given application, e.g., reduction of project budget, revision of project objectives. Such motions must be approved by a majority vote of council members present and eligible. The motion must include a statement of the reasons for setting such conditions. Council members who are ineligible to evaluate a given proposal will not vote on funding conditions. (6) Council members who do not attend the meeting may mail the evaluation forms to the chairperson in care of the Library Development Division of the Texas State Library and Archives Commission. In order to be counted, the mailed forms must arrive before the meeting. sec.2.125.Decision Making Process. To be considered for funding by the Texas State Library and Archives Commission, an application must receive a minimum adjusted mean score of 50 points. Commission staff will tabulate the council's work using a method that eliminates the high and low score, called an adjusted mean score. (1) Applications will be ranked in priority order by score for consideration by the commission. (2) If insufficient funds remain to fully fund the next application, the staff will negotiate a reduced grant with the next ranked applicant. (3) If the council recommends funding an application which, for legal, fiscal, or other reasons, is unacceptable to the staff, a contrary recommendation will be made. The council will be informed of this situation prior to presentation to the commission. A positive recommendation to the commission will be contingent upon successfully completing these negotiations prior to the commission meeting. If council is unable to produce a set of recommendations for funding, the staff will use the same evaluation procedures to develop recommendations to the commission. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813261 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 3. Library Services and Technology Act, Library Cooperation Grants-Part B, Services, Guidelines for Public Libraries 13 TAC sec.sec.2.130-2.135 The new sections are adopted under the Government Code sec.441.006 and sec.441.091 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects including grants. sec.2.130.Goals and Purposes. (a) This grant program promotes access to learning and information resources in all types of libraries for individuals of all ages; and promotes library services that provide all users access to information through state, regional, national, and international electronic networks; and provides linkages among and between libraries. (b) The grant encourages libraries in different areas, and encourages different types of libraries to establish consortia and share resources --encourages public libraries to participate in public library consortia or participate in multi-type library consortia that include a public library (which is a member of the Texas Library System) and to share among themselves the services of all libraries within the consortium. sec.2.132.Eligible Expenses. (a) This grant program will fund costs for staff, equipment, capital expenditures, materials, and professional services needed to provide: (1) cooperative multi-library or multi-type library training programs ; (2) cooperative multi-library or multi-type library literacy volunteer training programs; (3) cooperative multi-library or multi-type library programs; (4) cooperative multi-library or multi-type library preservation projects. (b) This grant program will not fund the following costs: (1) building construction or renovation; (2) food, beverages, or gifts; (3) equipment or technology not specifically needed to carry out the goals of the grant; (4) transportation/travel for participants or non-grant funded personnel; or (5) programs to enhance service within existing library structures, i.e. branch libraries. sec.2.133.Criteria for Award. The Library Services and Technology Act Advisory Council will score proposals on nine criteria. The maximum number of points for each category is as follows: (1) Community Profile (15 points). The applicant describes the greater community to be served by the grant; identifies a service that might be used if it were available; includes demographic statistics, library records, or surveys to support these statements; and attaches letters of cooperation showing their commitment to the project from agencies to be involved in the shared service. The applicant thoroughly describes services, programs, activities; describes the location where they will be offered; and explains how these services will attract shared library users. (2) Shared Services (15 points). The applicant describes thoroughly the shared services, programs, activities, and materials to be purchased; describes locations where they will be offered; and explains how these services will attract shared library users. (3) Personnel (5 points). List who will administer the funds. List which positions will provide the services. List how much time will be spent in each position on assigned duties. List how the qualifications of each person relate to their job duties. Full job descriptions are required for new hires. (4) Timetable (5 points). The applicant presents a timetable for project activities within the fiscal year (i.e., a list of actions with a date by which they will be accomplished); provides verification that facilities will be available, equipment and materials delivered; and an explanation of how the staff will be hired and trained in time to carry out the services as planned. (5) Objectives (10 points). The applicant sets achievable, measurable outcomes; describes how the outcomes will demonstrate expanded library services; and presents a reasonable method to collect data. (6) Reaching a Shared Target Area (10 points). The applicant submits a plan for introducing the shared library services to targeted users; the plan uses a variety of communication techniques and includes verbal communication. (7) Expenses Justified (15 points). The applicant fully justifies the budget by describing how budgeted items will contribute to the shared services; quotes a source for the stated costs (e.g., city pay classification for staff, catalog or city/county bid list for equipment); the costs are reasonable to achieve project objectives. (8) Adequacy of Resources (15 points). The applicant describes the joint resources which will be used to support this expansion of services during the grant year; submits estimated costs for continuing the expanded services next year, with a plan for how the library or group of libraries will assume those costs in the future. A written commitment of future support from governing bodies is desirable, but not required. (9) Evaluation (10 points). The applicant presents a method to count the users of the shared services as well as the effectiveness of the service. Applicant provides a method to identify any new library users. sec.2.134.Grant Review and Award Process. (a) Commission staff will review each application for the following: (1) legal eligibility of the institution to participate in a grant program and appropriate authorizing signature; (2) conformance to the federal and state regulations pertaining to grants; (3) inclusion of unallowable costs; (4) errors in arithmetic or cost calculations; (5) submission of all required forms; and (6) whether the application arrived at the Texas State Library and Archives commission by the required date and time. (b) Commission staff will raise issues and questions regarding the needs, methods, staffing and costs of the applications. Staff comments will be sent to the LSTA Council with the applications for consideration by the council. (c) Applicants will be sent a copy of the staff comments to give applicants an opportunity to respond in writing. Applicants may not modify the proposal in any way; however, applicants' responses to staff comments will be distributed to the council. (1) Applications with significant errors, omissions, or eligibility problems will not be rated. (2) Commission staff will be available to offer technical assistance to council members. (d) Applications will be scored using the following process: (1) The Library Services and Technology Act Advisory Council will review all complete and eligible grant applications forwarded to them by commission staff and complete a rating form for each. Each member will evaluate the proposal in relation to the specific requirements of the criteria and will mark a weighted rating, ranging from 0 - 15 points depending on the points assigned to each criterion. (2) No council member who is associated with an applicant or with an application, or who stands to benefit directly from an application will evaluate that application. Any council member who feels unable to fairly evaluate a particular application may choose not to review that application. (3) Council members will consider and assess the strengths and weaknesses of any proposed project only on the basis of the documents submitted. Considerations of geographical distribution, demographics, type of library, or personality will not influence the assessment of a proposal by the council. (4) Council members may not discuss proposals with any applicant before the proposals are reviewed. Commission staff is available to provide technical assistance to council members. Commission staff will conduct all negotiations and communication with the applicants. (5) Council members may offer a motion to set conditions for funding a given application, e.g., reduction of project budget, revision of project objectives. Such motions must be approved by a majority vote of council members present and eligible. The motion must include a statement of the reasons for setting such conditions. Council members who are ineligible to evaluate a given proposal will not vote on funding conditions. (6) Council members who do not attend the meeting may mail the evaluation forms to the chairperson in care of the Library Development Division of the Texas State Library and Archives Commission. In order to be counted, the mailed forms must arrive before the meeting. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813262 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 5. Library Services and Technology Act, Special Projects Grants, Guidelines for Public Libraries 13 TAC sec.sec.2.150-2.155 The new sections are adopted under the Government Code sec.441.006 and sec.441.091 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects including grants. sec.2.150.Goals and Purposes. This grant program expands public library services to all members of the library's community. It enables libraries to develop local programs for populations with special needs. Programs may be in one of the following categories: (1) Services to People with Limited English Proficiency --To improve access to library resources and services to individuals not born in the United States or whose native language is not English and therefore have difficulty speaking, reading, writing, or understanding the English language. (2) Services to Older Adults --To provide services, programs, and library materials for persons who are over 60 years of age. (3) Community Information and Referral Centers --To provide patrons with specific information of a utilitarian or practical nature on groups or organizations in the library's service area or to refer patrons to an organization, agency, or individual capable of providing the information. (4) Literacy Programs --To provide literacy programs for adults, school dropouts, and persons incarcerated in correctional facilities, in cooperation with other agencies and organizations, if appropriate. (5) Services for People with Disabilities --To provide library services to individuals who have physical, mental, visual, or hearing disabilities. (6) Intergenerational Library Programs --To develop intergenerational library programs that will match older adult volunteers with libraries interested in developing after school literacy and reading skills programs for unsupervised school children during after school hours. (7) Child Care Center Library Programs --To provide library services and programs to child care providers or child care centers, which are licensed or certified by the State, or otherwise meet the requirements of State law. (8) Services for the Disadvantaged in Urban and Rural Areas -- To make public library services accessible to disadvantaged individuals who are unable to benefit from public library services regularly available to the general public. Disadvantages include, but are not restricted to, distance, socio-economic or educational deprivation, or cultural isolation from the general community. sec.2.153.Criteria for Award. The Library Services and Technology Act Advisory Council will score proposals on nine criteria. The maximum number of points for each category is as follows: (1) Community Profile (15 points). The applicant describes the community which the library serves and describes the segments of that community which it is not serving; identifies a service that the non-users might use if it were available; and includes demographic statistics, library records, or surveys to support these statements. (2) New Services (15 points). The applicant describes thoroughly services, programs, activities, and material to be purchased; describes the location where they will be offered; and explains how these services will attract new library users. (3) Personnel (5 points). The applicant describes who will administer the grant funds and who will provide the services; how much time they will spend on their assigned duties; and how their qualifications relate to their job duties. Full job descriptions are required for new hires. (4) Timetable (5 points). The applicant presents a timetable for project activities within the fiscal year (i.e., a list of actions with a date by which they will be accomplished); provides verification that facilities will be available, equipment and materials delivered; and explains how the staff will be hired and trained in time to carry out the services as planned. (5) Objectives (10 points). The applicant sets achievable, measurable outcomes; describes how the outcomes will demonstrate expanded library services; and presents a reasonable method to collect data. (6) Reaching the Hard-to-Reach (10 points). The applicant submits a plan for introducing the new library services to traditionally hard-to-reach nonusers; the plan uses a variety of communication techniques, and includes verbal communication. (7) Expenses Justified (15 points). The applicant fully justifies the budget by describing how budget items will contribute to the new services; quotes a source for the stated cost (e.g., city pay classification for staff, catalog or city/county bid list for equipment); the costs are reasonable to achieve project objectives. (8) Adequacy of Resources (15 points). The applicant describes the local resources which will be used to support this expansion of services during the grant year; submits estimated costs for continuing the expanded services next year, with a plan for how the library will assume those costs in the future. A written commitment of future support from the governing body is desirable, but not required. (9) Evaluation (10 points). The applicant presents a method to count how many of the users of the new services are former nonusers. If the project proposes to educate individuals, the applicant describes educational outcomes and how they will be measured. sec.2.154.Grant Review and Award Process. (a) Commission staff will screen each application for the following: (1) legal eligibility of the institution to participate in the grant program and appropriate authorizing signatures; (2) conformance to the federal and state regulations pertaining to grants; (3) inclusion of unallowable costs; (4) errors in arithmetic or cost calculations; (5) submission of all required forms; and (6) whether the application arrived at the Texas State Library and Archives Commission by the required date and time. (b) Commission staff will raise issues and questions regarding the needs, methods, staffing, and costs of the applications. Staff comments will be sent to the LSTA Council with the applications for consideration by the council. (c) Applicants will be sent a copy of the staff comments to give applicants an opportunity to respond in writing. Applicants may not modify the proposal in any way; however, applicants' responses to staff comments will be distributed to the Council. (1) Applications with significant errors, omissions, or eligibility problems will not be rated. (2) Commission staff will be available to offer technical assistance to council members. (d) Applications will be scored using the following process: (1) The Library Services and Technology Act Advisory Council will review all complete and eligible grant applications forwarded to them by commission staff and complete a rating form for each. Each member will evaluate the proposal in relation to the specific requirements of the criteria and will mark a weighted rating, ranging from 0-15 points depending on the points assigned to each criterion. (2) No council member who is associated with an applicant or with an application, or who stands to benefit directly from an application will evaluate that application. Any council member who feels unable to fairly evaluate a particular application may choose not to review that application. (3) Council members will consider and assess the strengths and weaknesses of any proposed project only on the basis of the documents submitted. Considerations of geographical distribution, demographics, type of library, or personality will not influence the assessment of a proposal by the council. (4) Council members may not discuss proposals with any applicant before the proposals are reviewed. Commission staff is available to provide technical assistance to council members. Commission staff will conduct all negotiations and communication with the applicants. (5) Council members may offer a motion to set conditions for funding a given application, e.g., reduction of project budget, revision of project objectives. Such motions must be approved by a majority vote of council members present and eligible. The motion must include a statement of the reasons for setting such conditions. Council members who are ineligible to evaluate a given proposal will not vote on funding conditions. (6) Council members who do not attend the meeting may mail the evaluation forms to the chairperson in care of the Library Development Division of the Texas State Library and Archives Commission. In order to be counted, the mailed forms must arrive before the meeting. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813263 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 9, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 SUBCHAPTER A.Principles and Procedures of the Commission 13 TAC sec.2.11 The Texas State Library and Archives Commission repeals sec.2.11, without change to the proposed repeal as published in May 8, 1998, issue of the Texas Register (23 TexReg 4484). The repealed section contained definitions for Chapter 2 General Policies and Procedures. A new sec.2.1 that will contain the definitions used in Chapter 2 will be adopted. The repeal will correct a mistake in the numbers assigned to the section for definitions in Chapter 2. No comments were received concerning the repeal. The repeal is adopted under the Government Code sec.441.006 which provides the Commission with authority to govern the Texas State Library and adopt rules on various subjects. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813096 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 7, 1998 Proposal publication date: May 8, 1998 For further information, please call: (512) 463-5440 13 TAC sec.2.52 The Texas State Library and Archives Commission adopts an amendment to sec.2.52, concerning the exhibition of state archives with changes to the proposed text as published in the May 22, 1998 issue of the Texas Register (23 TexReg 5291). The rule will allow the commission to expand the loan of archival materials, historical items, and artifacts and to specify conditions under which those items will be loaned for public exhibition. Archival documents may deteriorate when exposed to certain levels of temperature, humidity, and light, among other factors. The amendment establishes standards for those factors, the compliance with which will reasonably ensure the stability of the archival materials. Due to their unique nature and historical value archival materials must also be protected against theft or damage during transit and while on public exhibition. Specific requirements are incorporated in the amendment, the compliance with which should reasonably assure the safety and security of the archival materials during their loan and exhibition. No public comments were received regarding the adoption of the amendment. The commission adopted several editorial changes to the published text. In the first sentence of sec.2.52(d)(1)(A) the word "should" was changed to "must" in order to reduce any ambiguity as to what was required. In sec.2.52(d)(2)(C) an error in the published temperature of 770 degrees was corrected to 70 degrees. In the second sentence of sec.2.52(d)(3)(B) the word "affect" was corrected to read "effect." The amendment is adopted under Government Code sec.441.190 and sec.441.006 which provide the Texas State Library and Archives Commission with the authority to govern the State Library and Archives and adopt rules establishing standards and procedures for the protection, maintenance, and storage of archival state records. sec.2.52. Customer Service Policies. (a)-(c) (No change) (d) Exhibition of State Archives. Archival material, historical items, artifacts, or museum pieces will be loaned for public exhibition only under conditions specified in paragraphs (1) - (8) of this subsection. Requests for loan of the original Texas Declaration of Independence, original copies of the Constitutions of Texas, Treaties of the Republic of Texas, and certain other highly significant documents will require the formal approval of the Commission. Microfilm reproductions, preservation photocopies, other photographic reproductions, or digital images will be created prior to archival materials being lent for exhibition. (1) General Requirements. (A) A formal loan request must be made in writing at least 60 days before the materials are to leave the Texas State Library and Archives Commission. The request shall be addressed to the Director and Librarian. The written request shall include the exhibition title, dates of exhibition and loan period, a general description of the exhibition, and complete citations for each item requested. If special circumstances warrant, the Director and Librarian may waive the 60-day requirement. (B) The maximum loan period is normally six months. The Director and Librarian reserves the right to recall loaned materials for good cause at any time and will attempt to give reasonable notice thereof. (C) The borrower must agree in writing to adhere to the commission rules governing the loan and exhibition of materials. If the borrower wishes to use its own incoming loan agreement form as well, it must first agree that the terms of the commission loan agreement are the controlling terms when there is a conflict between the two documents. (D) The borrower may not take any of the actions detailed in clauses (i), (ii), and (iii) of this subparagraph without first obtaining written permission from the Director and Librarian. (i) Display commission materials in a location or exhibition other than that cited on the loan agreement. (ii) Transfer physical custody of the loaned items to another institution or third party. (iii) Alter, clean, or repair loaned items; perform any conservation treatment; or remove a document from a housing provided by commission (e.g., polyester encapsulation, mat, etc.). (2) Security and Environmental Conditions. (A) Archival material, historical items, and artifacts must be displayed in a facility equipped with fire protection equipment as described in National Fire Protection Association-- Recommended Practice for the Protection of Museums and Museum Collections (ANSI/NFPA 911-1991). (B) Items on loan must be secure at all times. Professional security guards or other trained personnel must regularly patrol exhibition areas during hours of public access. The borrower shall have sufficient 24-hour guards or a 24-hour electronic security system to effectively monitor and protect the exhibition, storage, and preparation areas at all times. (C) Temperature and humidity levels must be monitored and controlled. A temperature of 70 ñ 5 degrees and relative humidity of 50% ñ 5% without rapid fluctuations must be maintained in the storage, preparation, and exhibition areas. Before approving a loan and while items are on loan, the Director and Librarian may request copies of temperature and humidity readings from the borrower to verify that these requirements can and are being met. (D) Exhibition cases must be dirt-free, dust-proof, and secured with locks or security screws. Frames must also be dirt- and dust-proof and secured to the wall with security screws or other hanging methods approved by the Director and Librarian. Glass or acrylic sheeting, such as Plexiglas, Lucite, or Polycast must protect all materials displayed in frames or cases. The Director and Librarian may specify grades of acrylic sheeting that filter ultraviolet light for materials that are especially light sensitive. (E) The exhibition must be monitored daily to ensure security and stability of documents within the cases and frames as well as adequate maintenance and cleaning of the exhibit area. (F) Eating, drinking, and smoking must be prohibited in the storage, preparation, and exhibition areas. (3) Lighting Conditions. (A) Incandescent bulbs are the preferred light source for exhibition lighting. All light sources must be filtered to remove the ultraviolet component. (B) When lighting items exhibited in a case, exterior incandescent lights shall be used whenever possible. If interior case lights are used, fluorescent lights with ultraviolet filters are preferable because fluorescent tubes will have minimal effect on the temperature in the case. (C) No original archival materials, historical items, or artifacts shall be exhibited where they will be exposed to direct or unfiltered sunlight. (4) Handling and Installation. (A) Original archival materials, historical items, or artifacts may be handled and installed only by a curator, registrar, preparator, or conservator under contract to or on the staff of the borrower. (B) The commission may encapsulate or mat documents for loan to minimize dangers associated with handling and exhibition. No item borrowed for exhibition may be altered, cleaned, repaired, or removed from housing provided by the commission without first obtaining written permission from the Director and Librarian. (C) The commission reserves the right to directly supervise the installation of its materials. (D) If documents are displayed in exhibition cases, the cases must be dirt-free, dust-proof, and locked or secured with security screws. (E) All items must be handled, supported, and conveyed by means that will prevent damage during transport to and from the borrowing institution and within it. (F) All items must be given sufficient support to prevent damage during exhibition. (5) Inspections. (A) A commission staff member may inspect the exhibition area before the loan is approved. If, after a commission staff inspection, in the opinion of the Director and Librarian any loan requirement cannot be met, the loan will not be made. (B) Commission staff members or personnel designated by the Director and Librarian may make inspection trips at any time during the period of the loan. (6) Packing and Transportation. (A) Unless the commission specifies otherwise, commission staff will pack items going out on loan. The borrower is responsible for packing loan items to return to the commission. All items must be given sufficient support and protection to prevent damage during transit. (B) The borrower will pay all costs associated with shipping or transporting the items on loan from the commission. (7) Insurance. (8) Publicity and Credit. (A) The Director and Librarian must approve any plans to reproduce loaned items for exhibition-related publications, other publications, and publicity purposes. (B) Commission materials on exhibition may be photographed by the general public without the use of flash or tripod. (C) In the exhibition and related publicity, the commission must receive clear and prominent credit. The following credit line shall be used: Archives and Information Services Division, Texas State Library and Archives Commission. (e)-(h) (No change) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 17, 1998. TRD-9813063 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 6, 1998 Proposal publication date: May 22, 1998 For further information, please call: (512) 463-5440 13 TAC sec.sec.2.53-2.55 The Texas State Library and Archives Commission adopts amendments to sec.2.53 and new sec.sec.2.54-2.55. The amendment to sec.2.53 and new sec.2.54 are adopted without changes and the text will not be published. New sec.2.55 is adopted with changes to the proposed text as published in the April 17, 1998 Texas Register (23 TexReg 3784-3785). A single procedure is adopted to manage the resolution of all disputes. The adopted procedures cover all areas of operations of the commission with the exception of disciplinary actions against county librarians under Government Code sec.sec.441.007 - 441.0074. Procedures concerning certification of county librarians will be proposed at another time. The adopted procedures will conform to General Services Commission procedures for resolution of procurement disputes as required by Senate Bill Government Code sec.2155.076. This adoption is made concurrently with the repeal of existing sec.sec.1.121-1.122, which the adopted rules replace and unify into one procedure. No public comment was received regarding these amendments. The Library Systems Act Advisory Board reviewed and recommended the adoption. The commission did make several technical and editorial corrections to sec.2.55. The phrase "and how to respond to any appeal which is filed" was added to the last sentence in subsection (f) to clarify the content of the director and librarian's notice to protesting and interested parties. To provide more flexibility in the deadline for interested parties to respond to a determination of an appeal, subsection (j) was replaced with the following text: "an interested party may file a response to an appeal of the determination of the Director and Librarian no later than 15 days after the appeal is mailed or delivered. The chair of the commission has the discretion to allow a response filed more than 15 days after the appeal of the determination by the Director and Librarian if the interested party shows good cause for the late filing or if the response raises an issue significant the general policies or procedures of the commission." In subsection (m) the phrase "to reverse" was inserted to read as follows: "Failing a majority vote of the commission to reverse, the Director and Librarian's decision is upheld." The amendment is adopted under the Government Code sec.441.006. The adopted amendment and new sections affect Senate Bill 1752, Texas Government Code sec.2156.005(c) and sec.2155.076, and Texas Government Code, Chapter 441, Subchapters A, F, G, H, I, J, and L, and Local Government Code Title 6, Subtitle C, and Human Resources Code, Chapter 91, Subchapter E. sec.2.55.Protest Procedure. (a) An aggrieved person who is not satisfied with a decision, procedure, or service received from the staff of the Texas State Library and Archives Commission or who is an actual or prospective bidder, grantee, or contractor aggrieved in connection with a solicitation, evaluation, or award may file a protest with the Director and Librarian in accordance with this rule. (b) A protest must be submitted to the Director and Librarian within 21 days after the person knows or should have known of the matter which is protested. The Director and Librarian has the discretion to allow a protest filed after 21 days if the protestant shows good cause for the late filing or if the protest raises an issue significant to the general policies and procedures of the commission. (c) The protestant shall mail or deliver a copy of the protest to all interested persons. The Director and Librarian will furnish a list of interested persons to a protestant. For protests of a competitive selection (bid, contract, or grant), interested persons shall include all persons who have submitted a bid, proposal, or application. (d) A protest must be in writing and identified as a protest under Commission rule 2.55, and contain the following: (1) a description of the protestant's interest in the matter; (2) the issue(s) to be resolved and remedy(s) requested; (3) the protestant's argument supporting the protest, including a statement of relevant facts and applicable law, specifying the statutes, rules, or other legal authority alleged to have been violated; (4) the protestant's affirmation that facts set forth in the protest are true; and (5) a certification that a copy of the protest has been mailed or delivered to all interested persons. (e) Upon receipt of a protest conforming to the requirements of this section, the commission shall not proceed with the solicitation, award, or contract until the protest is resolved, unless the Director and Librarian makes a written determination that delay would harm the substantial interests of the state. (f) The Director and Librarian has the authority to decide, settle, or resolve the protest and will make a written determination. The Director and Librarian may solicit written responses to the protest from other parties. The Director and Librarian shall inform the protesting party and other interested parties by letter of his determination, how to appeal the determination to the commission, and how to respond to any appeal which is filed. (g) An interested party may appeal the determination of the Director and Librarian. An appeal must be in writing and conform to paragraphs (1)-(3) of this subsection: (1) the appeal must be received in the office of the Director and Librarian no later than 15 days after the date the determination is mailed to interested parties; (2) a copy of the appeal must be mailed or delivered by the appealing party to all interested parties and contain a certification of mailing or delivery; (3) the appealing party must state whether or not an opportunity is requested to make an oral presentation to the commission in open meeting. (h) The Director and Librarian shall refer the matter to the commission for their consideration at an open meeting. (i) The chair of the commission has the discretion to allow an appeal filed more than 15 days after the Director and Librarian's determination if the appealing party shows good cause for the late filing or if the appeal raises an issue significant to the general policies or procedures of the commission. (j) An interested party may file a response to an appeal of the determination of the Director and Librarian no later than 15 days after the appeal is mailed or delivered. The chair of the commission has the discretion to allow a response filed more than 15 days after the appeal of the determination by the Director and Librarian if the interested party shows good cause for the late filing or if the response raises an issue significant to the general policies or procedures of the commission (k) Copies of the appeal and responses of interested parties, if any, shall be mailed to the commission by the Director and Librarian. (l) The chair of the commission has the discretion to decide whether or not a request for oral presentations will be granted and will set the order and amount of time for oral presentations that are allowed. The chair also has the discretion to decide whether presentations and written documents presented by Commission staff and interested parties will be allowed. (m) The commission will determine properly filed appeals and make its decision in open meeting. The commission shall vote to uphold or reverse the decision of the Director and Librarian. Failing a majority vote of the commission to reverse, the Director and Librarian's decision is upheld. The commission's decision is final and not subject to judicial review under the statutes governing the commission. (n) A decision issued either by the commission in open meeting or in writing by the Director and Librarian shall be the final administrative action of the commission. (o) Documentation concerning a protest of a competitive selection is part of the commission's records series for that selection and is retained in accordance with the commission's approved records retention schedule. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813079 Raymond Hitt Assistant State Librarian Texas State Library and Archives Commission Effective date: September 7, 1998 Proposal publication date: April 17, 1998 For further information, please call: (512) 463-5440 TITLE 16. ECONOMIC REGULATION PART II. Public Utility Commission of Texas CHAPTER 23.Substantive Rules SUBCHAPTER B.Records and Reports 16 TAC sec.sec.23.11-23.14 The Public Utility Commission of Texas (PUC) adopts the repeals of sec.sec.23.11 relating to General Reports; 23.12 relating to Financial Records and Reports; 23.13 relating to Statistical Reports; and 23.14 relating to Maintenance and Location of Records, with no changes to the proposed text as published in the May 15, 1998 Texas Register (23 TexReg 4722). The repeals are necessary to eliminate duplicative rules. The commission has adopted new sec.sec.25.71 - 25.83, 25.89, and 25.100 in Chapter 25, Subchapter D, relating to Records, Reports, and Other Required Information; and sec.sec.26.71 - 26.82, 26.87, 26.98, and 26.100 in Chapter 26, Subchapter D, relating to Records, Reports, and Other Required Information to replace sec.sec.23.11 - 23.14. These repeals are adopted under Project Number 19121. The commission received no comments on the proposed repeals. These repeals are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the 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.14.002. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 19, 1998. TRD-9813196 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: September 8, 1998 Proposal publication date: May 15, 1998 For further information, please call: (512) 936-7308 CHAPTER 25.Substantive Rules Applicable to Electric Service Providers SUBCHAPTER D.Records, Reports, and Other Required Information 16 TAC sec.sec.25.71-25.83, 25.89, 25.100 The Public Utility Commission of Texas (PUC) adopts new sec.sec.25.71, relating to General Procedures, Requirements and Penalties; 25.72 relating to Uniform System of Accounts; 25.73 relating to Financial and Operating Reports; 25.74 relating to Reports on Sale of Property and Mergers; 25.75 relating to Reports on Sale of 50% or More of Stock; 25.76 relating to Gross Receipts Assessment Report; 25.77 relating to Payments, Compensation, and Other Expenditures; 25.78 relating to State Agency Utility Account Information; 25.79 relating to Equal Opportunity Reports; 25.80 relating to Annual Report on Historically Underutilized Businesses; 25.81 relating to Service Quality Reports; 25.82 relating to Fuel Cost and Use Information; 25.83 relating to Construction Reports; 25.89 relating to Report of Loads and Resources; and 25.100 relating to Other Records, Reports, and Information that May be Required with changes to the proposed text as published in the May 15, 1998 type-name="italic"> Texas Register (23 TexReg 4727). The new sections are adopted under Project Number 19121. These new sections will replace sec.sec.23.11 relating to General Reports; 23.12 relating to Financial Records and Reports; 23.13 relating to Statistical Reports; and 23.14 relating to Maintenance and Location of Records as they apply to the electric service providers. The new sections ensure that the commission is able to adequately monitor the activities of electric utilities for compliance with the Public Utility Regulatory Act, Texas Utilities Code, sec.sec.11.001 - 63.063, other state statutes and/or federal requirements, and to assure the availability of safe, reliable and high quality electric service at just and reasonable rates. These sections provide rules that clarify commission procedures and more accurately reflect current statutes. The Appropriation Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. The PUC held three workshops to conduct a preliminary review of its rules. As a result of these workshops, the PUC is reorganizing its current substantive rules located in 16 Texas Administrative Code (TAC) Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. Chapter 25 has been established for all commission substantive rules applicable to electric service providers. The commission published notice of its intention to review sec.sec.23.11 - 23.14 in the May 15, 1998 issue of the Texas Register (23 TexReg 4935). In the notice of intention to review the commission requested specific comments on the Section 167 requirement regarding whether the reason for adopting sec.sec.23.11 - 23.14 continues to exist in adopting the corresponding sections in Chapter 25. The commission received no comments regarding the Section 167 requirement and finds that the reason for adopting sec.sec.23.11 - 23.14 continues to exist in adopting these new sections. The commission received comments on the proposed sections from Central and South West Texas Electric Utility Operating Companies (CSW), and Southwestern Public Service Company (SPS). Section 25.73(b) regarding annual earnings report: CSW comments that Supplemental Schedule II-1 in the annual earnings report instructions requires the reporting of totals for certain types of expenses, including advertising, contributions, etc. on May 15 of each year. Proposed sec.25.77 of this title (relating to Payments, Compensation, and Other Expenditures) requires the same type of information (detailed by payee) to be filed in a separate annual report by June 1 of each year. CSW suggests that during this review of agency rules, the commission take this opportunity to eliminate this duplication of information by deleting Supplemental Schedule II-1 from the annual earnings report. The commission declines to make the change suggested by CSW. Schedule II-1 contains a summary of expenditures made on items such as advertising, advocacy, and charitable contributions, which are either excluded from inclusion in rates, or have limitations under the law. The information is used to determine whether adjustments need to be made to the reported earnings in performing the earnings monitoring review. The information is not entirely duplicative of the information provided under sec.25.77 of this title because it gives aggregated data by type of expenditure rather than individual transaction amounts. The sec.25.77 report provides more detailed information which for the larger utilities, cannot feasibly be combined into the earnings report. This summary information is not considered to be burdensome to provide, since it is already prepared by the utility. Section 25.77 relating to Payments, Compensation, and Other Expenditures: The commission requested specific comments concerning the effect on the public interest of raising the threshold amount for reporting of information in proposed sec.25.77 from $250 to $500. CSW comments that the commission must establish a balance between examination of minute detail and observing general trends within companies and the industry, and believes this change will have no impact upon the public interest. The commission adopts the $500 threshold for reporting information relating to payments, compensation, and other expenditures. Section 25.80 relating to Annual Report on Historically Underutilized Businesses: The commission proposed language requiring electric utilities with more than 1,000 customers in a state other than Texas, or which purchase more than 10% of its goods and services (other than fuel, purchased power, and wheeling) from vendors in a state other than Texas, to report Texas data separately from data for other states. SPS comments that some vendors may have headquarters in Texas but the entity doing business with SPS may actually be located in another state. Some vendors may have multi-state locations and may show up twice in the report. SPS request clarification of what is intended to be reported as "Texas data" to assist in determining which Texas vendors actually need to be reported separately from other states. In response to SPS's request for clarification, the commission modifies sec.25.80(b)(5) by adding language to clarify what needs to be reported as Texas data and who is considered a Texas vendor. Other clarifying changes made by the commission. Section 25.71(f)(8) regarding due dates of reports: Southwestern Bell Telephone Company (SWBT) filed comments on proposed new sec.26.71(f)(8) concerning due dates of reports as it relates to the telecommunications industry. Section 26.71(f)(8) corresponds to sec.25.71(f)(8) as it relates to the electric industry. SWBT states that the State Comptrollers' office requires the annual Gross Receipts Assessment Report to be filed by August 15 of each year for the previous July 1 through June 30 reporting period. Therefore this report could not be filed with the commission by June 1 of each year. Consistent with SWBT's comments, sec.26.71(f)(8) and sec.25.71(f)(8) have been modified to require the Gross Receipts Assessment Report to be filed by August 15 of each year. All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting these sections, the commission makes other minor modifications for the purpose of clarifying its intent, i.e., the commission has changed the word "contains" to the word "list" in sec.26.100 (implied (a)); and corrected the form of citation to statute in sec.25.78(b)(2). These sections are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the 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.14.002. sec.25.71.General Procedures, Requirements and Penalties. (a) Who shall file. The record keeping, reporting, and filing requirements listed in this subchapter shall apply to all electric utilities operating in the State of Texas, excluding municipally owned utilities, unless otherwise specified. Moreover, the provisions of this subchapter are applicable to all services provided by such carriers. (b) Initial reporting. Unless otherwise specified in a section of this subchapter, periodic reporting shall commence as follows: (1) Quarterly reporting. For all electric utilities and other persons required to file records, reports and other required information under this chapter, who are not already filing quarterly with the commission as of the effective date of this section, reporting shall begin with an initial filing for the first fiscal quarter for which information is available. (2) Annual Reporting. For all electric utilities and other persons required to file records, reports and other required information under this chapter, who are not already filing annually with the commission as of the effective date of this section, reporting shall begin with an initial filing for the most recent fiscal year ending on or prior to April 30 of the first year the record, report or other required information must be filed with the commission. (c) Maintenance and location of records. All records, books, accounts, or memoranda required of an electric utility, as defined in the Public Utility Regulatory Act, sec.31.002(1) may be kept outside the State of Texas so long as those records, books, accounts, or memoranda are returned to the state for any inspection by the commission that is authorized by the Public Utility Regulatory Act. (d) Report attestation. All reports submitted to the commission shall be attested to by an officer or manager of the electric utility under whose direction the report is prepared, or if under trust or receivership, by the receiver or a duly authorized person, or if not incorporated, by the proprietor, manager, superintendent, or other official in responsible charge of the electric utility's operation. (e) Information omitted from reports. The commission may waive the reporting of any information required in this subchapter if it determines that it is either impractical or unduly burdensome on any electric utility to furnish the requested information. If any such information is omitted by permission of the commission, a written explanation of the omission must be stated in the report. (f) Due dates of reports. All periodic reports must be received by the commission on or before the following due dates unless otherwise specified in this subchapter. (1) Monthly reports: 45 days after the end of the reported period. (2) Quarterly reports other than shareholder reports: 45 days after the end of the reported period. (3) Semi-annual reports: 45 days after the end of the reported period. (4) Annual earnings report: May 15 of each year. (5) Shareholder annual reports: seven days from the date of mailing the same to shareholders. (6) Securities and Exchange Commission Filings: 15 days from the initial filing date with the Securities and Exchange Commission. (7) Special or additional reports: as may be prescribed by the commission. (8) Annual reports required by sec.25.76 of this title (relating to Gross Receipts Assessment Report) shall be due August 15 of each year and shall reflect transactions for the previous July 1 through June 30 reporting period. (9) Annual reports required by sec.25.77 of this title (relating to Payments, Compensation, and Other Expenditures) shall be due June 1 of each year and shall reflect the transactions for the most recent calendar year. (g) Special and additional reports. Each electric utility, including municipally owned utilities, shall report on forms prescribed by the commission special and additional information as requested which relates to the operation of the business of the electric utility. (h) Penalty for refusal to file on time. In addition to penalties prescribed by law, and sec.22.246 of the title (relating to Administrative Penalties) the commission may disallow for rate making purposes the costs related to the activities for which information was requested and not timely filed. sec.25.72.Uniform System of Accounts. (a) Every electric utility shall keep uniform accounts as prescribed by the commission of all business transacted. The classification of electric utilities, index of accounts, definitions, and general instructions pertaining to each uniform system of accounts as amended from time to time shall be adhered to at all times, unless provided otherwise by these rules, or specifically permitted by the commission. (b) Classification. For the purposes of accounting and reporting to the commission, each electric utility shall be classified as follows: (1) Major: electric utilities that had in each of the last three consecutive years sales or transmission service that exceeded any one or more of the following: (A) one million megawatt-hours of total sales; (B) 100 megawatt-hours of sales for resale; (C) 500 megawatt-hours of gross interchange out; or (D) 500 megawatt-hours of wheeling for others (deliveries plus losses). (2) Nonmajor: electric utilities that are not classified as "major" as defined in paragraph (1) of this subsection. (c) System of accounts. For the purpose of accounting and reporting to the commission, each electric utility shall maintain its books and records in accordance with the following prescribed uniform system of accounts: (1) Major: uniform system of accounts as adopted and amended by the Federal Energy Regulatory Commission for major electric utilities or other commission- approved system of accounts as will be adequately informative for all regulatory purposes. (2) Nonmajor: uniform system of accounts as adopted and amended by the Federal Energy Regulatory Commission for nonmajor electric utilities or other commission-approved system of accounts as will be adequately informative for all regulatory purposes. (d) Other system of accounts. When a utility has adopted a uniform system of accounts as may be required by a state or federal agency other than those previously mentioned in this section (e.g. United States Department of Agriculture - Rural Utilities Service), that system of accounts may be adopted by the electric utility after notification to the commission. (e) Merchandise accounting. Each electric utility shall keep separate accounts to show all revenues and expenses resulting from the sale or lease of appliances, fixtures, equipment, directory advertising, or other merchandise. (f) Accounting period. Each electric utility shall keep its books on a monthly basis so that for each month all transactions applicable thereto shall be entered in the books of the electric utility. (g) Rules related to capitalization of construction costs. Each electric utility shall accrue allowance for funds used during construction on construction work in progress to the extent not included in rate base. In the event construction work in progress is included in rate base pursuant to the rules in sec.23.21(c)(2)(D) of this title (relating to Cost of Service), capitalization of allowance for funds used during construction for electric utilities is allowed. sec.25.73.Financial and Operating Reports. (a) Annual reports. (1) Each major electric utility shall file with the commission the same annual report required by the Federal Energy Regulatory Commission or United States Department of Agriculture - Rural Utilities Service. Such annual reports shall be filed with the commission on the same dates as required to be filed by the Federal Energy Regulatory Commission or United States Department of Agriculture - Rural Utilities Service, whichever is applicable. Major electric utilities which are not required to file such reports shall file with the commission an annual report on the form prescribed by the Federal Energy Regulatory Commission. (2) Each nonmajor electric utility shall file with the commission the same annual report as is required of such electric utility by the Federal Energy Regulatory Commission or United States Department of Agriculture - Rural Utilities Service. Such annual reports shall be filed with the commission on the same dates as required to be filed by the Federal Energy Regulatory Commission or United States Department of Agriculture Rural Utilities Service, whichever is applicable. (3) Each electric utility holding company subject to annual reporting to the Securities and Exchange Commission and each electric utility shall file with the commission three copies of its annual report to shareholders, customers, or members. Unless included in the annual report to shareholders, customers, or members, each electric utility shall file concurrently with the filing of such report three copies of any audited financial statements that may have been prepared on its behalf. (b) Annual earnings report. Each electric utility shall file with the commission, on commission prescribed forms, an earnings report providing the information required to enable the commission to properly monitor electric utilities within the state. (1) Each electric utility shall report information related to the most recent calendar year as specified in the instructions to the report. (2) Each electric utility shall file three copies of the commission-prescribed earnings report and shall electronically transmit one copy of the report no later than the date prescribed in sec.25.71(f)(4) of this title (relating to General Procedures, Requirements and Penalties). (3) On the due date of the annual earnings report, each electric utility with a rate proceeding pending before the commission, pursuant to the Public Utility Regulatory Act, Chapter 36, in which a rate filing package is required, may submit an abbreviated earnings report. Specifications for the abbreviated filing are included in the General Filing Instructions for the annual earnings report. (c) Securities and Exchange Commission reports. Each electric utility and electric utility holding company subject to reporting requirements of the Securities and Exchange Commission shall file three copies of each required report with the commission. Three copies of each such report including 10-Ks, 10-Qs, 8-Ks, Annual Reports, and Registration Statements filed with the Securities and Exchange Commission shall be submitted to the commission no later than 15 days from the initial filing date with the Securities and Exchange Commission. (d) Duplicate information. An electric utility shall not be required to file with the commission forms or reports which duplicate information already on file with the commission. sec.25.74.Reports on Sale of Property and Mergers. (a) An electric utility shall not sell, acquire, lease or rent any plant as an operating unit or system in the State of Texas for a total consideration in excess of $100,000 unless the electric utility reports such transaction to the commission while pending or within 30 days after closing. (b) An electric utility shall not merge or consolidate with another electric utility or public utility operating in the State of Texas unless the electric utility reports such transaction to the commission while pending or within 30 days after closing. (c) Electric utilities shall not purchase voting stock in another electric utility or public utility doing business in the State of Texas, unless the electric utility reports such purchase to the commission while pending or within 30 days after closing. (d) Electric utilities shall not loan money, stocks, bonds, notes or other evidences of indebtedness to any corporation or person owning or holding directly or indirectly any stock of the electric utility unless the electric utility reports such transaction to the commission while pending or within 30 days after closing. A properly filed tariff change with respect to energy conservation loans available to customers, who may or may not be shareholders as described in this subsection, will be considered adequate reporting to the commission. sec.25.75.Reports on Sale of 50% or more of Stock. All transactions involving the sale of 50% or more of the stock of an electric utility shall be reported to the commission while pending or within 30 days after closing. sec.25.76.Gross Receipts Assessment Report. All electric utilities subject to the jurisdiction of the commission shall file a gross receipts assessment report with the state comptroller reflecting those gross receipts subject to the assessment as required by the Public Utility Regulatory Act on a form prescribed by the state comptroller. These reports shall be required on an annual basis for those companies that have elected to remit their assessment annually and on a quarterly basis for those companies that have elected to remit their assessment quarterly. Such reports and assessments shall be remitted in accordance with the Public Utility Regulatory Act, Chapter 16, Subchapter A. sec.25.77.Payments, Compensation, and Other Expenditures. An annual report shall be filed with the commission providing information for each of the following classes of payments, compensation (other than salary or wages subject to the withholding of federal income tax) and expenditures made relating to matters in Texas, and detailing (by payee) each expenditure (and for the purposes of this section any series of expenditures) made to a single payee exceeding $500 for: (1) business gifts and entertainment; (2) institutional, consumption-inducing, and other advertising expenses; (3) public relations expenses; (4) legislative matters, including advocacy before any legislative body; (5) representation before any governmental agency or body, including municipalities; (6) legal expenses not accounted for in other categories of this subsection; (7) charitable, civic, religious, and political contributions and donations; (8) all dues or membership fees paid, including an identification of that portion of those dues or membership fees paid to a trade association, industry group, or other organization formed to advance, or whose activities are or become primarily directed toward advancing, utility interests, which relate to activities listed in paragraphs (1)-(7) of this subsection if known following reasonable inquiry by the utility; and (9) other expenses as deemed appropriate by the commission. sec.25.78.State Agency Utility Account Information. (a) Application. The requirements of this section shall apply to any electric utility, including a municipally-owned electric utility. (b) In this section, "State agency" shall have the following meaning: (1) any board, commission, department, office, or other agency in the executive branch of state government that is created by the constitution or a statute of the state; (2) an institution of higher education as defined by the Education Code sec.61.003, other than a public junior college; (3) the legislature or a legislative agency; or (4) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of civil appeals, a state judicial agency, or the State Bar of Texas. (c) An electric utility shall provide the information required in subsection (e) of this section for each state agency account in the prescribed form and medium. The electric utility shall obtain from the General Services Commission or its designee a copy of the field layouts and electronic format that the electric utility shall use. The General Services Commission or its designee shall notify the electric utility of any changes to the field layouts and electronic format with sufficient time for the electric utility to submit the information required by this subsection in a timely manner. Such form and medium must make the reports easy to compile and analyze in a manner which is not unreasonably costly, and to the extent possible, the General Services Commission or its designee will accommodate the electric utilities' electronic formats. (d) An electric utility shall retain all billing records for each state agency account for at least four years from the billing date, notwithstanding any other commission rule relating to the retention of billing records that may provide for a shorter retention period. (e) An electric utility shall: (1) each year file the monthly billing information for each state agency account required by this subsection within 45 days after the end of the reporting period for the six months ending with the February billing period and for the six months ending with the August billing period. (2) provide in the prescribed form the following information for each state agency account: (A) Utility name: name of the electric utility providing service; (B) Account Name: name of the state agency receiving service from the electric utility; (C) Account Number; (D) Account Address: the address of the facility being served by the electric utility, or, if that is not available, the service location; (E) SIC Code: Standard Industrial Code number applicable to facilities served at the account, if available; (F) Account Description: descriptive information available to the electric utility regarding the nature of the facilities served at the account, (e.g., office building, traffic signal, etc.) if available; (G) Rate Class: name of the rate class under which service is provided (e.g., Residential, General Service, Highway Safety Lighting, etc.); (H) Rate Code: the code number used by the electric utility to identify the rate class under which service is provided; (I) Service Voltage: the specific service voltage (e.g., 480 volts, 12,470, 69,000, etc.) if available, otherwise provide general voltage level (e.g., secondary, primary, transmission); (J) Read Date: the date on which the meter was read during the billing period; (K) Kilowatt-Hour Meter Number: the serial number for the kilowatt-hour meter; (L) Kilowatt-Hour Multiplier: the multiplier used to determine kilowatt-hour consumption based on the meter reading; (M) Monthly kWh: the number of kilowatt-hours used for billing purposes; (N) Demand Meter Number: the serial number for the demand meter if different from that of the kilowatt-hour meter; (O) Demand Meter Multiplier: the multiplier used to determine demand based on the meter reading; (P) Demand Reading: the reading taken from the demand meter, stated in kilowatts or kilovolt-amperes; (Q) Billing Demand: the demand amount used for billing purposes, in kilowatts or kilovolt-amperes; (R) Metered Demand: the demand amount measured during the billing period, stated in kilowatts or kilovolt-amperes; (S) KVAR: reactive power measurement for the billing period, if available; (T) Power Factor: the ratio of real power (kW) to apparent power (kVa), if available; (U) Customer Revenue: the portion of the bill related to the monthly customer charge or facilities charge, if available; (V) Power Cost Recovery Factor (PCRF): the PCRF rate for the period that is assessed based on energy usage; the PCRF rate for the period that is assessed based on demand (if applicable); and the total PCRF charge for the period; (W) Energy Revenue: the portion of the bill related to the monthly energy charge(s), if available; (X) Demand Revenue: the portion of the bill related to the monthly demand charge(s), if available; (Y) Base Revenue: the portion of the bill related to the non-fuel charges, including customer, energy, and demand charges, if available; (Z) Fuel Revenue: the portion of the bill related to fuel and/or purchased power; (AA) Other Revenue: the portion of the bill related to taxes or other miscellaneous charges; (BB) Other Charges/Credits: the amount of any non-recurring charges or other credits, such as fuel credits and margin credits; (CC) Explanation: an explanation of the nature of the charge/credit included in Other Charges/Credits; (DD) Total Revenue: the total monthly bill, including base, fuel, and other charges; (EE) Load Factor: the ratio of the average demand during the billing period to the maximum demand; and (FF) Cost Per Kilowatt-Hour: the total cost during the billing period divided by the number of kilowatt-hours. (3) provide the information required by this section to the General Services Commission or its designee by electronic transfer, if feasible, or, otherwise, by diskette. Only in cases of extreme undue hardship will it be permissible for an electric utility to provide the information in paper documents. (f) Information provided pursuant to this section shall be subject to any protections of the Texas Government Code, Public Information Act, Chapter 552. Any request for information required by this section shall be filed with the Office of the Attorney General or its designee. (g) The commission, electric utilities, and the Office of the Attorney General's designee, as well as representatives of interested state agencies, shall continue to evaluate the effectiveness and efficiency of the public monitoring and verification system for state agency customers provided in this section. (h) An electric utility shall make a good faith effort to provide all the information required by this section. It is a violation of this section for any information to be omitted from the report unless a good faith reason exists for less than full compliance. Examples of good faith reasons for not providing a complete report include: technical limitations that cannot be corrected without undue expense, unavailability of the particular information on an electric utility's billing system or database, information that cannot reasonably be made available in the form requested, waiver by commission order, or written waiver by the Office of the Attorney General or its designee. Unless otherwise challenged in a complaint proceeding by the Office of the Attorney General as set forth herein, an electric utility is presumed to have made a good faith effort to provide the required information and is not required to seek any type of advance waiver. In the event an electric utility does not provide a complete report, the Office of the Attorney General may file a complaint with the commission. In any such complaint proceeding, the electric utility shall have the burden of showing the omission was in good faith. sec.25.79.Equal Opportunity Reports. (a) The term "minority group members," when used within this section, shall include only members of the following groups: (1) African-Americans; (2) American Indians; (3) Asian-Americans; (4) Hispanic-Americans and other Americans of Hispanic origin; and (5) women. (b) Each electric utility that files any form with local, state or federal governmental agencies relating to equal employment opportunities for minority group members, (e.g., EEOC Form EEO-1, FCC Form 395, RUS Form 268, etc.) shall file copies of such completed form with the commission. If such form submitted by a multi-jurisdictional electric utility does not indicate Texas-specific numbers, the electric utility shall also prepare, and file with the commission a form, in the same format and based on the numbers contained in the form previously filed with local, state or federal governmental agencies, indicating Texas-specific numbers. Each electric utility shall also file copies of any other forms required to be filed with local, state or federal governmental agencies which contain the same or similar information, such as personnel data identifying numbers and occupations of minority group members employed by the electric utility, and employment goals relating thereto, if any. (c) Any additional information relating to the matters described in this section may be submitted at the electric utility's option. (d) Any electric utility filing with the commission any documents described in subsections (b) and (c) of this section shall file two copies of such documents with the commission's filing clerk under the project number assigned by the Public Utility Commission's Central Records Office for that year's filings. Utilities shall obtain the project number by contacting Central Records. (e) An electric utility that files a report with local, state or federal governmental agencies and that is required by this section to file such report with the commission must file the report by February 15 of the year it is filed with the local, state or federal agencies. If the report is filed with local, state or federal agencies after February 15, the electric utility shall file the report with the commission by February 15 of the next year. (f) On May 1 of each year, the commission shall submit a report concerning the filed reports to the Texas legislature. sec.25.80.Annual Report on Historically Underutilized Businesses. (a) In this section, "historically underutilized business" has the same meaning as in Texas Government Code, sec.2161.001(2), as it may be amended. (b) Every electric utility shall report its use of historically underutilized businesses (HUBs) to the commission on a form approved by the commission. An electric utility may submit the report on paper, or on paper and on a diskette (in Lotus 1-2-3 (*.wk*) or Microsoft Excel (*.xl*) format). (1) Each electric cooperative utility shall on or before December 30 of each year submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Small Utilities HUB Report form. (2) Every electric utility other than those specified in paragraph (1) of this subsection shall on or before December 30 of each year submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Large Utilities HUB Report form. (3) Each electric utility wishing to report indirect HUB procurements may use the Supplemental HUB report form. (4) Each electric utility shall submit a text description of the method by which it determined which of its vendors is a HUB. (5) Each electric utility which has more than 1,000 customers in a state other than Texas, or which purchases more than 10% of its goods and services (other than fuel, purchased power, and wheeling) from vendors not located in Texas, shall separately report by total and category all utility purchases, all utility purchases from Texas vendors, and all utility purchases from Texas HUB vendors. A vendor is considered a Texas vendor if its physical location is geographically in Texas. (6) Each electric utility shall also file any other documents it believes appropriate to convey an accurate impression of its use of HUBs. (c) This section may not be used to discriminate against any citizen on the basis of race, nationality, color, religion, sex, or martial status. (d) This section does not create a new cause of action, either public or private. sec.25.81.Service Quality Reports. Service quality reports shall be submitted semi-annually on a form prescribed by the commission. sec.25.82.Fuel Cost and Use Information. Copies of all presently effective and future fuel purchase or sale contracts shall be available for examination or filed with the commission on request. Each generating electric utility, including municipally owned generating electric utilities, shall file monthly fuel reports on forms prescribed by the commission. sec.25.83.Construction Reports. Each electric utility constructing a facility requiring reporting to the commission under sec.23.31(c) of this title (relating to Certification Criteria) shall report to the commission on the commission-prescribed preliminary construction report form prior to the commencement of construction. sec.25.89.Report of Loads and Resources. Each electric utility that submits an annual report of loads and resources to the Electric Reliability Council of Texas independent system operator pursuant to sec.23.70(e) of this title (relating to Terms and Conditions of Open-Access Comparable Transmission Service) or other reliability council shall file a copy with the commission and maintain a copy of supporting documentation for five years. If no such annual report is prepared, the utility shall maintain a record of the load and resource documents prepared in the normal course of its activities for five years. sec.25.100.Other Records, Reports, and Information that May be Required. The following paragraphs list other sections of this title that have additional requirements for records, reports and other information relating to electric service, that electric utilities, apartment owners or other persons may be required to provide to the commission. This section is to assist persons in locating the requirements. Failure to list a section which requires additional filings in this section does not relieve the person responsible for filing the information of the requirement. (1) Section 23.18(c), (d), and (e) of this title (relating to Foreign Utility Company Ownership by Exempt Holding Companies); (2) Section 23.19(d) and (e) of this title (relating to Registration of Power Marketers and Exempt Wholesale Generators); (3) Section 23.21(c)(1)(F)(iv) and (e) of this title (relating to Cost of Service); (4) Section 23.23(b)(3), (5), (7) and (8), (c)(3) and (9) of this title (relating to Rate Design); (5) Section 23.24(c) of this title (relating to Form and Filing of Tariffs); (6) Section 23.31(c)(2)(D) of this title (relating to Certification Criteria); (7) Section 23.41(c) of this title (relating to Customer Relations); (8) Section 23.43(k) of this title (relating to Applicant and Customer Deposit); (9) Section 23.44(d) of this title (relating to New Construction); (10) Section 23.48 (c), (d) and (f) of this title (relating to Continuity of Service); (11) Section 23.50(c) of this title (relating to Central System or Nonsubmetered Master- Metered Utilities); (12) Section 23.51(b) of this title (relating to Utility Submetering); (13) Section 23.66(c)(1), (2) and (3), (h)(3) of this title (relating to Arrangements Between Qualifying Facilities and Electric Utilities); (14) Section 23.67(r), (t), and (u) of this title (relating to Open Access Comparable Transmission Service); (15) Section 23.70(h)(7), and (o) of this title (relating to Terms and Conditions of Open- Access Comparable Transmission Service); (15) Section 25.122 of this title (relating to Meter Records); (16) Section 25.161(c), (d), and (e) of this title (relating to Integrated Resource Planning); (17) Section 25.165(a) of this title (relating to Preliminary Integrated Resource Plan); (18) Section 25.169(c) of this title (relating to Approval of Resources Procured Through Solicitation); and (19) Section 25.301(b)(3) of this title (relating to Nuclear Decommissioning Trusts). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 19, 1998. TRD-9813197 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: September 8, 1998 Proposal publication date: May 15, 1998 For further information, please call: (512) 936-7308 CHAPTER 26.Substantive Rules Applicable to Telecommunications Service Providers SUBCHAPTER D.Records, Reports, and Other Required Information 16 TAC sec.sec.26.71-26.82, 26.87, 26.98, 26.100 The Public Utility Commission of Texas (PUC) adopts new sec.sec.26.71, relating to General Procedures, Requirements and Penalties; 26.72 relating to Uniform System of Accounts; 26.73 relating to Financial and Operating Reports; 26.74 relating to Reports on Sale of Property and Mergers; 26.75 relating to Reports on Sale of 50% or More of Stock; 26.76 relating to Gross Receipts Assessment Report; 26.77 relating to Payments, Compensation, and Other Expenditures; 26.78 relating to State Agency Utility Account Information; 26.79 relating to Equal Opportunity Reports; 26.80 relating to Annual Report on Historically Underutilized Businesses; 26.81 relating to Service Quality Reports; 26.82 relating to Construction Reports; 26.87 relating to Infrastructure Reports; 26.98 relating to Cost Allocation Manual; and 26.100 relating to Other Records, Reports, and Information that May be Required with changes to the proposed text as published in the May 15, 1998 Texas Register (23 TexReg 4746). The new sections are adopted under Project Number 19121. These new sections will replace sec.sec.23.11 relating to General Reports; 23.12 relating to Financial Records and Reports; 23.13 relating to Statistical Reports; and 23.14 relating to Maintenance and Location of Records as they apply to the telecommunications service providers. The new sections ensure that the commission is able to adequately monitor the activities of telecommunications utilities for compliance with the Public Utility Regulatory Act, Texas Utilities Code, sec.11.001 - 63.063, other state statutes and/or federal requirements, and to assure the availability of safe, reliable and high quality telecommunications service at just and reasonable rates. These sections provide rules that clarify commission procedures and more accurately reflect current statutes. The Appropriation Act of 1997, HB 1, Article IX, Section 167 (Section 167) requires that each state agency review and consider for readoption each rule adopted by that agency pursuant to the Government Code, Chapter 2001 (Administrative Procedure Act). Such reviews shall include, at a minimum, an assessment by the agency as to whether the reason for adopting or readopting the rule continues to exist. The PUC held three workshops to conduct a preliminary review of its rules. As a result of these workshops, the PUC is reorganizing its current substantive rules located in 16 Texas Administrative Code (TAC) Chapter 23 to (1) satisfy the requirements of Section 167; (2) repeal rules no longer needed; (3) update existing rules to reflect changes in the industries regulated by the commission; (4) do clean-up amendments made necessary by changes in law and commission organizational structure and practices; (5) reorganize rules into new chapters to facilitate future amendments and provide room for expansion; and (6) reorganize the rules according to the industry to which they apply. Chapter 26 has been established for all commission substantive rules applicable to telecommunications service providers. The commission published notice of its intention to review sec.sec.23.11 - 23.14 in the May 15, 1998 issue of the Texas Register (23 TexReg 4935). In the notice of intention to review the commission requested specific comments on the Section 167 requirement regarding whether the reason for adopting sec.sec.23.11 - 23.14 continues to exist in adopting the corresponding sections in Chapter 26. The commission received no comments regarding the Section 167 requirement and finds that the reason for adopting sec.sec.23.11 - 23.14 continues to exist in adopting these new sections. The commission received comments on the proposed sections from AT&T Communications of the Southwest, Inc. (AT&T) and Southwestern Bell Telephone Company (SWBT). Section 26.71(f)(8) regarding due dates of reports: SWBT filed comments on proposed new sec.26.71(f)(8) concerning due dates of reports. SWBT states that the State Comptrollers' office requires the annual Gross Receipts Assessment Report be filed by August 15 of each year for the previous July 1 through June 30 reporting period. Therefore this report could not be filed with the commission by June 1 of each year. The commission agrees with SWBT and modifies sec.26.71(f)(8) to reflect that this report is due by August 15 of each year for the previous July 1 through June 30 reporting period. Sections 26.72(g) and 26.73(a) and (b): AT&T suggest that the reference to "telephone utility" in proposed sec.26.72(g) and sec.26.73(a) and (b) be changed to "public utility" to clarify that these sections apply to dominant carriers. The commission agrees with AT&T and incorporates these changes. Section 26.73(c) regarding Securities and Exchange Commission Reports: SWBT recommends that the requirement to file three paper copies of reports filed with the Securities and Exchange Commission (SEC) be eliminated and replaced with a requirement of a notification letter to the commission for each filing made by the utility or the utility's parent. The notification letter would include the type of filing (i.e., 10-K, 10-Q, 8-K, etc.), the date of the filing, and the SEC web address to locate the report. SWBT submits that its proposal will help conserve the monetary and physical resources of both utilities and the commission. The commission declines to make the change requested by SWBT at this time. State law requires the commission to keep an official record copy of all required reports. At this time, this record copy must be in paper form and the paper form is also needed for scanning into the commission's Agency Information System. To assess SWBT's proposal, a copy of SWBT's 1998 8-K report was downloaded using the SEC's Electronic Data Gathering, Analysis, and Retrieval system (EDGAR). This report, as downloaded, would require a considerable amount of staff time to reformat the report to be acceptable for scanning purposes. It is anticipated that in the future the commission may be able to maintain its official record copy in electronic media and may be able to directly download the documents in an acceptable form from other programs such as EDGAR. At that time, the commission may reconsider SWBT's recommendation. Section 26.77 relating to Payments, Compensation, and Other Expenditures: The commission requested specific comments concerning the effect on the public interest of raising the threshold amount for reporting of information in proposed sec.25.77 from $250 to $500. SWBT commented that raising the expense limit from $250 is long over due and recommended that the limit be increased to at least $2,000. SWBT states that even at that level, there is little reason for reporting as the majority of items covered by the rule's requirement are shareholder-borne expenses which are booked almost entirely to below-the-line accounts and would not be included in a utility's cost of service for ratemaking purposes. SWBT does not believe that the Public Utility Regulatory Act (PURA) ever "obligated" the commission to require the reporting of these types of expenditures on an annual basis. SWBT states that continued application of these reporting requirements to utilities that have elected incentive regulation does not appear to serve a useful purpose. The commission declines to increase the amount to $2,000 as recommended by SWBT. This amount is a 300% increase over the amount of $500 published in the proposed rule and interested persons have not had an opportunity to comment on such an increase. The commission recognizes that PURA does not obligate the commission to require the reporting of these types of expenditures on an annual basis, but does give the commission the authority to do so. Election of incentive regulation is a four year commitment. The commission does not know what future action the legislature may take regarding incentive regulation upon completion of that four year commitment. The commission declines to change the application of these reporting requirements to utilities that have elected incentive regulation in this proceeding, but may revisit this issue once the legislature has determined the future of incentive regulation. The commission adopts the $500 threshold for reporting information relating to payments, compensation, and other expenditures. Other clarifying changes made by the commission. Section 26.80 relating to Annual Report on Historically Underutilized Businesses: The commission proposed language requiring utilities with more than 1,000 customers in a state other than Texas, or which purchase more than 10% of its goods and services from vendors in a state other than Texas, to report Texas data separately from data for other states. Southwestern Public Service Company (SPS) filed comments on proposed new sec.25.80 relating to Annual Report on Historically Underutilized Businesses as it relates to the electric industry. Section 25.80 corresponds to sec.26.80 as it relates to the telecommunications industry. SPS comments that some vendors may have headquarters in Texas but the entity doing business with SPS may actually be located in another state. Some vendors may have multi-state locations and may show up twice in the report. SPS requested clarification of what is intended to be reported as "Texas data" to assist in determining which Texas vendors actually need to be reported separately from other states. In response to SPS's request for clarification, the commission modifies sec.25.80(b)(5) and sec.26.80(b)(5) by adding language to clarify what needs to be reported as Texas data and who is considered a Texas vendor. type-name="italic">Section 26.71(f)(3) and sec.26.81 relating to Service Quality Reports: In proposed sec.26.81 the commission had modified this section from existing sec.23.11(i) to require service quality reports on a semi-annual basis for the telecommunications industry from the currently required quarterly basis. Upon further review, the commission finds that it still requires service quality reports for the telecommunications industry on a quarterly basis. For certain measures, a surveillance report is required if the utility's performance is below a commission established threshold level for three consecutive months. If the reporting frequency were greater than three months, the commission would not be able to obtain meaningful surveillance information to detect sub-standard performance on a geographically disaggregated basis. The quarterly reports are also used to monitor service quality in a competitive environment. Therefore, the commission has deleted proposed sec.26.71(f)(3) relating to semi- annual reports and has modified proposed sec.26.81 to require quarterly reports consistent with current commission practice. All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting these sections, the commission makes other minor modifications for the purpose of clarifying its intent, i.e., the commission inserted the language "as classified in sec.26.72(b)" in sec.26.73(a)(1); has changed the word "contains" to the word "list" in sec.26.100 (implied (a)); and corrected the form of citation to statute in sec.26.78(b)(2). These sections are adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 (Vernon 1998) (PURA) which provides the 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.14.002. sec.26.71.General Procedures, Requirements and Penalties. (a) Who shall file. The record keeping, reporting, and filing requirements listed in this subchapter shall apply to all public utilities operating in the State of Texas, excluding municipally owned utilities, unless otherwise specified. Unless otherwise specified in this subchapter the term "public utility" or "utility," insofar as it relates to telecommunications utilities, shall refer to dominant carriers. Moreover, the provisions of this subchapter are applicable to all services provided by such carriers. (b) Initial reporting. Unless otherwise specified in a section of this subchapter, periodic reporting shall commence as follows: (1) Quarterly reporting. For all public utilities and other persons required to file records, reports and other required information under this chapter, who are not already filing quarterly with the commission as of the effective date of this section, reporting shall begin with an initial filing for the first fiscal quarter for which information is available. (2) Annual Reporting. For all public utilities and other persons required to file records, reports and other required information under this chapter, who are not already filing annually with the commission as of the effective date of this section, reporting shall begin with an initial filing for the most recent fiscal year ending on or prior to April 30 of the first year the record, report or other required information must be filed with the commission. (c) Maintenance and Location of Records. All records, books, accounts, or memoranda required of a public utility, as defined in the Public Utility Regulatory Act, sec.51.002(8) may be kept outside the State of Texas so long as those records, books, accounts, or memoranda are returned to the state for any inspection by the commission that is authorized by the Public Utility Regulatory Act. (d) Report attestation. All reports submitted to the commission shall be attested to by an officer or manager of the utility under whose direction the report is prepared, or if under trust or receivership, by the receiver or a duly authorized person, or if not incorporated, by the proprietor, manager, superintendent, or other official in responsible charge of the utility's operation. (e) Information omitted from reports. The commission may waive the reporting of any information required in the sections of this subchapter if it determines that it is either impractical or unduly burdensome on any utility to furnish the requested information. If any such information is omitted by permission of the commission, a written explanation of the omission must be stated in the report. (f) Due dates of reports. All periodic reports must be received by the commission on or before the following due dates unless otherwise specified in this subchapter. (1) Monthly reports: 45 days after the end of the reported period. (2) Quarterly reports other than shareholder reports: 45 days after the end of the reported period. (3) Annual earnings report: May 15 of each year. (4) Shareholder annual reports: seven days from the date of mailing the same to shareholders. (5) Securities and Exchange Commission Filings: 15 days from the initial filing date with the Securities and Exchange Commission. (6) Special or additional reports: as may be prescribed by the commission. (7) Annual reports required by sec.26.76 of this title (relating to Gross Receipts Assessment Report) shall be due August 15 of each year and shall reflect transactions for the previous July 1 through June 30 reporting period. (8) Annual reports required by sec.26.77 of this title (relating to Payments, Compensation, and Other Expenditures) shall be due June 1 of each year and shall reflect the transactions for the most recent calendar year. (9) Periodic Certificate of Operating Authority report: Due as set forth in the commission order granting the certificate. (g) Special and additional reports. Each utility, including municipally owned utilities, shall report on forms prescribed by the commission special and additional information as requested which relates to the operation of the business of the utility. (h) Penalty for refusal to file on time. In addition to penalties prescribed by law, and sec.22.246 of the title (relating to Administrative Penalties) the commission may disallow for rate making purposes the costs related to the activities for which information was requested and not timely filed. sec.26.72.Uniform System of Accounts. (a) In this section the term "utility," insofar as it relates to telecommunications utilities, shall refer to dominant carriers. Moreover, the provisions of this section are applicable to all services provided by such carriers. Every utility shall keep uniform accounts as prescribed by the commission of all business transacted. The classification of utilities, index of accounts, definitions, and general instructions pertaining to each uniform system of accounts as amended from time to time shall be adhered to at all times, unless provided otherwise by these rules, or specifically permitted by the commission. (b) Classification. For the purposes of accounting and reporting to the commission, each public utility shall be classified as follows: (1) Class A: utilities with annual regulated operating revenues exceeding $100 million. (2) Class B: utilities with annual regulated operating revenues less than $100 million. (c) System of accounts. For the purpose of accounting and reporting to the commission, each public utility shall maintain its books and records in accordance with the following prescribed uniform system of accounts: (1) Class A: uniform system of accounts as adopted and amended by the Federal Communications Commission for Class A utilities or other commission-approved system of accounts as will be adequately informative for all regulatory purposes. (2) Class B: uniform system of accounts as adopted and amended by the Federal Communications Commission for Class B utilities or other commission-approved system of accounts as will be adequately informative for all regulatory purposes. (d) Other system of accounts. When a utility has adopted a uniform system of accounts as may be required by a state or federal agency other than those previously mentioned in this section (e.g. United States Department of Agriculture - Rural Utilities Service), that system of accounts may be adopted by the utility after notification to the commission. (e) Merchandise accounting. Each utility shall keep separate accounts to show all revenues and expenses resulting from the sale or lease of appliances, fixtures, equipment, directory advertising, or other merchandise. (f) Accounting period. Each utility shall keep its books on a monthly basis so that for each month all transactions applicable thereto shall be entered in the books of the utility. (g) Rules related to capitalization of construction costs. Each public utility shall accrue interest during construction on both short-term (on an off-book basis, if necessary) and long-term telephone plant under construction to the extent not included in rate base. In the event construction work in progress is included in rate base pursuant to the rules in subsection sec.23.21(c)(2)(D) of this title (relating to Cost of Service), interest during construction for public utilities shall be discontinued to the extent construction work in progress or telephone plant under construction is allowed. sec.26.73.Financial and Operating Reports. (a) Annual reports. (1) Each Class A and B public utility, as classified in sec.26.72(b), shall file with the commission the same annual report as is required of such utility by the Federal Communications Commission or United States Department of Agriculture - Rural Utilities Service. Such annual reports shall be filed on the same dates as required to be filed by the Federal Communications Commission or the United States Department of Agriculture-Rural Utilities Service, whichever is applicable. (2) Each utility holding company subject to annual reporting to the Securities and Exchange Commission and each utility shall file with the commission three copies of its annual report to shareholders, customers, or members. Unless included in the annual report to shareholders, customers, or members, each utility shall file concurrently with the filing of such report three copies of any audited financial statements that may have been prepared on its behalf. (b) Annual earnings report. Each utility shall file with the commission, on commission prescribed forms, an earnings report providing the information required to enable the commission to properly monitor public utilities within the state. (1) Each utility shall report information related to the most recent calendar year as specified in the instructions to the report. (2) Each utility shall file three copies of the commission-prescribed earnings report and shall electronically transmit one copy of the report no later than the date prescribed in sec.26.71(f)(4) of this title (relating to General Procedures, Requirements, and Penalties). (3) On the due date of the annual earnings report, each utility with a rate proceeding pending before the commission, pursuant to the Public Utility Regulatory Act, Chapter 53, in which a rate filing package is required, may submit an abbreviated earnings report. Specifications for the abbreviated filing are included in the General Filing Instructions for the annual earnings report. (4) Each dominant certificated telecommunications utility shall submit annually an access line report as part of its annual earnings report. (c) Securities and Exchange Commission reports. Each utility and utility holding company subject to reporting requirements of the Securities and Exchange Commission shall file three copies of each required report with the commission. Three copies of each such report including 10-Ks, 10-Qs, 8-Ks, Annual Reports, and Registration Statements filed with the Securities and Exchange Commission shall be submitted to the commission no later than 15 days from the initial filing date with the Securities and Exchange Commission. (d) Duplicate Information. A utility shall not be required to file with the commission forms or reports which duplicate information already on file with the commission. sec.26.74.Reports on Sale of Property and Mergers. (a) Except for a local exchange company exempted in subsection (e) of this section a dominant carrier shall not sell, acquire, lease or rent any plant as an operating unit or system in the State of Texas for a total consideration in excess of $100,000 unless the public utility reports such transaction to the commission while pending or within 30 days after closing. (b) Except for a local exchange company exempted in subsection (e) of this section a dominant carrier shall not merge or consolidate with another public utility or electric utility operating in the State of Texas unless the public utility reports such transaction to the commission while pending or within 30 days after closing. (c) Dominant carriers shall not purchase voting stock in another public utility or electric utility doing business in the State of Texas, unless the utility reports such purchase to the commission while pending or within 30 days after closing. (d) Dominant carriers shall not loan money, stocks, bonds, notes or other evidences of indebtedness to any corporation or person owning or holding directly or indirectly any stock of the public utility unless the public utility reports such transaction to the commission while pending or within 30 days after closing. (e) Incumbent local exchange companies electing under the Public Utility Regulatory Act, Chapter 58, are exempt from the requirements of subsections (a) and (b) of this section. (f) For dominant carriers, investigations by the commission, with or without public hearing, of the transactions described in subsection (a) and (b) of this section must be completed within 180 days after the date of notification by the dominant carrier. If an order is not entered within that time, the utility's action is considered consistent with the public interest. sec.26.75.Reports on Sale of 50% or More of Stock. (a) All transactions involving the sale of 50% or more of the stock of a dominant carrier except a local exchange company exempted in subsection (b) of this section, shall be reported to the commission while pending or within 30 days after closing. (b) Incumbent local exchange companies electing under the Public Utility Regulatory Act, Chapter 58, are exempt from the requirements of this subsection. (c) For dominant carriers, investigations by the commission, with or without public hearing, of the transactions described in this section must be completed within 180 days after the date of notification by the dominant carrier. If an order is not entered within that time, the utility's action is considered consistent with the public interest. sec.26.76.Gross Receipts Assessment Report. All telecommunications utilities subject to the jurisdiction of the commission shall file a gross receipts assessment report with the state comptroller reflecting those gross receipts subject to the assessment as required by the Public Utility Regulatory Act on a form prescribed by the state comptroller. These reports shall be required on an annual basis for those companies that have elected to remit their assessment annually and on a quarterly basis for those companies that have elected to remit their assessment quarterly. Such reports and assessments shall be remitted in accordance with the Public Utility Regulatory Act, Chapter 16, Subchapter A. sec.26.77.Payments, Compensation, and Other Expenditures. Dominant carriers shall file with the commission an annual report providing information for each of the following classes of payments, compensation (other than salary or wages subject to the withholding of federal income tax) and expenditures made relating to matters in Texas, and detailing (by payee) each expenditure (and for the purposes of this section any series of expenditures) made to a single payee exceeding $500 for: (1) business gifts and entertainment; (2) institutional, consumption-inducing, and other advertising expenses; (3) public relations expenses; (4) legislative matters, including advocacy before any legislative body; (5) representation before any governmental agency or body, including municipalities; (6) legal expenses not accounted for in other categories of this subsection; (7) charitable, civic, religious, and political contributions and donations; (8) all dues or membership fees paid, including an identification of that portion of those dues or membership fees paid to a trade association, industry group, or other organization formed to advance, or whose activities are or become primarily directed toward advancing, utility interests, which relate to activities listed in paragraphs (1)-(7) of this subsection if known following reasonable inquiry by the utility; and (9) other expenses as deemed appropriate by the commission. sec.26.78.State Agency Utility Account Information. (a) Application. The requirements of this section shall apply to each certificated telecommunications utility. (b) In this section "state agency" shall have the following meaning: (1) any board, commission, department, office, or other agency in the executive branch of state government that is created by the constitution or a statute of the state; (2) an institution of higher education as defined by the Education Code sec.61.003, other than a public junior college; (3) the legislature or a legislative agency; or (4) the Supreme Court of Texas, the Court of Criminal Appeals of Texas, a court of civil appeals, a state judicial agency, or the State Bar of Texas. (c) A utility shall provide the information required in subsection (e) of this section for each state agency account in the prescribed form and medium. The utility shall obtain from the General Services Commission or its designee a copy of the field layouts and electronic format that the utility shall use. The General Services Commission or its designee shall notify the utility of any changes to the field layouts and electronic format with sufficient time for the utility to submit the information required by this subsection in a timely manner. Such form and medium must make the reports easy to compile and analyze in a manner which is not unreasonably costly, and to the extent possible, the General Services Commission or its designee will accommodate the utilities' electronic formats. (d) A utility shall retain all billing records for each state agency account for at least four years from the billing date, notwithstanding any other commission rule relating to the retention of billing records that may provide for a shorter retention period. (e) Each certificated telecommunications utility in its capacity as local service provider shall: (1) each year file the information for each state agency account required by this subsection within 45 days after the end of the reporting period for the six months ending with the February billing period and for the six months ending with the August billing period. (2) provide in the prescribed form the following information for each state agency account: (A) Utility Name: name of the utility providing service; (B) Account Name: name of the state agency receiving service from the utility; (C) Agency Code Number, if available, or Account Number, if the agency code number is not available, or Telephone Number, if the account number is not available; (D) Account Address: the address of the facility being served by the utility; (E) Service Code: identifying code for each service or product provided (for example, Universal Service Order Code); (F) Service Description: each service code should have a separate description; (G) Quantity: the number of units of each product or service purchased; (H) Unit Rate: the rate charged for each unit of each service or product listed; and (I) Total Price: the total amount charged for each service or product listed; and (3) provide the information required by this subsection to the General Services Commission or its designee by electronic transfer, if feasible, or, otherwise, by diskette. Only in cases of extreme undue hardship will it be permissible for a utility to provide the information in paper documents. (f) Information provided pursuant to this subsection shall be subject to any protections of the Texas Government Code, Public Information Act, Chapter 552. Any request for information required by this section shall be filed with the Office of the Attorney General or its designee. (g) The commission, utilities, and the Office of the Attorney General's designee, as well as representatives of interested state agencies, shall continue to evaluate the effectiveness and efficiency of the public monitoring and verification system for state agency customers provided in this section. (h) A utility shall make a good faith effort to provide all the information required by this section. It is a violation of this section for any information to be omitted from the report unless a good faith reason exists for less than full compliance. Examples of good faith reasons for not providing a complete report include: technical limitations that cannot be corrected without undue expense, unavailability of the particular information on a utility's billing system or database, information that cannot reasonably be made available in the form requested, waiver by commission order, or written waiver by the Office of the Attorney General or his or her designee. Unless otherwise challenged in a complaint proceeding by the Office of the Attorney General as set forth herein, a utility is presumed to have made a good faith effort to provide the required information and is not required to seek any type of advance waiver. In the event a utility does not provide a complete report, the Office of the Attorney General may file a complaint with the commission. In any such complaint proceeding, the utility shall have the burden of showing the omission was in good faith. sec.26.79.Equal Opportunity Reports. (a) The term "minority group members," when used within this section, shall include only members of the following groups: (1) African-Americans; (2) American Indians; (3) Asian-Americans; (4) Hispanic-Americans and other Americans of Hispanic origin; and (5) women. (b) Each utility that files any form with local, state or federal governmental agencies relating to equal employment opportunities for minority group members, (e.g., EEOC Form EEO-1, FCC Form 395, RUS Form 268, etc.) shall file copies of such completed form with the commission. If such form submitted by a multi- jurisdictional utility does not indicate Texas-specific numbers, the utility shall also prepare, and file with the commission a form, in the same format and based on the numbers contained in the form previously filed with local, state or federal governmental agencies, indicating Texas-specific numbers. Each utility shall also file copies of any other forms required to be filed with local, state or federal governmental agencies which contain the same or similar information, such as personnel data identifying numbers and occupations of minority group members employed by the utility, and employment goals relating thereto, if any. (c) Any additional information relating to the matters described in this section may be submitted at the utility's option. (d) Any utility filing with the commission any documents described in subsections (b) and (c) of this section shall file two copies of such documents with the commission's filing clerk under the project number assigned by the Public Utility Commission's Central Records Office for that year's filings. Utilities shall obtain the project number by contacting Central Records. (e) A utility that files a report with local, state or federal governmental agencies and that is required by this section to file such report with the commission must file the report by February 15 of the year it is filed with the local, state or federal agencies. If the report is filed with local, state or federal agencies after February 15, the utility shall file the report with the commission by February 15 of the next year. (f) On May 1 of each year, the commission shall submit a report concerning the filed reports to the Texas legislature. sec.26.80.Annual Report on Historically Underutilized Businesses. (a) In this section, "historically underutilized business" has the same meaning as in Texas Government Code, sec.2161.001(2), as it may be amended. (b) Every utility shall report its use of historically underutilized businesses (HUBs) to the commission on a form approved by the commission. A utility may submit the report on paper, or on paper and on a diskette (in Lotus 1-2-3 (*.wk*) or Microsoft Excel (*.xl*) format). (1) Each small local exchange company and telephone cooperative utility shall on or before December 30 of each year submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Small Utilities HUB Report form. (2) Every utility other than those specified in paragraph (1) of this subsection shall on or before December 30 of each year submit to the commission a comprehensive annual report detailing its use of HUBs for the four quarters ending on September 30 of the year the report is filed, on the Large Utilities HUB Report form. (3) Each utility wishing to report indirect HUB procurements may use the Supplemental HUB report form. (4) Each utility shall submit a text description of the method by which it determined which of its vendors is a HUB. (5) Each utility which has more than 1,000 customers in a state other than Texas, or which purchases more than 10% of its goods and services from vendors not located in Texas, shall separately report by total and category all utility purchases, all utility purchases from Texas vendors, and all utility purchases from Texas HUB vendors. A vendor is considered a Texas vendor if its physical location is geographically in Texas. (6) Each utility shall also file any other documents it believes appropriate to convey an accurate impression of its use of HUBs. (c) This section may not be used to discriminate against any citizen on the basis of race, nationality, color, religion, sex, or martial status. (d) This section does not create a new cause of action, either public or private. sec.26.81.Service Quality Reports. Service quality reports shall be submitted quarterly on a form prescribed by the commission. sec.26.82.Construction Reports. Each utility constructing a facility requiring reporting to the commission under sec.23.31(c) of this title (relating to Certification Criteria) shall report to the commission on the commission-prescribed preliminary construction report form prior to the commencement of construction. sec.26.87.Infrastructure Reports. Each incumbent local exchange company (LEC) that elects incentive regulation under the Public Utility Regulatory Act (PURA), Chapters 58 or 59 shall file an infrastructure report with the commission each year on the anniversary date of its election. One copy of the report must be filed as a hard copy and one copy must be filed in an electronic format. The report must include sufficient information to ensure compliance with the requirements of PURA sec.58.053, Chapter 58, Subchapters F and G, and Chapter 59, Subchapters C and D. At a minimum, the report must include the following information: (1) End-to-end digital connectivity. (A) Percent and total number of access lines that have end-to-end digital connectivity available. Also, total number of lines that were upgraded to end- to-end digital connectivity during the previous year and cumulative for the period since election. This information shall be provided for each wire center or central office, identified by name and Common Language Location Identification (CLLI) Code, and by class of customers (such as residential and business). (B) The associated investment and expense for the previous year and cumulative for the period since election. (C) The total number of equipped and active voice channels, number of channels on fiber optics, and number of channels on copper facilities. This information shall be provided for each wire center or central office, identified by name and CLLI Code. (2) New digital switch deployment. (A) Percent and total number of local exchange access lines served by digital switching facilities. Also, total number of lines that were served by new digital switching equipment during the previous year and cumulative for the period since election. This information shall be provided for each wire center or central office, identified by name and CLLI Code. (B) Percent and total number of central offices equipped with digital switching facilities. Also, total number of central offices that were equipped with new digital switching equipment during the previous year and cumulative for the period since election. This information shall be provided for each wire center or central office, identified by name and CLLI Code. (C) The associated investment and expense for the previous year and cumulative for the period since election. (D) The type, make, and quantity of switching equipment installed during the previous year. This information shall be provided for each wire center or central office, identified by name and CLLI Code. Also include actual installation and service dates of the switch along with a brief description of its functionalities and capabilities. (3) Inter-office broadband facilities (capable of transmitting at least 45 megabits per second of digital information). (A) Percent and total number of inter-office facilities that use broadband facilities. Also, total number of inter-office facilities that were upgraded for broadband capability during the previous year and cumulative for the period since election. (B) Include schematic diagrams that indicate quantity (such as fiber sheath miles, and number of strands, number of DS-3 channels or optical channels, etc.) and relative location for each such facility, for the previous year. Also include installation and service dates for such facilities. (C) The associated investment and expense data for such facilities, for the previous year and cumulative for the period since election. (4) Common Channel Signaling System (SS-7) deployment. (A) Percent and total number of central offices equipped with SS-7 capability. Also, total number of central offices that were equipped with SS-7 capability during the previous year and cumulative for the period since election. This information shall be provided for each wire center or central office, identified by name and CLLI Code. Also include actual installation and service dates of SS- 7 capability along with a brief description of its functionalities. (B) The associated investment and expense data for such facilities, for the previous year and cumulative for the period since election. (5) Fiber optic facilities to tandem central offices. (A) Percent and number of serving central offices that have optical fiber facilities to their connecting tandem offices. Also, total number of serving central offices that were upgraded with fiber optic facilities to their respective tandem switching office during the previous year and cumulative for the period since election. (B) Include schematic diagrams that indicate quantity (such as fiber sheath miles, and number of strands, or number of DS-3 channels or optical channels etc.) and relative location of each such facility, for the previous year. Also include installation and service dates for those facilities. (C) The associated investment and expense data, for the previous year and cumulative for the period since election. (6) Infrastructure commitment to certain entities. (A) Identify each entity, by name and type, that requests services provided under PURA, Chapter 58, Subchapter G or Chapter 59, Subchapters C and D, as applicable. Include the address and telephone number for each entity served. (B) For each entity identified in subparagraph (A) of this paragraph, list the date of each request and the actual installation and service dates. Also list the type of service(s) requested and actually provided, including quantity and location. Provide information that describes the functionalities and application of each type of service provided. (C) For each service provided to an entity under PURA, Chapter 58, Subchapter G or Chapter 59, Subchapters C and D, except for point-to-point intraLATA 1.544 megabits per second service offered at a flat monthly tariff rate under PURA sec.58.259, a customer specific contract shall be filed with the commission within 30 days of the execution of the contract. Information under this subparagraph need not be included in the annual report required by this subsection, although the annual report should refer the reader to this filing for specific data. (7) A listing of exchanges with no digital presence as of September 1, 1995. Also, state which exchanges have been upgraded with digital service and the date put in service. The information required by this paragraph shall be provided in an electing company's initial report under this subsection and is not required to be provided in subsequent reports. sec.26.98.Cost Allocation Manual. (a) Cost allocation manual requirement. Each dominant certificated telecommunications utility that provides regulated intrastate utility service and also provides nonregulated utility service or sells other services or products shall maintain and file with the commission annually a cost allocation manual (CAM) describing the methodology used for allocating its costs between its regulated activities and its other activities in accordance with this subsection. (b) Allocation of costs. Notwithstanding any provision of this subsection to the contrary, each dominant certificated telecommunications utility shall maintain its accounts and subaccounts consistent with the content and titles prescribed in the Uniform System of Accounts for Telecommunications Companies as adopted and amended by the Federal Communications Commission (FCC) for Class A utilities. Each dominant certificated telecommunications utility subject to the FCC Class A cost allocation manual (CAM) filing requirements shall apportion its total costs in each of the Part 32 accounts into regulated, nonregulated and other cost pools, as required by the FCC rules governing this allocation (FCC Rule 64.901 - Allocation of Costs) and as filed in that dominant certificated telecommunications utility's CAM on file with the FCC. For such dominant certificated telecommunications utilities, the Part 32 accounts, appropriate cost pools, and approved apportionment methods are set forth in the FCC-approved CAM filed by the Class A dominant certificated telecommunications utilities. Each dominant certificated telecommunications utility not subject to the FCC Class A CAM filing requirements shall describe the methodology used to apportion its total costs in each of the Part 32 accounts into regulated, nonregulated and other cost pools. After initial assignment, costs included in the common cost pool shall be apportioned to the regulated and nonregulated cost pools utilizing the apportionment methods approved by the commission. The Part 32 accounts, appropriate cost pools, and approved apportionment methods are set forth in the commission-approved cost allocation matrix, which is available from the commission's central records office. (c) Contents of CAM. The CAM filed with the commission by a dominant certificated telecommunications utility shall contain at least the following sections and information: (1) Introduction - including a discussion of the cost accounting concepts, language, and applications utilized throughout the CAM; (2) Nonregulated Activities - identifying each nonregulated product or service provided by the dominant certificated telecommunications utility and the accounts associated with each such nonregulated product or service; (3) Incidental Activities - identifying all incidental activities of the dominant certificated telecommunications utility. Incidental activities shall be defined using the following four criteria: (A) the activity must be an outgrowth of regulated operation; (B) the activity cannot constitute a separate line of business; (C) the activity must have been traditionally treated as regulated for accounting purposes; and (D) the total of all incidental activities' revenues must not exceed 1.0% of a carrier's total revenues; (4) Costs Apportionment Table - identifying the dominant certificated telecommunications utility's specific methodologies, taken from the commission- approved cost allocation matrix, applied to each Part 32 account to apportion costs between regulated activities and nonregulated activities. For Class A dominant certificated telecommunications utilities, the appropriate cost pools and apportionment methods approved by the FCC shall be used; and (5) Time Reporting Procedures - describing the time reporting system used by the dominant certificated telecommunications utility's regulated telephone operating units, how frequently the reporting system is updated, the methods used to train employees to report time accurately, and the methods used to implement, monitor, and reinforce accurate time reporting by employees. (d) Filing requirements. Each dominant certificated telecommunications utility shall file annually, by June 1, with the commission the following information for the preceding calendar year: (1) its CAM; (2) estimates of the monetary costs or savings associated with any annual revisions by the dominant certificated telecommunications utility to its CAM, broken down with reference to particular affected Part 32 accounts; (3) a statement signed by an officer of the dominant certificated telecommunications utility attesting to the fact that the CAM was followed throughout the year for regulatory reporting purposes; (4) a regulated/nonregulated comparative percentage report. The report shall be broken down by Part 32 account, and shall be further broken down within each such account to indicate separately: (A) the dollar amount of regulated and nonregulated revenues/expenses/invested capital (ratebase); and (B) the percentages (based on the total amount of revenues/expenses/invested capital (ratebase) within that account) of those revenues/expenses/invested capital (ratebase) that are generated by regulated activities and by nonregulated activities. The report shall present the information in a comparative form with the immediate prior year regulated/nonregulated comparative percentage report. The first report shall contain only first year information; and (5) a copy of any audits, interpretive letters, reviews, or orders pertaining to the dominant certificated telecommunications utility's CAM or its application to transactions with affiliates or nonregulated lines of business which have been issued by the FCC. (e) Alternative filings. Notwithstanding any provision of this subsection to the contrary: (1) If the FCC requires a dominant certificated telecommunications utility to file a CAM regarding its interstate activities, and that dominant certificated telecommunications utility uses the same allocation basis for its intrastate costs as it does for its interstate costs, then the dominant certificated telecommunications utility shall meet the requirements of subsection (e)(3) of this section by filing with the commission annually by June 1 a complete copy of the CAM it filed most recently with the FCC, and, for purposes of developing and maintaining a CAM for its intrastate costs, shall follow the procedures set forth by the FCC for interstate cost allocation. (2) If a dominant certificated telecommunications utility allocates its intrastate costs on the same basis on which an affiliate of the dominant certificated telecommunications utility allocates its interstate costs, and the affiliate files a CAM with the FCC, then the dominant certificated telecommunications utility shall meet the requirements of subsection (c) of this section by filing with the commission annually by June 1 a complete copy of the CAM its affiliate filed most recently with the FCC, and, for purposes of developing and maintaining a CAM for its intrastate costs, shall follow the procedures set forth by the FCC for interstate cost allocation. (f) Exceptions to CAM filing requirements: (1) A dominant certificated telecommunications utility is not required to file the information specified in subsection (d)(2) of this section if the only nonregulated activities in which the dominant certificated telecommunications utility engages are the sale or installation, and/or repair of customer premises equipment and/or inside wire. (2) A dominant certificated telecommunications utility shall not be required to file the information specified in subsection (d)(2) of this section solely on the basis of its ownership of less than 5.0% of the voting securities of a nonregulated entity (which entity would be an affiliate of the dominant certificated telecommunications utility if the dominant certificated telecommunications utility owned 5.0% or more of its voting securities). (3) A dominant certificated telecommunications utility exclusively engaged in regulated activities is not required to file a CAM with the commission. Annually by June 1, each such dominant certificated telecommunications utility shall file with the commission a statement signed by an officer of the dominant certificated telecommunications utility attesting to the fact that the dominant certificated telecommunications utility was engaged in only regulated activities throughout the preceding calendar year. (4) A dominant certificated telecommunications utility is not required to file a CAM with the commission if the dominant certificated telecommunications utility's rates have been approved on a reciprocal basis, as provided for in sec.22.263 of this title (relating to Final Orders). (5) A dominant certificated telecommunications utility is not required to file the information specified in this section if the dominant certificated telecommunications utility is considered an average schedule company for determining interstate revenue requirements. (6) A small local exchange company (SLEC) as defined in sec.23.94 of this title (relating to Small Local Exchange Carrier Flexibility) is not required to file the information specified in subsection (d)(1) of this section. Each SLEC shall file annually, by June 1, with the commission, revision sheets containing all changes made to its CAM for the preceding calendar year. (g) Dominant certificated telecommunications utility flexibility. If a dominant certificated telecommunications utility subject to this subsection believes that certain Part 32 accounts, cost pools, or apportionment methods are not applicable to its activities, and further believes that its use of alternative accounts, cost pools, or apportionment methods would be in the public interest, then that dominant certificated telecommunications utility may apply to the commission for permission to use specifically identified alternative accounts, cost pools, or apportionment methods described in its application. If the commission finds that such alternative accounts, cost pools, or apportionment methods are in the public interest, then the commission may grant the application. Such an application by a dominant certificated telecommunications utility may be reviewed administratively. (h) Costs of affiliate transactions. Nothing in this subsection, nor the commission-approved cost allocation matrix, shall relieve the dominant certificated telecommunications utility of its burden of proving in a proceeding pursuant to the Public Utility Regulatory Act (PURA) sec.53.151 and sec.53.152 or sec.sec.51.009, 53.101 - 53.113, 53.201 and 53.202 that affiliate transactions meet the requirements of PURA sec.53.058. The ability of a dominant certificated telecommunications utility to recover its affiliate transactions through the intrastate cost of service remains subject to PURA sec.53.058. sec.26.100.Other Records, Reports, and Information that May be Required. The following paragraphs list other sections of this title that have additional requirements for records, reports and other information relating to telecommunications service, that public utilities, telecommunications utilities, telecommunications providers, or other persons may be required to provide to the commission. This section is to assist persons in locating the requirements. Failure to list a section which requires additional filings in this section does not relieve the person responsible for filing the information of the requirement. (1) Section 23.21(e) of this title (relating to Cost of Service); (2) Section 23.23(d)(5)(D)(v) and (ix) of this title (relating to Rate Design); (3) Section 23.24(c) of this title (relating to Form and Filing of Tariffs); (4) Section 23.26(c) and (k) of this title (relating to New and Experimental Services); (5) Section 23.28(l) of this title (relating to Promotional Rates for LEC Services); (6) Section 23.32(d)(f) of this title (relating to Automatic Dial Announcing Devices); (7) Section 23.38(g) of this title (relating to Standards for Granting of Certificates of Operating Authority and Service Provider Certificates of Operating Authority); (8) Section 23.44(d)(4) of this title (relating to New Construction); (9) Section 23.48(d) of this title (relating to Continuity of Service); (10) Section 23.54(b), (g) and (m) of this title (relating to Pay Telephone Service); (11) Section 23.57(g)(4) and (g)(6)(B) of this title (relating to Telecommunications Privacy); (12) Section 23.58(f) of this title (relating to Pay-per-call Information Services Call Blocking); (13) Section 23.61(b), (d), (e), (g), (h), (i) and (j) of this title (relating to Telephone Utilities); (14) Section 23.91(l)(1) of this title (relating to Long Run Incremental Cost Methodology for Dominant Certificated Telecommunications Utility (DCTU) Services); (15) Section 23.99(g) of this title (relating to Unbundling); (16) Section 23.102(i) of this title (relating to Imputation); (17) Section 23.106(i) of this title (relating to Selection of Telecommunications Utilities); (18) Section 23.133(f) of this title (relating to Texas High Cost Universal Service Plan (THCUSP)); (19) Section 23.134(g) of this title (relating to Small and Rural Incumbent Local Exchange Carrier (ILEC) Universal Service Plan); (20) Section 23.136(e) of this title (relating to Implementation of the Public Utility Regulatory Act sec.56.025); (21) Section 23.138(d) of this title (relating to Additional Financial Assistance (AFA)); (22) Section 23.142(h) of this title (relating to Lifeline Service and Link Up Service Programs); (23) Section 23.143(h) of this title (relating to Tel-Assistance Service); (24) Section 26.141(h) of this title (relating to Distance Learning, Information Sharing Programs, and Interactive Multimedia Communications); (25) Section 26.161(c) of this title (relating to Electronic Publishing). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 19, 1998. TRD-9813198 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: September 8, 1998 Proposal publication date: May 15, 1998 For further information, please call: (512) 936-7308 SUBCHAPTER Q.9-1-1 Issues 16 TA sec.26.431 The Public Utility Commission of Texas (commission) adopts new sec.26.431, relating to Monitoring of Certain 911 Fees with changes to the proposed text as published in the June 5, 1998 Texas Register (23 TexReg 5883). The rule is necessary to implement the commission's statutory requirement to monitor certain fees set by the Advisory Commission on State Emergency Communications (ACSEC). The new rule establishes a procedural framework for how ACSEC will provide the supporting documentation for the assessment of the 911 fees and the allocation of revenue from the fees, including the provision of notice and setting intervention deadlines. This section was adopted under Project Number 18008. The commission received neither comments nor reply comments on the proposed rule. The commission modifies subsection (e) to clarify that the commission shall determine whether a proposed rate or allocation is not appropriate and notify ACSEC, the governor, and the Legislative Budget Board within 120 days of the initial filing. This section was published under Subchapter O relating to 9-1-1 Issues. The subchapter designation for 9-1-1 Issues has been changed to Subchapter Q. This new rule is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated sec.14.002 and sec.14.052 (Vernon 1998) (PURA) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure; and Texas Health and Safety Code Annotated (Vernon 1998) sec.sec.771.071, 771.072, 771.0725 and 771.076, which requires that the commission monitor the establishment of certain 911 fees and the allocation of the revenue from these fees. Cross Index to Statutes: Public Utility Regulatory Act sec.14.002 and sec.14.052 and Texas Health and Safety Code Annotated (Vernon 1998) sec.sec.771.071, 771.072, 771.0725 and 771.076. sec.26.431.Monitoring of Certain 911 Fees. (a) Purpose. The purpose of this section is to implement the commission's statutory requirement to monitor the fees the Advisory Commission on State Emergency Communications (ACSEC) establishes and the allocation of the revenues from such fees pursuant to Texas Health and Safety Code (1998) sec.sec.771.071, 771.072, 771.0725 and 771.076. (b) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) 9-1-1 Service - The meaning established in Texas Health and Safety Code (1998) sec.771.001(6). (2) Regional Planning Commission - The meaning established in Texas Health and Safety Code (1998) sec.771.001(10). (c) ACSEC shall: (1) provide documentation to the commission regarding the rate for the fees authorized in Texas Health and Safety Code (1998) sec.771.071 and sec.771.072, and the allocation of revenue pursuant to sec.771.072(d) and (e) including, but not limited to, documentation from each regional planning commission or other public agency designated by the regional planning commission to provide 9-1-1 service; (2) complete direct mail notice, no later than the fifteenth day after providing its documentation to the commission, to the municipalities and counties whose 9- 1-1 service fees are established by ACSEC; and (3) publish in the Texas Register notice of its proposed rates and allocation of revenue, no later than the fifteenth day after ACSEC provides its documentation to the commission. (d) Interested parties shall file, no later than 45 days after ACSEC publishes notice in the Texas Register, comments on ACSEC's documentation and on the appropriateness of the rates for each fee and the allocation of the revenue from such fees. (e) The commission will review the documentation, rates and revenue allocations provided by ACSEC and any comments submitted. If the commission determines that a proposed rate or allocation is not appropriate, it shall provide comments to ACSEC, the governor, and the Legislative Budget Board within 120 days of ACSEC's initial filing. The commission's comments shall explain its concerns, if any. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 19, 1998. TRD-9813199 Rhonda Dempsey Rules Coordinator Public Utility Commission of Texas Effective date: September 8, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 936-7308 TITLE 19. EDUCATION PART I. Texas Higher Education Coordinating Board CHAPTER 5. Program Development SUBCHAPTER S. Transfer of Lower Division Course Credit 19 TAC sec.5.393 The Texas Higher Education Coordinating Board adopts amendments to Chapter 5, Subchapter S, sec.5.393, concerning Transfer of Lower Division Course Credit (Resolution of Transfer Disputes for Lower-Division Courses) without changes to the proposed text as published in the June 5, 1998 issue of the Texas Register (23 TexReg 5891). The proposed amendments to the rule would carry out the provisions of Senate Bill 148 of the 75th Legislature, directing the Coordinating Board to develop a recommended core curriculum of at least 42 semester credit hours, including a statement of the content, component areas, and objectives of the core curriculum. The proposed amendments to the rule offer those guiding principles but do not prescribe specific courses, a responsibility designated in the bill to each individual college and university. There were no comments received concerning the proposed amendments to the rule. The amendments to the rule are adopted under Texas Education Code, Subchapter S, Section 61.822, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Transfer of Lower Division Course Credit (Resolution of Transfer Disputes for Lower-Division Courses). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 21, 1998. TRD-9813361 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: September 10, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 483-6162 19 TAC sec.sec.5.400-5.405 The Texas Higher Education Coordinating Board adopts new sec.sec.5.400 - 5.405, concerning Transfer of Lower Division Course Credit with changes to the proposed text as published in the June 5, 1998 issue of the Texas Register. Sections 5.400, 5.401, and 5.404 are being adopted without changes and will not be republished. The new proposed amendments would carry out the provisions of Senate Bill 148 of the 75th Legislature, directing the Coordinating Board to develop a recommended core curriculum of at least 42 semester credit hours, including a statement of the content, component areas, and objectives of the core curriculum. The new proposed rules offer those guiding principles but do not prescribe specific courses, a responsibility designated in the bill to each individual college and university. Comments were received regarding the Wellness/Physical Education Activity courses as follows: 114 letters (72 from self-identified citizens, 30 from faculty/staff at Texas A&M University, 6 from Tyler Junior College, 2 from Lamar University, 1 from The University of North Texas, 1 from Texas Tech University, 1 from Richardson Independent School District, and 1 from Texas A&M University at Galveston) protesting the limit of 42 semester credit hours, requesting a larger number of semester credit hours in the core (suggesting 48 semester credit hours), and arguing for the statewide inclusion of physical activity/kinesiology/wellness courses in the core curriculum; 1 letter from a citizen with professional training in kinesiology endorsing the 42 semester credit hours limit and observing that no study exists linking participation in physical activity/kinesiology/ wellness courses during college with life-long attitudes or levels of overall fitness; 1 letter from the executive director of Texas Association For Health, Physical Education, Recreation & Dance, endorsing the position taken by the Coordinating Board in the proposed rules in removing the lower-division semester credit hours cap and allowing institutions discretion to include physical activity/kinesiology/ wellness semester credit hours if they choose; also endorsing the inclusion of those aspects in the supplementary document. Response: The 42 semester credit hour requirement is mandated by Section 61.822 of the Texas Education Code, and is not at the discretion of the Coordinating Board to change. In response to the comments, Section 5.403 of the rule was changed to remove the 45 semester credit hour lower-division cap. Comments were received regarding Mathematics (acceptability of college algebra and total Semester credit hours devoted to mathematics) as follows: Nine letters regarding the level of mathematics courses, all uneasy with college algebra as the acceptable minimum, were received, from the University of North Texas, Sul Ross State University, The University of Texas at Tyler, a private citizen, and several faculty from Texas A&M University, including a letter protesting the inclusion of college algebra in the core signed by 43 members of the Mathematics faculty. Letters protesting the inclusion of college algebra as required transfer were also received from Texas A&M University administration and the Faculty Senate. Response: The agency agreed and non-substantive changes in Section 5.402 were made. Comments were received regarding Lab Science as follows: Several phone calls, letters from Midwestern State, University of Texas at Tyler and Victoria College, numerous questions (not formal comments) and one in-person comment from a Board member were received regarding the difference between non-lab and lab science courses and credit. Response: The agency disagreed with the comments because the curriculum design charts in Section 5.402 provide for as many as two lab science courses as the institutions design their individual core curricula. No changes to the rules were necessary. Comments were received regarding concurrent enrollment, "temporary" enrollment for the purpose of circumventing more rigorous "native" core requirements as follows: Letters from University of Houston, University of Texas of the Permian Basin, and Midwestern State University voiced concerns about students who might mix-and-match different core or field of study courses in an effort to find the easiest ones. Administrators and faculty from a wide range of institutions either submitted written comments or phoned to express concern about the potential manipulation for abuse of the free availability of transfer to find the easiest but not most appropriate way to complete these requirements. Response: The Agency agreed to try to address this concern by making modifications to Sections 5.402 (e) and 5.405 (c), and by using language taken from the original statute. Comments were received regarding inclusion of foreign language in the core as follows: One letter was received from Lamar University defending the inclusion of a specific foreign language requirement. Response: The agency disagreed because some institutions include foreign language proficiency in their admission requirements, it was considered that another curricular requirement could be redundant. The design of the core curriculum outlined in Section 5.402 allows for the inclusion of foreign language but does not require it. No changes were made. Comments were received regarding whether upper-level courses would be allowed with a core curriculum as follows: Letters from Texas A&M University and Southwest Texas State University were received suggesting that the rule is ambiguous or maintaining that upper-level courses are excluded. Response: The agency disagrees with this comment. Although 42 semester credit hours of any core curriculum must be comprised of lower-division courses in order to be transferrable from two-year colleges, the rules as written address the conditions under which upper-level courses may be included in core curricula that exceed 42 semester credit hours. No changes were made. Comments were received regarding limiting the core to 45 semester credit hours as follows: Letters from the Texas A&M System office, Texas A&M University, University of Texas of the Permian Basin, and University of Texas at Tyler requested consideration of more than 45 lower-division semester credit hours, and Texas Woman's University voiced concern about the 45 semester credit hours limit minimizing the value of a liberal arts education. Response: The agency disagreed because some institutions did not have any formalized general education, core requirements until the Legislature's first bill concerning core curriculum (1987). The staff believes that a formally recognized core curriculum underlines the importance of a liberal arts education. Section 5.403 was changed, however, to remove the 45 semester credit hour cap on lower-division credit in the core curriculum. Comments were received regarding focus on "traditional studies" as follows: One comment from Texas Woman's University criticized the core curriculum for its traditionalist design, and calls for a greater focus on ethnic and women's studies. Response: The agency disagreed. The supplementary document "Core Curriculum: Assumptions and Defining Characteristics," adopted as a means of guidance to institutions in the design of their curricula, includes these goals in the "Perspectives" section. The curriculum as presented in the rules offers significant opportunity for diversity studies. No changes were made to the rules. Comments were received regarding exclusion of technical courses from core, and application of rules to academic degree programs as follows: Comments were received from Amarillo College and South Plains College suggesting that this point be clarified. Response: The agency disagreed. The statute specifies that the law applies to academic courses and academic degree programs. Because the courses in each institution's curriculum must be consistent with the courses listed in the Academic Course Guide Manual, which excludes non- academic courses, staff felt this point was sufficiently clear. No changes were made. Comments were received regarding transferring grades of "D" as part of a 42 semester credit hours block as follows: One letter was received from The University of Texas of the Permian Basin, protesting any move to require that an institution ever be required to accept a grade of "D" in transfer for any reason. Response: The agency disagrees. A modification to Section 5.391 (d) (3) has been proposed for consideration at the October board meeting to strengthen the existing policy of assuring equal treatment of native and transfer students regarding the application of credit in courses with a grade of "D" to any degree requirements. Comments were received regarding general quality concerns as follows: Although many comments regarding other specific matters also alluded to the general concern for maintaining the quality of undergraduate educational experience, three letters from Texas A&M University focused on the topic. Response: The agency agrees that the quality of undergraduate educational experience throughout the state must be maintained. Although much anecdotal evidence exists on both sides of the quality vs. transfer debate, no empirical evidence has been presented to staff for either position. No changes were made. The new amendments to the rules are adopted under Texas Education Code, Subchapter S, Section 61.822, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules concerning Transfer of Lower Division Course Credit. sec.5.402. Core Curriculum. (a) In accordance with Texas Education Code, Chapter 61, Subchapter S, each general academic institution and community/technical college shall design and implement a core curriculum, including specific courses comprising the curriculum, of no less than 42 lower- division semester credit hours. No institution may require a core curriculum of more than 42 semester credit hours without Board approval. (b) Each institution's core curriculum must be designed to satisfy the exemplary educational objectives specified for the component areas of the "Core Curriculum: Assumptions and Defining Characteristics" adopted by the Board; all lower-division courses included in the core curriculum must be consistent with the "Texas Common Course Numbering System;" and must be consistent with the framework identified in Charts I and II of this subsection. Chart I specifies the minimum number of semester credit hours required in each of five major component areas that a core curriculum must include (with sub-areas noted in parentheses). Chart II specifies options available to institutions for the remaining 6 semester credit hours. (c) Institutions shall begin to honor student transfer of core courses and core curricula beginning in fall 1998, and must implement the core curriculum requirement by fall 1999. (d) If a student successfully completes the 42 semester credit hour core curriculum at an institution of higher education, that block of courses may be transferred to any other institution of higher education and must be substituted for the receiving institution's core curriculum. A student shall receive academic credit for each of the courses transferred and may not be required to take additional core curriculum courses at the receiving institution unless the board has approved a larger core curriculum at that institution. (e) A student concurrently enrolled at more than one institution of higher education shall follow the core curriculum requirements in effect for the institution at which the student is classified as a degree-seeking student. Figure 1: 19 TAC sec.5.402(d) Figure 2: 19 TAC sec.5.402(d) (f) Except as specified in subsection (g) of this section, a student who transfers from one institution of higher education to another without completing the core curriculum of the sending institution shall receive academic credit within the core curriculum of the receiving institution for each of the courses that the student has successfully completed in the core curriculum of the sending institution. Following receipt of credit for these courses, the student may be required to satisfy the remaining course requirements in the core curriculum of the receiving institution. (g) Each student must meet the minimum number of semester credit hours in each component area; however, an institution receiving a student in transfer is not required to accept component core course semester credit hours beyond the maximum specified in a core component area. (h) An institution may include within its core curriculum a course or courses that combine exemplary educational objectives from two or more component areas of the exemplary educational objectives defined in this section. (i) Each institution must note core courses on the transcript of students as recommended by the Texas Association of Registrars and Admissions Officers. (j) Each institution must publish and make readily available to students its core curriculum requirements stated in terms consistent with the "Texas Common Course Numbering System." sec.5.403. Core Curricula Larger than 42 Semester Credit Hours. The board will consider approval of a core curriculum from a general academic institution, community college, or technical college if it has been previously approved by the institution's Board of Regents or Board of Directors and is consistent with the following: (1) The institution must provide a narrative justification of the need and appropriateness of a larger core curriculum that is consistent with its role and mission. (2) No proposed upper-division core course is substantially comparable in content or depth of study to a lower-division course listed in the "Texas Common Course Numbering System." sec.5.405. Field of Study Curricula. (a) If a student successfully completes a field of study curriculum developed by the Board, that block of courses may be transferred to a general academic teaching institution and must be substituted for that institution's lower- division requirements for the degree program for the field of study into which the student transfers, and the student shall receive full academic credit toward the degree program for the block of courses transferred. (b) A student who transfers from one institution of higher education to another without completing the field of study curriculum of the sending institution shall receive academic credit in the field of study curriculum of the receiving institution for each of the courses that the student has successfully completed in the field of study curriculum of the sending institution. Following receipt of credit for these courses, the student may be required to satisfy the remaining course requirements in the field of study curriculum of the receiving institution. (c) A student concurrently enrolled at more than one institution of higher education shall follow the field of study curriculum requirements of the institution at which the student is classified as a degree-seeking student. (d) Each institution must review and evaluate its procedures for complying with field of study curricula at intervals specified by the Board and shall report the results of that review to the Board. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813250 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: September 9, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 483-6162 TITLE 25. HEALTH SERVICES PART I. Texas Department of Health CHAPTER 313.Athletic Trainers 25 TAC sec.sec.313.3, 313.5, 313.15 313.20 The Advisory Board of Athletic Trainers (board) adopts amendments to sec.sec.313.3, 313.5, 313.15 and new sec.313.20, concerning the licensure and regulation of athletic trainers. New sec.313.20 is adopted with changes to the proposed text as published in the June 5, 1998, issue of the Texas Register (23 TexReg 5930). Sections 313.3, 313.5, and 313.15 are adopted without changes, and therefore the sections will not be republished. The amended and new sections provide for the effective regulation and licensure of athletic trainers. Section 313.3 is amended to cover the cost of administering the licensing program as required by Texas Civil Statutes, Article 4512d, sec.7(a). Section 313.5 is amended to clarify the intent of the section by deleting unnecessary language. The section is also amended to provide for variety and flexibility in student athletic trainer apprenticeship programs, allowing students to be adequately trained in the practice settings they are likely to encounter as licensed athletic trainers. The section is also amended to establish an effective and efficient method of determining eligibility of out-of-state athletic trainers for Texas examination and licensure. This method takes into consideration athletic trainer licenses issued by other states and athletic trainer certification issued by a national certification body. Section 313.15 defines acceptable standards of conduct for licensed athletic trainers by prohibiting sexual contact between licensees and persons receiving athletic training services. New sec.313.20 sets out general parameters of athletic training services to provide guidance and reference to the public and to licensees regarding the provision of those services. The new section will also help to ensure that effective athletic training programs are established which maximize injury prevention, rehabilitation, and treatment. The following comments were received concerning the proposed sections. Following each comment is the board's response and any resulting changes. Comment: Concerning sec.313.3, one commenter states that the proposed fees would be appropriate. The commenter also states that the courses listed in sec.313.5(b)(1)(A) would be appropriate with the inclusion of a course in athletic training administration. Response: The board agrees with the first comment. The board disagrees with the second comment. The courses listed in sec.313.5(b)(1)(A) were proposed for deletion, to be replaced by (1) the requirement of a degree and current licensure as an athletic trainer issued by another state, or (2) a degree and current certification by the National Athletic Trainers Association Board of Certification of this subparagraph. No change was made as a result of this comment. Comment: One commenter states that the course work for sec.313.5(b)(1)(A) and (B) should be the same, since there is only one entry level test. The commenter believes this would lessen confusion, improve public education, and promote the status of the profession. Response: The board disagrees. There is considerable difficulty in defining course work requirements that will ensure adequate training of student athletic trainers in Texas, but at the same time provide for persons who hold athletic training licenses issued by other states to be eligible for Texas examination and licensure. Many times persons who hold these licenses meet course work requirements that are substantially equivalent to Texas course work requirements, but not specifically equivalent. It is necessary for the board to establish an equitable, effective, and efficient method of determining eligibility for these persons. No changes were made as a result of this comment. Comment: One commenter states that student athletic trainers should not earn apprenticeship hours at their place of employment, except in the case of a stipend. Response: The board disagrees. Student athletic trainers are working either in college or university settings or in affiliated settings approved by the collegiate supervising athletic trainer. In many of these settings, students are in financial assistance programs that pay an hourly wage for hours worked in the athletic training room or at games or other events. These programs are essential in order to help ensure that students meet their academic goals. No changes were made as a result of this comment. Comment: One commenter is opposed to proposed sec.313.5(b)(1)(A)(ii) because the National Athletic Trainers Association Board of Certification (NATABOC) does not reciprocate by accepting state licensure as meeting certification requirements. The commenter also states that adoption of the rule would open up licensure to more out-of-state applicants and reduce the number of jobs available for Texas students. Response: The board disagrees. The proposed section is not intended to constitute reciprocity, which is generally recognized to be a mutual agreement between regulatory agencies of different states to license the other state's licensees without imposing examination or other requirements. A person who holds current certification by the NATABOC must hold a degree and must successfully complete the Texas Athletic Trainer Written and Oral/Practical Examinations in order to be licensed in Texas. The commenter did not comment on sec.313.5(b)(1)(A)(i), but it is important to note that most out-of-state licenses are issued on the basis of NATABOC certification. No changes were made as a result of this comment. Comment: Two commenters are opposed to proposed sec.313.5(b)(1)(B)(iii)(I), which deletes the requirement that supervising athletic trainers must be employees of the college or university. One commenter states the rule would put unqualified student athletic trainers in the field and student athletic trainers would not be directly supervised on a day-to-day basis. The commenter also states the rule would eliminate consistency in the program. The other commenter states that this removes responsibility from the supervising athletic trainer and the university and places more responsibility on the student trainer. The commenter also states this takes jobs away from athletic trainers by allowing outside consultants to supervise collegiate athletic training programs on a contract basis. Response: The board disagrees. The first sentence of the rule requires that athletic training programs "shall be under the direct supervision of and on the same campus as a Texas licensed athletic trainer" and this requirement was not proposed for amendment. The amended rule does not alter the responsibilities of supervising licensed athletic trainers as currently set out in the section. Ensuring consistency in athletic training programs so that students may succeed is the responsibility of each college or university that trains students to become athletic trainers. Only licensed athletic trainers may supervise student athletic trainers in the collegiate setting. No changes were made as a result of these comments. Comment: Concerning sec.313.5(b)(1)(B)(iii)(III), one commenter agrees with the rule as long as the new language allows student athletic trainers to accumulate some of their hours in secondary school settings as previously allowed. Response: The board confirms that student athletic trainers may earn a maximum of 600 apprenticeship hours in secondary school settings (as well as other affiliated settings) with the stipulation that no more than 300 hours may be earned at one affiliated setting. Comment: Concerning sec.313.5(b)(2), one commenter states that this paragraph should be deleted. The commenter believes that all athletic trainer applicants should meet the qualifications listed under sec.313.5(b)(1) without regard to whether they hold a degree in physical or corrective therapy. Response: Section 313.5(b)(2) was not addressed in the proposed rules. Texas Civil Statutes, Article 4512d, sec.9, sets out athletic trainer licensure qualifications for persons who hold degrees in physical and corrective therapy. The board may not establish more stringent qualifications than those set out in law. No changes were made as a result of this comment. Comment: Concerning new sec.313.20, one commenter states that he agrees with the proposal if it would allow more autonomy for licensed athletic trainers, as well as third party billing. If not, the commenter is opposed to the section because it would not give licensed athletic trainers anything that is not already available. Response: The board disagrees because the purpose of new sec.313.20 is to set out general parameters of athletic training services to provide guidance and reference to the public and to licensees regarding the provision of those services. The new section will help ensure that effective athletic training programs are established which maximize injury prevention, rehabilitation, and treatment. The new section does not affect the requirement in Texas Civil Statutes, Article 4512d, sec.1(1) that athletic trainers provide services under the advice and consent of a team physician. No change was made as a result of this comment. Comment: Concerning new sec.313.20(a) and (b), one commenter suggested that the term "team physician" should be changed to "physician licensed to practice medicine by a state board of medical examiners or any other qualified health care professional who within the scope of practice of their professional licensure is authorized to refer for health care services." Response: The definition of "athletic trainer" found in Texas Civil Statutes, Article 4512d, sec.1(1) requires that athletic training services be provided under the advice and consent of a "team physician." Due to this requirement of law, the board is unable to consider the commenter's recommended language. No change was made as a result of this comment. Comment: Concerning new sec.313.20(c)(7), staff noted that "Conduct" should not be capitalized. Response: The board agrees and has changed "Conduct" to "conduct" at sec.313.20(c)(7). Comment: Concerning new sec.313.20(c)(5) and (7), one commenter states that the terms athletic training and sports medicine are not synonymous. The commenter suggests that both rules use the language "athletic training or sports medicine" instead of "sports medicine." Response: The board agrees and has added the suggested language at sec.313.20(c)(5) and (7). Comment: One commenter states that the Act limits the scope of practice for athletic trainers to: prevention and rehabilitation of injuries; use of physical modalities; and performance with the consent of the team physician. The commenter suggests that the scope of practice set forth in sec.313.20 is, therefore, too broad in that it: (1) addresses illnesses as well as injuries; (2) includes assessment, treatment, and research; (3) uses the term "a physician" rather than "his physician;" (4) authorizes practice in any setting; (5) defines "athlete" too broadly; and (6) includes a laundry list of activities which are not strictly prevention and rehabilitation of injuries. The commenter is concerned that the inclusion of activities which do not truly require licensure would make it illegal for non-licensed persons to engage in those activities. Response: In large part, the board respectfully disagrees. Section 1(1) of the Act broadly defines the function of athletic trainers as a person "who, upon the advice and consent of his team physician carries out the practice of prevention and/or physical rehabilitation of injuries incurred by athletes. To carry out these functions the Athletic trainer is authorized to use physical modalities such as heat, light, sound, cold, electricity, or mechanical devices related to rehabilitation and treatment." Illnesses, such as heat exhaustion, must necessarily and obviously be addressed by the athletic trainer to prevent injuries. Assessment, treatment, and research are similarly necessary to the prevention of injuries, and, indeed, "treatment" is specifically authorized by the Act. The use of the term "a physician" merely acknowledges that there may be more than one physician for a particular team, and that an athletic trainer may provide services for more than one team. Athletic trainers do provide their services in a variety of settings (with the advice and consent of a team physician), and nothing in the Act suggests such is improper. The term "athlete" is broadly defined; however, sec.313.20 clearly provides that athletic training services may only be provided upon the advice and consent of a team physician. The laundry list of services provided by athletic trainers, such as administering first aid and emergency care for acute athletic injuries, does not suggest that such activities may not be provided by others who are not licensed. The Act prohibits non-licensees from providing any of the activities of an athletic trainer as defined in the Act, and this rule in no way makes it illegal for non-licensees to perform any activity not defined in the Act. The board believes that the scope of practice section embodies what is currently included in effective athletic training programs and will assist educators and employers, as well as athletic trainers, to ensure that the prevention of injuries and rehabilitation or treatment of injuries are carried out as effectively as possible. No change was made as a result of this comment. The comments on the proposed rules received by the board during the comment period were submitted by Texas Nursing Association, several individuals, and board staff. One individual commented in favor of the rule that increases fees. The commenters were generally not in favor of the scope of practice rule and the rule amending the licensure qualifications. The comments received from Texas Nursing Association were not in favor of the scope of practice rule in its entirety. Several commenters raised questions and suggested clarifying language concerning specific provisions in the rules. The amendments and new section are adopted under Texas Civil Statutes, Article 4512d, sec.5(a), which provides the board with the authority to adopt rules consistent with the Act which are necessary for the performance of its duties; under Texas Civil Statutes, Article 4512d, sec.5(c), which provides the board with the authority to establish guidelines for athletic trainers in the state; and under Texas Civil Statutes, Article 4512d, sec.7(a), which provides the board with the authority to set fees under the Act in amounts that are reasonable and necessary to collect sufficient revenue to cover the costs of administration of the Act. sec.313.20.Scope of Practice. (a) A licensed athletic trainer prevents, assesses, treats, rehabilitates, and researches injuries and illnesses incurred by athletes. An athlete is a person involved in exercise, conditioning, or a physical activity that requires physical strength, power, endurance, skill, or speed. A licensed athletic trainer practices under the advice and consent of a team physician. (b) The activities listed in subsection (c)(1) - (7) of this section may be performed in any setting authorized by a team physician and may include, but not be limited to, an educational institution, professional or amateur athletic organization, an athletic facility, or a health care facility. (c) Services provided by a licensed athletic trainer may include, but are not limited to: (1) plan and implement a comprehensive athletic injury and illness prevention program; (2) conduct an initial assessment of an athlete's injury or illness and formulate an impression of the injury or illness in order to provide emergency or continued care and refer to a physician for definitive diagnosis and treatment, if appropriate; (3) administer first aid and emergency care for acute athletic injuries and illnesses; (4) coordinate, plan, and implement a comprehensive rehabilitation program for athletic injuries; (5) coordinate, plan, and supervise all administrative components of an athletic training or sports medicine program; (6) provide health care information and counsel athletes; and (7) conduct research and provide instruction on subject matter related to athletic training or sports medicine. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 18, 1998. TRD-9813112 Michael Daniel Saly Chairman Advisory Board of Athletic Trainers Effective date: September 7, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 458-7236 TITLE 30. ENVIRONMENTAL QUALITY PART I. Texas Natural Resource Conservation Commission CHAPTER 106. Exemptions From Permitting SUBCHAPTER V. Thermal Control Devices 30 TAC sec.106.491 The Texas Natural Resource Conservation Commission (commission) adopts an amendment to sec.106.491, concerning Dual Chamber Incinerators, without changes to the proposed text as published in the March 20, 1998, issue of the Texas Register (23 TexReg 2950); however, the rule language is published for clarification. A correction of error was published in the April 3, 1998, issue of the Texas Register (23 TexReg 3611). EXPLANATION OF ADOPTED RULE This amendment is adopted to reduce the possibility that incinerators operated under the conditions of this section will cause human exposure to potentially harmful substances or cause nuisances. The amendment requires an increase in the minimum afterburner, or secondary chamber, temperature from 1,200 to 1,400 degrees Fahrenheit and requires that combustion gases be retained in the chamber for at least 0.5 seconds. This temperature increase represents an accepted industry practice and may cause a slight increase in operating costs for additional fuel to raise the temperature of the secondary incinerator chamber. These conditions will allow exhaust gases to be more completely burned prior to release to the atmosphere. The commission is also reducing the hourly charge rate of incinerators covered under this section from 1,000 pounds to 500 pounds per hour to promote more complete combustion. The amendment specifies a minimum stack height of six feet above the peak of the highest building within 150 feet of the stack to promote exhaust gas dispersal and reduce the chances of exhaust gases affecting persons on the ground or in nearby structures. Incinerators operated under this exemption will be required to register with the commission and to maintain records as specified in 30 TAC Chapter 111. This will improve the ability of the commission to enforce the conditions of this section. The amendment is adopted to allow the section to be more protective of human health. FINAL REGULATORY IMPACT ANALYSIS The commission estimates that the amendment, which affects new facilities only, may cause a small increase in fuel use to elevate temperatures in the secondary combustion chambers of incinerators. The amended section requires that the stack of the incinerator be at least six feet above the peak of the highest building within 150 feet of the incinerator. This provision could require that the stack of some incinerators be extended or require that the incinerator be relocated. These cases would likely be isolated, and operators finding themselves in this situation would have the option of placing the unit under permit. The amendment thus will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The commission has reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code (the Code), sec.2001.0225, and has determined that the rulemaking is not subject to sec.2001.0225 because it does not meet the definition of a "major environmental rule" as defined in the Code, and it does not meet any of the four applicability requirements listed in sec.2001.0225(a). TAKINGS IMPACT ASSESSMENT The commission estimates that the amendment, which affects new facilities only, may cause a small increase in fuel use to elevate temperatures in the secondary combustion chambers of incinerators. The amended section requires that the stack of the incinerator be at least six feet above the peak of the highest building within 150 feet of the incinerator. This provision could require that the stack of some incinerators be extended or require that the incinerator be relocated to meet the setback distance from buildings. These cases would likely be isolated, and operators finding themselves in this situation would have the option of placing the unit under permit. However, these requirements could cause a situation where the specific use of portions of private property might have to be modified or restricted to comply with the regulation. This could conceivably place a burden on the property. The commission does not believe that this burden would be significant or have a lasting effect. Because incompletely burned substances emitted from incinerators can be harmful to human health, the commission is taking this action in response to what it believes to be a real and substantial threat to public health. COASTAL MANAGEMENT PLAN The commission has determined that this rulemaking action relates to an action or actions subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, sec.sec.33.201 et. seq.), and the commission's rules in 30 TAC Chapter 281, Subchapter B, concerning Consistency with the Texas Coastal Management Program. As required by 31 TAC sec.505.11(b)(2) and 30 TAC sec.281.45(a)(3) relating to actions and rules subject to the CMP, commission rules governing air pollutant emissions must be consistent with the applicable goals and policies of the CMP. The commission has reviewed this rulemaking action for consistency with the CMP goals and policies in accordance with the rules of the Coastal Coordination Council, and has determined that this rulemaking action is consistent with the applicable CMP goal 31 TAC sec.501.12(1) by protecting and preserving the quality and values of coastal natural resource areas. This action is consistent with 31 TAC sec.501.14(q), which requires the commission to protect air quality in coastal areas. The amendment to sec.106.491 will allow more thorough combustion of incinerator exhaust gas, promote its dispersal, and will not allow new emissions. HEARING AND COMMENTERS A public hearing regarding the proposed rule was held in Austin on April 13, 1998, and the public comment period also closed on April 13, 1998. No oral comments were received at the public hearing, but the Houston Independent School District (HISD) and the United States Environmental Protection Agency (EPA) submitted written comments on the proposal. HISD questioned whether existing incinerators charging at 800 pounds per hour (pph) would be regulated down to 500 pph by this amendment or a legislative change to 500 pph. The commenter also asked under what regulations incinerators charging at 800 pph would be regulated. This amendment will not apply to unmodified existing units which may continue to charge at the higher rate. There is no pending legislation concerning incinerators, and any legislation introduced at the next session of the legislature will require evaluation by the commission to determine the necessary regulation amendments. All incinerators remain subject to the monitoring and recordkeeping requirements of Chapter 111, concerning Control of Air Pollution from Visible Emissions and Particulate Matter. New incinerators that charge above 500 pph will be subject to the permitting requirements of 30 TAC Chapter 116, concerning Control of Air Pollution by Permits for New Construction or Modification. Copies of these rules are available from the New Source Review (NSR) Division at the commission's central office in Austin, from the commission's regional offices, or from the Internet. EPA commented that Texas had never submitted the base regulation for the initial adoption of the standard exemption list as a revision to the state implementation plan (SIP). EPA also requested that the commission include a basis for each provision and condition of the new or revised section and that meeting the operation and production limits of the sections will result in emissions less than the 25-ton per year emission threshold that qualifies a source for exemption from permitting. The commenter further stated that the commission should include assurances that emissions will not interfere with the maintenance of air quality standards. The current list of standard exemptions was compiled after ongoing evaluations by the commission of the effect of a source category on air quality. The evaluation was based on engineering review, experience with similar or identical sources, and inspections of source operations. In recent years, the commission has reevaluated the exemptions applied to larger facilities or facilities using substances that are potentially harmful with the intent of ensuring that the exemption is protective of human health. This reevaluation was based, in part, on computer dispersion modeling and has resulted in the commission proposing modifications to exemptions applied to operations using heavy metals, ammonia, and other potentially harmful substances. The overall result of the evaluations is that the exemptions remain protective of human health and are not significant contributors to air quality deterioration. The commission has not submitted standard exemptions as SIP revisions since the creation of Chapter 106 in mid-1996. Because the exemptions are used by insignificant sources, the commission desires that monitoring and recordkeeping imposed on these sources remain at a minimum. The commission also believes that it has a state NSR program that is equivalently enforceable with federal programs. The standard exemptions are part of that NSR program. The commission believes that it is important that the protectiveness review of standard exemptions continue and that the result of that review be incorporated into the exemptions. The commission is committed to resolving the issue of the respective roles of the state and federal permitting programs, but believes that this resolution should occur in a separate, non-rulemaking action. This will prevent any delay in amending remaining standard exemptions under protectiveness review. STATUTORY AUTHORITY The amendment is adopted under the Texas Health and Safety Code, the Texas Clean Air Act (TCAA), sec.sec.382.012, 382.017, and 382.057. Section 382.012 requires the commission to prepare and develop a general, comprehensive plan for the proper control of the state's air. Section 382.017 authorizes the commission to adopt rules consistent with the policy and purposes of the TCAA, while sec.382.057 authorizes the commission by rule to exempt certain facilities or changes to facilities from the requirements of sec.382.0518 if such facilities or changes will not make a significant contribution of air contaminants to the atmosphere. sec.106.491. Dual Chamber Incinerators (Previously SE 2). Dual-chambered incinerators which burn only waste generated on-site and which meet the conditions of this section are exempt. Incinerators used in the processing or recovery of materials or to dispose of pathological waste as defined in sec.106.494 of this title (relating to Pathological Waste Incinerators (Previously SE 90)), hospital waste, and/or infectious waste are not authorized by this section. (1) The incinerator shall meet the following design requirements. (A) The incinerator shall be equipped with an afterburner automatically controlled to operate with a minimum temperature of 1,400 degrees Fahrenheit and a minimum gas retention time of 0.5 seconds. (B) The manufacturer's rated capacity (burn rate) shall be 500 pounds per hour or less. (C) Stacks shall have unobstructed vertical discharge when the incinerator is operated. Properly installed and maintained spark arrestors are not considered obstructions. (D) Stack height shall be six feet above the peak of the highest building within 150 feet. (2) The incinerator shall meet the following operational conditions. (A) Before construction begins, the facility shall be registered with the commission's Office of Air Quality in Austin using Form PI-7. (B) (No change.) (C) This facility shall be used solely for the disposal of the following waste materials generated on-site: paper, wood, cardboard cartons, rags, garbage (animal and vegetable wastes as defined in Chapter 101 of this title (relating to General Rules)), and combustible floor sweepings; containing overall not more than 10% treated papers, plastic, or rubber scraps. Neither garbage content nor moisture content shall exceed 50% and noncombustible solids shall not exceed 10%. (D) The manufacturer's recommended operating instructions shall be posted at the incinerator and the unit shall be operated in accordance with these instructions. (E) Incinerator owners and operators shall meet the monitoring, testing, reporting, and recordkeeping requirements found in Chapter 111 of this title (relating to Control of Air Pollution from Visible Emissions and Particulate Matter). This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813241 Margaret Hoffman Director, Environmental Law Division Texas Natural Resource Conservation Commission Effective date: September 9, 1998 Proposal publication date: March 20, 1998 For further information, please call: (512) 239-1966 TITLE 31. NATURAL RESOURCES AND CONSERVATION PART X. Texas Water Development Board CHAPTER 357.Regional Water Planning Guidelines 31 TAC sec.357.2, sec.357.7 The Texas Water Development Board (board) adopts amendments to 31 TAC sec.357.2 relating to Definitions without change to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6939) and the section will not be republished. The board adopts amendments to 31 TAC sec.357.7 relating to Regional Water Plan Development with changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6939). The proposed amendments will clarify the requirement for providing regional water planning during conditions where flows are at 50% and 75% of normal. The changes from the proposed sections were made in sec.357.7(a)(2), (3) and (4) to eliminate proposed amendments intended to clarify how data for population projections, evaluation of current supplies, and for water supply and demand analysis are to be presented in regional water plans. The board will be proposing additional rules to these paragraphs in the near future. An additional change was made in sec.357.7(a)(5) to clarify that water management strategies shall be developed for cities. During the initial adoption of Chapter 357, many comments were received on definitions of "normal hydrological conditions," "flows at 50% of normal," and "flows at 75% of normal." Based upon discussions since the initial rule adoption, the board concludes that references in Senate Bill 1 that require regional water planning groups to "submit a plan that has specific provisions for water management strategies to be used when flows are at 50% of normal and when flows are at 75% of normal" require strategies that will be employed as the water supply condition changes from normal availability to the worst case of drought of record. These are often referred to as drought contingency planning or similar such phrases. As the rules are currently written, the regional water planning groups could be required to develop a total of three plans which could be based on water supplies during a period that has less water supply than during the drought of record. This does not appear to be the intent of the legislation. A key aspect of the type of planning called for in the proposed amendments is that it reflects conditions that are "current and real time" and are not solely dependent on legal authorizations. Several major water providers have such plans, including the City of Corpus Christi, Lower Colorado River Authority, and Colorado River Municipal Water District. In the proposed revisions, the regional water planning groups are to identify the actions, referred to as water management strategies, that would be used when the amount of water in the water source reaches 75% and 50% of the normal amount, such as when a lake contains 50% of its normal amount of water. Examples of the water management strategies that could be considered include water conservation and drought response planning, including water demand management. To implement these concepts, the board now proposes amendments to sec.357.2 (Definitions) that would eliminate the definition of "normal hydrological conditions," which currently is based on median flows in the flow range that occurs most frequently for surface water, and on median precipitation values in the precipitation range that occurs most frequently for groundwater. Amendments are proposed to the definitions of "flows at 50% of normal" and "flows at 75% of normal" to remove reliance on the definition of "normal hydrological conditions." Section 357.2 is also amended to number all definitions in conformity with current Texas Register format requirements. Amendments are adopted to sec.357.7(a)(3) and (5) (relating to Regional Water Plan Development) to clarify that the regional water planning groups are required only to develop a water plan for drought of record conditions, and are not required to develop separate water plans for conditions where flows are 50% and 75% of normal. The amendments make clear that the basis for planning will be drought of record. The amendments would provide that the regional water planning groups would be required to identify water management strategies for times that flows are at 50% and 75% of normal, but would not be required to meet all shortages at such times. The 50% and 75% levels are triggered by the amount of water that remains in the source compared to normal conditions. Amendments also would specify that the executive administrator, after coordination with staff of the Texas Natural Resource Conservation Commission and Texas Parks & Wildlife Department and representatives of the regional water planning groups, would identify the methodology to be used to calculate water availability during drought of record and to describe conditions when flows are at 50% and 75% of normal. Rules currently require the executive administrator to consult and develop this calculation for "normal hydrologic conditions." One comment was received from the Brazos River Authority supportive of the amendments but suggesting changes in the methodology being developed by the TWDB, TNRCC, and TPWD to determine when flows are at 50% and 75% of total. These sections are adopted under the authority granted in Texas Water Code, sec.6.101, which provides the board with the authority to adopt rules necessary to carry out its powers and duties under the Texas Water Code and laws of Texas, and under the authority of Texas Water Code, sec.16.053, which requires the board to develop rules and guidelines: to provide procedures for adoption of regional water plans by regional water planning groups and approval of regional water plans by the board, to govern procedures to be followed in carrying out the responsibilities in Texas Water Code, sec.16.053; and for the format in which information is to be presented in the regional water plans. The board also proposes the sections under the authority of the provisions of Texas Water Code, sec.16.053 which require regional water plans to be consistent with guidance principles for the state plan, and which require regional water plans to provide information based on data provided or approved by the board, and which provides certain statutory requirements for the regional water plans. sec.357.7.Regional Water Plan Development. (a) Regional water plan development shall include the following: (1) (No change.) (2) presentation of current and projected population and water demands. Results shall be reported by city, county and that portion of a river basin within the regional water planning area for major providers of water for municipal and manufacturing purposes, and for categories of water use including municipal, manufacturing, irrigation, steam electric power generation, mining, and livestock watering; (3) evaluation of adequacy of current water supplies available to the regional water planning area for use during drought of record. This evaluation shall consider surface water and groundwater data from the state water plan, existing water rights, contracts and option agreements, other planning and water supply studies, and analysis of water supplies currently available to the regional water planning area. Analysis of surface water available during drought of record from reservoirs shall be based on firm yield analysis of reservoirs. Firm yield is defined as the supply the reservoir can provide during a drought of record using reasonable sedimentation rates and the assumption that all senior water rights will be totally utilized. Until information is provided by the Texas Natural Resource Conservation Commission, regional water planning groups may use estimates of the projected amount of water that would be available from existing water rights during a drought of record, when flows are at 75% of normal, and when flows are at 50% of normal. Once this information is available from the Texas Natural Resource Conservation Commission, the regional water planning group shall incorporate it in its next planning cycle. The executive administrator, after coordination with staff of the Texas Natural Resource Conservation Commission and the Texas Parks and Wildlife Department, shall identify the methodology, in consultation with representatives of regional water planning groups, to be used by regional water planning groups to calculate water availability during drought of record and describe conditions when flows are at 50% and 75% of normal. The executive administrator shall provide available technical assistance to the regional water planning groups upon request to assist them in selecting appropriate methods and data to be used to determine water supply availability. Results of evaluations shall be reported by city, county, and portion of a river basin within the regional water planning area for major providers of municipal and manufacturing water, and for categories of water use including municipal, manufacturing, irrigation, steam electric power generation, mining, and livestock watering; (4) water supply and demand analysis comparing water demands as developed in paragraph (2) of this subsection with current water supplies available to the regional water planning area as developed in paragraph (3) of this subsection to determine if the water users in the regional water planning area will experience a surplus of supply or a need for additional supplies. The social and economic impact of not meeting these needs shall be evaluated by the regional water planning groups and reported by regional water planning area and river basin. Other results shall be reported by city, county, and portion of a river basin within the regional water planning area for major providers of municipal and manufacturing water, and for categories of water use including municipal, manufacturing, irrigation, steam electric power generation, mining, and livestock watering. The executive administrator shall provide available technical assistance to the regional water planning groups, upon request, on water supply and demand analysis, including methods to evaluate the social and economic impacts of not meeting needs; (5) using the water supply needs identified in paragraph (4) of this subsection, plans to be used during the drought of record to provide sufficient water supply to meet the needs identified in paragraph (4) of this subsection and in accordance with water management strategies and scenarios described in paragraph (8) of this subsection. Also, water management strategies shall be identified to be used when flows are at 50% of normal and when flows are at 75% of normal. Water management strategies shall be developed for cities, major providers of municipal and manufacturing water, and for categories of use including municipal, manufacturing, irrigation, steam electric power generation, mining and livestock watering. The plan to be used for water supply during drought of record shall meet all needs for the water use categories of municipal, manufacturing, irrigation, steam electric power generation, mining, and livestock watering except: (A)-(B) (No change) (6)-(9) (No change.) (b)-(c) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 20, 1998. TRD-9813287 Suzanne Schwartz General Counsel Texas Water Development Board Effective date: September 9, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 463-7981 PART XVIII Texas Groundwater Protection Committee CHAPTER 601.Groundwater Contamination Report SUBCHAPTER A.General Provisions Relating to Public Files and Joint Report 31 TAC sec.sec.601.2-601.5 The Texas Groundwater Protection Committee (committee) adopts amendments to 31 TAC sec.sec.601.2-601.5, Subchapter A, concerning General Provisions relating to Public Files and Joint Report. Sections 601.2, 601.3 and 601.4 are adopted with changes to the proposed text as published in the June 12, 1998 issue of the Texas Register (23 TexReg 6142). Section 601.5 is adopted without changes and will not be republished. This action also constitutes the committee's readoption of the rules contained in 31 TAC Chapter 601, concerning the Groundwater Contamination Report, in accordance with the General Appropriations Act, Article IX, sec.167, 75th Legislature, 1997. EXPLANATION OF ADOPTED RULE The purpose of these rules is to define the conditions that constitute groundwater contamination for the purpose of inclusion of cases in the public files for each state agency having responsibilities related to the protection of groundwater. The rules also describe the contents of the committee's Joint Groundwater Monitoring and Contamination Report required under Texas Water Code sec.26.406. The purpose of the adopted amendments is to implement legislative changes to Texas Water Code sec.26.403(c) regarding committee membership and to update the rules to reflect correct agency names and to establish the policies of the committee regarding the report. Format changes were also made to conform with recent rules passed by the Secretary of State. FINAL REGULATORY IMPACT ANALYSIS The committee has reviewed the adopted rulemaking in light of the regulatory impact analysis (RIA) requirements of the Texas Government Code sec.2001.0225 and has determined that the rulemaking is not subject to sec.2001.0225, which applies only to certain major environmental rules that have at lease one of four results. The adopted rulemaking provides for a listing of the duties and responsibilities assigned to the committee under the Texas Water Code, sec.26.406, concerning the maintenance by certain state agencies of public files containing documented cases of groundwater contamination and the publication by the committee, in conjunction with the Texas Natural Resource Conservation Commission (TNRCC), of annual groundwater monitoring and contamination reports and to establish general policies of the committee to guide such implementation. The adopted rules are not specifically intended to protect the environment or to reduce risks to human health and therefore, does not meet the definition of a major environmental rule. The purpose of this specific rulemaking is to review and consider for readoption committee rules under the General Appropriations Act, Article IX, Section 167, 75th Legislature, 1997. As part of this review, the rule was revised to include legislative additions to membership since the rule was adopted. The rule also does not meet any of the four results that would trigger applicability of sec.2001.0225. First, the adopted rule does not exceed a standard set by federal law because there is no equivalent federal statute for the reporting of groundwater contamination. Second, this adopted rule does not exceed an express requirement of state law. Sections 26.405(a)(5) and 26.406(c) of the Texas Water Code require the committee to publish a joint groundwater monitoring and contamination report by April 1 of each year. The report must cover the activities and findings of the committee during the previous calender year. The report must describe the current status of groundwater monitoring programs conducted or required by each agency at regulated facilities or in connection with regulated activities; contain a description of each case documented during the previous year and of each case of groundwater contamination documented during previous periods for which enforcement action was incomplete at the time of issuance of the preceding report; and indicate the status of enforcement action for each case. The committee is also tasked under sec.26.406(d) of the Texas Water Code to adopt rules defining the conditions that constitute groundwater contamination for purposes of inclusion of cases in the public files and the joint report. Third, this adopted rule does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program because this report is not part of a delegation agreement or contract between the state and a federal program. Finally, this adopted rule does not adopt a rule solely under the general powers of the agency instead of under a specific state law. Rules are required under sec.26.406(d) of the Texas Water Code. TAKINGS IMPACT ASSESSMENT The committee has prepared a Takings Impact Assessment for this rule pursuant to Texas Government Code Ann. sec.2007.043. The following is a summary of that Assessment. The purpose of this rulemaking is to review and consider for readoption committee rules under the General Appropriations Act, Article IX, Section 167, 75th Legislature, 1997. As part of this review, the rule was revised to include legislative additions to membership since the rule was adopted. These rules provide for a listing of the duties and responsibilities assigned to the committee under the Texas Water Code sec.26.406, concerning the maintenance by certain state agencies of public files containing documented cases of groundwater contamination and the publication by the committee, in conjunction with the TNRCC, of annual groundwater monitoring and contamination reports and to establish general policies of the committee to guide such implementation. Because the rule governs the actions of the member agencies and organizations on the committee, it does not effect private real property and does not, in whole or in part, or temporarily or permanently, restrict or limit a property owner's right to the property that would otherwise exist in the absence of the rule. COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW The adopted committee rulemaking does not authorize actions listed in Coastal Coordination Act Implementation Rules in 31 TAC sec.505.11(b)(2) or sec.505.11(a)(6) or the Natural Resources Code Chapter 33. Section 33.205(a) of the Natural Resources Code states that "An agency or subdivision that takes an agency or subdivision action described by sec.33.2051 or sec.33.2053 that may adversely affect a coastal natural resource area shall comply with the goals and policies of the coastal management program." Title 31 TAC sec.505.11(b)(2) and sec.505.11(a)(6), which correspond directly with Natural Resources Code sec.33.2051 and sec.33.2053 and describe agency rulemaking actions, requiring certain agencies to comply with sec.33.205(a) and (b) of the Natural Resources Code when adopting or amending a rule governing certain activities. However, these provisions do not list the committee as an agency subject to the provisions of Natural Resources Code sec.33.205(a) and (b) or that must demonstrate compliance with the goals and policies of the Coastal Management Plan. The committee is described as "an interagency committee" in Texas Water Code sec.26.403, with the power to adopt rules under Texas Water Code sec.26.406(d). Texas Water Code sec.26.403(b) designates the TNRCC as the lead agency for the committee, and provides that the TNRCC shall administer the activities of the committee; however, the committee is given separate statutory power to adopt rules under sec.26.406(d). Therefore, the above provisions of the Texas Administrative Code and the Natural Resources Code do not apply to the committee's adoption of rules. Nonetheless, should the rulemaking actions of the committee be interpreted for any reason as the TNRCC's adoption of rules, none of the adopted rules falls under the actions described in 31 TAC sec.505.11(b)(2) and sec.505.11(a)(6) or Natural Resources Code sec.33.2051 or sec.33.2053. Therefore, the requirements of the Coastal Management Plan do not apply to this rulemaking. HEARING AND COMMENTS The proposed rule was published in the June 12, 1998 issue of the Texas Register (23 TexReg 6142). No hearing was held on the proposed rule and the public comment period closed on July 13, 1998. Henry, Lowerre, Johnson, Hess, and Frederick Attorneys at Law submitted written comments on the proposal. ANALYSIS OF TESTIMONY The commentor noted that the existing rules and the proposed amendments were too vague and allowed committee agencies too much discretion in determining what to report. The committee disagrees with this comment. As previously adopted and as proposed, the rules have purposely been defined in broad terms so that the varying jurisdictional abilities and programs of the contributing agencies could be compiled in similar formats and analyzed by the committee. The commentor noted that an agency's failure to document groundwater contamination for the committee or to pursue charaterization and resolution of groundwater contamination should be addressed by the committee and its rules. The committee disagrees with this comment. The committee does not possess the statutory authority to adopt rules to compel an agency to take or refrain from taking any certain action related to an agency's reporting requirements or the agency's failure to pursue charactization and resolution of groundwater contamination. The committee only has authority to promulgate rules defining conditions that constitute groundwater contamination for the purpose of inclusion of cases in the public files and the joint report. The commentor noted that sec.601.5 of the rules does not reflect the responsibility of all committee member agencies and organizations to provide information for the report. The committee disagree with this comment and notes that sec.601.5 conforms with the legislative directive given to the committee under the Texas Water Code, sec.26.406 (c). However, sec.601.2 (relating to Applicability) was modified to apply to all agencies and organizations having membership on the committee. The commentor noted that sec.601.5 does not define the term "documented". The committee agrees that the term "documented" was not defined in the proposed rule and has incorporated a definition of the term "Documented groundwater contamination" within sec.601.3 of the adopted rule. Documented groundwater contamination is defined as a case of groundwater contamination where an agency has an established procedure for making a determination based on the quality of groundwater and the information pertinent to making the determination is maintained by the agency under sec.601.4(b). The commentor noted that no section of the proposed rule adequately defines the term "groundwater contamination". The committee disagrees with this comment. The term "groundwater contamination" is adequately defined under sec.601.3 (7). This definition is derived from definitions in sec.26.001 of the Texas Water Code; 40 Code of Federal Regulations, Parts 144, 145, and 146; and Title 30 Texas Administrative Code Chapter 331. However, the committee has modified the definition to refer to the agencies required to maintain public files under sec.601.4 (b). The commentor notes that all aspects of the rule must be evaluated. The committee agrees with this comment and notes that all aspects of the rule were evaluated in accordance with the General Appropriations Act, Article IX, sec.167, 75th Legislature, 1997, and this was indicated in the proposed rule's preamble under the heading "REVIEW OF COMMITTEE RULES". The commentor noted that the committee must do the cost-benefit analysis required by Chapter 2001 of the Texas Government Code. The committee agrees with this comment and note that the preamble for the proposed rule clearly states the rulemaking is not subject to the four pertinent issues under sec.2001.0225. The required rulemaking cost analysis has been performed under the headings "FISCAL NOTE" and "PUBLIC BENEFIT" as required under sec.2001.024. The preamble for the proposed rule failed to identify the responsible committee officer who prepared the analysis. The "FISCAL NOTE" and "PUBLIC BENEFIT" discussions were prepared by Mary Ambrose, designated chairman of the committee. STATUTORY AUTHORITY These amended sections are adopted under Texas Water Code, sec.sec.26.401- 26.407. Texas Water Code sec.26.406(d) provides the committee with the authority to promulgate rules defining the conditions that constitute groundwater contamination for the purposes of inclusion of cases in the public files and the joint report. sec.601.2.Applicability. These rules specifically apply to each state agency or organization having membership on the committee. The committee is composed of the Texas Natural Resource Conservation Commission, the Texas Department of Health, the Texas Department of Agriculture, the Railroad Commission of Texas, the Texas Water Development Board, the Texas Alliance of Groundwater Districts, the Texas Agricultural Experiment Station, the Bureau of Economic Geology of the University of Texas at Austin, and the State Soil and Water Conservation Board. sec.601.3.Definitions. The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise. (1) Act--House Bill 1458 (71st Session) codified as Texas Water Code sec.sec.26.401-26.407. (2) Commission--Texas Natural Resource Conservation Commission. (3) Committee--Texas Groundwater Protection Committee. (4) Documented groundwater contamination--A case of groundwater contamination where an agency has an established procedure for making a determination based on the quality of groundwater and the information pertinent to making the determination is maintained by the agency under sec.601.4 (b) of this title (relating to Public Files). (5) Enforcement action--Any action of the agencies, identified in sec.601.2 of this title (relating to Applicability), which accomplishes or requires the identification, documentation, monitoring, assessing, or remediation of groundwater contamination. (6) Groundwater--Water below the land surface in a zone of saturation. (7) Groundwater contamination--The detrimental alteration of the naturally occurring physical, thermal, chemical, or biological quality of groundwater. Furthermore, groundwater contamination, for purposes of inclusion of cases in the public files and the joint groundwater monitoring and contamination report, shall be limited to contamination reasonably suspected of having been caused by activities or by entities under the jurisdiction of the agencies identified in sec.601.4 (b) of this title (relating to Public Files), except in the case of an underground source of drinking water granted an aquifer exemption by the commission with concurrence from the United States Environmental Protection Agency in accordance with 40 Code of Federal Regulations, Parts 144, 145, and 146, and 30 TAC Chapter 331 (relating to Underground Injection Control); and affecting groundwater which contains a concentration of: (A) less than or equal to 10,000 milligrams per liter (mg/liter) of dissolved solids; or (B) greater than 10,000 mg/liter if it is: (i) currently extracted for beneficial use such as domestic, industrial, or agricultural purposes; or (ii) hydrologically connected with, and with the potential for contaminant movement to, a surface water body or another zone of groundwater which has a concentration of less than or equal to 10,000 mg/liter of dissolved solids. sec.601.4.Public Files. (a) Subject to the limitations provided by the Texas Water Code, sec.sec.26.401- 26.407 (the Act), and the Open Records Act, Texas Civil Statutes, Article 6252- 17a, information collected, assembled, or maintained by the committee and the agencies having responsibilities related to protection of groundwater under the Act is public record open to inspection and copying during regular business hours. (b) Each agency having the responsibilities related to the protection of groundwater under the Act shall maintain a public file of all documented cases of groundwater contamination that are reasonably suspected of having been caused by activities regulated by the agency. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 24, 1998. TRD-9813428 Margaret Hoffman Director, Environmental Law Division Texas Natural Resource Conservation Commission Effective date: September 13, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 239-4640 TITLE 34. PUBLIC FINANCE PART IV. Employees Retirement System CHAPTER 87.Deferred Compensation 34 TAC sec.sec.87.1, 87.3, 87.5, 87.11, 87.15, 87.17, 87.21 The Employees Retirement System of Texas (ERS) adopts amendments to sec.sec.87.1, 87.3, 87.5, 87.11, 87.15, 87.17, and 87.21, concerning the deferred compensation plan. Sections 87.5 and 87.15 are adopted with changes to the proposed text as published in the July 10, 1998, issue of the Texas Register (23 TexReg 7172). Sections 87.1, 87.3, 87.11, 87.17, and 87.21 are adopted without changes and will not be republished. These rules are being amended in order to reflect changes in federal law. These rules allow deferred compensation funds to be placed in trust for the exclusive benefit of plan participants and beneficiaries. One comment was received asking for clarification of the ownership of certain assets by the plan. The comment was received through a state legislator's office. The ERS agrees that further clarification is helpful and changes were made to sec.sec.87.5(e)(1), 87.5(l), and 87.15(g) to clarify the ownership of assets by the plan before January 1, 1999 and after December 31, 1998. These rules are adopted under Government Code sec.609.508, which provides the board of trustees the authority to adopt any rules necessary to administer the deferred compensation program. sec.87.5.Participation by Employees. (a) - (d) (No change.) (e) Participants with existing life insurance products. (1) This paragraph is effective until December 31, 1998. When a participant has deferrals and investment income in a life insurance product, the State of Texas: (A) retains all of the incidents of ownership of the life insurance product; (B) is the sole beneficiary of the life insurance product; (C) is not required to transfer the life insurance product to the participant or the participant's beneficiary; and (D) is not required to pass through the proceeds of the product to the participant or the participant's beneficiary. (2) This paragraph is effective January 1, 1999, and thereafter. When a participant has deferrals and investment income in a life insurance product, the life insurance product shall be held in trust for the exclusive benefit of the participant and beneficiaries. (f) Normal maximum amount of deferrals. (1) (No change.) (2) The normal maximum amount of deferrals is equal to the lesser of $8,000 (as periodically adjusted in accordance with Internal Revenue Code sec.457(e)(15)) or 33 1/3% of a participant's includible compensation. Mathematically, the preceding is equivalent to the lesser of $8,000 (as adjusted) or 25% of the participant's gross income. (3) (No change.) (4) The participant's employing agency will monitor the annual deferral limits for each plan participant to ensure the maximum annual deferral limit of the lesser of $8,000 (as adjusted) or 25% of a participant's gross income is not exceeded. If a participant makes deferrals in excess of the normal maximum annual deferral limit and is not participating under the catch-up provision, the following actions will be taken. (A) Upon notification by the participant's agency, the vendor will return to the participant's agency the amount of deferrals in excess of the normal plan limits, that is, the lesser of $8,000 (as adjusted) or 25% of the participant's gross income without any reduction for fees or other charges. (B) Upon receipt of the funds, the participant's agency will reimburse the participant through its payroll system. (g) Catch-up exception to the normal maximum amount of deferrals. (1) - (7) (No change.) (8) No participant shall be permitted to participate in any catch-up provision during or after the calendar year in which the participant reaches normal retirement age. If a participant makes deferrals in excess of the normal plan limits under the catch-up provision during or after the calendar year in which the participant reaches normal retirement age, the following actions will be taken. (A) Upon notification by the participant's state agency, the vendor will return to the participant's state agency, the amount of deferrals in excess of the normal plan limits, that is, the lesser of $8,000 (as adjusted) or 33 1/3% of includible compensation without any reduction for fees or other charges. (B) (No change.) (h) -(k) (No change.) (l) Ownership of deferrals and investment income. (1) Until December 31, 1998, a participant's deferrals and investment income are the property of the State of Texas until the deferrals and investment income are actually distributed to the employee. (2) Effective January 1, 1999, in accordance with Chapter 609, Government Code and Internal Revenue Code sec.457(g), all amounts currently and hereafter held under the plan, including deferrals and investment income, shall be held in trust by the Board of Trustees for the exclusive benefit of participants and their beneficiaries and may not be used for or diverted to any other purpose, except to defray the reasonable expenses of administering the plan. In its sole discretion, the Board of Trustees may cause plan assets to be held in one or more custodial accounts or annuity contracts that meet the requirements of Internal Revenue Code sec.sec.457(g) and 401(f). In addition, effective January 1, 1999, the Board of Trustees does hereby irrevocably renounce, on behalf of the State of Texas and participating state agencies, any claim or right which it may have retained to use amounts held under the plan for its own benefit or for the benefit of its creditors and does hereby irrevocably transfer and assign all plan assets under its control to the Board of Trustees in its capacity as the trustee of the trust created hereunder. Adoption of this rule shall constitute notice to vendors holding assets under the plan to change their records effective January 1, 1999, to reflect that assets are held in trust by the Board of Trustees for the exclusive benefit of the participants and beneficiaries. Failure of a vendor to change its records on a timely basis may result in the expulsion of the vendor from the plan. (m) Market risk and related matters. (1) The plan administrator, the trustee, an employing state agency, or an employee of the preceding are not liable to a participant if all or part of the participant's deferrals and investment income are diminished in value or lost because of: (A) market conditions; (B) the failure, insolvency, or bankruptcy of a qualified vendor; or (C) the plan administrator's initiation of a transfer in accordance with the sections in this chapter. (2) (No change.) (n) (No change.) sec.87.15.Transfers. (a) - (c) (No change.) (d) Procedures for making a transfer of all deferrals and investment income from a qualified investment product. (1) - (2) (No change.) (3) If a check is used to make a transfer, this paragraph applies. (A) The qualified vendor must make the check payable to the State of Texas, or effective January 1, 1999, the trust, and promptly send the check to the plan administrator. (B) - (E) (No change.) (4) (No change.) (e) Procedures for making a transfer of less than all deferrals and investment income from a qualified investment product. (1) (No change.) (2) If the plan administrator initiates a transfer, this paragraph applies. (A) (No change.) (B) The qualified vendor must make the check payable to the State of Texas, or effective January 1, 1999, the trust, and promptly send the check to the plan administrator. (C) - (H) (No change.) (3) If a participant initiates a transfer, this paragraph applies. (A) - (B) (No change.) (C) After receiving notification of a transfer from the plan administrator, a qualified vendor shall issue a check payable to the State of Texas, or effective January 1, 1999, the trust, in an amount equal to the transfer. The vendor shall ensure that the plan administrator receives the check no later than the 30th day after the vendor receives notification of the transfer. (D) - (F) (No change.) (f) (No change.) (g) Transfers into life insurance products. (1) (No change.) (2) This paragraph is effective until December 31, 1998. When a participant chooses to transfer deferrals and investment income to an existing replacement life insurance product within the same vendor, the State of Texas: (A) retains all of the incidents of ownership of the life insurance product; (B) is the sole beneficiary of the life insurance product; (C) is not required to transfer the life insurance product to the participant or the participant's beneficiary; and (D) is not required to pass through the proceeds of the product to the participant or the participant's beneficiary. (3) This paragraph is effective January 1, 1999, and thereafter. When a participant chooses to transfer deferrals and investment income to an existing replacement life insurance product within the same vendor, the life insurance product shall be held in trust for the exclusive benefit of the participant and beneficiaries. (h) (No change.) This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 21, 1998. TRD-9813397 Sheila W. Beckett Executive Director Employees Retirement System Effective date: September 10, 1998 Proposal publication date: July 10, 1998 For further information, please call: (512) 867-3336 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART XX. Texas Workforce Commission CHAPTER 809.Child Care and Development SUBCHAPTER A.General Provisions 40 TAC sec.809.5 The Texas Workforce Commission (Commission) adopts new sec.809.5, concerning the State Advisory Committee on Child Care Programs with changes to proposed text as published in the June 12, 1998 issue of the Texas Register (23 TexReg 6184). The purpose of the rule is to establish a 20 member advisory committee that shall advise the Commission in developing coordinated state policies for the use of federal and state funds in child care programs, pursuant to the provisions of the Texas Human Resources Code, Chapter 44, Subchapter C. The advisory committee shall review child care policies and programs for compliance with applicable guidelines and shall advise the Commission of the results of the review. For the purpose of ensuring effective communication, the Commission made non- substantive changes to subsection (i), by adding the requirement that local workforce development boards be sent a copy of the State Advisory Committee's annual report. The Commission received comments on the rule from local workforce development boards, an advisory committee member, and a resource center. Some commenters were for the rule, expressed concerns and had questions about the rule as proposed, and suggested changes. The names of interested groups or associations offering comments on the rules are as follows: West Central Texas Development Board; An Advisory Committee Member; The Connections Resource Center; and The North Central Texas Workforce Development Board. Following each comment or group of related comments is the Commission's response. Comment: One commenter stated the advisory committee should also include employer representatives. Response: Many of the appointees specifically required by statute are also employers. The Commission believes that the appointees required by the rule represent a balanced representation within the community, including employers, and believes the rule as stated follows the intent of the statute, which does not permit altering the specific balance of appointees. Comment: One commenter stated she agrees with the proposed rule provisions except for the omission of the number of times the advisory committee should meet as a whole within a year's time, and added that she would like to see this included in the rule. Response: The rule as proposed follows the intent of the statute. The Commission will strive to ensure the advisory committee meets as often as necessary to adequately perform the functions required by statute; however, the Commission does not deem it necessary to set a fixed number of times for meeting within the text of the rule. Comment: One commenter stated the rule was supported as written. Response: The Commission acknowledges this comment. Comment: One commenter reflected that since in many areas of the state the local workforce development boards are responsible for managing child care programs in their communities, she believed local workforce development boards should be considered a member of the "Child Care Management Services (CCMS) Advisory Committee" with voting authority. The commenter pointed out that local workforce development boards have child care expertise within their membership, and that significant input on child care issues at the local level would be missed without designated local workforce development board representation. As such, a local workforce development board representative should be inserted as a specific requirement under sec.809.5(c)(1-8). Response: (Note: The above commenter uses the term "Child Care Management Services (CCMS) Advisory Committee" in referencing the proposed rule. Due to the context of the above comment, the Commission is interpreting the comment to reflect upon the proposed "Child Care State Advisory Committee" rule.) The Commission fully intends to involve local workforce development boards in child care matters, and to seek out local workforce development board advice on child care issues. The provisions of the rule do not preclude specific committee appointees from also being members of local workforce development boards. The Commission believes that the local workforce development boards should be represented on the committee and amends the rule accordingly. Comment: In reference to sec.809.5(h), in areas where local workforce development boards are responsible for child care planning, one commenter states local workforce development boards should hold public hearings as part of the annual planning process, not the advisory committee, and the advisory committee and Commission would then receive the outcomes of the meetings as part of the local workforce development board's child care plan. Response: The statute specifically states the advisory committee shall hold public hearings. This however, does not preclude local workforce development boards from holding child care meetings as well, and submitting the results of these hearings to the Commission. Local workforce development boards are units of local government, and as such, their meetings fall under the provisions of the Texas Open Meetings Act. Therefore, the Commission does not deem it appropriate to incorporate the commenter's suggestion into the rule. Comment: The same commenter proposed that if the advisory committee must hold the hearings, the hearings should be actively advertised to help insure that they are well attended, with several weeks of advance notice to all local workforce development boards, state agencies that provide child care for their clients, child care facilities, and the general public. Response: The Commission agrees that the hearings are deserving of a high degree of publicity and hopes they will be well attended The Commission will strive to ensure sufficient advertisement will be utilized to inform all interested parties of the hearings; however, the Commission does not deem it necessary to add this specific requirement to the rule. Comment: In reference to 809.5(i), one commenter asserted that all local workforce development boards should receive the annual report in addition to the Commission, as without access to this document, the local workforce development boards would lose a potentially valuable resource in their efforts to continually raise the quality of child care, and the commenter believes this to be an opportunity to solidify a link between the child care community and the local workforce development boards. Response: The Commission agrees. The local workforce development boards will be sent the annual report, and the Commission will strive to ensure local workforce development boards are kept apprised of all other relevant data. The new section is adopted under Texas Labor Code, sec.301.061 and sec.302.021, which provides the Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of the Commission programs. sec.809.5. Child Care State Advisory Committee. (a) The Commission appoints the State Advisory Committee on Child Care Programs. (b) The advisory committee shall consist of 20 members, not including ex officio members. (c) The advisory committee appointees will be a balanced representation of: (1) parents, guardians, or custodians of children who use child care programs; (2) child care advocacy groups; (3) operators and providers of child care programs and services representing rural and urban communities; (4) for profit and nonprofit providers of child care services representing rural and urban communities; (5) experts in early childhood development and education; (6) experts in child health and nutrition; (7) other child care professionals; (8) the general public; and (9) ex officio representatives from each state agency, as determined by the Commission, that have an interest or role in state child care programs. (d) At least one of the members of the committee, in addition to the qualifications required for that member, must represent a local workforce development board. (e) The Commission shall provide staff support and other support necessary to the advisory committee to operate the committee. (f) Subject to appropriations, the advisory committee may be reimbursed for travel expenses incurred while conducting the business of the board. (g) The advisory committee shall advise the Commission in developing coordinated state policies for the use of federal and state funds in child care programs. (h) The advisory committee shall review child care policies and programs for compliance with applicable guidelines and shall advise the Commission on the results of the review in accordance with the Texas Human Resources Code, Chapter 44, Subchapter C, as amended. (i) The Commission with the assistance of the advisory committee shall hold biennial public hearings on state and federal child care programs to elicit public response and recommendations regarding the quality, accessibility, and affordability of child care services. The hearings must be held in at least three separate geographical regions of the state and may be held in conjunction with other public hearings on child care held by the Commission. (j) The advisory committee shall annually report its findings and recommendations to the Commission, and the local workforce development boards will be sent a copy of this report. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 21, 1998. TRD-9813355 J. Randel (Jerry) Hill General Counsel Texas Workforce Commission Effective date: September 10, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 463-8812 SUBCHAPTER E.Client Eligibility Process Requirements 40 TAC sec.809.93 The Texas Workforce Commission (Commission) adopts new sec.809.93, concerning the receipt of Texas Workforce Commission Applicant Child Care, with changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6185). The purpose of the rule is to establish a priority for receiving child care subject to the availability of funds for individuals who need child care to accept employment, receive a referral from a Department of Human Services (DHS) Texas Works Advisor to attend a Workforce Orientation for Applicants, and secure employment prior to Temporary Assistance For Needy Families (TANF) program certification, pursuant to House Bill 1863, 74th Legislature, Regular Session. For the purpose of clarity, the Commission made non-substantive changes to subsection (a), by deleting paragraph (2), which states that the client shall "reside in a county where Choices services are available" and renumbering the paragraphs accordingly. The Commission also added a provision to subsection (c), which incorporates an element of good cause for voluntary terminations that occur within the 30 day period prior to receiving the referral from the Department of Human Services Texas Works Advisor to attend a Workforce Orientation for Applicants The Commission received comments on the rule from a state representative, a workforce development board, an advisory committee member, and a resource center. Some commenters were for the rule, expressed concerns and had questions about the rule as proposed, and suggested changes. The names of interested groups or associations offering comments on the rules are as follows: A State Representative; An Advisory Committee Member; The Connections Resource Center; and The North Central Texas Workforce Development Board. Following each comment or group of related comments is the Commission's response. Comment: One commenter asserted that the receipt of Texas Workforce Commission Applicant Child Care appears to be in the best interest of children and parents at a time when child care is essential toward maintaining employment. Response: The Commission acknowledges this comment. Comment: One commenter stated providing child care services to individuals who apply for TANF benefits but choose to go to work prior to receiving TANF benefits is an excellent idea, and will enable local workforce development boards to be more responsive of families' efforts to become self-sufficient. Response: The Commission acknowledges this comment. Comment: One commenter asks if the Workforce Orientation for Applicants will be offered at times (e.g. evenings, early mornings, weekends) convenient for individuals who apply for TANF but choose to go to work prior to receiving TANF benefits, as it would be unfortunate for individuals to lose work time in order to go to an orientation about finding and keeping jobs. Response: The Commission agrees that offering the Workforce Orientation at times convenient for clients is important; however, because the orientation represents an eligibility requirement for TANF, and the client in the commenter's case has chosen employment, not TANF, the Commission does not deem it necessary to add such a requirement specifically to the rule. The Commission will continue to encourage local staff and local workforce development boards to offer a sufficient number of orientations for the number of applicants referred. Comment: One commenter asks if an exception to the 30 day period will be made for individuals who have voluntarily quit employment due to child care difficulties? Response: The Commission agrees that there are times when an individual's reason for quitting employment may need to be considered, and has incorporated a good cause statement in reference to voluntary terminations within the 30 day period prior to receiving the referral from the Department of Human Services Texas Works Advisor to attend a Workforce Orientation for Applications. Comment: One commenter states that prohibiting child care for applicants when they are looking for employment prior to being certified for TANF is not supportive of the goal to keep applicants from following through with becoming TANF recipients, and that a period of 30 to 60 days of job search related child care should be made available for Applicant Child Care to assist and motivate parents to stay off TANF and find meaningful employment. Response: The Commission is in favor of assisting parents to stay off of TANF benefits and find meaningful employment, but does not deem it necessary to alter the rule as proposed for this reason. The period between applying for TANF benefits and certification for benefits is generally less than 30 days. Therefore, it would not be possible to provide "applicant child care" for a period as long as 60 days for an employment search. If employment is not secured by a TANF applicant prior to TANF certification, the applicant becomes a TANF recipient. As a TANF recipient, the individual is potentially eligible for child care as a Choices program participant. Comment: One commenter points out that there are numerous legitimate reasons why an individual might voluntarily leave a paid leave position, such as unreliable child care, employer harassment or a family medical situation. The commenter believes individuals should not be penalized for leaving a position for any of these reasons, and that good cause for voluntarily leaving a position should be considered. Response: The Commission agrees that there are times when an individual's reason for quitting employment may need to be considered, and has incorporated a good cause statement in reference to voluntary terminations within the 30 day period prior to receiving the referral from the Department of Human Services Texas Works Advisor to attend a Workforce Orientation for Applications. The new section is adopted under Texas Labor Code, sec.301.061 and sec.302.021, which provides the Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of the Commission programs. sec.809.93. Texas Workforce Commission Applicant Child Care. (a) Subject to the availability of funds, the Child Care Management Services Contractor shall provide Child Care for up to one year for individuals who meet the following criteria. The client shall: (1) need child care to accept employment; (2) receive a referral from the Department of Human Services Texas Works Advisor to attend a Workforce Orientation for Applicants; (3) locate employment prior to TANF certification; and (4) provide verification of a valid social security number. (b) To receive Applicant Child Care, individuals shall also meet the requirements stated in the following sections: (1) Section 809.2 of this title (relating to the definition of Family Members); (2) Section 809.61(a) of this title (relating to Basic Requirements to Obtain Child Care Services from the Child Care Management Services (CCMS) System); (3) Section 809.65 of this title (relating to Eligibility Criteria for Commission Funded Child Care Services); (4) Section 809.67(a) of this title (relating to Income Limits for Child Care Services); and (5) Section 809.68 of this title (relating to Income Inclusions for Child Care Eligibility Determination). (c) To receive Applicant Child Care, individuals shall not have voluntarily terminated paid employment of at least thirty hours a week within thirty days prior to receiving the referral from the Department of Human Services Texas Works Advisor to attend a Workforce Orientation for Applicants, unless the voluntary termination was for good cause connected with the individual's work. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 21, 1998. TRD-9813329 J. Randel (Jerry) Hill General Counsel Texas Workforce Commission Effective date: September 10, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 463-8812 SUBCHAPTER J.School-Linked Child Care Program 40 TAC sec.sec.809.201-809.205 The Texas Workforce Commission (Commission) adopts new sec.sec.809.201-809.205, School-Linked Child Care Program, regarding funding to be awarded by the Commission to school districts to provide for child care before and after school, as well as during school vacations and holidays. Sections 809.201-809.205 are adopted without changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6186). Sections 809.201-809.205 will not be republished. The purpose of the rules is to implement the statutory requirements for the School-Linked Child Care Program as found in Texas Education Code sec.33.902. The purpose of the program is to encourage school districts to provide child care to school age children before and after school, as well as during school vacations and holidays. The number of awards provided is limited by the amount of funds available to the Commission for this program. The Commission will strive to assure an equitable allocation of funds awarded under these rules between urban and rural areas of the state. The Commission will take into consideration whether or not a school district has been awarded funds under this program in the past, and may give preference to a school district which has not previously been awarded such funds. New Subchapter J is adopted as the location for the School-Linked Child Care Program rules. Section 809.201 explains the purpose of this subchapter. Section 809.202 provides definitions of the terms used in this subchapter. Section 809.203 lists some of the information which must be included by a school district in a response to a request for proposal issued by the Commission for funding through this program. Section 809.204 describes the criteria which will be used by the Commission in awarding funds. Section 809.205 lists the allowable uses of funds awarded. The Commission received comments from three individuals and two groups which did not clearly state approval or disapproval of the rules but expressed concerns regarding some aspects of the rules. Comments were received from Connections Resource Center, North Central Texas Workforce Development Board, and three individuals, including a Child Care Advisory Committee Member. The Commission received the following comments concerning the proposed rules. Following each comment is the Commission's response. Comment: One commenter suggested that the Commission allow Texas Education Agency approved/accredited private schools to apply for funds through the School-Linked Child Care Program. Response: The Commission is not authorized to make the change requested. Texas Education Code sec.33.902(d) requires the Commission to distribute School-Linked Child Care Program funds to school districts. Comment: One commenter suggested that the Commission support its request that the administration of the School-Linked Child Care Program be moved from the Commission to the Local Workforce Development Boards (boards). Response: The Commission is not authorized to make the change requested. Texas Education Code sec.33.902 specifically states that the Work and Family Policies Clearinghouse has the responsibility for the distribution of School-Linked Child Care Program funds. Comment: One commenter suggested that representatives of the boards be given an opportunity to participate in the development of the Request for Proposals for funding from the School-Linked Child Care Program. Response: The Commission encourages input from affected parties in the development of Request for Proposals (RFPs). Of course, any entity participating in the development of an RFP is not eligible to respond to that RFP. Boards will be offered the opportunity to participate in the development of the RFPs for School-Linked Child Care in the future. Comment: One commenter suggested that allocations of School-Linked Child Care Program funds should be based on a "fair share" formula which takes into consideration the poverty levels, population, and number of school age children located in the areas submitting proposals. Response: One of the primary goals of this program is to meet the needs in the community for school age child care. Section 809.204(7) requires that a response to an RFP issued by the Commission for School-Linked Child Care include a description of the need in the community for school age child care and the resources available to meet that need. Bidders are asked to describe the need in their community for the proposed services, and the information provided is considered in the award process. Comment: One commenter suggested that the criteria for selection of successful proposals from School-Linked Child Care Program funds should give preference to proposers who provide some type of reading instruction activities to children in the program. Response: The Commission acknowledges the importance of reading programs and will work with the Texas Education Agency (TEA) to assure that information regarding TEA's statewide Reading Initiatives Program for school age children is made available to all interested bidders and providers under this program. The Commission will work with contract providers under this program to establish or maintain reading instruction services. Comment: One commenter suggested that the Commission consider multiple-year funding for programs which successfully provide quality care. The commenter stated that three years are required to establish a new program, and if the Commission funded new programs for three consecutive years that school districts would be more likely to be able to locate continued funding. Response: The rules do not prevent bidders from responding to successive year RFPs. The rules provide that one of the criteria in making the awards is prior success of the bidder. Comment: One commenter suggested that an additional requirement be added to any School-Linked Child Care Program request for proposals. Applicants should be required to strive to provide care which exceeds minimum child care licensing standards, and funding of subsequent years should be conditioned on the demonstrated ability or efforts to provide good child care. Response: Every effort will be made to recognize and promote quality child care services in programs receiving funding. Two of the criteria in making the awards are prior success of the bidder in providing services and innovative uses of program funds. A bidder is required to provide information on its prior experience in providing child care services. Comment: One commenter stated that child care providers in the Dallas area were concerned that the School-Linked Child Care Program would make an economic difference to their business because of the closing of the before and after school component of their program. Response: School districts may choose to contract with private child care providers to provide services under this program. Since the grant is not intended for areas of the state where adequate school age child care services exist, it is not anticipated that the program would have a negative impact on existing providers. The new rules are adopted under Texas Labor Code sec.301.061, which provides the Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Commission programs, and under Texas Education Code sec.33.902 which requires that the Commission establish by rule procedures and eligibility requirements for distributing School-Linked Child Care Program funds to school districts. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on August 19, 1998. TRD-9813209 J. Randel (Jerry) Hill General Counsel Texas Workforce Commission Effective date: September 8, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 463-8812