ADOPTED RULES An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 16. ECONOMIC REGULATION PART I. Railroad Commission of Texas CHAPTER 1.Practice and Procedure SUBCHAPTER G.Hearings 16 TAC sec.1.130 The Railroad Commission of Texas adopts new sec.1.130, relating to telephonic proceedings, with changes to the proposed version published in the July 17, 1998, issue of the Texas Register (23 TexReg 7318). New sec.1.130 outlines the method to request a telephonic proceeding, how the proceeding shall be conducted, the establishment of the record in such proceedings, and the grounds for a default judgment or a dismissal. New sec.1.130 permits a party to request to appear at a commission proceeding by telephone either in the request for a hearing or in a subsequent timely-filed motion. The request must be in writing, filed at the commission, and served on all parties, and must include the pertinent telephone number(s), the scope of the telephonic portion of the proceeding, and the identity of any witnesses that may testify telephonically. If expert witnesses will testify, the request must include their qualifications to testify as experts. In determining whether it is feasible to conduct all or part of a proceeding telephonically, the hearings examiner must ensure that such proceeding will provide due process and will be fair, and must take into account the following factors: whether a party's request is timely; whether all parties have agreed in writing, and if so, whether the parties have demonstrated how witnesses will be separated, how coaching of witnesses will be prevented, why observing only a witness's oral demeanor is sufficient, how the witnesses' and parties' identities will be established; the number of parties; the number of witnesses; the number and type of exhibits; the distance of the parties or witnesses from Austin; the nature of the hearing; and any other pertinent factors which the examiner believes may affect the proceeding. If the examiner determines that a telephonic proceeding will be held, the examiner must notify the parties, and the parties must file and serve all documentary evidence, other than prefiled written testimony, in advance of the proceeding. All substantive and procedural rights apply to telephonic proceedings, subject only to the limitations of the physical arrangement. The time and location of telephonic proceedings will be posted, and any person may, by advance request, be present in the room with the hearings examiner. The hearings examiner will conduct telephonic proceedings using a speaker telephone; either the hearings examiner will make a tape recording of the telephonic proceeding, or the proceeding will be transcribed by a court reporter. The hearings examiner will initiate the telephonic proceeding, including arranging any necessary conference call. When all parties appearing telephonically are connected, the hearings examiner will affirm the parties' consent to the telephonic proceeding; call the proceeding to order; ask for all parties to identify themselves, their locations, and their witnesses; affirm on the record the prior written agreement from all parties consenting to the telephonic appearance or proceeding; and state whether the proceeding is being memorialized by means of a tape recording or transcription of the proceeding. The hearings examiner will administer the oath to each witness individually, prior to his or her testimony. If the hearings examiner decides or any party requests not to proceed with the telephonic proceeding at any time, or asserts that the presence of the parties or witnesses in the hearing room is necessary for full disclosure of the facts, the hearings examiner may postpone, continue, or recess the proceeding, as appropriate, until the earliest possible date and time for the proceeding to be reconvened with all participants present in person. The examiner must state on the record or in writing to all parties the reasons for terminating the telephonic proceeding and state the date, time, and location of the reconvened proceeding. The commission may consider the following events to constitute a failure to appear and grounds for default or dismissal: failure to answer the telephone for more than 10 minutes after the scheduled time for the proceeding; failure to free the telephone for the proceeding for more than 10 minutes after the scheduled time for the proceeding; failure to be ready to proceed with the proceeding within 10 minutes of the scheduled time; and a party's intentional disconnection from the conference call. If the examiner is prevented from connecting all parties (due to technical difficulties, for example), the examiner may postpone, continue, or recess the proceeding, as appropriate, until the earliest possible date and time for the proceeding to be reconvened. In the event of accidental disconnection of one or more parties to the proceeding, the hearings examiner will immediately recess the hearing and attempt to re-establish the connection or connections. If reconnection is achieved within 30 minutes, the hearings examiner may resume the telephonic hearing, or may postpone, continue, or recess the proceeding, as appropriate, until the earliest possible date and time for the proceeding to be reconvened. The examiner must state on the record the date, time, and location of the reconvened proceeding. If reconnection cannot be achieved, then the hearings examiner recesses the telephonic proceeding until a date and time certain and at a location specified in a written notice of reconvened hearing. The commission received two comments on the proposed new section. Lone Star Gas Company agreed generally with the overall aim of the rule. In a late-filed comment, Texas Oil & Gas Association (TxOGA) expressed neither support nor opposition, but raised one issue. TxOGA's comment pointed out that the Commission had decided that telephonic hearings could be conducted in protested matters only when all parties agree, and observed that the current proposed draft appears to allow an examiner to conduct a telephonic proceeding even if a party objects. TxOGA suggested that the proposed rule be changed to incorporate the Commission's directive that telephonic proceedings may be conducted in a protested matter only when all parties agree. As published, the proposed rule indeed does incorporate the Commission's directive. Subsection (a) of the proposed rule reads: The hearings examiner, on the timely written motion of a party or on the examiner's own motion and with the consent of all parties to a protested proceeding, may conduct all or part of a prehearing conference or hearing by telephone. This language requires (1) either a timely motion by a party or the examiner's own motion, and (2) the consent of all parties to a protested proceeding. The factors listed in subsection (c) of the rule are designed to ensure that, even if all parties to a protested matter do agree to a telephonic proceeding, the hearing will provide due process and will be fair. In other words, the fact that the parties agree to a telephonic hearing does not require that the examiner conduct it in that manner. Lone Star's comment offered minor revisions that it believed would make the rule more flexible. First, Lone Star stated that the determination whether a proceeding would be conducted telephonically should be made more than five days prior to the hearing, in order to allow the parties adequate time either to prepare for it or to confirm plans to attend a proceeding in Austin. Accordingly, Lone Star suggested that the references to "five days" in subsections (c)(2) and (d) should be changed to "ten days." Second, Lone Star suggested a deadline for filing and serving documentary evidence longer than the three calendar days originally proposed, particularly considering that under sec.1.48(d), relating to service in protested contested cases, service is completed when a properly-addressed item is placed in an official mail depository. The minimum time Lone Star suggested is three business days, but five business days would be preferable, so that weekends, holidays, or slow mail deliveries do not cause the difficulties that would ensue should the hearing convene without all parties having received the documentary evidence. Third, Lone Star observed that the deadline stated in subsection (e) should be made subsidiary to any applicable ruling by the hearings examiner, so that the examiner would have the authority to set a different deadline without the formality of a party requesting and having to show good cause for the change. Finally, Lone Star commented that subsection (e) should exclude from the scope of the term "documentary evidence" prefiled written testimony filed pursuant to sec.1.105, which governs the filing of written testimony. The commission agrees that the changes suggested by Lone Star provide helpful flexibility in the rule; finds that incorporating such changes in the rule upon adoption comes fairly within the scope of the notice of proposed rulemaking; and adopts the rule as amended by the changes Lone Star proposed. The commission adopts the new section under the Texas Government Code, sec.2001.004(1), which requires the commission to adopt rules of practice stating the nature of all available formal and informal procedures. Texas Government Code, sec.2001.004(1), is affected by the new section. sec.1.130.Telephonic Proceedings. (a) The hearings examiner, on the timely written motion of a party or on the examiner's own motion and with the consent of all parties to a protested proceeding, may conduct all or part of a prehearing conference or hearing by telephone. (b) A party may request to appear at a prehearing conference or a hearing by telephone. (1) All motions requesting a telephonic appearance or proceeding shall be in writing, shall be filed at the commission and served on all parties not less than 20 days prior to the proceeding, and shall include the pertinent telephone number(s). (2) If the request is to conduct only a portion of the proceeding by telephonic means, the requesting party shall specify the part of the proceeding to be conducted telephonically. (3) If the proceeding involves testimony, the requesting party shall identify the witnesses and, for expert witnesses, their qualifications to testify as experts. (4) Responses to a request for telephonic appearance shall be made in accordance with sec.1.28 of this title (relating to Responsive Pleadings and Emergency Action). (5) Upon agreement of the parties or a finding of good cause, the examiner may modify the times for filing a request for telephonic appearance and/or responses to such a request, and for filing witness information. (c) In considering whether conducting all or part of a prehearing conference or hearing by telephone is feasible, the hearings examiner shall ensure that the telephonic hearing will provide due process and will be fair, and shall take into account the following factors: (1) whether a party's request for such is timely; (2) whether all parties to a protested proceeding have agreed in writing, filed no later than ten days prior to the proceeding, to conducting all or part of the proceeding via telephone; (3) whether the parties have demonstrated: (A) how witnesses will be separated; (B) how coaching of witnesses will be prevented; (C) why observing a witness's oral demeanor is adequate to make a reliable determination of the truth of the witness's testimony; and (D) how the witnesses' and parties' identities will be established; (4) the number of parties; (5) the number of witnesses; (6) the number and type of exhibits; (7) the distance of the parties or witnesses from Austin; (8) the nature of the hearing; and (9) any other pertinent factors which the examiner believes may affect the proceeding. (d) The hearings examiner shall issue a ruling not less than ten days prior to the proceeding stating whether the proceeding will be conducted, in whole or in part, telephonically. In addition, the examiner shall notify all parties by telephone or by facsimile transmission of the ruling. The parties may waive this notice deadline. (e) Unless otherwise directed by the hearings examiner, the proponent of any documentary evidence other than prefiled written testimony filed pursuant to the provisions of sec.1.105 of this title (relating to Written Testimony) shall serve copies of that evidence on all parties and the hearings examiner no later than five business days prior to the telephonic proceeding. All documentary evidence shall be clearly labeled with the name of the sponsoring party and a unique document number. With the consent of the hearings examiner, a party may supplement or amend evidence less than three days prior to the proceeding or during the proceeding. (f) All substantive and procedural rights apply to telephonic proceedings, subject only to the limitations of the physical arrangement. (g) The time and location of telephonic proceedings shall be properly posted, and any person may, by advance request, be present in the room with the hearings examiner. (h) The hearings examiner shall conduct telephonic proceedings using a speaker telephone. The hearings examiner shall make a tape recording of the telephonic proceeding, or the proceeding may be recorded by a court reporter by prior arrangement, pursuant to sec.1.129 of this title (relating to Reporters and Transcripts). (i) The telephonic proceeding, including arranging the conference call, shall be initiated by the hearings examiner. When all parties appearing telephonically are connected, the hearings examiner shall affirm the parties' consent to the telephonic proceeding. (1) The hearings examiner shall then call the proceeding to order and ask for all parties to identify themselves, their locations, and their witnesses. (2) The hearings examiner shall affirm on the record the prior written agreement from all parties consenting to the telephonic appearance or proceeding and shall state whether the proceeding is being memorialized by means of a tape recording or transcription of the proceeding. (3) The hearings examiner shall administer the oath to each witness individually, prior to his or her testimony. (j) If the hearings examiner is prevented from establishing the telephonic connection for the proceeding through circumstances which are beyond the control of any party or the examiner; which cannot be attributed to any party's intentional or negligent conduct; and which continue for at least 30 minutes past the time for beginning the hearing, the hearings examiner may postpone, continue, or recess the proceeding, as the hearings examiner deems appropriate, until the earliest possible date and time for the proceeding to be reconvened. The hearings examiner shall state on the record or in writing to all parties the date, time, and location of the reconvened proceeding. (k) If the hearings examiner decides or any party requests not to proceed with the telephonic proceeding at any time, or asserts that the presence of one or more of the parties or witnesses in the hearing room is necessary for full disclosure of the facts and states the reasons for such an assertion, the hearings examiner may postpone, continue, or recess the proceeding, as the hearings examiner deems appropriate, until the earliest possible date and time for the proceeding to be reconvened with all participants present in person. The examiner shall state on the record and in writing to all parties the reasons for terminating the telephonic proceeding and the date, time, and location of the reconvened proceeding. (l) The commission may consider the following events to constitute a failure to appear and grounds for default or dismissal: (1) failure to answer the telephone for more than 10 minutes after the scheduled time for the proceeding; (2) failure to free the telephone for the proceeding for more than 10 minutes after the scheduled time for the proceeding; (3) failure to be ready to proceed with the proceeding within 10 minutes of the scheduled time; and (4) a party's intentional disconnection from the call. (m) In the event of accidental disconnection of one or more parties to the proceeding, the hearings examiner shall immediately recess the hearing and attempt to re-establish the connection or connections. (1) If reconnection is achieved within 30 minutes, the hearings examiner may resume the telephonic hearing, or may postpone, continue, or recess the proceeding, as the hearings examiner deems appropriate, until the earliest possible date and time for the proceeding to be reconvened. The examiner shall state on the record or in writing to all parties the date, time, and location of the reconvened proceeding. (2) If reconnection cannot be achieved within 30 minutes, then the hearings examiner shall recess the telephonic proceeding until a date and time certain and at a location specified in a written notice of reconvened hearing. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on September 1, 1998 and filed with the Office of the Secretary of State on September 1, 1998. TRD-9813852 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: September 21, 1998 Proposal publication date: July 17, 1998 For further information, please call: (512) 463-7008 CHAPTER 7.Gas Utilities Division SUBCHAPTER B.Substantive Rules 16 TAC sec.7.45 The Railroad Commission of Texas adopts amendments to sec.7.45, relating to the commission's quality of service rules for gas utilities, without changes to the proposed version published in the July 17, 1998, issue of the Texas Register (23 TexReg 7321). Section 7.45 sets forth minimum service standards for gas utility service to residential and small commercial customers. The amendment implements the provisions of House Bill 670, 73rd Legislature, 1993, later codified in Texas Civil Statutes, Article 1446c-2, and subsequently in Texas Utilities Code, sec.sec.182.001-182.005. New paragraph (2)(E) requires gas utilities to permit persons 60 years of age and older to delay payment of gas utility bills without penalty for up to 25 days after the utility bill is issued. The commission received no comments on the proposed amendment. The commission adopts the amendment under Texas Utilities Code, sec.104.001, which authorizes the commission to determine the classification of customers and services and to ensure that gas utilities comply with the obligation of the Code, and sec.sec.182.001-182.005, which provide for the delay without penalty of the payment date of gas utility bills by elderly persons. Texas Utilities Code, sec.sec.104.001 and 182.001-182.005, are affected by the amendment. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on September1, 1998 and filed with the Office of the Secretary of State on September 1, 1998. TRD-9813853 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: September 21, 1998 Proposal publication date: July 17, 1998 For further information, please call: (512) 463-7008 16 TAC sec.7.74 The Railroad Commission of Texas adopts the repeal of existing sec.7.74, relating to school piping testing, and new sec.7.74, relating to school piping testing, without changes to the version published in the May 29, 1998, issue of the Texas Register (23 TexReg 5547). On November 21, 1997, a representative of Texas local distribution companies filed a petition for rulemaking that proposed modifications to the then recently-adopted sec.7.74. The commission reviewed the petition and incorporated most of the requested changes in new sec.7.74, which comprehensively describes the duties and obligations of all parties under the statute that requires the biannual inspection of natural gas piping in school facilities, Texas Civil Statutes, Article 6053-2a, and clarifies definitions, testing procedures, and time lines for compliance. Because the petition also rearranged the portions of existing sec.7.74 that would be retained, for ease of review the commission proposed the simultaneous repeal of the existing rule and the adoption of the newly-reorganized and amended version. New sec.7.74 includes definitions for "school district," "school district facility," "natural gas supplier," "other inspection," and "Act." The commission changed the petition's requested definition of "natural gas supplier" to match that in Texas Civil Statutes, Article 6053-2a, which is a more comprehensive definition. The commission also modified the petition's requested procedures, found in subsection (c) of this section. As adopted, sec.7.74(c) requires a natural gas supplier that sells and delivers natural gas to school district facilities to develop procedures for (1) receiving written notice from school districts specifying the date and result of each test; and (2) terminating natural gas service in the event that either a hazardous leak is found during testing or testing is not completed in the required intervals. The gas supplier is also responsible for maintaining a list of school district facilities to which it sells and delivers natural gas, as well as copies of test results for a period of at least two years. New sec.7.74 outlines who is qualified to conduct testing and when the testing shall be conducted, as well as the procedures for conducting the testing. New sec.7.74 includes two provisions not found in the previous version of sec.7.74, specifically (c)(3) and (4), which outline the limits of responsibilities of natural gas suppliers under this rule, and identify methods of compliance. The commission modified the sections as proposed in the original petition to incorporate the requested changes yet still be consistent with the requirements of Texas Civil Statutes, Article 6053-2a. The remaining provisions focus on clarifying the types of tests that comply with this rule and labeling the section as "Testing." The commission also added language to clarify that a person conducting testing must be "qualified" and must notify both the school district and the natural gas supplier in the event of a leak. In the event of either failure to test or report of a hazardous leak, the supplier is responsible for terminating service. The commission received comments from one individual opposed to the testing methods proposed in the rule. The comments suggested that other methods, specifically shut-in tests, be used to perform pressure tests. However, this testing method would not meet the requirements of the Act; therefore no changes were made to the proposed rule. The commission adopts the repeal under Texas Utilities Code, sec.sec.121.201- 121.205, which authorize the commission to adopt safety standards and practices applicable to the transportation of gas and to all gas pipeline facilities within Texas to the maximum degree permissible under, and to take any other requisite action in accordance with, 49 U.S.C. sec.60101, et seq. (West 1997), and under Texas Civil Statutes, Article 6053-2a, which directs the Railroad Commission of Texas to enforce the article. Texas Utilities Code, sec.sec.121.201-121.205, and Texas Civil Statutes, Article 6053-2a, are affected by the repeal. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on September 1, 1998 and filed with the Office of the Secretary of State on September 1, 1998. TRD-9813854 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: September 21, 1998 Proposal publication date: May 29, 1998 For further information, please call: (512) 463-7008 The commission adopts new sec.7.74 under Texas Utilities Code, sec.sec.121.201- 121.205, which authorize the commission to adopt safety standards and practices applicable to the transportation of gas and to all gas pipeline facilities within Texas to the maximum degree permissible under, and to take any other requisite action in accordance with, 49 U.S.C. sec.60101, et seq. (West 1997), and under Texas Civil Statutes, Article 6053-2a, which directs the Railroad Commission of Texas to enforce the article. Texas Utilities Code, sec.sec.121.201-121.205, and Texas Civil Statutes, Article 6053-2a, are 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. Issued in Austin, Texas, on September 1, 1998 and filed with the Office of the Secretary of State on September 1, 1998. TRD-9813855 Mary Ross McDonald Deputy General Counsel Railroad Commission of Texas Effective date: September 21, 1998 Proposal publication date: May 29, 1998 For further information, please call: (512) 463-7008 TITLE 22. EXAMINING BOARDS PART IX. Texas State Board of Medical Examiners CHAPTER 163. Licensure 22 TAC sec.163.1 The Texas State Board of Medical Examiners adopts an amendment to sec.163.1, concerning definitions, without changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6819) and will not be republished. The amendment is adopted to ensure continuity with the Medical Practice Act and to be consistent with current terminology. The section amends paragraph (16)(G)(ii) to change the name of American Osteopathic Association to Bureau of Osteopathic Specialists. No comments were received regarding adoption of the amendment. The amendment is adopted under the Medical Practice Act, Texas Civil Statutes, Article 4495b, sec.2.09(a), which provides the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this Act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on September 4, 1998. TRD-9814080 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: September 24, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 305-7016 CHAPTER 183. Acupuncture 22 TAC sec.183.13 The Texas State Board of Medical Examiners adopts an amendment to sec.183.13, concerning patient records, without changes to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6820) and not will not be republished. The section is amended to clarify the patient's responsibility relating to referral to a physician or chiropractor. The form contained in subsection (a), paragraph (11) is amended to include the word whether. No comments were received regarding adoption of the amendment. The amendment is adopted under the Medical Practice Act, Texas Civil Statutes, Article 4495b, sec.2.09(a), which provides the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this Act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this Act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on September 4, 1998. TRD-9814081 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: September 24, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 305-7016 CHAPTER 193. Standing Delegation Orders 22 TAC sec.193.8 The Texas State Board of Medical Examiners adopts new sec.193.8, concerning delegated administration of immunizations or vaccinations by a pharmacist under written protocol, with nonsubstantive changes (193.8(e)(1)(C)) to the proposed text as published in the July 3, 1998, issue of the Texas Register (23 TexReg 6821). The new section is adopted because it has been mandated by Senate Bill 786, 75th Legislature. The following comments were received: Texas Medical Association - This organization commented that proposed sec.193.8 should be amended to add a new section to encourage or require pharmacists or physicians to coordinate their activities with the Texas Department of Health or other public health authority to relate doses of immunizations provided as well as adverse reactions that may result from such administration of immunizations. The following are the reasons why the Board disagrees with the submissions and proposals set forth above: The Board believes that since physicians are bound by all state and federal requirements regarding the practice of medicine, a statement to this effect is unnecessary. Texas Nurses Association- This organization commented that the Pharmacy Act requires that as a condition of a pharmacist's administering immunizations or vaccinations that no licensed health care provider authorized to administer medications be reasonably available to administer the immunization. TNA felt that a physician who knowingly delegated to a pharmacist when such a health care provider was available would constitute inappropriate and illegal delegation. Accordingly, TNA commented that proposed sec.193.8 should be amended by adding a new subparagraph (G) to subsection (e)(1) relating to what the written protocol should contain: (G) a statement that the pharmacist may not administer the immunization or vaccination if a licensed health care provider authorized to administer the immunization or vaccination is reasonably available to do so. For purposes of this section, "reasonably available" means a) in a health care facility, including a nursing home and hospital, with licensed health-care providers on staff, those times when such a provider is available to administer the immunization within 24 hours, and b) in other settings, those times when a licensed health-care provider is on site and readily available to administer the immunization without inconveniencing the patient or client. The following are the reasons why the Board disagrees with the submissions and proposals set forth above: These concerns were considered by the Board of Medical Examiners, however, the Board felt that these concerns would be more appropriately addressed by the Pharmacy Board in their rules regarding the delegated administration of immunizations or vaccinations by a pharmacist under protocol. The group went on to comment that subsection (e)(1)(C) should be amended to include the following language which has been italicized: (C) a statement identifying the location(s) at which the pharmacist may administer immunizations or vaccinations which may not include where the patient resides, except for a licensed nursing home or hospital. The following are the reasons why the Board disagrees with the submissions and proposals set forth above: Not applicable. The Board agrees with the comments received and incorporates the suggested change as a nonsubstantive amendment to the published proposal. Texas Academy of Family Physicians- This group commented that proposed sec.193.8(d)(2) should be amended to read: "Has an established physician-patient relationship with each patient under 14 years of age and referred the patient to the pharmacist; The group felt that this change would convey a pre-existing physician-patient relationship, as opposed to a relationship developed strictly upon a need for immunization. The group further commented that proposed sec.193.8 subsection (e)(1)(F) should be amended to read: a statement that describes the content of, and the appropriate mechanisms for the pharmacist to report the administration of immunizations or vaccinations to the physician issuing the written protocol as well as the patient's primary care physician within 24 hours of administering the immunization or vaccination. The following are the reasons why the Board disagrees with the submissions and proposals set forth above: The Board considered these comments, but felt that these amendments were not necessary because these comments have already been incorporated by the Pharmacy Board in their rules governing the delegation by physicians to pharmacists of the administration of immunizations or vaccinations under protocol. The new rule is adopted under the Medical Practice Act, Texas Civil Statutes, Article 4495b, sec.2.09(a), which provides the Texas State Board of Medical Examiners with the authority to make rules, regulations and bylaws not inconsistent with this Act as may be necessary for the governing of its own proceedings, the performance of its duties, the regulation of the practice of medicine in this state, and the enforcement of this Act. sec.193.8.Delegated Administration of Immunizations or Vaccinations by a Pharmacist under Written Protocol. (a) Purpose. This section is promulgated to promote the efficient administration and regulation of the delegation by physicians to pharmacists of the administration of immunizations or vaccinations under written protocol pursuant to the Medical Practice Act, sec.3.061 (related to Delegation of Certain Functions). (b) Delegation. A physician licensed to practice medicine in Texas may delegate to a properly qualified and trained pharmacist acting under adequate supervision the administration of immunizations and vaccinations authorized by the physician through the physician's order, standing medical order, standing delegation order, or other order or protocol as provided for in this section. (c) Delegated Administration of Immunizations and Vaccinations under Written Protocol. Administration of Immunizations and Vaccinations does not include the selection of drug products not prescribed by the physician unless the drug product is named in the physician initiated protocol. (d) Supervision. Physician supervision shall be considered adequate for purposes of this section if the delegating physician is in compliance with this section and the physician: (1) is responsible for the formulation or approval of the physician's order, standing medical order, standing delegation order, or other order or written protocol and periodically reviews the order or protocol and the services provided to the patient under the order or protocol on a schedule defined in the written protocol; (2) has established a physician-patient relationship with each patient under 14 years of age and referred the patient to the pharmacist; (3) is geographically located so as to be easily accessible to the pharmacist administering the immunization or vaccination; (4) receives, on a schedule defined in the written protocol, a periodic status report on the patient, including any problem or complication encountered; and (5) is available through direct telecommunication for consultation, assistance, and direction. (e) Written protocol. Written protocols for purposes of this section shall mean a physician's order, standing medical order, standing delegation order, or other written order. (1) A written protocol must contain at a minimum the following listed in subparagraphs (A)-(F) of this paragraph: (A) a statement identifying the individual physician authorized to prescribe drugs and responsible for the delegation of administration of immunizations or vaccinations; (B) a statement identifying the individual pharmacist authorized to administer immunizations or vaccinations as delegated by the physician; (C) a statement identifying the location(s) at which the pharmacist may administer immunizations or vaccinations which may not include where the patient resides, except for a licensed nursing home or hospital; (D) a statement identifying the immunizations or vaccinations that may be administered by the pharmacist; (E) a statement identifying the activities the pharmacist shall follow in the course of administering immunizations or vaccinations including procedures to follow in the case of reactions following administration; and (F) a statement that describes the content of, and the appropriate mechanisms for the pharmacist to report the administration of immunizations or vaccinations to the physician issuing the written protocol within 24 hours of administering the immunization or vaccination. (2) A standard protocol may be used, or the physician may develop an immunization or vaccination protocol for the individual patient. If a standard protocol is used, the physician shall record, what deviations if any, from the standard protocol are ordered for that patient. (f) Review and revision of protocols. (1) At least annually, written protocols shall be reviewed by the physician and, if necessary, revised. (2) Documentation of the administration of immunizations or vaccinations to the patient by a pharmacist shall be reviewed by the physician on the schedule established in the protocol. (g) Construction and interpretation. This section shall not be construed or interpreted to restrict the use of a pre-established health care program or restrict a physician from authorizing the provision of patient care by use of a pre-established health care program if the patient is institutionalized and the care is to be delivered in a licensed hospital with an organized medical staff that has authorized standing delegation orders, standing medical orders, or protocols. This section may not be construed to limit, expand, or change any provision of law concerning or relating to therapeutic drug substitution or administration of medication, including the Texas Pharmacy Act, Article 4542a-1, Vernon's Texas Civil Statutes, sec.17(a)(5). 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 September 4, 1998. TRD-9814082 Bruce A. Levy, M.D., J.D. Executive Director Texas State Board of Medical Examiners Effective date: September 24, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 305-7016 PART XV. Texas State Board of Pharmacy CHAPTER 309.Generic Substitution 22 TAC sec.309.3 The Texas State Board of Pharmacy (Board) adopts an amendment to sec.309.3, concerning Prescription Drug Orders without changes to the proposed text as published in the July 3, 1998 issue of the Texas Register (23 TexReg 6829). This amendment implements the provisions of section 21 of Senate Bill 609 passed by the 75th Legislature which requires the Board to establish, by rule, a list of narrow therapeutic index drugs. The adopted amendment to the rule incorporates the recommendations of a Task Force composed of representatives from the Texas State Board of Pharmacy, Texas State Board of Medical Examiners, pharmacy and medical associations, and generic and brand name manufacturers. The amendment, as specified in the legislation, requires a pharmacist to notify the patient and the prescribing physician if the pharmacist refills a prescription for a narrow therapeutic index drug with a generically equivalent product different from the product used on the previous refill. The adopted amendment outlines the conditions under which this substitution may occur. The amendment also establishes a list of narrow therapeutic index drugs, which are subject to the provisions of the new section 40(m) of the Texas Pharmacy Act. Narrow therapeutic index drugs are drugs in which a small variance of the drug level in the blood can change the effectiveness or toxicity of the drug. The list contains those drugs that health-care practitioners generally monitor closely through lab tests to ensure that the drug remains at the appropriate blood level for the individual patient. The Texas State Board of Medical Examiners has reviewed the list established by the committee and agrees that the list of drugs in the proposed amendment is appropriate for the purpose of section 40(m) of the Texas Pharmacy Act. In addition, Board staff has reviewed the laws and rules in other states and has determined that this list is consistent with similar lists in at least five states (Arkansas, Florida, Kentucky, North Carolina, and Virginia). There has been a great deal of confusion and misinformation as to exactly what the new section 40(m) of the Texas Pharmacy Act and the adopted rules say and do. It is important to note that new section 40(m) as passed by the Legislature and the adopted rules do not prohibit or restrict substitution of narrow therapeutic index drugs. In fact, the law and adopted rules do not change any of the procedures and requirements for generic substitution on the initial prescription. A pharmacist is still allowed to substitute a generically equivalent drug product for a brand name drug product if: (1) the physician authorizes the substitution; (2) the patient does not refuse the substitution; (3) the equivalent drug costs the patient less than the brand name product; and (4) the pharmacist chooses a generic drug product that is rated as equivalent to the brand name by the federal Food and Drug Administration (FDA) in its publication titled: "Approved Drug Products with Therapeutic Equivalence Evaluations" or the "Orange Book." The fact that a drug product is included on the list in this adopted rule in no way questions the therapeutic equivalence of a generic version of the drug product if FDA has determined the drug product is equivalent to the brand name product. The law and adopted rules should, more appropriately, be referred to as the "NTI notification requirements." The law and adopted rules simply require that, if a pharmacist cannot refill a prescription on which the physician has authorized generic substitution with the same product used on the previous filling of the prescription, the pharmacist may dispense another generically equivalent drug product, provided the pharmacist notifies: (1) the patient of the change at the time of dispensing; and (2) the prescribing physician of the change within 72 hours after the prescription is dispensed. The law and adopted rules do not require the pharmacist to "get permission from the physician to use another generically equivalent drug product." The substitution instructions to the pharmacist are included on the initial prescription and, as the rules state in subsection (d)(1), all "refills shall follow the original substitution instructions." The notice requirement in the adopted amendment promotes good communication between the patient, the prescribing practitioner, and the pharmacist, particularly with regard to medications that require frequent monitoring of performance. The agency received oral comments on the rule at a public hearing on August 4, 1998, and also received numerous written comments. A total of 15 persons commented at the public hearing and 72 letters of written comments were received. Included in these comments were those of nine organizations. The organizations commenting in favor of the rule included: Texas Academy of Family Physicians, Epilepsy Foundation of Central and South Texas, Epilepsy Foundation of Greater North Texas. Each of these organizations commented that the notification requirement in the rule would provide for better patient care and, therefore, was in the best interest of the patient. In addition to these organizations, several individual comments also expressed this opinion. The agency agrees with these comments. Organizations commenting against the rule included: Texas Citizens for a Sound Economy; Gray Panthers; Citizens Against Government Waste; National Pharmaceutical Alliance; and National Association of Chain Drug Stores. Each of these organizations expressed concern that the rule would limit the substitution of generic alternatives to brand name products and thus increase the cost of prescription drugs to the consumer. In addition to these organizations, several individual comments also expressed this opinion. The agency disagrees with these comments because the rule does not prohibit the substitution of generic drug products for brand name products. The Texas Society of Health-System Pharmacists commented that FDA should still continue to be the authority in terms of determining the equivalence and substitutability of drugs. The Board agrees with this comment and notes that current rules specify that a pharmacist may only substitute drugs that are rated equivalent to the brand name product by the FDA. This rule does not change this requirement. A number of comments asked the agency to amend the list of drugs to include only those drugs that are not considered to be therapeutically equivalent to their brand name counterpart by the FDA. The agency disagrees with this proposal because the purpose of the rule is to require notification to the physician and patient if the pharmacist dispenses a different equivalent drug product on a refill. Texas Pharmacy rules specify that a pharmacist can only substitute drug products if the FDA has rated the products equivalent. If the list only included drugs that were not equivalent, it would essentially be a non-list, because none of the products on the list could be used by the pharmacist for substitution. One comment asked the agency to delete warfarin sodium from the list of drugs. The agency disagrees with this comment because patients taking warfarin sodium are required to be closely monitored by health care professionals when taking this product, whether they are taking the generic or the brand name product. Many factors, including diet and patient compliance, can affect the absorption rate of the drug and subsequent effect of the drug. Therefore, it is important that the physician be informed of any change in the patient's drug regimen, including a change in the drug product dispensed. Several comments expressed concern that the rule would limit a patient's choice to receive a less expensive generic drug product and thereby increase the cost of prescription drugs to the patient. As mentioned above, the agency disagrees with these comments because the rule does not prohibit or restrict in any way the substitution of a less expensive generic drug product. The rule simply requires notification to the patient and physician when a pharmacist cannot refill a prescription with the same drug product used on the last filling of the prescription. Several comments asked the Board to support efforts to make sure that, when a physician requests a brand name and specific formulation of NTI drugs, no substitutions occur. The Board does not consider these comments as being for or against the proposed amendment. The Board agrees under Texas law that pharmacists may not substitute a generic equivalent when a physician has not authorized substitution. The agency also received 12 comments from members of the Texas Legislature. Five were in favor of the rule as proposed, and seven suggested modification of the list. The amendment is adopted under Sections 4, 16(a), and 40(m) of the Texas Pharmacy Act (Article 4542a-1, Texas Civil Statutes). The Board interprets section 4 as authorizing the agency to adopt rules to protect the public health, safety, and welfare through the effective control and regulation of the practice of pharmacy. The Board interprets section 16(a) as authorizing the agency to adopt rules for the proper administration and enforcement of the Act. The Board interprets section 40(m) as directing the agency to consult with the Board of Medical Examiners and by rule to establish a list of narrow therapeutic index drugs. 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 September 2, 1998. TRD-9813977 Gay Dodson, R.Ph. Executive Director/Secretary Texas State Board of Pharmacy Effective date: September 22, 1998 Proposal publication date: July 3, 1998 For further information, please call: (512) 305-8028 TITLE 25. HEALTH SERVICES PART II. Texas Department of Mental Health and Mental Retardation CHAPTER 403.Other Agencies and the Public SUBCHAPTER O.Administrative Hearings of the Department in Contested Cases 25 TAC sec.sec.403.451-403.463 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeals of sec.sec.403.451 - 403.463 of Chapter 403, Subchapter O, concerning administrative hearings of the department in contested cases, without changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6126). New sec.sec.411.151 - 411.163 of new Chapter 411, Subchapter D, concerning the same, which replace the repealed sections, are contemporaneously adopted in this issue of the Texas Register. The subchapter describes the procedures for all department administrative hearings involving contested cases. The procedures adequately protect the rights of all parties involved; are consistent with due process requirements of the Texas and federal constitutions; and result in fair and expeditious decisions. No public comment on the proposed repeals was received. These sections are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority, and the Texas Government Code, sec.2001.004, which requires the department to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. 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 September 4, 1998. TRD-9814060 Charles Cooper Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 28, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 206-4516 CHAPTER 409.Medicaid Programs SUBCHAPTER C.Fraud and Abuse and Recovery of Benefits 25 TAC sec.409.69 The Texas Department of Mental Health and Mental Retardation (department) adopts new sec.409.69 of Chapter 409, Subchapter C, concerning fraud, abuse, and recovery of benefits, without changes to the text as proposed in the July 10, 1998, issue of the Texas Register (23 TexReg 7172). The new section is adopted pursuant to Acts 1997, 75th Legislature, Chapter 1153, sec.2.07, which requires the development of a new provider contract that contains provisions designed to strengthen the department's ability to prevent provider fraud under the state Medicaid program. The department is required to promulgate a rule requiring Medicaid providers to re-enroll in the program under the new contract or modify the provider's existing contract by September 1, 1999. A public hearing was held Thursday, July 30, 1998, and no oral testimony was given. No written comments were received from the public. The new section is adopted under the Texas Human Resources Code, sec.32.021, Texas Government Code, sec.531.021, Texas Health and Safety Code, sec.532.015(a), and Acts 1997, 75th Legislature, Chapter 1153, sec.2.07. 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 September 4, 1998. TRD-9814062 Charles Cooper Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 24, 1998 Proposal publication date: July 10, 1998 For further information, please call: (512) 206-4516 CHAPTER 410.Volunteer Services and Public Information SUBCHAPTER B.Community Relations 25 TAC sec.sec.410.51-410.76 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeals of sec.sec.410.51-410.76 of Chapter 410, Subchapter B, concerning community relations, without changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6126-6127). New sec.sec.417.301-417.316 of new Chapter 417, Subchapter G, concerning the same, which replace the repealed sections, are contemporaneously adopted in this issue of the Texas Register. The repeals allow for the adoption of new sections. No public comment on the proposed repeals was received. These sections are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas MHMR Board with broad rulemaking authority and the Texas Government Code, Chapter 2255, which authorizes the adoption of rules governing the relationship between certain private organizations and TDMHMR and its employees. 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 September 4, 1998. TRD-9814059 Charles Cooper Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 28, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 206-4516 CHAPTER 411.State Authority Responsibilities SUBCHAPTER D.Administrative Hearings of the Department in Contested Cases 25 TAC sec.sec.411.151-411.163 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.411.151 - 411.163 of Chapter 411, Subchapter D, concerning administrative hearings of the department in contested cases. Section 411.163 is adopted with changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6127-6134). Sections 411.151 - 411.162 are adopted without changes and will not be republished. The repeals of sec.sec.403.451 - 403.463 of Chapter 403, Subchapter O, concerning the same, which the new sections replace, are contemporaneously adopted in this issue of the Texas Register. The subchapter describes the procedures for all department administrative hearings involving contested cases. The procedures adequately protect the rights of all parties involved; are consistent with due process requirements of the Texas and federal constitutions; and result in fair and expeditious decisions. Section 411.163, relating to distribution, is updated to reflect current terminology. Written public comment was received from the Parent Association for the Retarded of Texas (PART), Austin; the parent of a state school resident, Garland, and a mental health consumer advocate, Houston. Two commenters objected to the language in sec.411.151(1), which states the rules "provide a simple, efficient, and uniform set of procedures...." The commenters stated that some of the procedures are difficult to understand and that a reader would have to look up the many referenced citations at the library in order to fully comprehend the procedures. The commenters believed that there are portions of the rules that are written for attorneys and not for lay people. The department responds that the rules reference certain regulations in order to be in compliance with law. Incorporating the cited regulations into the rules would be impractical because the regulations are literally hundreds of pages in length and subject to amendment at any time. The department notes that state statutes are available on the Internet at www.capitol.state.tx.us/statutes/statutes.html. Regarding portions of the rules that appear to be written for attorneys, the department responds that legal procedures are often difficult to understand. The department notes, however, that it has made a concerted effort to write these rules for a lay person's understanding without compromising the integrity of the procedures and state and federal statutes. The same two commenters requested a definition of "legally authorized representative (LAR)." The department responds that a definition is unnecessary because the term is not used in the rules. The same two commenters objected to the administrative law judge (ALJ) being appointed by the TDMHMR commissioner. The commenters stated that the ALJ should be an impartial hearing officer from the State Office of Administrative Hearings (SOAH) because the ALJ makes determinations regarding every aspect of the proceeding. The commenters stated the belief that the department had an unfair advantage because it selects the ALJ; determines the rules for the hearing; and evaluates evidence. The department responds that having the commissioner appoint the ALJ is not unique to the Texas Department of Mental Health and Mental Retardation -- all of the large health and human service agencies in Texas follow this approach. The subchapter was originally adopted to fulfill the requirements of the Administrative Procedures Act (APA), which direct state agencies to adopt rules regarding its administrative hearing procedures. The APA provides specific procedures and language regarding the department's authority when conducting administrative hearings in contested cases. Should the department contract with the SOAH to conduct its hearings, the administrative law judge at SOAH would have the same authority, but no knowledge of mental health and mental retardation issues. ALJs are selected to conduct impartial hearings, not to rule in favor of the department. They are bound by the Texas Rules of Civil Procedure and Texas Rules of Civil Evidence. This means that after each party has provided evidence (e.g., exhibits, oral testimony, cross- examination) to prove his or her case, the ALJ makes a decision based solely on that evidence. The decision must include finding of fact and conclusions of law. This provision prevents the decision from being arbitrary or biased toward the department or any party. The department notes that in most cases a second level of appeal, a judicial review, is available to parties dissatisfied with the decision of an administrative hearing. Regarding sec.411.156(m), which states "the ALJ may communicate with other members of the department who have not participated in the proceeding of the contested case for the purpose of utilizing the special skills or knowledge of the department's staff in evaluating evidence...," the two commenters stated that this communication creates a bias because it doesn't allow for the other party to provide its special skills or knowledge in evaluating the evidence. The commenters stated that all information obtained by the ALJ should be obtained in the actual proceeding for official notice of everyone involved. The department responds that the duty of evaluating evidence is that of the ALJ, not the parties involved in the contested case. The ALJ can evaluate evidence by communicating with other members of the department who have not participated in the proceeding of the contested case. Since this communication does not involve either party, one party does not have an unfair advantage over the other. The department notes that sec.411.156(d) and (e) states that all parties are given the opportunity to respond to and present evidence and argument on all issues involved and to call witnesses, but the ALJ is responsible for evaluating that evidence. Regarding sec.411.158(a)(5), which states "[official] notice may be taken of generally recognized facts within the area of the department's specialized knowledge," the same two commenters questioned why the department can provide such information and not the other party. The commenters believed this information should be discussed only during the hearing. The department responds that the language, which originates in the Administrative Procedures Act, expedites the hearing by eliminating unnecessary procedures when accepting into the record indisputable facts relating to issues of mental health and mental retardation, the area of the department's specialized knowledge. For example, these generally recognized facts may include a statement that state hospitals operate under the Mental Health Facilities Division of the department; that the department's priority population for mental retardation services in 1994-1995 consisted of 73,225 persons; or that department rules governing client- identifying information adopted by the Texas MHMR Board became effective on August 3, 1998. Facts within the area of another party's specialized knowledge are not considered generally recognized, but would be officially noticed nevertheless, as evidence submitted by the party during the proceeding. The department notes that language is in place which requires the notification of all parties of material officially noticed and all parties are provided an opportunity to contest it. Regarding sec.411.160(g), which states that a party notified by mail of a decision is presumed to have been notified on the date such notice is mailed, the two commenters stated that people do not receive mail on the same day that it is mailed. The commenters suggested changing the language to presume notification hree days after the notice is mailed. The department responds that it declines to change the language because it is consistent with the Texas Government Code, sec.2001.142(c). One commenter stated that department rules are all form and no substance. The department responds that the commenter's concerns are unclear regarding the proposed subchapter governing administrative hearings of the department in contested cases. These sections are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority, and the Texas Government Code, sec.2001.004, which requires the department to adopt rules of practice stating the nature and requirements of all available formal and informal procedures. sec.411.163.Distribution. This subchapter governing administrative hearings of the department in contested cases shall be distributed to: (1) members of the Texas Board of Mental Health and Mental Retardation; (2) executive, management, and program staff at Central Office; (3) superintendents/directors of all department facilities; (4) persons designated as administrative law judges; (5) any party to an administrative hearing conducted under this subchapter; and (6) advocacy organizations. 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 September 4, 1998. TRD-9814061 Charles Cooper Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 28, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 206-4516 CHAPTER 417.Agency and Facility Responsibilities SUBCHAPTER G.Community Relations 25 TAC sec.sec.417.301-417.316 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.417.301-417.316 of new Chapter 417, Subchapter G, concerning community relations. Sections 417.303 - 417.305, 417.307, 417.309, 417.315 are adopted with changes to the proposed text as published in the June 12, 1998, issue of the Texas Register (23 TexReg 6134-6141). Sections 417.301, 417.302, 417.306, 417.308, 417.310 - 417.314, and 417.316 are adopted without changes. The repeals of sec.sec.410.51-410.76 of Chapter 410, Subchapter B, concerning the same, which the new sections replace, are contemporaneously adopted in this issue of the Texas Register. It is imperative that all department volunteer service programs and non-profit organizations that exist to generate revenue for the department and its facilities be administered with the highest ethical and professional conduct. To this end, TDMHMR promulgates rules for its employees and volunteers that ensure the coordination of activities and efforts of such volunteer service programs and non-profit organizations. The subchapter describes the requirements for the operation of volunteer programs at facilities of the department; describes requirements by which facilities and their volunteer services councils, which generate resources on a facility's behalf, are to operate; and describes requirements for fundraising activities, soliciting donations, and receiving donations at facilities and state-operated community services. The definition of "volunteer" in sec.417.303 is expanded on adoption to include those individuals who provide time and/or services to the department, a facility, a SOCS, or a VSC. The information contained in paragraphs (13) and (14) of sec.417.304(e) are consolidated in paragraph (12). References to rules governing client-identifying information in sec.417.305(e) and sec.417.315 are updated. Language is modified in sec.417.305(d)(5) to clarify that, in addition to attendance at a basic orientation, volunteers must also fulfill any other requirements necessary to successfully perform their assigned duties. Language is modified in sec.417.307(b) to clarify the VSC board is elected in accordance with its bylaws and subject to approval by the facility CEO. Subsection (f) in sec.417.307 is expanded to prohibit the VSC from authorizing an employee to use a VSC debit card and to prohibit the VSC from holding monies on behalf of facility employees for non-VSC-sponsored activities. In sec.417.309(a)(2)(A)(I), the requirement for providing individual pre-numbered cash receipts for each donation is stated without regard to the party responsible for such action. Written public comment was received from the Parent Association for the Retarded of Texas (PART), Austin; the parent of a state school resident, Garland; and the president of a volunteer services council, Abilene. Two commenters objected to the language contained in the proposed preamble, in the definitions of "Texas Foundation of Mental Health and Mental Retardation" and "volunteer service councils," sec.417.312, and Exhibit I, which states that funds generated by volunteer service councils (VSCs) are on behalf of TDMHMR. The commenters preferred the clarifying language contained in sec.417.307(a), which states funds generated by VSCs are on facilities' behalf "for the needs of persons served, the enhancement of existing facility operations, employee recognition/education projects, and new initiatives for the betterment of quality of life for persons served." The department responds that the absence of the clarifying language in certain sections of the subchapter does not negate the requirement that funds generated by non-profit organizations are ultimately used for the needs of persons served, the enhancement of existing facility operations, employee recognition/education projects, and new initiatives for the betterment of quality of life for persons served. The same two commenters requested a definition of "legally authorized representative (LAR)." The department responds that a definition is unnecessary because the term is not used in the rules. Regarding the term "person served," the two commenters requested changing the term to "individual" because "individual" is used in other department policies. The department responds that, without a compelling reason, it declines to change the term. The department notes that in other department policies the terms "client" and "consumer" are also used. Regarding sec.417.307(e) and (e)(7), the same two commenters stated that the allowable use of VSC funds for "employee recognition/education projects" seemed to contradict the prohibition of VSC funds as "cash awards or salary supplementation for employees." One commenter asked for an explanation of "employee recognition/education projects." The department responds that employee recognition/education projects are not the same as cash awards or salary supplementation. Employee recognition projects are awards programs for employees that do not provide cash awards and are consistent with state statute regarding awards for state employees. Employee education projects could be a VSC-sponsored educational seminar or educational training opportunity for facility staff. Regarding sec.417.307(c)(1), one commenter objected to requiring the volunteer services council's bylaws to include methodology for limiting the terms of officers and board members by number of years. The commenter stated that if the language is intended to assure that new members are regularly elected to VSC boards, then the commenter agrees with the intent. However, the commenter believed that this intent can be accomplished without depriving VSCs of the services of dedicated, active board members. The commenter suggested requiring a specific percentage of board members elected at each election to be new members to that board. If the commenter's suggestion is not incorporated into the adopted rules, the commenter asked if a person can, after having served on a VSC board, be elected again to that board after a period of absence from that board. The department responds that the intent of the requirement is not solely to assure the election of new members. The requirement for VSC bylaws to outline specific methodology for limiting terms, as well as replacing board members, electing a nominating committee, and joining the VSC, is intended to reflect a generally accepted standard that promotes ethical behavior and accountability while strengthening public trust. Regarding re-election to a VSC board, the department responds that a board's bylaws determine re-election of a previous board member. These sections are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas MHMR Board with broad rulemaking authority and the Texas Government Code, Chapter 2255, which authorizes the adoption of rules governing the relationship between certain private organizations and TDMHMR and its employees. sec.417.303.Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. (1) Cash - Currency, checks, drafts, money orders, and other forms of legal tender. (2) Chief executive officer (CEO) - The superintendent/director of a state facility or the executive director of a state-operated community services (SOCS). (3) Commissioner - The commissioner of the Texas Department of Mental Health and Mental Retardation. (4) Community relations staff - The staff who manage the volunteer programs and oversee volunteer fundraising activities at a facility or SOCS. (5) Department - The Texas Department of Mental Health and Mental Retardation (TDMHMR). (6) Direct contact - An assignment which involves working with persons served. (7) Director of community relations - The employee responsible for coordinating the community relations functions and volunteer programs at a facility or SOCS. (8) Donation - A contribution of anything of value (e.g., funds or in-kind goods and services) freely given to a VSC, facility, or SOCS. (9) Donor - An individual, group, or organization that makes a donation. (10) Employee - An individual who is legally employed to perform work and who is paid a salary or wage by a facility, SOCS, or Central Office. (11) Facility - A state school, state hospital, or state center of the department. (12) 501(c)(3) organization - An organization recognized by the Internal Revenue Service as a nonprofit corporation and granted the right to receive tax deductible contributions under sec.501(c)(3) of the Internal Revenue Code. (13) Long Term Friendship - A personal friendship between an employee and a specific person served which developed over a period of time. The authenticity of the friendship is verified by the appropriate professional, based upon the quality and duration of the relationship. (14) Office of Community Relations, Central Office - The Central Office department responsible for providing support to statewide community relations programs, including volunteer services, nonprofit management, and fundraising. (15) Person served - A person receiving mental health or mental retardation services from the department. (16) State-operated community services (SOCS) - Community residential and nonresidential programs operated by the department. (17) TDMHMR - The Texas Department of Mental Health and Mental Retardation. (18) Texas Foundation for Mental Health and Mental Retardation - A nonprofit organization which exists to generate resources on behalf of TDMHMR. (19) Visiting group - A group of varying individuals associated with an organization (e.g., civic, fraternal, corporate, religious, social, service, or education), which is not affiliated with the department, that visits a facility or SOCS (e.g., tours) or participates in a special event and has constant and adequate staff supervision. (20) Volunteer - An individual who is not part of a visiting group and who provides time and/or services to persons served, the department, a facility, a SOCS, or a VSC without payment. Volunteers include: (A) community citizens; (B) family members of persons served when not acting on behalf of the person served; (C) employees when not acting in the capacity of employment; (D) persons served when not acting solely on behalf of themselves; and (E) community restitution volunteers who are required by a court to provide a specified number of hours of volunteer services in lieu of a jail sentence. (21) Volunteer services council (VSC) - A facility or SOCS's 501(c)(3) organization that is formed for generating resources on behalf of the facility or SOCS. (22) Volunteer Services State Council (VSSC) - A statewide nonprofit organization serving all volunteer services councils and volunteer groups of state-operated community services (SOCS) and community MHMR centers. sec.417.304.Volunteer Programs. (a) Value of volunteers and donors. Volunteers and donors of the Texas Department of Mental Health and Mental Retardation are highly valued as an essential component of its functions. Volunteers are recognized and supported in their efforts to provide goods, services, and personal attention for persons served which enhance and enrich the best treatment and habilitation the state can provide. Donors are recognized and supported in their efforts to enhance the fundraising capabilities and revenue development of the department, enabling the department to provide additional services and goods to the people it serves. (b) Requirement to operate volunteer program. Each facility is responsible for operating a volunteer program with a full-time director. Facility volunteer programs are funded by the department with support from the Office of Community Relations, Central Office. (c) Insurance. Department funds are used to purchase insurance to protect volunteers and visiting groups in the performance of their services. (d) Professional ethics in volunteer administration. All volunteer services activities and practices shall be in accordance with the Association for Volunteer Administration's (AVA) Professional Ethics in Volunteer Services Administration. A copy of Professional Ethics in Volunteer Services Administration can be obtained by contacting the Office of Community Relations, TDMHMR Central Office, P.O. Box 12668, Austin, TX 78711-2668. (e) Volunteer guidelines. (1) Volunteers and visiting groups are responsible for complying with all applicable rules, regulations, policies, and procedures of the department and the facility, specifically including, but not limited to: (A) Chapter 414, Subchapter A of this title, concerning Client-Identifying Information; (B) Chapter 404, Subchapter E of this title, concerning Rights of Persons Receiving Mental Health Services; (C) Chapter 405, Subchapter Y of this title, concerning Client Rights - Mental Retardation Services; and (D) Chapter 417, Subchapter K of this title, concerning Abuse, Neglect, and Exploitation in TDMHMR Facilities. (2) A volunteer or visiting group may not give money directly to persons served. If a volunteer or visiting group wishes to donate money to a specific person served, then the volunteer or visiting group must consult the director of community relations for the proper procedure for doing so. (3) Under no circumstances may volunteers or visiting groups take or accept money from persons served. (4) Keys to state buildings, state vehicles, or state equipment are not issued to volunteers and visiting groups unless determined necessary by the director of community relations, as documented in writing, and approved by the CEO or designee. (5) Volunteers and visiting groups may use state property only in connection with their assigned duties or in connection with activities of the VSC. (6) Volunteers and visiting groups are not authorized to use facility letterhead. (7) Volunteers and visiting groups may not take photographs of persons served without obtaining permission from the community relations staff, who will determine if photographs are necessary, and if so, will ensure the completion of "Consent for Publication" form, referenced as Exhibit A in sec.417.314 of this title (relating to Exhibits). (8) All portions of volunteer records which directly or indirectly identify a person served or a person formerly served are confidential. The confidentiality of such portions of the records shall be maintained and may only be disclosed as authorized by state statute and Chapter 414, Subchapter A of this title, concerning Client-Identifying Information. (9) A facility may: (A) provide free meals to volunteers if the volunteer is on duty during mealtime; and (B) reimburse a volunteer for out-of-pocket expenses as determined by the facility's policies and procedures. (10) Each volunteer shall represent the department's position if identifying him/herself as a volunteer of the department, facility, program, or council. This does not preclude a volunteer from speaking freely about any matter as a private citizen, provided the volunteer clarifies that such comments are the individual's opinion and are not made on behalf of the department, facility, program, or council. (11) Volunteers and visiting groups may ride as passengers in state vehicles in connection with their approved volunteer assignment. (12) Volunteers may drive state and non-state vehicles and transport persons served in such vehicles as permitted by facility policies and procedures. (f) Current employees as volunteers. Employees may volunteer at a facility if they do so willingly and without coercion. (1) Except for the situation described in paragraph (2) of this subsection, the functional area and geographic location of an employee's volunteer assignments must be as far removed as possible from his/her regular work assignments and duties. (2) If an employee and a person served have a long term friendship as defined in sec.417.303 of this title (relating to Definitions), then, as permitted by facility policies and procedures, the employee may take the person served to his/her home or other location to participate in a special activity (e.g., holiday celebration), provided the special activity allows for quality one-to- one time between the employee and the person served. (3) Employee volunteers must submit a statement verifying that they are volunteering their time without coercion using the "Employee Volunteer Statement" form, referenced as Exhibit B in sec.417.314 of this title (relating to Exhibits). A copy of the signed form is kept in the community relations office and in the employee's personnel file. (g) Former employees as volunteers. Former employees eligible for rehire may apply to volunteer at the same or at a different facility after a waiting period specified by the facility's policies and procedures. (h) Persons served as volunteers. (1) A person served may perform services as a volunteer if: (A) the duties the person will be performing: (i) do not constitute a job which is or should be the work of a paid employee; and (ii) are included in the job description of a volunteer assignment; (B) the person has, willingly and without coercion, expressed a desire to volunteer and understands that the activity is a free-will service which means "without pay"; (C) there are no privileges available to the person that are not also available to persons served who do not volunteer; (D) appropriate orientation and on-the-job training is provided to enable the person to understand and perform the requirements of the volunteer assignment; (E) the person understands the boundaries or risks, if any, of the volunteer assignment; (F) the person's volunteer assignment is compatible with his/her treatment plan; and (G) the person's volunteer assignment is not on the same unit in which the person resides. (2) If the person served is also employed by the facility, then the person's volunteer assignment must be as far removed as possible from his/her work assignments and duties. (3) Persons served who volunteer must submit a statement verifying that they are volunteering their time without coercion using the "Client Volunteer Statement" form, referenced as Exhibit C in sec.417.314 of this title (relating to Exhibits). A copy of the signed form is kept in the community relations office and in the person's record. (4) Activities engaged in by persons served for their own benefit as opposed to activities for the common benefit (e.g., gardening/cultivating a plant, as opposed to trimming the shrubs) are not considered volunteered services, and are not subject to the provisions of this subchapter. (5) A person served who was previously a resident of a facility may become a volunteer at the facility at the discretion of the director of community relations. (i) Family members as volunteers. A family member of a person served may volunteer provided the family member's volunteer assignment is not on the same unit in which the person served resides. sec.417.305.Volunteer Program Procedures. (a) Request for volunteers. Requests for volunteers may come from facility staff and are submitted to the community relations office for processing. (b) Volunteer assignment job description. Each volunteer assignment has a job description which accurately describes the duties of the assignment. All job descriptions are reviewed periodically and revised as needed to accurately describe the duties actually being performed by the volunteer. (c) Discrimination prohibited. No volunteer, prospective or assigned, shall be discriminated against based on race, color, national origin, religion, sex, handicap, veteran status, or political affiliation. (d) Volunteer application and placement process. Persons interested in volunteering at a facility must complete an application for volunteer service using the "Volunteer Application," referenced as Exhibit D in sec.417.314 of this title (relating to Exhibits), or an appropriate substitute. All volunteer applications are maintained in the community relations office. (1) All prospective volunteers must be at least 14 years of age. (A) Facilities may specify a minimum age above 14 years for specific volunteer assignments. (B) Prospective volunteers ages 14-17 years must have permission from their parent or legal guardian as documented on the "Parental Permission Form - For Volunteers Under the Age of 18," referenced as Exhibit E in sec.417.314 of this title (relating to Exhibits). (C) The number of volunteer hours for minors must not exceed the number of hours per week allowed for minors to work under the Fair Labor Standards Act. (2) All prospective volunteers are subject to a criminal history record check as authorized in the Texas Health and Safety Code, sec.533.007, and Chapter 414, Subchapter K of this title, concerning Criminal History Clearances. Completion of the criminal history clearance must occur prior to volunteer placement. (3) All prospective volunteers must complete a confidentiality agreement using the "Confidentiality Agreement for Volunteers" form, referenced as Exhibit F in sec.417.314 of this title (relating to Exhibits), or an appropriate substitute. (4) All prospective volunteers must be approved for volunteer assignment by the director of community relations. A prospective volunteer is given a volunteer assignment with the agreement of the supervising staff member. (5) Before reporting to their volunteer assignment all volunteers are required to complete a basic orientation conducted by the community relations staff. Volunteers must also fulfill any other requirements necessary to successfully perform the duties outlined in the job description of their volunteer assignment. (A) Community relations staff should consult with and utilize the training resources of the facility's human resources office. (B) Training should be offered at times which are convenient to volunteers, including weekends and evenings. (e) Assessment of volunteers' performance. Community relations staff and facility staff who supervise volunteers should make reasonable efforts to periodically review and evaluate volunteers' performance of assigned duties using the "Volunteer Assessment Form," referenced as Exhibit G in sec.417.314 of this title (relating to Exhibits), or an appropriate substitute. As part of the assessment process, volunteers are given an opportunity to evaluate their volunteer experience. (f) Separation from volunteer assignment. (1) The director of community relations may remove a volunteer from his/her assignment if it is determined that the volunteer is unsuited for the assignment. In determining if a volunteer is unsuited for an assignment, consideration is given to previous discussions with the volunteer and the volunteer's staff supervisor regarding the assignment, and the amount of satisfactory services provided by the volunteer. If the volunteer is removed from his/her assignment, the director of community relations may consider the volunteer for another assignment. (2) A volunteer may decide to leave his/her assignment at any time for any reason. A volunteer who decides to leave his/her assignment shall inform the community relations staff of such decision. If a person served volunteer decides to leave his/her assignment, the community relations staff will notify the person's treatment team. (g) Exit interviews. Community relations staff should make reasonable efforts to conduct an exit interview with volunteers who are leaving their assignment, using the "Exit Interview Form," referenced as Exhibit H in sec.417.314 of this title (relating to Exhibits). (h) Visiting group placement. The director of community relations coordinates with a representative of the visiting group for appropriate placement, orientation, and training. There is no minimum age for members of a visiting group. sec.417.307.Volunteer Services Council (VSC). (a) Each facility may have a 501(c)(3) organization (i.e., volunteer services council (VSC)) to generate resources on its behalf for the needs of persons served, the enhancement of existing facility operations, employee recognition/education projects, and new initiatives for the betterment of quality of life for persons served. Pre-existing VSCs of consolidated facilities may remain independent or choose to merge into a single 501(c)(3) organization (i.e., VSC). Each VSC must comply with the relevant TDMHMR Board Policies and Procedures, department rules, state laws and regulations, and Internal Revenue Services requirements. Each VSC is responsible for coordinating its activities with facility administration. The facility CEO has full authority over all functions and projects concerning the facility, including persons served and employees. (b) A VSC board is elected in accordance with its bylaws and subject to approval by the facility CEO. (1) The facility CEO and director of community relations have non-voting membership on the VSC board and executive committee. (2) A facility employee may not be a VSC board member. An employee's spouse and minor children are also prohibited from being a VSC board member. (c) The VSC bylaws outline specific methodology for: (1) limiting terms of officers and board members by number of years; (2) replacing board members; (3) election of a nominating committee; and (4) joining the VSC. (d) A memorandum of understanding (MOU) governs the relationship between the facility and the VSC. A sample MOU is referenced as Exhibit I in sec.417.314 of this title (relating to Exhibits). The MOU shall: (1) require the VSC to be in compliance with existing state and federal laws and regulations, and applicable department rules and policies; (2) specify the relationship between facility staff and the VSC, and include a mechanism for conflict resolution; (3) specify a method for facility staff to assist the VSC in processing and receipting donations; (4) specify a mechanism to ensure that: (A) solicitation is compatible with the mission, vision, and goals of TDMHMR; (B) solicitation employs all accepted rules of ethical fundraising; (C) solicitation is an appropriate type of fundraising for the VSC; and (D) all proceeds, less legitimate expenses, are used for the needs of persons served, the enhancement of existing facility operations, employee recognition/education projects, and new initiatives for the betterment of quality of life for persons served (5) include limitations and specifics regarding the amount and type of expenditures the VSC has authorized the director of community relations to make on behalf of the VSC; (6) specify that, in the event the VSC is audited by the Internal Revenue Service, a copy of the audit report is forwarded to the director of community relations for submission to the Office of Community Relations, Central Office; and (7) assert the right of the department to review and approve all donations of real property and any improvements to existing real property which may be made to the department by the VSC. (e) Funds generated by a VSC may only be used for the needs of persons served, the enhancement of existing facility operations, employee recognition/education projects, and new initiatives for the betterment of quality of life for persons served. Funds may not be used for: (1) gifts for legislators or gifts for individual employees, which are not part of the facility's established award program; (2) recognition events or receptions for individual employees or legislators; (3) political contributions or lobbying efforts; (4) alcoholic beverages, unless used at a fundraising event; (5) loans, including travel advances; (6) operating mental health and mental retardation programs, or contracting for mental health and mental retardation programs on behalf of a facility; (7) cash awards or salary supplementation for employees; and (8) other purposes determined by the department to be unethical, unlawful, or inappropriate. (f) A VSC may not: (1) authorize a facility employee to sign a VSC check, use a VSC debit card, or use a VSC general credit card, such as American Express, VISA, MasterCard, or Discover; or (2) hold monies on behalf of facility employees for non-VSC-sponsored activities. (g) The facility provides the VSC with: (1) fundraising assistance; (2) clerical and administrative services, (e.g., word processing and accounting assistance); (3) training for volunteers, board members, and officers; (4) coordination of activities: and (5) office space. (h) The VSC is responsible for providing: (1) its own postage; (2) its own printing (including letterhead and newsletters); (3) its own special event insurance; (4) bond for its officers and signatory agents; and (5) a mechanism for recognizing its donors, volunteers, and visiting groups. (i) A facility's office of community relations may maintain a VSC petty cash fund for its VSC if guidelines regarding the fund's purpose and maximum dollar amount are included in the memorandum of understanding between the facility and the VSC as required by subsection (d) of this section. (1) The primary custodian of the petty cash fund is responsible for maintaining receipts and accurate documentation of all petty cash funds disbursed, and furnishing such documentation to the treasurer of the VSC. (2) Documentation of petty cash disbursements are included in the VSC's annual treasurer's report or audit report to the Office of Community Relations, Central Office as required by sec.417.313(d)(1) of this title (relating to Auditing and Reporting Guidelines). (3) The primary and alternate custodians of the petty cash fund must complete a signed responsibility statement for the funds. (4) An officer of the VSC or an individual, who is not the director of community relations or a community relations staff member, will conduct and document cash counts or cash audits of the petty cash fund once every two months. sec.417.309.Donations. (a) Acceptance of Donations. (1) Donations to the VSC. Donations made to the VSC may be processed by facility staff if a method for such assistance is included in the MOU. (A) Donated funds. (i) Each facility shall develop written policies and procedures which ensures the separation of duties for: (I) opening VSC mail; (II) receiving cash and checks to the VSC; (III) receipting funds; (IV) recording funds received (fund receiving log); (V) depositing funds; and (VI) reconciling monthly VSC bank statements with the facility's record of funds received. (ii) All donated funds remain the property of the VSC until they are accepted by the facility. (B) Donated in-kind goods and services. (i) The donor determines the value of the in-kind goods and services for tax purposes. (ii) In-kind goods that cannot be used by the VSC may be: (I) distributed to other nonprofit agencies that have an appropriate use for them; (II) sold, with the proceeds retained by the VSC, unless sale of the donation is prohibited by the donor; or (III) discarded, if appropriate. (iii) Goods and services are assigned a value in accordance with department recommendations for accounting purposes. (iv) All donated in-kind goods and services remain the property of the VSC until they are accepted by the facility, or board if applicable. (2) Donations made directly to a facility/SOCS. All donations made directly to a facility/SOCS are processed by facility/SOCS staff. For SOCS without a community relations office, the CEO appoints an employee who is responsible for the tasks required of community relations staff as described in this section. (A) Donated funds. (i) Funds less than $500 are processed through the facility/SOCS cashier. Accounting staff are responsible for recording the funds, with the appropriate designation, if applicable, and forwarding a copy of the record to the community relations office. An individual pre-numbered cash receipt for each donation must be completed. (ii) Funds $500 or more are processed in accordance with the department's operating instructions for Donations Valued at $500 or More (417-17). Following acceptance by the Texas MHMR Board, accounting staff are responsible for recording the funds, with the appropriate designation, if applicable, and forwarding a copy of the record to the community relations office. Community relations staff are responsible for completing an individual pre-numbered cash receipt for each donation. (B) Donated goods and services. (i) The donor determines the value of the goods and services for tax purposes. (ii) The community relations staff assign a value to goods and services using values recommended by the department for accounting purposes. Goods and services valued at $500 or more are processed in accordance with the department's operating instructions for Donations Valued at $500 or More (417-17). (iii) Donated goods that cannot be used are considered surplus and processed in accordance with the department's operating instruction for Materials Management (407-2). (b) Acknowledgment of donations. (1) Donations received by a VSC are acknowledged in accordance with department guidelines. (2) Donations valued at less than $500 received by a facility/SOCS are acknowledged in a letter to the donor from the director of community relations. Donations valued at $500 or more that have been accepted by the Texas MHMR Board are acknowledged in a letter to the donor from the director of community relations. sec.417.315.References. Reference is made to the following state and federal statute, and department rules and policies: (1) Texas Health and Safety Code, sec.533.007; (2) Chapter 404, Subchapter H of this title, concerning Criminal History Clearances; (3) Chapter 410, Subchapter C of this title, concerning Capital Improvements by Citizens Groups; (4) Chapter 414, Subchapter A of this title, concerning Disclosure of Client- Identifying Information; (5) Chapter 410, Subchapter A of this title, concerning Public Responsibility Committees; (6) Chapter 404, Subchapter E of this title, concerning Rights of Persons Receiving Mental Health Services; (7) Chapter 405, Subchapter Y of this title, concerning Client Rights - Mental Retardation Services; (8) Chapter 417, Subchapter K of this title, concerning Abuse, Neglect, and Exploitation in TDMHMR Facilities; (9) Fair Labor Standards Act; (10) Donations Valued at $500 or More Operating Instruction, 417-17; (11) Nutrition and Food Service Operating Instruction, 407-1; and (12) Materials Management Operating Instruction, 407-2. 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 September 4, 1998. TRD-9814058 Charles Cooper Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: September 28, 1998 Proposal publication date: June 12, 1998 For further information, please call: (512) 206-4516 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 5.Property and Casualty Insurance SUBCHAPTER E.Texas Windstorm Insurance Association 28 TAC sec.5.4603 The Commissioner of Insurance adopts an amendment to 28 TAC sec.5.4603 concerning the forms for windstorm inspections. Amended sec.5.4603 adopts by reference the forms to be used for windstorm inspections to determine compliance with applicable building code requirements in the plan of operation of the Texas Windstorm Insurance Association ("Association"). Amended sec.5.4603 adds two new forms used by the Texas Department of Insurance Windstorm Inspection Unit in the performance of inspections and certifications of structures located in the designated catastrophe areas, revises four forms used in the performance of inspections and certifications of structures located in the designated catastrophe areas, eliminates seven forms that are no longer used by the Windstorm Inspection Unit for the purposes of performing inspections and certifications of structures located in the designated catastrophe areas, adds one new form used by Texas licensed professional engineers in the design of structures located in the designated catastrophe areas, and revises one form and eliminates one form used by Texas licensed professional engineers in the performance of inspections and certifications of structures located in the designated catastrophe areas. The amendment also re-orders the listing of the forms. Section 5.4603 is adopted with changes to the proposed text as published in the June 26, 1998, issue of the Texas Register (23 TexReg 6689) and with changes to the proposed forms which the section adopts by reference, all of which are more particularly described below. The amended section was considered by the Commissioner of Insurance in a public hearing on August 18, 1998, Docket No. 2368. The amendment concerns the adoption by reference of forms to be used for windstorm inspections. The amended section is necessary to reflect additions of and amendments to forms to be used for windstorm inspections to determine compliance with applicable building code requirements in the plan of operation of the Association. Article 21.49 sec.6A of the Insurance Code specifies inspection or approval procedures for property to be considered insurable for windstorm and hail insurance through the Association. All structures located in the designated catastrophe areas in tier 1 counties that are constructed or repaired or to which additions are made on or after January 1, 1988; and structures located in specified designated catastrophe areas in Harris County that are constructed or repaired or to which additions are made on and after March 1, 1996, for portions of the cities of Seabrook and La Porte; June 1, 1996, for the city of Morgan's Point; and April 1, 1997, for portions of the cities of Shoreacres and Pasadena; must be inspected or approved by the commissioner for compliance with the building specifications in the plan of operation of the Association to be considered insurable property for windstorm and hail insurance from the Association. The commissioner must issue a certificate of compliance that is evidence of insurability of the structure by the Association for each structure that qualifies. The new and revised forms are necessary to incorporate changes in the inspection process and to add new requirements to the inspection process as a result of the adoption by the commissioner under Commissioner Order No. 97-0626, dated June 30, 1997, of new prescriptive building codes applicable to structures located in the designated catastrophe areas. The effective date of the section as published in the proposal was August 1, 1998; however, in order to allow for at least twenty days after filing with the Texas Register for the section to become effective, the effective date of the section has been changed to October 1, 1998. An amendment to Form WPI-2, Building Compliance, was proposed by the Texas Board of Professional Engineers and has been accepted by the department; accordingly, the name of the form has been changed to Form WPI-2, Building Construction Compliance. Additionally, the department has made formatting and editorial changes on Form WPI-1, Application for Windstorm Building Inspection, to clarify the information requested by the submitter of the form and to allow for identification of the submitter's name. The department has also made a change on Forms WPI-2 and WPI-2D clarifying that the engineer's seal be a stamp or ink replica. The new and revised forms are: Application for Windstorm Building Inspection, Form WPI-1; Building Construction Compliance, Form WPI-2; Building Design Compliance, Form WPI-2D; Field Form, Form WPI-7; Certificate of Compliance, Form WPI-8; Texas Department of Insurance Application Acknowledgment - No Fee Required, Form WPI-9; Texas Department of Insurance Application Acknowledgment for Engineered Structure - No Fee Required, Form WPI-9E; and Texas Department of Insurance Application Acknowledgment - Fee Required, Form WPI-9F. These forms will improve the efficiency of the windstorm inspection process and the operations of the windstorm unit. They are more comprehensive and user-friendly, and will provide the public, insurance industry and engineers more expedient service from the windstorm inspection staff. The information contained on the new forms will also provide an improved data history on structures, which will be available to the public, industry and engineers. The changes to the forms will reduce the number of forms used in the inspection and certification process from 13 to 8. Amended sec.5.4603 adopts by reference the forms to be used for windstorm inspections to determine compliance with applicable building code requirements in the plan of operation of the Association. The new Texas Department of Insurance Application Acknowledgement for Engineered Structure - No Fee Required, Form WPI-9E, is to acknowledge receipt of the application for a windstorm building inspection of an engineered structure, assign an application identification number, and acknowledge that a Texas licensed professional engineer will be responsible for the inspection and notification of compliance of the structure. The new Texas Department of Insurance Application Acknowledgement - Fee Required, Form WPI-9F, is to acknowledge receipt of the application for a windstorm building inspection of structures inspected by the department, includes specific information such as the field office location, telephone number, application identification number, and types of inspections requested, and also stipulates the required fee for inspections of new structures and additions to existing structures. The revised forms for use by the department's windstorm inspectors, licensed professional engineers, and department staff are as follows: Application for Windstorm Building Inspection, Form WPI-1, which is the initial step in the inspection process, has been revised to provide comprehensive information on the structure to be inspected, including but not limited to the type of building, type of construction, type of building materials, and the manufacturer and type of specific products used on the building. The information on the application permits immediate determination if the structure should be inspected by a windstorm inspector or a Texas licensed professional engineer. Field Form, Form WPI-7, is completed by the windstorm inspector for each inspection requested; it represents the results of an inspection at any given time, and a copy is left at the job site with the original placed in the inspection file. This form incorporates information contained on the deleted forms WPI-3, 4, 5, 6 and 11, and addresses the type of inspection conducted, inspection status, and comment on a structure's foundation, framing, roof, and mechanical equipment. This form will reduce the amount of paperwork associated with separate forms for each type of inspection and will provide a mechanism to track the progress of a structure on one document. Texas Department of Insurance Application Acknowledgement - No Fee Required, Form WPI-9, is used to acknowledge receipt of the application for a windstorm building inspection of structures inspected by the department. The name of the form has been changed from Inspection Acknowledgement to Texas Department of Insurance Application Acknowledgement - No Fee Required and includes specific information such as the application identification number, field office location, telephone number, and type of inspections requested. The WPI-9 also states that a fee is not required for alterations, repairs and mechanical inspections. Certificate of Compliance, Form WPI-8, indicates insurability for windstorm and hail insurance through the Association. The WPI-8 is issued by the department certifying that a structure was erected, altered, and/or repaired to comply with the wind load provisions of ASCE 7-93, Minimum Design Loads for Buildings and Other Structures (a national consensus standard), or the Southern Standard Building Code, as amended May 8, 1973, or the TCPIA Windstorm Resistant Construction Code. Form WPI-8 was revised to include the designated catastrophe area (Inland I, Inland II or Seaward) for the structure being certified. The revision of Field Form, Form WPI-7, has resulted in the deletion of the following forms: Foundation Inspection, Form WPI-3; Rough Framing Inspection, Form WPI-4; Final Framing Inspection, Form WPI-5; Mechanical Equipment Inspection, Form WPI-6; and Re-Roofing Application, Form WPI-11. Two other forms that have been deleted are the Mobile Home Tie Down Survey, Form WPI-MH-1, which was completed as a service to the Association and was not considered a mandatory service and has been discontinued by the department due to the increased workload of the windstorm inspectors, and the Metal Building Certificate, Form WPI-2M, which has been incorporated into the new form Building Design Compliance, Form WPI-2D. The new and revised forms for use by Texas licensed professional engineers are as follows: The new Building Design Compliance, Form WPI-2D, is for use by Texas licensed professional engineers to notify the department that a structure, including a metal building, has been designed to comply with the wind load provisions of ASCE 7-93, Minimum Design Loads for Buildings and Other Structures, in the Seaward and Inland I areas, or the Southern Standard Building Code, as amended May 8, 1973, for structures located in the Inland II areas, particularly for construction methods and materials that are not specified in the existing guide or the new code. The revised Building Construction Compliance, Form WPI-2, is for use by Texas licensed professional engineers to notify that they have inspected the structure and the structure was erected, altered and/or repaired to comply with the wind load provisions of ASCE 7-93, Minimum Design Loads for Buildings and Other Structures, for structures located in the Seaward and Inland I areas, or the Southern Standard Building Code, as amended May 8, 1973, for structures located in the Inland II areas. For structures not previously inspected and certified which were erected, altered and/or repaired from January 1, 1988, through August 31, 1998, Form WPI-2 requires notification by Texas licensed professional engineers that the structures meet the wind load provisions of the Southern Standard Building Code, as amended May 8, 1973, applicable to structures located inland of the intracoastal canal or the TCPIA Windstorm Resistant Construction Code, applicable to structures located seaward of the intracoastal canal. The submission of the Building Construction Compliance form to the department with the seal of the Texas licensed professional engineer and the department's acceptance will generate a certificate of compliance for the insured. Foundation Certificate, Form WPI-10, used by Texas licensed professional engineers to certify foundations only, has been deleted as this information will now be incorporated into the revised Building Construction Compliance, Form WPI- 2. Comment: A commenter requested that the use of the word "certification" on Form WPI-2 be amended to "statement of compliance" stating that their professional liability insurance coverage excludes liability created by the effect of a certification clause. The commenter believes that if an engineer certifies his services, he is assuming a level of responsibility far beyond the normal standard of care and that liability for services beyond the standard of care is not insurable. Agency Response: The department has amended the form and rule; however, the department notes that the language used and the seal of the engineer clearly places accountability and responsibility of compliance of the structure with the engineer. Comment: A commenter requested that the use of the word "inspect" be removed from the WPI-2, Building Compliance. The commenter stated that the courts have defined "inspect" to mean superintend, oversee, control, manage, direct, restrict, regulate, govern and administer. The commenter further stated that the engineer's standard services by no means allow him this level of responsibility. Agency Response: The department does not agree to change this language. Article 21.49, Section 6A, stipulates that all structures, to be considered insurable property for windstorm and hail insurance from the Association, must be inspected or approved by the Commissioner for compliance with building specifications. It is the department's belief that the engineer will be held to the level of responsibility that the term "inspect" implies. Comment: A commenter stated that the title of the Form WPI-2, Building Compliance, was confusing as some building codes use the term "building compliance" to indicate that only the design is in compliance. The commenter recommended using "Building Construction Compliance" to avoid confusion. Agency Response: The department agrees and has amended the language as recommended. Comment: A commenter recommended that language on form WPI-2 be altered to allow the certifying engineer to better identify the specific role that he/she might perform. Agency Response: The department disagrees. In accordance with the Windstorm Inspection Manual, 28 TAC sec.5.4602, an engineer is required to notify the department of compliance of a structure; therefore, it is only necessary for the department to know that an engineer has ultimately sealed the Building Compliance Form, WPI-2. It is not necessary for the department to know what services any other engineer has performed. For: Texas Board of Professional Engineers and the Structural Engineers Association of Texas. The amended section is adopted pursuant to the Insurance Code Articles 21.49 and 1.03A. Article 21.49 sec.6A of the Insurance Code specifies inspection or approval procedures for property to be considered insurable for windstorm and hail insurance through the Texas Windstorm Insurance Association. All structures located in the designated catastrophe areas in tier 1 counties that are constructed or repaired or to which additions are made on or after January 1, 1988; and structures located in specified designated catastrophe areas in Harris County that are constructed or repaired or to which additions are made on and after March 1, 1996, for portions of the cities of Seabrook and La Porte; June 1, 1996, for the city of Morgan's Point; and April 1, 1997, for portions of the cities of Shoreacres and Pasadena; must be inspected or approved by the commissioner for compliance with the building specifications in the plan of operation of the Association to be considered insurable property for windstorm and hail insurance from the Association. Article 21.49 sec.6A requires the commissioner to issue a certificate of compliance that is evidence of insurability of the structure by the Association and to promulgate rules and forms to effect the provisions of this section. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. sec.5.4603. Forms for Windstorm Inspections. (a) The Texas Department of Insurance adopts by reference the following forms for use in windstorm inspection: (1) Application for Windstorm Building Inspection, Form WPI-1, as amended October 1, 1998; (2) Building Construction Compliance, Form WPI-2, as amended October 1, 1998; (3) Building Design Compliance, Form WPI-2D, effective October 1, 1998; (4) Field Form, Form WPI-7, as amended October 1, 1998; (5) Certificate of Compliance, Form WPI-8, as amended October 1, 1998; (6) Texas Department of Insurance Application Acknowledgment - No Fee Required, Form WPI-9, as amended October 1, 1998; (7) Texas Department of Insurance Application Acknowledgment for Engineered Structure - No Fee Required, Form WPI-9E, effective October 1, 1998; (8) Texas Department of Insurance Application Acknowledgment - Fee Required, Form WPI-9F, effective October 1, 1998. (b) These forms are published by and available from the Texas Department of Insurance. Copies of these forms may be obtained from the Windstorm Inspections Section of the Inspections Division, Texas Department of Insurance, 333 Guadalupe, P.O. Box 149104, Austin, Texas 78714-9104. 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 September 2, 1998. TRD-9813988 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Effective date: September 22, 1998 Proposal publication date: June 26, 1998 For further information, please call: (512) 463-6327 CHAPTER 19.Agent's Licensing SUBCHAPTER U.Utilization Reviews for Health Care Provided Under Workers' Compensation Insurance Coverage 28 TAC sec.sec.19.2001-19.2021 The Commissioner of Insurance adopts new sec.sec.19.2001-19.2021, concerning utilization reviews for health care provided under workers' compensation insurance coverage. The new subchapter is adopted with changes to the title of the subchapter, and with changes to the proposed text of sec.sec.19.2003, 19.2006, 19.2008, 19.2011 and 19.2016 as published in the May 22, 1998, issue of the Texas Register (23 TexReg 5317). Sections 19.2001, 19.2002, 19.2004, 19.2005, 19.2007, 19.2009, 19.2010, 19.2012-19.2015, 19.2017-19.2021 is adopted without changes and will not be republished. This subchapter implements the provisions of Insurance Code Article 21.58A, sec.14(c), which was amended by House Bill 3197 in 1997, 75th Legislature, Chapter 903. The amendment was effective September 1, 1997, but applies only to utilization reviews for health care provided under workers' compensation insurance coverage after January 1, 1998. House Bill 3197 amended sec.14(c) such that, except as otherwise provided, Insurance Code Article 21.58A applies to utilization review of health care provided to persons eligible for workers' compensation medical benefits under Title 5, Labor Code. It further provided that the Commissioner of Insurance shall regulate, in the manner provided for by Insurance Code Article 21.58A, a person who performs review of health care and medical benefits provided for under Chapter 408, Labor Code, but that Article 21.58A, sec.14(c), does not affect the Texas Workers' Compensation Commission's authority to exercise the powers granted to it under Title 5, Labor Code. It also provided that, in the event of a conflict between Insurance Code Article 21.58A and Title 5, Labor Code, the latter prevails, and that the department and the Texas Workers' Compensation Commission (TWCC) may adopt rules and enter into memorandum of understanding as necessary to implement amended Insurance Code Article 21.58A. Development of these rules was a collaborative effort between the Department, TWCC, and a utilization review advisory committee which consisted of representatives of the insurance industry, health care providers, consumers, an employer, and a utilization review agent. In addition, the Department and TWCC entered into a memorandum of understanding setting forth those areas of regulation of utilization review agents and processes specific to workers' compensation that are controlled and regulated by TWCC pursuant to the Texas Workers' Compensation Act (Texas Labor Code Title 5, Subtitle A), and TWCC rules and procedures, and those which are subject to regulation by the Department pursuant to Art. 21.58A and the Department's rules and procedures (22 Tex. Reg. 11140, November 14, 1997). It is upon this authority that the department adopts these rules. The title of the subchapter, as well as the statutory basis in adopted sec.19.2001(a), is amended from the published rule to refer to utilization review for health care rather than utilization review for medical benefits. The term "medical benefits" in workers' compensation cases has a specific definition that relates to payment for health care, rather than review if health care is medically reasonable and necessary. The more appropriate title for this subchapter is embodied in the term "health care," the approval or denial of which constitutes utilization review. Adopted sec.19.2003(4), the definition of adverse determination, is revised for the same reason, to replace "medical benefits" with the more appropriate "health care." This same definition is also revised by replacing "are" with "is", for subject/verb agreement. Adopted sec.19.2003(28), is revised to clarify that the Texas Workers' Compensation Act applies to the provision of health care to an injured employee, rather than the determination of medically reasonable and necessary. Adopted sec.19.2003(33), definition of utilization review, was slightly altered by adding the word "alone" after the word "preauthorization", and adding the word "both" before the phrase "preauthorization and retrospective review." This additional language is necessary to clarify that the definition refers to either a system for preauthorization or a system of preauthorization and retrospective review. Adopted sec.19.2003(36), definition of working day, was revised based on comments to specify that a legal holiday is not considered a working day. The list of excepted days in the proposed rule was under-inclusive. This amendment was made in response to two comments. Adopted sec.19.2006(e) was changed based on comments to clarify that utilization review of dental health care by a dentist is mandated only in the case of denial based upon medical necessity, i.e. an adverse determination. Adopted sec.19.2008(b) was revised to delete the word "either" from the second sentence of the subsection. A comment indicated that the word was unnecessary and potentially confusing. Adopted sec.19.2008(d)(2) is revised to reference review by an appropriate doctor or other health care provider in response to a comment, and for consistency with Insurance Code Article 21.58A Section 4(i). Adopted sec.19.2011 was revised based on comments to clarify that the reviewing doctor or provider is the person with whom the referring provider must be given a reasonable opportunity to discuss an adverse determination. Adopted sec.19.2016(b) was revised based on comment to clarify the reporting requirements under these rules. The revision makes it clear that separate reports for complaints and adverse determinations must be filed, and specifies the requirements for such reports. Section 19.2001 contains general provisions regarding this chapter, including the statutory basis, severability provisions and a designation of the purpose of the rules. Section 19.2002 contains limitations on applicability and assures that the subchapter does not affect the authority of the Texas Workers' Compensation Commission under Title 5, Labor Code. Section 19.2003 defines certain terms used in this subchapter. Section 19.2004 contains information regarding the certification of utilization review agents to perform review of health care provided for under Title 5, Labor Code. The section states where to obtain and file an application for certification, and includes a list of information required to be submitted by the applicant. Requirements for filing revisions to the application during the review process are set forth, as well as the applicable time frames and certain duties of the applicant and the department during the application process. Requirements that an applicant must prove have been met prior to obtaining certification of registration are also listed. The section provides that a utilization review agent registered pursuant to this subchapter must apply for renewal of such registration every two years, and sets forth renewal requirements and procedures. The section also sets forth the process for appeal if an application or renewal is denied. Section 19.2005 contains the general standards of utilization review of health care provided for under Chapter 408 of Title 5, Labor Code, and requires that the plan be reviewed by a physician and conducted in accordance with standards developed with input from other appropriate health care providers. The section also requires a description of the elements of review which must be provided, and requires written procedures for various operational aspects of the utilization review agent. The section requires use of written medically acceptable screening criteria, and allows delegation of review under certain circumstances. Section 19.2006 addresses qualification of personnel and required reporting thereon, and certain prohibitions regarding treatment of personnel. It requires that utilization review of health care be provided under the direction of a physician and that utilization review of dental health care be reviewed by a dentist. Section 19.2007 contains information regarding the prohibition of certain activities of utilization review agents. A utilization review agent's contact with and receipt of information from health care providers is governed by sec.19.2008. Section 19.2009 contains information regarding on-site review by a utilization review agent, generally prohibiting the utilization review agent from being present at an injured employee's examination or treatment without consent, and requiring certain identification protocol for utilization review staff during on-site visits. Section 19.2010 contains information regarding requirements of notice of determinations made by utilization review agents, excluding retrospective review. Requirements affording a health care provider a reasonable opportunity to discuss a proposed plan of treatment which is being questioned are addressed in sec.19.2011. Section 19.2012 states that appeals from an adverse determination made by a utilization review agent certified pursuant to this subchapter shall be governed by the Texas Workers' Compensation Act and applicable rules. Section 19.2013 deals with requirements of a utilization review agent's telephone accessibility. Confidentiality requirements with regard to utilization review are set forth in sec.19.2014. Section 19.2015 describes various aspects of retrospective review of medical necessity. Requirements regarding a utilization review agent's complaint system, complaints to the department, and required reporting to the department are set forth in sec.19.2016. Also set forth in this section are authority and procedures for on- site review of the operations of utilization review agents by the department. Section 19.2017 contains the regulations for enforcement of the standards of utilization review and any other requirements under this subchapter. Section 19.2018 makes it a criminal offense to perform utilization review pursuant to this subchapter without a certificate of registration. Section 19.2019 contains information regarding insurance companies that perform utilization review. Utilization review agents performing only specialty review are addressed in sec.19.2020. Section 19.2021 states that adverse determinations pursuant to this subchapter are not subject to independent review as set forth in Chapter 12 of this title (relating to Independent Review Organizations). General comments. COMMENT: A commenter believes the rules are not reasonable and require further clarification. The commenter feels the rules are restrictive and will result in higher costs for medical care in the workers' compensation industry, will be a "nightmare" for insurance companies and agents to administer, and are written in the providers' favor. The commenter contends the costs of performing utilization review (UR) will skyrocket, and will have a significant impact on the day to day costs to insurance companies and utilization review agents (URAs). The commenter believes the increased costs will arise from (1) increased physician advisor/consultant charges due to the additional time required for contacting the treating physician for every adverse determination; (2) additional staff to meet administrative requirements; and (3) cost of certification process and licensing fee are extremely high. Furthermore, the commenter asserts the rules restrict the utility of UR for curbing unnecessary medical services in the workers' compensation arena. RESPONSE: The department disagrees. The rules are reasonable and include appropriate modifications of the utilization review agent rules governing group health URAs, 28 TAC sec.19.1701 et seq. The rules reflect the legislative intent that utilization review agents in the workers' compensation area are subject to regulation. The department disagrees that the rules are written in the health care providers' favor. The rules are written to implement Insurance Code Article 21.58A to regulate URAs and insurance carriers. The department recognizes that these requirements may increase costs, but the increased cost area identified by the commenter results from the statute, not the rules. In addition, the cost for initial certification has been reduced from $2,157 to $2,150, and more significantly, the cost for renewal of certification has been reduced from $2,076 to $545. See, 28 TAC sec.19.802. The department disagrees that the rules curb the utility of utilization review to restrict unnecessary medical services. The rules reflect the legislative intent of Insurance Code Article 21.58A and the Texas Workers' Compensation Act that UR provided in the workers' compensation area be subject to the same standards and requirements as UR in general except where there would be a conflict with the Workers' Compensation Act. COMMENT: A commenter poses the following questions regarding application of the rules: Will payment reductions/denials based on documentation failing to support the level of service, charges appearing unrelated to the injury, or provider billing services normally included in the global rate be considered adverse determinations? Shouldn't the provider be responsible for submitting necessary documentation to support charges without the insurance company or URA having to involve a physician advisor when the documentation is not provided? RESPONSE: The answers to these two questions are related. The reductions/denials specified in the first question appear to be clarifications of coverage or TWCC fee disputes rather than adverse determinations. Adverse determinations are limited to denials based on unnecessary care or lack of medical necessity. The specific instances identified by the commenter do not appear to be adverse determinations. Denials based on global fees or unrelatedness are not considered adverse determinations and should not be couched as such. Conversely, determinations based upon medical necessity should not be couched in other terms in an effort to avoid UR. As to the second question, the department believes that the health care provider should be responsible for submitting documentation to support the medical necessity of services provided. The department believes that denial of "charges" based on lack of documentation for the level of services provided, or where documentation of procedure is required, is not UR and would not require a physician advisor. COMMENT: A commenter questions whether software for tracking and reporting complaints is available through TDI. RESPONSE: There is no requirement for a specific method of tracking complaints; therefore, there is no specific software available through or required by TDI. The rules provide flexibility for URAs to determine what method of tracking and reporting best suits that URA's operations. COMMENT: A commenter asks if an insurance company or URA has to provide proof that an employee was notified of an adverse determination, i.e. through certified mail receipts, etc. RESPONSE: A copy of the adverse determination letter is sufficient proof of notification to the injured employee. The required use of certified mail would or could place an undue financial burden on the URA. COMMENT: A commenter questions why the biographical affidavit form requires employment and residences for the past 20 years and why the applicant has to indicate whether past and current employers may be contacted. RESPONSE: The information required on the biographical affidavit form is standardized and is required biographical information from all regulated entities. The request for approval to contact employers allows the department to investigate applicants for determination of worthiness for licensure, and is not unlike requirements for applicants for other forms of licensure, including other URAs. COMMENT: A commenter suggests that the TWCC Mental Health Treatment Guideline (TWCC Rule 134.1000) on confidentiality should either be incorporated by reference or restated in the rules. RESPONSE: The department disagrees that this is necessary. The confidentiality protections are already referenced in sec.19.2014(h), and include the TWCC Mental Health Treatment Guideline. In addition, TWCC treatment guidelines are referenced in the definition of screening criteria, sec.19.2003(29). COMMENT: Numerous commenters suggested that TDI accept accreditation of workers' compensation utilization management programs by AHAC/URAC as evidence of substantial compliance with these rules. RESPONSE: The department disagrees. Insurance Code Article 21.58A does not allow TDI to delegate accreditation functions to a commercial accrediting association. sec.19.2003. COMMENT: A commenter suggests adding a definition for "Qualified Mental Health Provider." RESPONSE: The department disagrees that the suggested definition is necessary. The definition of Health Care in sec.19.2003(13)(c) includes provision for psychological services that are prescribed by a doctor. The definition of a doctor is based on sec.401.011(17) of the Texas Labor Code. The regulation, where appropriate, already refers to other health care providers. sec.19.2003(4). COMMENT: A commenter suggests revising the definition to delete the reasonableness requirement and add a medical necessity requirement. RESPONSE: The department disagrees. The language in the rule is consistent with the definition of health care in the Texas Labor Code sec.401.011(19). Moreover, the reasonable and necessary requirement is consistent throughout the rules. sec.19.2003(5). COMMENT: Two commenters stated their agreement with the appeal process set forth in the rules, and two other commenters advocated the addition of an internal appeal process within the URA prior to submission of an appeal to TWCC. One commenter notes that the group health utilization review rules contain provisions requiring an internal appeal of an adverse determination by the UR agent, and contends that this procedure should not have been deleted from these proposed rules. The commenter contends that no conflict exists between this procedure and the workers' compensation statute and rules which provide for medical dispute resolution. The commenter further contends that the proposed rules create a difference between the group health and workers' compensation utilization review rules to the detriment of injured workers, and suggests that addition of an internal appeals process through the URA, prior to invoking the TWCC medical dispute resolution process, would alleviate this difference. Another commenter contends that addition of an internal approval process will be less burdensome on TWCC. RESPONSE: The department disagrees. Art 21.58A Sec. 14(c) provides that in the event of a conflict between that section and Title 5, Labor Code (the workers' compensation statute), the latter prevails. The appeal procedures in the Labor Code are different from those in the Insurance Code. Labor Code Sec. 413.031 establishes a medical dispute appeal process administered by the TWCC, which has been further implemented by TWCC rules. The department believes that the latter provisions take precedence, and TWCC has stated its agreement. See also the TDI- TWCC memorandum of understanding referenced in the preamble. The utilization review advisory committee also specifically voted not to include an internal appeal process in the proposed rule. At the same time, the department notes that TWCC Rule 133.305, which requires that a request for review include documentation indicating that efforts have been made to attempt to resolve the dispute, allows a health care provider or injured worker to obtain an informal review of an initial denial prior to a request for dispute resolution. While these proposed rules do not mandate a particular internal appeal process, they also do not prohibit this type of review. As one commenter noted, his company, which performs workers' compensation utilization review, has always offered parties an internal appeal option. These rules would not prohibit that option. sec.19.2003(9). COMMENT: Concern was expressed that complaints do not have to be submitted in writing. One commenter supported the definition of complaint. RESPONSE. The department acknowledges this concern, but points out that oral complaints are specifically allowed for by Insurance Code Article 21.58A, Section 4(m). sec.19.2003(13)(A). COMMENT: A suggestion was made that reference to osteopathic services be added to the definition of health care. RESPONSE: The department disagrees. There are specific treatments that are designed for the use of osteopathic physicians; however, the definition of "health care" is verbatim from Texas Labor Code sec.401.011(19). sec.19.2003(22). COMMENT: Concern was expressed that the use of the term "compensable injury" may cause confusion in cases where a claim has been disputed and dispute resolution is pending and suggested instead the term "claimed injury." RESPONSE: The department disagrees. The definition of "compensable injury" in these rules is based upon the definition in the Texas Labor Code sec.419.011(8). There is no similar definition in the Texas Labor Code for "claimed injury." sec.19.2003(26). COMMENT: For consistency with the definition of doctor, it was suggested that the definition of physician should refer to licensed doctor of osteopathic medicine rather than doctor of osteopathy. RESPONSE: The department disagrees. While the commenter's point may have merit, the term "doctor of osteopathy" is statutory, Insurance Code Article 21.58A Sec. 2(18). For purposes of the rules, the department will consider the term "doctor of osteopathy" to be consistent with "doctor of osteopathic medicine." sec.19.2003(28). COMMENT: A commenter suggested that the definition of retrospective review be expanded to include whether the treatment is causally related to the compensable injury. The commenter also states that the proposed rules are unclear on whether the routine review of medical bills submitted for payment constitutes retrospective utilization review if charges are disallowed on the basis of medical necessity, and asks whether, if that is the case, the provider notification provisions must be followed on each medical bill. Finally, the commenter asks on what basis the department includes a definition of retrospective review, contending that HB 3197 expanded the coverage of Art. 21.58A to include workers' compensation, but not to include retrospective utilization review. RESPONSE: The department disagrees that the definition should be expanded as the commenter suggests. Causal relationship is an issue of compensability, which is addressed in Chapter 410 of the Labor Code and is determined by TWCC's dispute resolution process and not its medical dispute resolution process; as such, it is not a proper subject for utilization review. If charges are denied on the basis of medical necessity, this constitutes an adverse determination subject to these rules and notification to the appropriate parties, including the injured employee, is required pursuant to TWCC Rule 133.300. The rule contains a definition of retrospective review in deference to the TWCC medical dispute resolution statute and rules, which provide for review of more than just prospective review. See the TDI-TWCC memorandum of understanding. However, the definition should not be interpreted as an intent to expand the department's regulatory authority beyond the bounds of Art. 21.58A. The use of the terms "preauthorization" and "preauthorization and retrospective review" was intended to make clear that the department's regulatory authority over URAs is limited to those entities that perform preauthorization alone or both preauthorization and retrospective review. This is consistent with the department's historic practice with respect to URAs regulated pursuant to Art. 21.58A since its enactment in 1991. However, the definition should not in any respect be construed as limiting the scope of medical dispute review performed by TWCC pursuant to the Labor Code and TWCC rules and guidelines. sec.19.2003(29). COMMENT: A commenter suggests that TWCC Treatment Guidelines should be referenced as "examples of" recommended treatment parameters, rather than "tools that identify" recommended treatment parameters. RESPONSE: The department disagrees. The language within the ground rules of the TWCC treatment guidelines describes the guidelines as tools. sec.19.2003(33). COMMENT: One commenter recommends that the definition of "utilization review" be revised to track the language of Art. 21.58A concerning "prospective and concurrent" review, but recommends that the exception for spinal surgery be retained. Another commenter expresses concern that the definition's phrase "a system for preauthorization, or preauthorization and retrospective review..." may be viewed as limiting the rules' applicability to retrospective review only when the matter under review was also subject to preauthorization. That commenter suggests that alternative phrases, such as "a system for preauthorization and retrospective review" or "a system for preauthorization and/or retrospective review" would include both processes. Finally, two commenters suggested that prospective review (preauthorization) not be limited to those procedures authorized by TWCC Rule 134.600. RESPONSE: The department agrees in part and disagrees in part. The terms "prospective" and "concurrent" are not used in the definition in order to be consistent with Labor Code Sec. 413.014, which speaks specifically to "preauthorization" and which limits preauthorization only to those treatments and services authorized by TWCC rules. See also TDI-TWCC memorandum of understanding. The department agrees with retaining the exception for spinal surgery. The use of the terms "preauthorization" and "preauthorization and retrospective review" was intended to make clear that the department's regulatory authority over URAs is limited to those entities that perform preauthorization alone or both preauthorization and retrospective review. This is consistent with the department's historic practice with respect to URAs regulated pursuant to Art. 21.58A since its enactment in 1991. However, the definition should not in any respect be construed as limiting the scope of medical dispute review performed by TWCC pursuant to the Labor Code and TWCC rules and guidelines. sec.19.2003(36). COMMENT: Two commenters pointed out that the specific holidays listed as not being working days did not comport with the TWCC definition of legal holiday. RESPONSE: The department agrees and the definition has been revised to reference legal holiday. sec.19.2004(c)(6). COMMENT: Opposition was expressed to the requirement that URAs submit names of individuals performing UR. It was suggested that either requiring the URA to submit a certification signed by the officers that the individuals conducting UR do not have a conflict of interest, or requiring only the names of the medical director and other physician/providers involved in non-certification recommendations would be sufficient. RESPONSE: The department disagrees. URAs are accountable for which individuals have been credentialed. It is not an unreasonable burden to require a URA to monitor the individuals that have been credentialed to perform UR. sec.19.2004(f)(1). COMMENT: A commenter questions if "timely manner" means according to TWCC preauthorization and payment time guidelines and suggests that "timely manner" be defined. RESPONSE: The department disagrees. "Timely manner" includes the most reasonably prompt action possible and may differ with each fact situation. In addition, such action must comply with any time frame set forth or referenced by the rules. sec.19.2005. COMMENT: A commenter recommends that the word "physician" be replaced with "doctor," and that the words "and approved by a physician" be deleted from the first sentence of this section. It is the commenter's position that as worded now, medical doctors and doctors of osteopathy would oversee doctors of chiropractic, violating the intent of the Texas Workers' Compensation Act which provides for identical rights and privileges for doctors of chiropractic, osteopathy, and medicine, within each doctors' scope of practice, and would threaten to interfere with or impair the legal rights and privileges of licensed doctors of chiropractic under the Texas Workers' Compensation Act. RESPONSE: The department disagrees. This section requires that a physician review the UR plan pursuant to Texas Insurance Code Article 21.58A, but allows oversight of a chiropractor's treatment decisions to be reviewed by a chiropractor in the event of an adverse determination. The rules do not impair or interfere with any rights or privileges that may arise under the Texas Workers' Compensation Act. sec.19.2005(2)(A). COMMENT: A commenter recommends that the word "identification" be replaced with "application of screening criteria that includes consideration of" and elimination of the phrase "who may require flexibility in the application of screening criteria through utilization review decisions" because a URA may not be provided with information needed to identify individuals with special circumstances. RESPONSE: The department disagrees. Individuals with special circumstances must be identified by the URA, and their requirements for flexibility need to be taken into consideration. sec.19.2005(2)(I). COMMENT: A commenter suggests inserting the phrase "Except when published for the agent's internal use only" at the beginning of this paragraph. RESPONSE: The department disagrees, as this confidentiality is adequately addressed by sec.19.2014(f). sec.19.2005(3). COMMENT: Two comments suggest revisions referring denials to a "physician or dentist" rather than a doctor. A commenter suggests removing the term "other health care provider." Another commenter recommends replacing the reasonably and necessary standard with a medically necessary standard. RESPONSE: The department disagrees. Use of the term "doctor" in this section is consistent with the Texas Labor Code. Review of denials by other health care providers is contemplated by the Insurance Code Article 21.58A, Section 4(i). The use of reasonable and necessary standard is consistent with the definition of health care under the Texas Labor Code sec.401.011(19). sec.19.2006(a). COMMENT: A commenter suggests adding a provision that information other than medical records received from doctors or health care providers shall be received by nurses, physician assistants, registered records administrators, or accredited records technicians. RESPONSE: The department disagrees. Registered records administrators and accredited records technicians were deleted from the statute during the 75th Legislative Session. The rule is consistent with Insurance Code Article 21.58A Sec. 4(c). sec.19.2006(a). COMMENT: One comment supports the language stating that individuals obtaining information and conducting reviews need not only be doctors or nurses, but may also be "health care providers qualified to provide the service requested by the provider." The commenter suggests that this practice be extended throughout the rule to allow "like providers" to perform UR of other providers in their specialties. Another commenter suggests revising the provision to require doctor and provider licensure by the appropriate Texas entity. RESPONSE: The department disagrees. It is not consistent with the language or intent of Insurance Code Article 21.58A to require that all UR functions be performed only by like health care providers. Such a requirement would be burdensome and costly to URAs, and would likely delay the UR process. Insurance Code Article 21.58A does not require a Texas license to perform UR. The screening criteria and UR plan require plan development be done by a physician and denials by an appropriate doctor or hcp, but the actual performance of UR does not require Texas licensure. sec.19.2006(d). COMMENT: A commenter suggested revising (d) to read "utilization review conducted by a utilization review agent shall be under the direction of a doctor currently licensed by a Texas state licensing agency to practice medicine, osteopathic medicine, optometry, podiatry, or chiropractic. Such doctor may be employed by or under contract to the utilization review agent." RESPONSE: The department disagrees. The term "physician" has been used in this section of the rule because the statute requires physicians, as opposed to doctors, to provide direction of the URA. The rules apply to the regulation of URAs, not the doctors who might be performing UR. Further, UR doctors are not required to be licensed in Texas under Texas Insurance Code Article 21.58A. sec.19.2006(e). COMMENT: A commenter requested clarification that review by a dentist is necessary only to support a denial, a nurse could approve a request based on screening criteria. RESPONSE: The department agrees that clarification is necessary, and has revised Subsection (e). sec.19.2006. COMMENT: A commenter recommends adding new subsection (f) which would read "Mental and behavioral health services shall be reviewed by a qualified mental health provider currently licensed by a state licensing agency in the United States. Utilization review of psychological or neuropsychological testing shall be reviewed by a psychologist currently licensed by a state licensing agency in the United States." RESPONSE: The department disagrees. Distinctions are not made in the Insurance Code Article 21.58A for UR by other non-doctor health care providers. sec.19.2007(a). COMMENT: A commenter seeks clarification of what constitutes "unnecessary or unreasonably repetitive" contacts, and what conditions may require additional contacts. RESPONSE: The department does not believe that any further definition of these terms is either necessary or desirable. The rules are to be used with flexibility according to the circumstances. A URA should be capable of exercising some judgment, and its behavior determined on a case-by-case basis. sec.19.2008(b). COMMENT: Concern is expressed that this section sets costs of copying by TWCC rules, but the Texas State Board of Medical Examiners also establishes rules that determine the cost of copying medical records when done by a licensed physician. The question is posed as to what happens if the two rates differ. RESPONSE: The department does not believe any revision is necessary since the Insurance Code Article 21.58A Sec. 4(l) specifically vests authority to set rates in the TWCC. The language of the rule does not set a minimum rate, only a maximum rate. sec.19.2008(b) COMMENT: One comment supported this subsection, but recommended deletion of the word "either" towards the end of the subsection. RESPONSE: The department agrees and the subsection has been revised. sec.19.2008(c). COMMENT: A commenter suggests amending the last sentence to read: "The required information should be supplied by the treating doctor or designated representative, unless the utilization review agent has already been supplied the information by another source." RESPONSE: The department disagrees. A URA needs information from the most direct source, and the treating doctor may not necessarily be the requesting party or the doctor whose treatment is under review. sec.19.2008(c)(1). COMMENT: Numerous commenters expressed concern about the prohibition against URAs requiring codes from providers. It was also asserted that the rules were inconsistent in that URAs are prohibited from requiring codes from providers, but they may ask providers for the codes, and they are required to report the codes to TDI in sec.19.2015. RESPONSE: The department does not believe there is any inconsistency. The rule is not meant to prohibit requesting codes from doctors, but instead prohibits conditioning approval of treatment upon receipt of the codes. A treatment may not be denied simply because the doctor did not provide the code. The department recognizes that cooperation between providers and URAs is desirable. This recognition is evidenced by the second sentence of this provision that allows URAs to request the coding information from the providers. sec.19.2008(d)(1). COMMENT: A commenter suggests adding the introductory phrase "has reviewed the TWCC Advisories and the TWCC Medical Fee Guideline and." RESPONSE: The department disagrees. The requested language is contemplated in the definition of screening criteria, sec.19.2003(29). Additionally, some requested services may not be published in TWCC publications, and the requested language would be limiting. sec.19.2008(d)(2). COMMENT: A commenter suggests adding "or other healthcare provider" to the end of this paragraph. RESPONSE: The department agrees, and the provision has been changed to incorporate the suggested language. sec.19.2008(d)(3). COMMENT: A commenter requests clarification of how many attempts to talk to the health care provider must be made. RESPONSE: The department does not believe that any further clarification is necessary. The rules are meant to be used with flexibility according to the circumstances. A URA should be capable of exercising some judgment, and its behavior determined on a case-by-case basis. sec.19.2008(e). COMMENT: A commenter requests clarification of whether this subsection requires insurance carriers to share pertinent clinical and demographic information on individual injured employees with its URAs. RESPONSE: This subsection does require that insurance carriers share this information with its URAs. sec.19.2008(f). COMMENT: A commenter suggests adding "or other information from the mental health provider to substantiate the need for the treatment in review" to the end of this subsection. RESPONSE: The department disagrees and believes the requested information is already provided in sec.19.2008(c). sec.19.2008(f). COMMENT: One comment strongly supports this subsection, but recommends adding: "Healthcare providers requesting mental health services shall submit initial evaluation reports and interim progress reports as required by the Mental Health Treatment Guidelines." RESPONSE: The department believes that this concern is already addressed by the definition of screening criteria and these rules address the information required in sec.19.2008(c). sec.19.2010. COMMENT: A commenter suggests that subsection (a) is inconsistent with Insurance Code Art. 21.58A, Sec. 5(a), which provides that a URA may notify the patient, patient's representative, or patient's provider, but this section requires notice to all. The commenter recommends that URAs should be required to notify the provider, and the provider should notify the patient. RESPONSE: The department disagrees. Notification requirements are specified in 28 TAC, Chapter 134, Subchapter G (TWCC Rules). The requested revision would put these rules in conflict with the language in the TWCC rules implementing the Texas Labor Code. sec.19.2011. COMMENT: A commenter requests specification of what is considered a reasonable opportunity to discuss an adverse determination before an adverse determination is issued. Another commenter contends the requirement that the requesting healthcare practitioner be able to speak directly to the reviewer prior to an adverse determination is unworkable, especially given TWCC's 3-day turnaround on preauthorization request. As long as the clinical rationale required by sec.19.2010 is provided, the verbal discussion could occur after the determination but prior to appeal. Another commenter suggests adding a provision for a time extension past TWCC's 3-day deadline in the event the treating physician is unavailable to discuss a request with the reviewing physician. RESPONSE: The department disagrees that any further clarification is necessary. The rules are meant to be used with flexibility according to the circumstances. A URA should be capable of exercising some judgment, and its behavior determined on a case-by-case basis. The intent of the rules is to allow a reasonable opportunity to discuss an adverse determination before an adverse determination is issued. The department disagrees with the request for a time extension. A reasonable opportunity is all that is required; no extension of time is necessary. sec.19.2011. COMMENT: A commenter requests clarification that the URA must give the referring health care provider a reasonable opportunity to speak to the reviewing physician, doctor, or dentist. Another commenter suggests adding "or other health care provider" to the list of reviewing providers. RESPONSE: The department agrees and the section has been changed. sec.19.2014(b)(2). COMMENT: A commenter suggests requiring the notarized signature of the individual who is the subject to the personal information. RESPONSE: The department disagrees. Requiring the signature to be notarized could be unduly burdensome on the injured individual and the department does not believe it is necessary to impose such a requirement. sec.19.2014(d)(2). COMMENT: A commenter recommends adding the requirement that an individual be allowed to view personal information in person "at a location in Texas nearest to the individual's home. RESPONSE: The department believes this would be unnecessarily burdensome and costly to URAs. The provision for review by mail addresses this concern and does not impose unnecessary requirements on the URAs. sec.19.2014(f). COMMENT: A commenter suggests adding the requirement that a health care provider give written approval for release of performance tracking data. RESPONSE: The department disagrees, as this would impose an additional restriction to Insurance Code Article 21.58A, Sec. 8(f). sec.19.2014(i). COMMENT: A commenter recommends that "upon request" be inserted after "must" to be consistent with sec.19.2014(j). RESPONSE: The department disagrees. There is no inconsistency between (i) and (j), and the existing language is important to maintain confidentiality. sec.19.2014. COMMENT: A commenter suggests revising this section to not interfere with existing business practices sanctioned by Texas. The commenter contends that requiring a signed release from injured workers before sharing medical information between legitimate business partners could add significant cost and delay UR efforts, and undermine the ability to monitor system performance. RESPONSE: The department disagrees. Prior written consent of the patient is required by Insurance Code Article 21.58A, Sec. 8(b). sec.19.2015. COMMENT: One commenter states that this entire section should be deleted because it is in violation of Art. 21.58A, and specifically the statutory definition of utilization review as "a system of prospective and concurrent review..." The commenter does not believe that the department has the statutory authority to expand or amend the definition to include retrospective review. In the alternative, it says, should the department determine that it has such authority, it should place a time limit on how far back retrospective review could be conducted (i.e., six months, or one year). RESPONSE: The department disagrees. This section parallels language in Art. 21.58A Sec. 11 and in the department's utilization review rules for group health and HMOs. With regard to allegedly expanding statutory definitions, see responses to comments on 19.2003(28) and (33), above. Once again, these rules are not intended to expand the scope of the department's authority over that provided for in Art. 21.58A, but of necessity must reference the workers' compensation statutes and rules which are specifically preserved by Art. 21.58A. As to time limits on retrospective review, TWCC Rule 133.305 provides that a request for review of medical services and dispute resolution must be submitted to TWCC no later than one calendar year after the date(s) of service in dispute. sec.19.2016(b)(2). COMMENT: A commenter suggests adding language regarding reporting of adverse determinations "as determined by the TWCC's list of preauthorized health care treatments and services adopted under TWCC Rule 134.600(h)(1-16)." RESPONSE: The department disagrees. The information included in the suggested language is already required by these rules under sec.sec.19.2010(b) and 19.2012, both referencing the Texas Labor Code, Chapter 134, Subchapter G. sec.19.2016(b). COMMENT: A commenter requests verification that URAs will not have to report codes if not provided by the health care provider. A commenter questions why the burden for supplying correct codes has shifted from the provider to the URA. RESPONSE: The department cannot verify the comment because URAs will have to provide codes even if providers do not provide them. The department does not believe that the burden has been shifted. It is the URA's responsibility to provide codes in required reports. COMMENT: Numerous comments indicated confusion about what specific reports had to be made, and whether separate complaint and adverse determination reports were required. RESPONSE: The department has revised subsection (b) to clarify the reports to be made and whether separate complaint and adverse determination reports are required. sec.19.2019. COMMENT: A commenter questions how insurers who are exempted from certain application requirements for URAs should comply with the URA requirements to which they are subject. RESPONSE: Insurers performing their own UR are exempted not only from fees, per sec.19.2004(j), but from the requirements as designated in sec.19.2004(a), (b), (c)(11-12), (e), (f), (g), (h) and (i) as well. Said insurers must still comply with other URA requirements. For, with changes: Texas Osteopathic Medical Association, Texas Workers' Compensation Insurance Fund, Liberty Mutual, Texas Chiropractic Association, Kyle Babick, Ph.D. & Assoc., P.C., First Health, Hammerman & Gainer Inc., American Insurance Association, American Accreditation Healthcare Commission/URAC. Against: PRNA Services, Forte Managed Care. This subchapter is adopted under Insurance Code Articles 21.58A, sec.14(c) and 1.03A. The Insurance Code Article 21.58A, sec.14(c) provides that the department may promulgate standards and rules for the certification and operation of utilization review agents to review health care services provided to persons eligible for workers' compensation medical benefits under Title 5, Labor Code. The Insurance Code Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. sec.19.2003. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings unless the context clearly indicates otherwise. (1) Act--Insurance Code Article 21.58A, entitled "Health Care Utilization Review Agents." (2) Active practice--A minimum of 20 hours per week in the examination, diagnosis and/or treatment of patients. (3) Administrative Procedure Act--Government Code Chapter 2001. (4) Adverse determination--A determination by a utilization review agent that the health care furnished or proposed to be furnished to an injured employee is not reasonable and necessary. (5) Appeal process--The processes outlined in the Texas Workers' Compensation Act, including but not limited to Texas Labor Code sec.413.031 and Chapter 134, Subchapter G of this title (relating to Treatments and Services Requiring Preauthorization), Chapter 133, Subchapter D of this title, (relating to Dispute and Audit of Bills by Insurance Carriers). (6) Certificate--A certificate of registration granted by the commissioner to a utilization review agent. (7) Commissioner--The Commissioner of Insurance. (8) Compensable injury--An injury that arises out of and in the course and scope of employment for which compensation is payable under the Texas Workers' Compensation Act. (9) Complaint--An oral or written expression of dissatisfaction with a utilization review agent concerning the utilization review agent's process. A complaint is not an expression of dissatisfaction with a specific adverse determination, a misunderstanding or misinformation that is resolved promptly by supplying the appropriate information or clearing up the misunderstanding to the satisfaction of the complaining party. (10) Department--Texas Department of Insurance. (11) Dentist--A licensed doctor of dentistry, holding either a D.D.S. or a D.M.D. degree. (12) Doctor--A doctor of medicine, osteopathic medicine, optometry, dentistry, podiatry, or chiropractic who is licensed and authorized to practice. (13) Health care--Includes all reasonable and necessary medical aid, medical examinations, medical treatments, medical diagnoses, medical evaluations, and medical services. The term does not include vocational rehabilitation. The term includes: (A) medical, surgical, chiropractic, podiatric, optometric, dental, nursing, and physical therapy services provided by or at the direction of a doctor; (B) physical rehabilitation services performed by a licensed occupational therapist provided by or at the direction of a doctor; (C) psychological services prescribed by a doctor; (D) the services of a hospital or other health care facility; (E) a prescription drug, medicine, or other remedy; and (F) a medical or surgical supply, appliance, brace, artificial member, or prosthesis, including training in the use of the appliance, brace, member, or prosthesis. (14) Health care facility--A hospital, emergency clinic, outpatient clinic, or other facility providing health care. (15) Health care provider--Any person, corporation, facility, or institution licensed by a state to provide or otherwise lawfully providing health care that is eligible for independent reimbursement for those services. (16) Injured employee--An employee with a compensable injury under the Texas Workers' Compensation Act. (17) Inquiry--A request for information or assistance from a utilization review agent. (18) Insurance carrier-- (A) an insurance company; (B) a certified self-insurer for workers' compensation insurance; or (C) a governmental entity that self-insures, either individually or collectively. (19) Insurance company--A person authorized and admitted by the Texas Department of Insurance to do insurance business in this state under a certificate of authority that includes authorization to write workers' compensation insurance. (20) Life-threatening--A disease or condition resulting from a compensable injury, for which the likelihood of death is probable unless the course of the disease or condition is interrupted. (21) Medical benefit--Payment for health care reasonably required by the nature of a compensable injury and intended to: (A) cure or relieve the effects naturally resulting from the compensable injury, including reasonable expenses incurred by the injured employee for necessary treatment to cure and relieve the injured employee from the effects of an occupational disease before and after the injured employee knew or should have known the nature of the disability and its relationship to the employment; (B) promote recovery; or (C) enhance the ability of the injured employee to return to or retain employment. (22) Medical records--The entire history of diagnosis and treatment for a compensable injury, including but not limited to medical, dental, and other health care records from all disciplines rendering care to an injured employee. (23) Nurse--A professional or registered nurse, a licensed vocational nurse, or a licensed practical nurse. (24) Open records law--Government Code, Chapter 552. (25) Person--An individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert. (26) Physician--A licensed doctor of medicine or a doctor of osteopathy. (27) Preauthorization--The process of a doctor, other health care provider or health care facility requesting approval to provide a specific treatment or service prior to rendering the treatment or service as delineated in Chapter 134, subchapter G of this title (relating to Treatments and Services Requiring Preauthorization.) (28) Retrospective review--The process of reviewing health care which has been provided to injured employees under the Texas Workers' Compensation Act to determine if the health care was medically reasonable and necessary. (29) Screening criteria--The written policies, decision rules, medical protocols, TWCC fee and treatment guidelines, and TWCC rules and advisories used by the utilization review agent as part of the utilization review process (e.g., appropriateness evaluation protocol (AEP), and intensity of service, severity of illness, discharge, and appropriateness screens (ISD-A)). The TWCC Treatment Guidelines are tools that identify recommended treatment parameters and typical courses of intervention, whose purpose is to clarify those services that are reasonable and medically necessary. The guidelines are not to be used as fixed treatment protocols by either the health care provider or insurance carrier and shall not be viewed as prescriptive or the sole basis for approval or denial of proposed services. There may be injured employees who will require more or less treatment than is recommended in the guidelines. Treatment falling outside the parameters of the guidelines will be subject to more careful scrutiny and may require additional documentation of special circumstances to justify the need for treatment. Each guideline includes specific ground rules which establish the use of the guideline. (30) Texas Workers' Compensation Act--Texas Labor Code, Title 5. (31) Treating doctor--The doctor primarily responsible for treating the injured employee's compensable injury as defined in the Texas Labor Code sec.401.011(42). (32) TWCC--Texas Workers' Compensation Commission. (33) Utilization review--A system for preauthorization alone, or both preauthorization and retrospective review, to determine if health care proposed to be provided, being provided, or which has been provided to an injured employee is medically reasonable and necessary. Utilization review shall not include the spinal surgery second opinion process as delineated in Chapter 133, subchapter C of this title (relating to Second Opinions for Spinal Surgery), or elective requests for clarification of coverage or prepayment guarantee. (34) Utilization review agent--An insurance carrier, the carriers' agent(s), and/or any entity contracted or subcontracted to provide utilization review. (35) Utilization review plan--The screening criteria and utilization review procedures of a utilization review agent. (36) Working day--A weekday, excluding a legal holiday. (37) Workers' compensation insurance coverage: (A) an approved insurance policy, pursuant to Article 5.56 of the Insurance Code, to secure the payment of compensation under the Texas Workers' Compensation Act; (B) coverage to secure the payment of compensation through self-insurance as provided by the Texas Workers' Compensation Act; or (C) coverage provided by a governmental entity to secure the payment of compensation under the Texas Workers' Compensation Act. sec.19.2006. Personnel. (a) Personnel employed by or under contract with the utilization review agent to perform utilization review shall be appropriately trained and qualified and, if applicable, currently licensed. Personnel who obtain information regarding an injured employee's specific medical condition, diagnosis and treatment options or protocols directly from the doctor or other health care provider, either orally or in writing, and who are not doctors shall be nurses, physicians assistants, or health care providers qualified to provide the service requested by the provider. This provision shall not be interpreted to require such qualifications for personnel who perform clerical or administrative tasks. (b) A utilization review agent may not permit or provide compensation or any thing of value to its employees or agents, condition employment or its employee or agent evaluations, or set its employee or agent performance standards, based on: the amount or volume of adverse determinations; reductions or limitations on lengths of stay, duration of treatment, medical benefits, services, or charges; or the number or frequency of telephone calls or other contacts with health care providers or injured employees, which are inconsistent with the provisions of this subchapter. (c) The utilization review agent is required to provide the name, number, type, and minimum qualification or qualifications of the personnel either employed or under contract to perform the utilization review to the commissioner. Utilization review agents shall be required to adopt written procedures used to determine if doctors or other health care providers utilized by the utilization review agent are licensed, qualified, and appropriately trained, and must maintain records on such. (d) Utilization review conducted by a utilization review agent shall be under the direction of a physician currently licensed to practice medicine by a state licensing agency in the United States. Such physician may be employed by or under contract to the utilization review agent. (e) Utilization review of dental health care shall be reviewed by a dentist currently licensed by a state licensing agency in the United States prior to issuance of an adverse determination. sec.19.2008. Utilization Review Agent Contact with and Receipt of Information from Health Care Providers. (a) A health care provider may designate one or more individuals as the initial contact or contacts for utilization review agents seeking routine information or data. In no event shall the designation of such an individual or individuals preclude a utilization review agent or medical advisor from contacting a health care provider or others in his or her employ where a review might otherwise be unreasonably delayed or where the designated individual is unable to provide the necessary information or data requested by the utilization review agent. (b) Unless precluded or modified by contract, the workers' compensation insurance carrier shall reimburse health care providers for the reasonable costs of providing written medical information, including copying and transmitting any requested injured employee records or other documents pursuant to Chapter 133, Subchapter B of this title, (relating to Required Reports). A health care provider's charge for providing medical information to a utilization review agent shall not exceed the cost of copying records set by rules of the Texas Workers' Compensation Commission and may not include any costs that are otherwise specified in TWCC rules and/or guidelines as not reimbursed separately or are recouped as a part of the charge for health care. (c) When conducting utilization review the utilization review agent shall require only the information necessary to complete the review. This information may include identifying information about the injured employee, the treating health care provider, and facilities rendering care. It may also include clinical information regarding the diagnoses of the injured employee and the medical history of the injured employee relevant to the diagnoses and the compensable injury, the injured employee's prognosis, and the treatment plan prescribed by the treating health care provider along with the provider's justification for the treatment plan. It must include the medical information to substantiate the medical necessity for the specific treatment in review. These items shall only be requested when relevant to the utilization review in question, and be requested as appropriate from the health care provider or health care facility. The required information should be obtained from the appropriate source since no one source will have all of this information. (1) Utilization review agents shall not routinely require hospitals and doctors to supply numerically codified diagnoses or procedures. Utilization review agents may ask for such coding, since if it is known, its inclusion in the data collected increases the effectiveness of the communication. (2) Utilization review agents shall not routinely request copies of medical records on all injured employees reviewed. During utilization review, copies of medical records should only be required when a difficulty develops in determining whether the health care is medically reasonable and necessary. In those cases, only the necessary or pertinent sections of the record should be required. (d) Information in addition to that described in this section may be requested by the utilization review agent or voluntarily submitted by the health care provider when there is significant lack of agreement between the utilization review agent and health care provider regarding the appropriateness of health care during the review process. "Significant lack of agreement" means that the utilization review agent: (1) has tentatively determined, through its professional staff, that a service cannot be authorized to be provided or reimbursed; (2) has referred the case to an appropriate doctor or other health care provider for review; and (3) has talked to or attempted to talk to the health care provider for further information. (e) The utilization review agent shall share all pertinent clinical and demographic information on individual injured employees among its various divisions (e.g., preauthorization, return to work planning, case management) to avoid duplicate requests for information from injured employees or health care providers. (f) Notwithstanding any other provision of this subchapter, a utilization review agent may not require as a condition of treatment approval, or for any other reason, the observation of a psychotherapy session or the submission or review of a mental health therapist's process or progress notes. This does not preclude the utilization review agent from requiring submission of an injured employee's medical record. sec.19.2011. Requirements Prior to Adverse Determination. Subject to the notice requirements of sec.19.2010 of this title (relating to Notice of Determinations Made By Utilization Review Agents, Excluding Retrospective Review), in any instance where the utilization review agent is questioning whether the health care is medically reasonable and necessary, the health care provider who ordered the services shall be afforded a reasonable opportunity to discuss the plan of treatment for the injured employee and the clinical basis for the utilization review agent's decision with the appropriate doctor or health care provider performing the review, prior to issuance of an adverse determination. The utilization review agent shall have written procedures describing how the opportunity is afforded. sec.19.2016. Complaints and Reporting Requirements. (a) Utilization review agent's complaint system. A utilization review agent shall establish and maintain a complaint system that provides reasonable procedures for the resolution of oral or written complaints initiated by injured employees, their representatives, or health care providers, concerning the utilization review process, and shall maintain records of such complaints for three years from the time the complaints are filed. The complaint procedure shall include a written response to the complainant by the agent within 30 days of the agent's receipt of the complaint. (b) Utilization review agent's complaint reporting requirements to the department. By March 1, of each year, the utilization review agent shall submit to the commissioner or his or her delegated representative a summary report of all complaints involving workers' compensation at such times and in such form as the commissioner may require, and shall permit the commissioner to examine the complaints and all relevant documents at any time. To be disclosed in the report is the subject matter of the complaint categorized as follows: (1) administration (e.g., copies of medical records not paid for, too many calls or written requests for information from provider, too much information requested from provider); (2) qualifications of utilization review agent's personnel; (3) complaint process (e.g., treating doctor has not been afforded the opportunity to discuss plan of treatment with utilization review physician, no notice of adverse determination, no notice of clinical basis for adverse determination, written procedures for appeal to TWCC not provided). (c) Utilization review agent's adverse determination reporting requirements to the department. The summary report also covers reviews performed by the utilization review agent during the preceding calendar year and includes: (1) the total number of written notices of adverse determinations; (2) a listing of adverse determinations for preauthorization, by the medical condition and treatment using primary ICD-9 (physical diagnosis) or DSM-IV (mental health diagnosis) code, and CPT (procedure) code or other relevant procedure code if a CPT designation is not available, or any other nationally recognized numerically codified diagnosis or procedure; and (3) the classification of party requesting review (i.e., health care provider, injured employee, their representative, etc.); (d) Complaints to the department. Within a reasonable time period, upon receipt of a written complaint alleging a violation of this subchapter or the Act, by a utilization review agent, from an injured employee, their representative or health care provider, the commissioner or his or her delegated representative shall investigate the complaint, notify the utilization review agent of the complaint, require response by the utilization review agent addressing the complaint within 10 days of receipt of the complaint, and furnish a written response to the complainant and the utilization review agent named. This response must include the following: (1) a statement of the original complaint; (2) a statement of the findings of the commissioner or his or her delegated representative and an explanation of the basis of such findings; (3) corrective actions, if any, on the part of the utilization review agent which the commissioner or his or her designated representative finds appropriate and whether the utilization review agent has voluntarily agreed to take such action; and (4) a time frame in which any corrective actions should be completed. (e) Evidence of corrective action. The utilization review agent will provide evidence of corrective action within the specified time frame to the commissioner or his or her representative. (f) Authority of the department to make inquiries. In addition to the authority of the commissioner to respond to complaints described in subsection (b) of this section, the department is authorized to address inquiries to any utilization review agent in relation to the agents' business condition or any matter connected with its transactions which the department may deem necessary for the public good or for a proper discharge of its duties. It shall be the duty of the agent to promptly answer such inquiries in writing. (g) Lists of utilization review agents. The commissioner shall maintain and update monthly a list of utilization review agents issued certificates and the renewal date for those certificates. The commissioner shall provide the list at cost to all individuals or organizations requesting the list. (h) On-site review by the Texas Department of Insurance. (1) The commissioner or the commissioner's designated representative is authorized to make a complete on-site review of the operations of each utilization review agent at the principal place of business for such agent, as often as is deemed necessary. (2) Utilization review agents will be notified of the scheduled on-site visit by letter, which will specify, at a minimum, the identity of the commissioner's designated representative and the expected arrival date and time. (3) The utilization review agent must make available during such on-site visits all records relating to its operation. (4) The commissioner or the designated representative may perform periodic telephone audits of utilization review agents authorized to conduct business in this state to determine if the agents are reasonably accessible. 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 31, 1998. TRD-9813828 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Effective date: September 20, 1998 Proposal publication date: May 22, 1998 For further information, please call: (512) 463-6327 CHAPTER 34.State Fire Marshall SUBCHAPTER H.Storage and Sale of Fireworks 28 TAC sec.sec.34.801, 34.807-34.809, 34.811-34.815, 34.817-34.818, 34.822- 34.826, 34.830 The Commissioner of Insurance adopts amendments to Subchapter H, Storage and Sale of Fireworks, sec.sec.34.801, 34.807-34.809, 34.811-34.815, 34.817-34.818, 34.822-34.826, and 34.830. Section 34.826 is adopted with changes to the proposed text as published in the July 24, 1998, issue of the Texas Register (23 TexReg 7514). Amendments to sec.34.828 as published are not adopted. Therefore, sec.34.828 will continue to include the same provisions. Sections 34.801, 34.807-34.809, 34.811-34.815, 34.817-34.818, 34.822-34.825, and 34.830 are adopted without changes to the proposed text as published and will not be republished. These amendments are necessary in part to implement legislation enacted by the 75th Legislature in SB 371. SB 371, in part, transferred the operations of the state fire marshal and all of the powers, duties, rights, obligations, contracts, records, personnel, property, funds, and unspent appropriations of the Texas Commission on Fire Protection with respect to the administration of Article 5.43-4 of the Insurance Code from the Texas Commission on Fire Protection to the Texas Department of Insurance, effective September 1, 1997. Consequently, the Texas Department of Insurance now regulates fireworks. Therefore, provisions in the fireworks rules referring to the Texas Commission on Fire Protection are amended to reflect the transfer of authority from that commission to the Commissioner of Insurance. SB 371 also eliminated the fireworks importer license, added a pyrotechnic special effects license, and created two separate public display permits-single and multiple. The importer license was removed by statute, and is also removed by these amendments, because the function performed by the importer-importing of fireworks from other states to Texas-will now be performed by the licensed fireworks distributor. The multiple display permit replaces the public display license, which was also removed by SB 371, and is also removed by these amendments. Public display licensees, who formerly have been required by statute to pay late fees for late renewals, will no longer be required to pay the statutory late fees required of all fireworks licensees, but will be required to apply annually for multiple public display permits. Dividing public display permits into two categories of permits-single and multiple-is more appropriate than a single public display permit because while many public fireworks displays are performed at certain locations only once or twice per year, some businesses provide fireworks displays on many occasions throughout each year. The addition of the new license for a pyrotechnic special effects operator is appropriate because local governments sometimes require that a public fireworks display using Fireworks 1.4G be supervised by a licensed pyrotechnic technician. In these instances, a license requiring expertise in the use of Fireworks 1.4G should be issued. These amendments establish application fees for the new license and permits and also establish renewal fees for the new license. SB 371 also stated that the commissioner shall adopt by reference two NFPA standards-NFPA 1123, applicable to public fireworks displays, and NFPA 1126, applicable to pyrotechnic displays before proximate audiences. The amendments to sec.34.826 include NFPA 1126 in new subsection (k), but do not include NFPA 1123. NFPA 1123 will be considered by the commissioner separately in an upcoming rulemaking procedure. Additionally, SB 371 deleted references to class B and class C fireworks, and substituted for those classes the newer classifications, Fireworks 1.3G and Fireworks 1.4G, which are used in federal law, as well as in other jurisdictions. Although some of the rules in this subchapter previously have been amended using the newer classification system, the adopted amendments now use the newer classifications, resulting in uniform use of the newer classifications throughout the fireworks rules. Additional language has been added to subsection (k) of sec.34.826, Testing, as proposed, to provide that testing shall be permitted by a licensed manufacturer or distributor, and that such testing must be conducted under the direct, on- site supervision of a licensed pyrotechnic operator. In addition, the proposed amendments to sec.34.828 have been deleted. The proposed new language of sec.34.828 had been meant to apply to certain rule amendments that were not in fact proposed in this rulemaking. Therefore, sec.34.828 remains unchanged. Section 34.801 is amended by the addition of a provision stating that the rules should be read in conjunction with Article 5.43-4 of the Insurance Code for a complete understanding of the regulation of the fireworks industry. Section 34.807 is amended by the removal of an unnecessary provision providing for administrative actions against license and permit holders in accordance with the Administrative Procedure Act. The removal of this provision does not reflect a policy not to enforce the statute and regulations affecting the fireworks industry. Additionally, sec.34.808 is amended by deleting definitions of the terms that are already defined in Article 5.43-4 of the Texas Insurance Code, as well as terms that have been removed by SB 371. Additionally, sec.34.809(c) is amended by the addition of a sentence requiring that the original permit be posted at all retail locations for which the permit was issued. Subsection (h) of sec.34.809 is amended to require that persons engaging in the business of using or storing Fireworks 1.3G must obtain a federal license or permit if required by federal law, making it clear that the insurance department will enforce this provision. Additionally, sec.34.811(e) will increase from three to five the number of public displays in which a pyrotechnic operator license applicant must have assisted before being licensed. The amendment also will require a written verification of this experience by another licensed pyrotechnic operator. This requirement is intended to ensure that such operators have adequate experience before becoming licensed to conduct public displays. Section 34.812(b) is amended by clarifying the time at which public display permits expire, which will be midnight on the date on the permit. Additionally, sec.34.813(c) is amended to require that the name, address and telephone number of the applicant be stated on the public display permit, rather than the sponsoring organization or person. This will enable the public and any regulatory authority to determine the identity of the person or business responsible for the conduct of the display. An additional amendment to sec.34.813(c) allows the number of fireworks to be discharged at a public display to be estimated in the application and on the permit, because the exact number that will be discharged often cannot be precisely determined when the permit is issued. Additionally, subsection (e) is amended by the addition of a requirement that a separate permit is required for each site separated by over 1,000 feet from another permitted site. This requirement also enables both the public and any regulatory authority to identify the person or businesses responsible for all public displays. This will allow each site to be separately evaluated for safety requirements. Additionally, sec.34.815(b) is amended to allow a limited version of the fireworks rules to be provided to a purchaser of a retail fireworks permit. This will allow the fireworks licensee to furnish only those rules applicable to retail permit holders, rather than the entire set of fireworks rules. This should reduce confusion about which provisions in the rules are of concern to these permit holders. Additionally, sec.34.815(c) is amended to require that both used and unused permits be returned no later than March 1 of each year. Additionally, sec.34.817(f) is amended by removing the prohibition against displays from air supported structures, because the meaning of this prohibition is unclear to both regulatory authorities and to the industry, and public safety is not jeopardized by the removal of this unclear provision. Subsection (f) is also amended to prohibit retail fireworks stand operators and assistants from operating a fireworks stand while under the influence of alcoholic beverages or from consuming alcohol while operating the stand. Additionally, sec.34.818(b) is amended to allow a power interruption in the form of one or more switches near exit doors of retail fireworks stands at a single location. This change provides greater flexibility and less expense than the current requirement of a master switch, but does not sacrifice safety. Additionally, sec.34.824 is amended to clarify that the tables specifying that the separation between fireworks processing and storage buildings and other structures are applicable except to the extent that federal law may be less restrictive. Additionally, sec.34.825(a)(3) is deleted because it is an unnecessary and potentially unclear provision stating that reporting of hazardous material incidents as required by federal regulations is not required by these rules. The removal of the provision does not reflect any department of insurance position relating to the reporting of such incidents under federal law. Additionally, sec.34.826 is amended by the addition of a new subsection (k) providing that the testing of fireworks is not considered a public display, and clarifying that no additional license or permit is required for this activity. However, such testing is to be performed in separately designated safe areas, is permitted only by licensed manufacturers or distributors, and will be required to be conducted under the direct on-site supervision of a licensed pyrotechnic operator. This amendment permits the testing of fireworks products like those used in public displays to minimize the risk of harm to the public. Section 34.830 is rewritten for the purpose of clarification. It provides that disciplinary actions against licensees and permitees will be based on law in effect at the time of the alleged violations. No comments were received regarding adoption of the amendments. The amendments are adopted pursuant to the Insurance Code, Articles 5.43-4 and 1.03A. The Insurance Code, Article 5.43-4, section 16(a), directs the commissioner to adopt rules the commissioner considers necessary for the protection, safety, and preservation of life and property, including rules regulating: (1) the issuance of licenses and permits to persons engaged in manufacturing, selling, storing, possessing, or transporting fireworks in this state; (2) the conduct of public fireworks displays; and (3) the safe storage of Fireworks 1.4G and Fireworks 1.3G. Section 16(b) further directs the commissioner to: (1) determine reasonable criteria and qualifications for licenses and permits; (2) set license and permit fees within the limits provided by Article 5.43-4; (3) determine the qualifications and examination requirements for pyrotechnic operators; and (4) establish a procedure for reporting and processing complaints. Section 5 of Article 5.43-4 also provides that the commissioner, in promulgating rules, may use standards recognized by federal law or regulation, and those published by a nationally recognized standards-making organization. Article 1.03A provides that the commissioner may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance only as authorized by a statute. sec. 34.826. Preparing and Conducting Public Displays. (a) Storage. Public display fireworks may be stored temporarily for a period not to exceed 30 days prior to display date in a locked area, in regular 1.3G shipping cartons, not accessible by the general public, and in a location approved by the local fire prevention officer. (b) (No change.) (c) Public display criteria. (1) The area selected for the discharge of aerial shells shall be located so that the trajectory of the shells will not come within 25 feet of any overhead object. (2) Mortars shall be separated from spectator viewing and parking areas; from health care, church, asylum, school, and penal facilities; from storage of hazardous materials; and from residential occupancies by the minimum distances specified in the following table: Figure: 34 TAC sec.34.826(c)(2) (3) Fireworks shall not be discharged within 100 feet of any tent or canvas shelter. (4) The potential landing area shall be a large, clear, open area acceptable to the authority having jurisdiction. (5) Spectators, vehicles, or any readily combustible materials shall not be located within the potential landing area during the display. (6) If, at any time, steady winds of 25 mph or other conditions prevail which in the opinion of either the authority having jurisdiction or the licensed pyrotechnic operator, pose a danger, the public display shall be postponed until conditions improve to an acceptable level. (7) Any fireworks that remain unfired after the display is concluded shall be immediately disposed of or removed in a manner safe for the particular type of fireworks. (d) Pyrotechnic equipment and installation. Reusable mortars shall be made of steel tubing or equivalent (cast iron and other fragmenting types of metal are prohibited) having a smooth bore and a steel bottom plate equal in thickness to the tube welded continuously around its perimeter except as follows: (1) Wooden base plugs in good condition may be substituted for welded steel bottom plates where such plugs have a minimum thickness of l/2 inch per inch of bore diameter. Plugs shall be securely fastened. Wooden base plugs shall be discarded and replaced when split, shrunken, charred to less than minimum required thickness, or otherwise damaged. Screw type caps for plugs are prohibited. (2) Mortars limited solely for the firing of single break shells and finale batteries may be made of spiral or convolute wound chipboard or kraft paper tubes. Tubes for two-inch shells shall have a wall thickness of not less than l/4 inch. Tubes for three-inch shells shall have a wall thickness of not less than 3/8 inch. Tubes for four-, five-, and six-inch shells shall have a wall thickness of not less than l/2 inch. All tubes shall have a base plug in good condition, the thickness of which shall be not less than half the inside diameter of the tube. The base plug shall be securely fastened to the tube. (3) For single break shells, three-inch and four-inch mortar tubes may be made of 26 gauge or heavier galvanized iron riveted along their seams, beginning at a point within one inch of each end and spaced not more than three inches between rivets and having a two-inch wooden base plug. (4) The minimum inside length of reusable mortars shall be not less than five times their inside diameter for mortars up to seven inches inside diameter and not less than four times their inside diameter for mortars having an inside diameter greater than seven inches. (5) Any damaged mortars (split or bulged tube, base, seam, or with loose rivets, bolts, or wooden base plug) shall not be used for firing. (6) Not less than 50% of the mortar tube length shall be below the normal surface of the ground. Sand or earth filled bags shall not be required unless the tubes do not conform to construction provisions of this subsection. When required, such bags shall be laid against the firing side of the mortars. The upper surface of the bags shall be level with the mortar tube muzzles. Such bags shall also be placed similarly at both ends of each line of mortars. (e) Special setting of mortars. On locations where it is impossible to bury mortars in suitable clean earth or where the authority having jurisdiction and the licensed pyrotechnic operator in charge agree that public safety will be increased, mortars may be set for firing in approved sand or dirt filled steel drums or troughs and shall comply with the following. (1) The depth of the drum or trough shall permit burial in sand of each mortar to within 50% of the length of the mortar. (2) The containers shall be set and the mortars secured at the angle determined as safe for firing. Batteries may consist of as many approved units as required for the display, but each unit shall be set, braced, and secured, as determined by the wind direction and velocity predicted for the firing time. (3) Finale batteries shall be set, braced, and secured as determined by the wind direction and velocity predicted for the firing time. (f) Ready boxes. (1) Before any firing begins, the entire complement of shells for any licensed or permitted public display shall be brought to the firing site and stored in ready boxes at a point not less than 25 feet distant upwind (with relation to the firing time) from the nearest mortar. These ready boxes shall be constructed and may be of wood, rubber, steel, or fiberboard cartons. (2) A flame retardant tarp or a wood, rubber, or steel cover shall protect all ready boxes from the time they are placed in position until they are emptied, except that the cover may be lifted when shells are taken from or returned to the boxes. (3) The use of compartmentation to avoid the mixing of shell sizes is recommended in large displays. Individual boxes should be used for each different shell size. (g) Loading mortars. (1) Mortars shall be cleared of paper or other burning material after being fired, if necessary. No shell hang firing shall be cleared from mortars for at least 30 minutes after being lighted. (2) Finale batteries shall not be reloaded with finale chains, but may be reloaded with individual shells. (h) Firing mortars. (1) All firing shall be done upon order or signal of the licensed pyrotechnic operator directing the public display. No safety cap shall be removed from any shell match until immediately before the mortar is fired. Used igniters shall not be discarded in the area between the mortars and the ready boxes. (2) Electric firing, if utilized, shall comply with the following requirements. (A) Connecting any electric firing circuit to any power supply, whether battery or other, is prohibited until all special effects fireworks, pyrotechnics, and explosives in the sequence are connected to firing leads and are cleared for actual firing. Circuitry may be tested with a galvanometer equipped with a silver chloride battery. (B) Power sources for firing fireworks and pyrotechnics shall be restricted to batteries or individually isolated, ungrounded generators used for firing purposes only. Commercial or house power circuits may be used for this purpose in conjunction with an appropriate transformer. (C) Short circuiting shunts shall be maintained on all electrically fired pyrotechnic items during preparatory operations including loading, setting, and adjustment. (D) Firing boxes shall be designed to prevent firing unless the switch is manually operated. (E) Each explosive charge set in or on water, either salt or fresh, shall be fired by an individual two wire circuit. (i) Public display safety precautions. (1) A display must be conducted in accordance with all local regulations and conditions prescribed by the fire prevention officer at the time of the site inspection. (2) During the display, at least one approved Class A type 2 1/2 gallon fire extinguisher or charged garden hose connected to a water line or equivalent means of fire protection shall be provided. (3) Fireworks articles or items shall not be permitted to cross over or burst directly above the spectator area during such display and it shall be in full view of the pyrotechnic operator at the time of the burst. (4) Vehicular traffic control shall be provided in all cases where the authority having jurisdiction determines that there is a potential hazard to motor vehicles and people traveling on public highways or roadways. (j) Proximate audience display criteria. Public displays before a proximate audience shall be conducted in accordance with the provisions of the National Fire Protection Association (NFPA) 1126, Standards for the Use of Pyrotechnics Before a Proximate Audience, 1996 Edition. Public displays conducted in accordance with this section shall include pyrotechnic devices, including 1.3G, 1.4G, and 1.4S, as defined in NFPA 1126, and individuals conducting such displays shall be regulated by the provisions of this subchapter as pyrotechnic operators. (k) Testing. Testing of fireworks and components of fireworks intended for public displays shall be performed in an area set aside for that purpose and located a safe distance from any plant building or other structure. Such testing shall be permitted by a licensed manufacturer, or licensed distributor, conducted under the direct on-site supervision of a licensed pyrotechnic operator, and no public display permit is required. 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 25, 1998. TRD-9813537 Lynda H. Nesenholtz General Counsel and Chief Clerk Texas Department of Insurance Effective date: September 14, 1998 Proposal publication date: July 24, 1998 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY PART 1. Texas Natural Resource Conservation Commission CHAPTER 115.Control of Air Pollution From Volatile Organic Compounds SUBCHAPTER G.Consumer Related Sources 1. Consumer Products 30 TAC sec.115.600 The Texas Natural Resource Conservation Commission (commission) adopts amendments to sec.115.600, concerning Definitions without changes to the proposed text as published in the June 5, 1998 issue of the Texas Register (23 TexReg 5939). EXPLANATION OF ADOPTED RULE. This adoption amends the commission's consumer products rule to exclude a new type of insecticide designed to kill house dust mites from the volatile organic compound (VOC) limitation applicable to other crawling bug insecticides. The insecticide formulation necessary to kill house dust mites requires that the VOC content exceed the limitation contained in sec.115.612(a). The amendment adds language to the sec.115.600 definition of "crawling bug insecticide" to differentiate a "house dust mite" from other crawling bugs and a "house dust mite product" from crawling bug insecticides. This rule amendment permits the sale of such products in Texas. The amendment also numbers the individual definitions in the section to conform to new Texas Register standards. FINAL REGULATORY IMPACT ANALYSIS. The commission has reviewed the 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 has prepared a Takings Impact Assessment for this rule under Texas Government Code, sec.2007.043. The following is a summary of that assessment. The specific purpose of this rulemaking is to amend definitions contained in the commission's consumer products rule to differentiate a "house dust mite" from other crawling bugs and a "house dust mite product" from crawling bug insecticides. This action will exclude house dust mite insecticides from the VOC limitation contained in the rule. This rulemaking does not constitute a taking of private, real property. COASTAL MANAGEMENT PLAN. The commission has determined that this rulemaking action is subject to the Texas Coastal Management Program (CMP) in accordance with the Coastal Coordination Act of 1991, as amended (Tex. Nat. Res. Code Ann. sec.33.201 et. seq.), the rules of the Coastal Coordination Council (31 TAC Chapters 501-506), and the TNRCC's rules in 30 TAC Chapter 281, Subchapter B, Consistency with the Texas Coastal Management Program. As required by 31 TAC sec.sec.505.11(b)(2) and 505.22(a), and 30 TAC sec.281.45(a)(3) relating to actions and rules subject to the CMP, agency rules governing air pollutant emissions must be consistent with applicable CMP goals and policies. The commission has reviewed this rulemaking action for consistency, and has determined that this proposed rulemaking action is consistent with the applicable CMP goals and policies. The CMP policy applicable to this rulemaking action is the policy that commission rules comply with regulations at Title 40, Code of Federal Regulations (40 CFR), to protect and enhance air quality in the coastal area (31 TAC sec.501.14(q)). Because this rulemaking only clarifies a definition, it does not change existing emission requirements. Current emission requirements are in compliance with 40 CFR Part 51. Therefore, this action is consistent with the CMP policy that agency regulations comply with 40 CFR. HEARING AND COMMENTERS. The commission conducted a public hearing on June 29, 1998, in Austin, and did not receive any oral testimony. The commission received written comments from the Chemical Specialties Manufacturers Association (CSMA); International Sanitary Supply Association (ISSA); S.C. Johnson Wax; Theochem Laboratories; and the United States Environmental Protection Agency (EPA) during the comment period which closed on July 6, 1998. All of the commenters expressed support for the rule amendment as proposed and urged its adoption. The EPA also agreed with the commission that the change will have little impact on the effectiveness of the consumer products rule and Texas' 15% State Implementation Plan objectives. There were no specific comments directed towards the proposed rule language. The commission appreciates the support expressed by all of the commenters. There were no changes to the proposed rule language in response to comments. STATUTORY AUTHORITY. The amendment is adopted under the Texas Health and Safety Code, the Texas Clean Air Act (TCAA), sec.382.012 and sec.382.017. 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. 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 31, 1998. TRD-9813813 Margaret Hoffman Director, Environmental Law Division Texas Natural Resource Conservation Commission Effective date: September 20, 1998 Proposal publication date: June 5, 1998 For further information, please call: (512) 239-1970 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART IX. Texas Department on Aging CHAPTER 260.Area Agency on Aging Administrative Requirements 40 TAC sec.260.1 The Texas Department on Aging adopts sec.260.1 relating to the Area Agency on Aging Administrative Requirements without changes to the proposed text as published in the June 19, 1998, issue of the Texas Register (23 TexReg 6431). The text of the rule will not be republished. The rule has been amended in order to establish the use of standardized forms which will improve the collection and accuracy of the required programmatic and financial performance targets (units, persons, unit costs) reported to the Department as outlined in the approved area plan of each area agency on aging. The purpose of the amendments is to establish the use of uniform reporting instruments which will assist each area agency in maintaining verifiable supporting documentation of the services they provide to the elderly in their service region. A summary of the comments received relating to the amendment of (g)(7) are as follows: Comment: The commentor suggests only one standard form for client notes because AAA staff initially does not know if the client will require Case Management or Benefits Counseling and suggests adding Benefits Counseling to the list of codes and renaming the form "Case Narrative"or "Client narrative". The commentor also asks for clarification regarding the actual form as to rather a new page is to be used each month and suggests that "date" is redundant since it is included with each entry. The commentor also suggests that "provider" and "site" be removed to conserve space. Agency Response: Since the comments are not directed at the proposed amendment regarding the use of forms to be used for reporting data to the Department in and of itself, no change to the proposed amendment needs to be considered. However, the Department will review the applicability of the suggested changes to the design of the forms across the network when creating and/or revising forms. Additionally, the amendment as proposed will allow for an area agency to request a waiver from the Department to allow an area agency to modify a form to address their specific needs and concerns upon prior approval from the Department. Comment: The commentor expressed concerns regarding changing the forms used with only a few months left in the fiscal year. The commentor had specific concerns regarding why the month and year is identified on the top of the narrative when the date next to the entry should be adequate and if pages have to be numbered, does it mean that the pages have to be numbered for each month if separate continuing notes by month are kept? The commentor also suggests that the provider/site information on the client's continuing notes be eliminated to save space and that "service coordination" may be a better description if the case manager is simply helping the client by contacting service providers which are not to be reimbursed by the AAA and suggests that definitions need further clarification to ensure consistency. The commentor also requests clarification as to why the new form requires "time" for each activity since a case manager may be involved in more than one activity when in a client's home and these activities may overlap. In addition, the commentor suggests that more space for continuing notes could be achieved by adjusting the margins, eliminating duplicative information such as MM/YY, page #, provider, site, etc. Agency Response: Due to the expected adoption date of the rule it will not be effective until the beginning of the Department's next fiscal year. Since the remaining comments are not directed at the proposed amendment regarding the use of forms to be used for reporting data to the Department in and of itself, no change to the proposed amendment needs to be considered. However, the Department will review the applicability of the suggested changes to the design of the forms across the network when creating and/or revising forms. Additionally, the amendment as proposed will allow for an area agency to request a waiver from the Department to use an alternative form which would allow an area agency to modify a form to address their specific needs and concerns upon prior approval from the Department Comments were received regarding the proposed amendment from the North Texas Area Agency on Aging and the Texoma Area Agency on Aging. The rule is adopted under the Human Resources Code, Section 101.021, which provides the Texas Department on Aging with the authority to promulgate rules governing the operation of the Department. The Human Resources Code, Chapter 101, relating to the operation of the Texas Department on Aging, is affected by this proposed action. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on September 2, 1998. TRD-9813923 Mary Sapp Executive Director Texas Department on Aging Effective date: September 22, 1998 Proposal publication date: June 19, 1998 For further information, please call: (512) 424-6872 PART XIX. Texas Department of Protective and Regulatory Services CHAPTER 725.General Licensing Procedures SUBCHAPTER S.Administrative Procedures 40 TAC sec.725.1810 The Texas Department of Protective and Regulatory Services (TDPRS) adopts new sec.725.1810, with changes to the proposed text published in the July 10, 1998, issue of the Texas Register (23 TexReg 7186). The justification for the new section is to outline the conditions under which an administrative penalty will be assessed. This is a new enforcement tool in sec.42.078 of the Human Resources Code (Administrative Penalty). The new section will function by providing increased compliance with child care regulations, and therefore increased protection for children in out-of-home care. During the public comment period, TDPRS received comments from the Child Development Association of Texas, the Advisory Committee on Child Care Administrators and Facilities, Texas Licensed Child Care Association, and individuals. A summary of the comments and TDPRS's responses follow: Comment: One commenter stated that providers were continuing to voice concerns regarding penalties and their implementation. The commenter suggested that TDPRS take care when recommending penalties to assure providers there are ample options to be considered prior to the application of penalties. Response: The rule was written to show that administrative penalties will be assessed after the provider has failed repeatedly to come into compliance within a three- month period of time or after corrective action when time limits for compliance have expired. TDPRS believes that this system of allowing time for corrections builds options for the provider. TDPRS may, however, proceed to suspension, probation, or revocation without imposing administrative penalties in any instance in which the violation is serious enough to warrant such action. No change was made to the rule based on this comment. Comment: One commenter did not understand the term "within a three month period of time." Response: This term relates to the timeframe within which fines may be assessed if the provider shows repeated, but less serious, noncompliances of those standards listed which pose a risk to the health and safety of children. These health and safety standards are listed in sec.725.4020(f)and(g). TDPRS has not changed the wording of the rule based on this comment, but will train staff and providers on the application of the rule as needed. Comment: Commenters requested that the term "within a three month period of time" be deleted and replaced with the term "after a three month period of time." Response: TDPRS did not incorporate this change because it would mean that we would not be able to assess fines as a further incentive to comply with standards for three months. Also, using the three-month timeframe answers the request from providers for a specific guideline for when a fine may be assessed. TDPRS has, however, clarified sec.725.1810(a)(1) to indicate that the provider must have repeatedly failed to come into compliance with the standards within a three-month period. Comment: Commenters requested that the term "less serious risk to children" be changed to "serious or imminent risk to children" and that the reference to "less serious" be deleted. Response: TDPRS did delete the term less serious. TDPRS did not change "less serious risk to children" to "serious or imminent risk to children" because it would be in conflict with the intent of the Sunset Commission recommendation that TDPRS assign administrative penalties where the violations were not serious enough to warrant more severe nonmonetary sanctions. Any serious or imminent risk to children would be cause for considering adverse action such as suspension or revocation. Comment: Commenters requested that the reason for fines be changed from "failure to comply with any corrective action plan after the time limits have expired" to "failure to comply with written probation corrective action plan." Response: TDPRS did not make this change because it would mean that administrative penalties could be assigned only during times when the facility or family home is placed on probation. Probation is a corrective action used for more serious violations of standards and as a final step before suspension or revocation. Comment: Commenters requested that a new statement be added which would allow for administrative penalties only after "a minimum 90 day technical assistance plan and period offered by the agency." Response: TDPRS did not incorporate this statement because it would limit fines being assessed, regardless of the lack of corrections made by the facility or family home. Comment: Commenters requested that a paragraph be added stating that: "Fines will not be assessed for repeated violations of those standards identified in sec.725.4020 (f) and (g) which do not pose a serious or imminent risk to the health and safety of children, while the centers' staff are cooperatively participating in an agency and center coauthored technical assistance plan and period for making corrective actions." Response: TDPRS did not use this language because a) the rule already references use of penalties for violations that are less serious than imminent risk to children; b) the intent of the legislation is to use penalties for repeated non- compliances; and c) a corrective action plan is already in place in the rule as an alternative method of regulation to fines. Comment: Commenters requested that changes be made to sec.725.2040 (Judicial Review) where the standards posing a risk to the health and safety of children when violated are listed. The commenter asked that the word "may" be added to "pose a risk to the health and safety of children," and that the words "a serious or imminent" be added to classify risk to the health and safety of children when violated." Response: TDPRS did not incorporate these suggested changes because they address rules previously adopted by the Board and cannot be incorporated into these rules. The new section is adopted under the Human Resources Code, Title 2, Chapter 42, which authorizes the department to administer general child-placing and child care licensing programs and specifically sec.42.078 HRC which mandates rules for administrative penalties. The new section implements the HRC, sec.42.078. sec.725.1810.Administrative Penalties. (a) Administrative penalties are fines imposed against a facility or family home, licensed or registered, when that facility or family home violates Chapter 42 of the Human Resources Code (HRC) or a rule or order adopted under that chapter. Nonmonetary, administrative penalties or remedies including, but not limited to, corrective action plans, probation, and evaluation periods shall be imposed, when appropriate, before monetary penalties. The Texas Department of Protective and Regulatory Services (TDPRS) may proceed to suspension, probation or revocation without imposing administrative penalties in any instance in which, in TDPRS's opinion, the violation is serious enough to warrant such action. (1) Fines may be assessed after a provider has failed repeatedly within a three- month period to come into compliance with those standards identified in sec.725.4020 (f) and (g) of this title (relating to Judicial Review) which pose a risk to the health and safety of children when violated, but where the violations were not serious enough to warrant more severe nonmonetary sanctions. (2) Fines may be assessed for failure to comply with any corrective action plan after time limits for correction have expired. (b) Penalty assessment shall be based on the day the facility/family home is notified that a repeated violation has been cited or any corrective action plan has not been implemented. The ending period for the fine shall be the date the facility notifies TDPRS the violation has been corrected, unless a subsequent site visit determines no proper correction has been made. (c) When notified of the penalty, it shall be the responsibility of the facility/family home to notify TDPRS when the violation is corrected. If necessary, a site visit by TDPRS staff may be made within seven calendar days to confirm that the violation has been corrected. (d) Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty. The penalty for a violation may be in an amount not to exceed the following limits, based on the number of children receiving care at the facility or family home at the time of the violation: Figure: 40 TAC 725.1810(d) (e) The amount of the penalty shall be based on: (1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of any prohibited acts and the hazard or potential hazard created to the health, safety, or economic welfare of the public; (2) the history of previous violations; (3) the amount necessary to deter future violations; and (4) efforts to correct the violation. (f) In determining the amount of the penalty, the primary consideration shall always be the actual or potential harm posed to children in care by the violation, and the number of children exposed to that actual or potential harm. (g) Monetary penalties shall not be assessed for violations of clerical errors or standards which do not clearly apprise the facility or family home of the action required by the standard. (h) Upon determination that a violation has occurred, the executive director may issue a recommendation on the imposition of a penalty, including a recommendation on the amount of the penalty. (i) Within 14 days after the date the recommendation is issued, the executive director shall give written notice of the recommendation to the person owning or operating the facility. The notice may be given by certified mail. The notice must include a brief summary of the alleged violation and a statement of the amount of the recommended penalty and must inform the person that the person has a right to a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty. (j) Within 20 days after the date the person receives the notice, the person in writing may accept the determination and recommended penalty of the executive director, or may make a written request for a hearing on the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty. (k) If the person accepts the determination and recommended penalty of the executive director or fails to respond to the notice in a timely manner, the executive director shall issue an order and impose the recommended penalty. (l) If the person requests a hearing, the executive director shall set a hearing and give notice of the hearing to the person. The hearing shall be held by an administrative law judge of the State Office of Administrative Hearings. The administrative law judge shall make findings of fact and conclusions of law and issue a final decision finding that a violation has occurred and imposing a penalty or finding that no violation occurred. (m) The notice of the administrative law judge's order given to the person under Chapter 2001, Government Code, must include a statement of the right of the person to judicial review of the order. (n) Within 30 days after the date the administrative law judges order becomes final as provided by sec.2001.144, Government Code, the person shall: (1) pay the amount of the penalty; (2) pay the amount of the penalty and file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty; or (3) without paying the amount of the penalty, file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both the occurrence of the violation and the amount of the penalty. (o) Within the 30-day period, a person who acts under subsection (n)(3) of this section may: (1) stay enforcement of the penalty by: (A) paying the amount of the penalty to the court for placement in an escrow account; or (B) giving to the court a supersedeas bond that is approved by the court for the amount of the penalty and that is effective until all judicial review of the order is final; or (2) request the court to stay enforcement of the penalty by: (A) filing with the court a sworn affidavit of the person stating that the person is financially unable to pay the amount of the penalty and is financially unable to give the supersedeas bond; and (B) giving a copy of the affidavit to the executive director by certified mail. (p) On receipt of a copy of an affidavit under subsection (o)(2) of this section, the executive director may file with the county, within five days after the date the copy is received, a contest to the affidavit. The court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay the enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the amount of the penalty and to give a supersedeas bond. (q) If the person does not pay the amount of the penalty and the enforcement of the penalty is not stayed, the executive director may refer the matter to the attorney general for collection of the amount of the penalty. (r) Judicial review of the order: (1) is instituted by filing a petition as provided by Subchapter G, Chapter 2001, Government Code; and (2) is under the substantial evidence rule. (s) If the court sustains the occurrence of the violation, the court may uphold or reduce the amount of the penalty and order the person to pay the full or reduced amount of the penalty. If the court does not sustain the occurrence of the violation, the court shall order that no penalty is owed. (t) When the judgment of the court becomes final, the court shall proceed under this subsection. If the person paid the amount of the penalty and if that amount is reduced or is not upheld by the court, the court shall order that the appropriate amount plus accrued interest be remitted to the person. The rate of the interest is the rate charged on loans to depository institutions by the New York Federal Reserve Bank, and the interest shall be paid for the period beginning on the date the penalty was paid and ending on the date the penalty is remitted. If the person gave a supersedeas bond and if the amount of the penalty is reduced, the court shall order the release of the bond after the person pays the amount. (u) A penalty collected under this section shall be sent to the comptroller for deposit in the general revenue fund. (v) All proceedings under this section are subject to Chapter 2001, Government Code. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on September 1, 1998. TRD-9813907 C. Ed Davis Deputy Director, Legal Services Texas Department of Protective and Regulatory Services Effective date: October 1, 1998 Proposal publication date: July 10, 1998 For further information, please call: (512) 438-3765