TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

Chapter 1. PRESUMPTIVE MEDICAID ELIGIBILITY FOR PREGNANT WOMEN

Subchapter A. ELIGIBILITY REQUIREMENTS

The Texas Department of Human Services (DHS) proposes to repeal §§1.1, 1.3, 1.5, 1.7, and 1.9 in its Presumptive Medicaid Eligibility for Pregnant Women chapter; and proposes new §§1.1, 1.3, and 1.5 in Chapter 1, renamed Presumptive Medicaid for Pregnant Women Program. The purpose of the repeals and new sections is to rewrite the rules in plain language format that is easier for the public to understand. The rules concern the Presumptive Medicaid for Pregnant Women Program, which provides limited medical coverage for pregnant women to ensure early access to prenatal care, and include eligibility requirements for clients and providers.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the sections are in effect, the public benefit anticipated as a result of enforcing the sections is that the public and providers will have rules that are easier to understand and comply with. There is no adverse economic effect on small or micro businesses, or on businesses of any size, as a result of enforcing or administering the sections, because the rules are restating current policy and are not imposing any additional requirements on the medical providers. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-161, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

40 TAC §§1.1, 1.3, 1.5, 1.7, 1.9

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under the Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053; and the Government Code, §531.021.

§1.1.Client Eligibility Requirements.

§1.3.Service Limitations.

§1.5.Eligibility Requirements for Providers.

§1.7.Qualified Provider Notification.

§1.9.Qualified Provider Monitoring.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 9, 2003.

TRD-200302915

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

40 TAC §§1.1, 1.3, 1.5

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under the Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053; and the Government Code, §531.021.

§1.1.Client Eligibility Requirements.

(a) The Presumptive Medicaid for Pregnant Women Program provides limited medical coverage for pregnant women to ensure early access to prenatal care. The Texas Department of Human Services (DHS) administers the program through contracts with third-party medical providers, as provided in §1.3 of this chapter (relating to Eligibility Requirements for Medical Providers).

(b) Pregnant applicants must meet all applicable eligibility requirements for pregnant women as specified in Chapter 4 of this title (relating to Medicaid Programs--Children and Pregnant Women) and apply at qualified provider sites.

(c) Medical providers certify eligible applicants for the month of decision and the following month, as required by the Social Security Act, §1920(b)(1) (42 United States Code §1396r- 1(b)(1)).

(d) Eligible recipients are limited to one eligibility period per pregnancy.

(e) Medicaid coverage for presumptive eligibility covers medically necessary services, except labor, delivery, inpatient services, and Texas Health Steps services.

§1.3.Eligibility Requirements for Medical Providers.

(a) Applications to provide presumptive Medicaid services are available from DHS, Purchased Health Services, Y-927, P.O. Box 149030, Austin, Texas 78714-9030.

(b) Medical provider applicants must:

(1) be eligible Medicaid providers;

(2) offer services provided by outpatient hospitals, rural health clinics, or clinics, either provided or directed by physicians (clinics may be administered by someone who is not a physician), as further described in the Social Security Act, §1905(a)(2)(A) or (B) (42 U.S.C. §1396d(a)(2)(A) or (B)), or §1905(a)(9) (42 U.S.C. §1396d(a)(9)), or both; and

(3) receive funds from, or participate in, one of the following programs:

(A) health centers for medically underserved populations providing primary health services, including migrant health centers, under 42 U.S.C. §254b;

(B) rural health outreach networks, under 42 U.S.C. §254c ;

(C) maternal and child health services block grant programs, under 42 U.S.C. §701 et seq.);

(D) the Indian Health Care Improvement Act, Public Law 94-437, as amended (25 U.S.C. §1651 et seq.);

(E) Special Supplemental Food Program for Women, Infants, and Children (WIC), under 42 U.S.C. §1786;

(F) Commodity Supplemental Food Program of the Agriculture and Consumer Protection Act of 1973, Public Law 93-86, as amended (7 U.S.C. §612c note);

(G) a state perinatal program; or

(H) the Indian Health Service or a health program or facility operated by a tribe or tribal organization under the Indian Self-Determination Act, Public Law 93-638, as amended (25 U.S.C. §450f et seq.).

(c) Applicants must demonstrate the capability to make presumptive eligibility determinations and receive:

(1) preliminary DHS approval of the criteria in subsection (b) of this section; and

(2) final DHS approval, based on an operating plan as described in subsection (d) of this section, which is developed with the DHS regional director responsible for Medicaid for pregnant women.

(d) The operating plan contains the details of the operating procedures between the local DHS office and the medical provider. The operating plan must specify how the provider will:

(1) meet the basic intent of the Presumptive Medicaid for Pregnant Women Program;

(2) provide access to prenatal care services as a part of the facility's ongoing service package, with the following stipulations:

(A) providers not offering prenatal care services must, through a referral and tracking system, coordinate access to prenatal care services; and

(B) providers must ensure services include a case management approach, which assists pregnant women during the Medicaid application process and prenatal care visits;

(3) provide or assure verification of pregnancy;

(4) ensure that prenatal care appointments are scheduled within 10 working days of presumptive eligibility decisions, unless DHS gives an exception. If DHS gives an exception, then providers must report quarterly on their progress toward meeting the requirement;

(5) provide enough trained staff to interview and process the budget of each pregnant woman;

(6) monitor the accuracy of presumptive eligibility determinations;

(7) ensure that presumptive eligibility application packets are delivered to a DHS service site within one working day of eligibility decisions;

(8) ensure that provider staff are trained by DHS on how to determine presumptive eligibility;

(9) maintain a record of each presumptive eligibility application decision, both certified and denied, for three years after the decision date;

(10) submit required reports to the DHS regional director responsible for Medicaid for pregnant women;

(11) prepare an applicant for her DHS interview by providing her with a list of DHS-required documents and informing her as to what information DHS must verify;

(12) keep the financial information of applicants and recipients confidential; and

(13) provide services without discrimination on the grounds of race, color, national origin, age, sex, or disability.

(e) DHS may verify with a third-party agency that an applicant meets the criteria specified in subsections (b)-(d) of this section.

(f) DHS notifies applicants of approval or disapproval of qualified provider status.

§1.5.Monitoring Medical Providers.

(a) The Texas Department of Human Services (DHS) monitors providers of presumptive Medicaid services.

(b) DHS may discontinue eligibility operations with providers that fail to meet program requirements or to comply with the local operating plan.

(c) DHS cancels the qualified provider status of providers that intentionally misrepresent program eligibility requirements or are negligent in determining eligibility.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 9, 2003.

TRD-200302916

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Chapter 3. TEXAS WORKS

The Texas Department of Human Services (DHS) proposes the repeal of Subchapter F, concerning citizenship, §§3.601-3.604; and proposes new Subchapter F, concerning citizenship requirements for the Temporary Assistance for Needy Families (TANF) and Food Stamp programs, §§3.601-3.603, in its Texas Works chapter. The purpose of the repeals and new sections is to reorganize Subchapter F and rewrite the rules in question-and-answer format to make them easier for the public to understand. New §§3.601-3.603 concern alien eligibility for TANF. A related proposal concerning alien eligibility for food stamp benefits and miscellaneous questions concerning alien status for the TANF and Food Stamp programs appears elsewhere in this issue of the Texas Register .

The purpose of new §3.602 is to comply with a clarification issued by the United States (U.S.) Department of Justice concerning alien eligibility for TANF. The clarification states that aliens are eligible for TANF if they entered the U.S. prior to August 22, 1996, and remained continuously present in the U.S. until becoming qualified aliens. This eligibility applies regardless of whether these individuals entered the U.S. legally or possessed qualified status at the time of entry. A qualified alien is defined as a refugee, asylee, Cuban/Haitian entrant, battered alien, parolee, conditional entrant, legal permanent resident, or alien whose deportation has been withdrawn.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local governments as a result of enforcing or administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated additional cost of $200,000 in fiscal year (FY) 2003; $1.6 million in FY 2004; $2.2 million in FY 2005; $2.5 million in FY 2006; and $2.9 million in FY 2007.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the sections are in effect, the public benefit anticipated as a result of enforcing the sections will be to have rules that the public can more easily navigate and understand. Proposed new §3.602 also ensures that DHS is in compliance with federal regulations concerning alien eligibility for TANF. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposal concerns citizenship requirements for the TANF and Food Stamp programs and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-178, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

Subchapter F. CITIZENSHIP

40 TAC §§3.601 - 3.604

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The repeals are proposed under the Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial and nutritional assistance programs.

The repeals affect Human Resources Code, §§31.001-31.081 and §§33.001- 33.027.

§3.601.Requirements.

§3.602.Reporting Illegal Aliens to Immigration and Naturalization Service (INS).

§3.603.Disqualification because Verification of Citizenship is Pending.

§3.604.Disqualification because Verification of Alien Status is Pending.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2003.

TRD-200302952

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Subchapter F. CITIZENSHIP REQUIREMENTS FOR THE TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) AND FOOD STAMP PROGRAMS

40 TAC §§3.601 - 3.603

The new sections are proposed under the Human Resources Code, Chapter 31, which authorizes DHS to administer financial assistance programs.

The new sections affect Human Resources Code, §§31.001-31.081.

§3.601.What do the words and terms in this subchapter mean?

In this subchapter, the following words and terms have the following meanings unless the context clearly indicates otherwise:

(1) DHS--The Texas Department of Human Services.

(2) TANF--The Temporary Assistance for Needy Families Program.

(3) U.S.--The United States of America.

(4) U.S.C.--United States Code.

§3.602.What are the citizenship requirements for the TANF Program?

To qualify for TANF benefits, applicants must be:

(1) citizens of the U.S.;

(2) non-citizen aliens who entered the U.S. before August 22, 1996, who have lived in the U.S. continuously since entry, and who at the time of application meet the eligibility criteria specified in 8 U.S.C. 1641(b) and (c); or

(3) non-citizen aliens who entered the U.S. on or after August 22, 1996, who have lived in the U.S. continuously since entry and who, at the time of application, meet the eligibility criteria specified in 8 U.S.C. 1612(b)(2).

§3.603.Does DHS require proof of citizenship from TANF applicants?

(a) DHS requires proof of citizenship from TANF applicants. Applicants are primarily responsible for providing proof. DHS may also obtain proof of citizenship for individuals born in Texas through an automated inquiry process with the Texas Bureau of Vital Statistics.

(b) TANF applicants:

(1) unable to prove citizenship, without good cause, are disqualified until proof is provided; or

(2) with good cause, can postpone the proof of citizenship requirement. DHS provides assistance until eligibility is reviewed.

(c) DHS grants good cause to TANF applicants who:

(1) demonstrate they made a good faith effort to provide the proof; and

(2) could not provide proof because of circumstances beyond their control, such as a delay in receiving information from a person or organization from which proof was requested.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2003.

TRD-200302953

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

40 TAC §§3.604 - 3.607

The Texas Department of Human Services (DHS) proposes new §§3.604-3.607, concerning citizenship requirements for the Temporary Assistance for Needy Families (TANF) and Food Stamp programs, in its Texas Works chapter. The purpose of the new sections is to reorganize Subchapter F and rewrite the rules in question-and-answer format to make them easier for the public to understand. The rules detail citizenship requirements for the Food Stamp Program, outline requirements for proof of eligible alien status for TANF and food stamp applicants, and address reporting of undocumented aliens who apply for TANF and food stamps.

The purpose of new §3.604 is to comply with 8 United States Code 1612(a), which was amended by the 2002 Farm Bill to partially restore Food Stamp Program eligibility to qualified aliens in three different phases. The first phase of this restoration, effective October 1, 2002, restored eligibility to qualified aliens receiving disability benefits regardless of the date they entered the United States (U.S). The second phase, effective April 1, 2003, restored eligibility to applicants possessing qualified alien status for five years. The third phase, effective October 1, 2003, restores eligibility to qualified aliens under the age of 18, regardless of the date of entry into the U.S. Proposed §3.604 ensures that DHS complies with federal law.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are fiscal implications for state government as a result of enforcing or administering the sections. There are no fiscal implications for local governments as a result of enforcing or administering the sections.

The effect on state government for the first five-year period the sections are in effect is an estimated additional cost of $22,259 in fiscal year (FY) 2003; $0 in FY 2004; $0 in FY 2005; $0 in FY 2006; and $0 in FY 2007.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the sections are in effect, the public benefit anticipated as a result of enforcing the sections will be to have rules that the public can more easily navigate and understand. Proposed new §3.604 brings DHS rules into compliance with federal regulations and ensures that more households will be eligible to receive food stamps. This will allow for improved nutrition for more Texas households. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the sections, because the proposal concerns citizenship requirements for the TANF and Food Stamp programs and does not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-178, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

The new sections are proposed under the Human Resources Code, Chapters 31 and 33, which authorizes DHS to administer financial and nutritional assistance programs.

The new sections implement Human Resources Code, §§31.001-31.081 and §§33.001-33.027.

§3.604.What are the citizenship requirements for the Food Stamp Program?

To qualify for food stamp benefits, applicants must be:

(1) citizens of the U.S.; or

(2) non-citizen aliens legally admitted to the U.S. who meet the eligibility criteria specified in 8 U.S.C. 1612(a).

§3.605.Does DHS require proof of citizenship from Food Stamp Program applicants?

(a) Only Food Stamp Program applicants with questionable citizenship are required to provide proof of citizenship. Applicants are primarily responsible for proving citizenship.

(b) Applicants unable to prove questionable citizenship are disqualified until proof is provided.

§3.606.Does DHS require proof of eligible alien status for TANF and Food Stamp Program applicants?

Yes, DHS disqualifies TANF or Food Stamp Program applicants who are aliens until proof of eligible alien status is provided. However, DHS certifies eligible household members who live with the aliens.

§3.607.Does DHS report to the Immigration and Naturalization Service (INS) undocumented aliens who apply for assistance?

DHS reports to INS only those aliens who apply for TANF or food stamp benefits and who have a final order of deportation.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2003.

TRD-200302954

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Subchapter V. MEDICAID ELIGIBILITY

40 TAC §§3.2201 - 3.2207

(Editor's note: The text of the following sections proposed for repeal will not be published. The sections may be examined in the offices of the Texas Department of Human Services or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)

The Texas Department of Human Services (DHS) proposes to repeal §§3.2201- 3.2207, concerning Medicaid eligibility for households that are eligible for Temporary Assistance for Needy Families (TANF), in its Texas Works chapter. The purpose of the repeals is to remove the rules from Chapter 3 so that they can be updated and proposed as new rules, written in plain language format, in their own chapter, DHS's new Chapter 14. The new rules are proposed elsewhere in this issue of the Texas Register .

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed repeals are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the repeals.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the repeals are in effect, the public benefit anticipated as a result of repealing the sections is that the public will have rules on medical assistance for families who are eligible for TANF that are located in their own chapter and are easier to understand. There is no adverse economic effect on small or micro businesses, or businesses of any size, as a result of repealing the sections; the rules concern client eligibility and requirements and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed repeals. There is no anticipated effect on local employment in geographic areas affected by these repeals.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-162, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

The repeals are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The repeals affect the Human Resources Code, §§22.0001-22.038 and §§32.001- 32.053; and the Government Code, §531.021.

§3.2201.Eligibility Requirement.

§3.2202.Three Months Prior.

§3.2203.Four Months Post-Medicaid Eligibility.

§3.2204.Type Program 07 Medicaid.

§3.2205.Type Program 37 Medicaid.

§3.2206.Third-Party Resources.

§3.2207.Failure to Comply.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 9, 2003.

TRD-200302946

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Chapter 14. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)-LEVEL MEDICAL ASSISTANCE

Subchapter A. PROGRAM REQUIREMENTS

40 TAC §§14.1 - 14.6

The Texas Department of Human Services (DHS) proposes new §§14.1-14.6, concerning Temporary Assistance for Needy Families (TANF)-level medical assistance, in its new Chapter 14. The purpose of the new sections is to rewrite the rules governing TANF-level medical assistance that currently are in DHS's Chapter 3, Subchapter V (§§3.2201- 3.2207), into plain language format and to move them into their own chapter. The new rules also update program references and correct several citations.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed sections are in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the sections.

Judy Denton, Deputy Commissioner for Family Services, has determined that, for each year of the first five years the new sections are in effect, the public benefit anticipated as a result of enforcing the sections is that the public will have rules on medical assistance for families who are eligible for TANF that are located in their own chapter and are easier for the public to understand. There is no adverse economic effect on small or micro businesses, or businesses of any size, as a result of enforcing or administering the sections; the rules concern the eligibility and requirements of households for TANF-level medical assistance and do not affect the operation of businesses. There is no anticipated economic cost to persons who are required to comply with the proposed sections. There is no anticipated effect on local employment in geographic areas affected by these sections.

Questions about the content of this proposal may be directed to Eric McDaniel at (512) 438- 2909 in DHS's Texas Works Policy section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-162, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to these rules. Accordingly, DHS is not required to complete a takings impact assessment regarding these rules.

The new sections are proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The new sections affect the Human Resources Code, §§22.0001-22.038 and §§32.001-32.053; and the Government Code, §531.021.

§14.1.Eligibility Requirement.

Households eligible for Temporary Assistance for Needy Families benefits also qualify for medical assistance under Medicaid, as provided by the Social Security Act, §1931 (42 U.S.C. 1396u-1).

§14.2.Three Months Prior Medicaid Coverage.

(a) Three months prior Medicaid coverage refers to retroactive coverage of applicants and recipients with unpaid medical expenses during one or more of the three months before the application month.

(b) To qualify for three months prior Medicaid coverage, Temporary Assistance for Needy Families Program applicants and recipients must meet the requirements of the Social Security Act, §1902(a)(34) (42 U.S.C. 1396a(a)(34)).

§14.3.Four Months Post-Medicaid Eligibility.

Households are eligible for four months post-Medicaid coverage, as provided by the Social Security Act, §1931 (42 U.S.C. 1396u-1), if they:

(1) received Temporary Assistance for Needy Families or Medicaid only under the Social Security Act, §1931; and

(2) then were denied cash assistance or Medicaid because of receipt of child support.

§14.4.Twelve-Month Transitional Medicaid.

(a) Temporary Assistance for Needy Families or Medicaid only recipients, certified as required by the Social Security Act, §1931 (42 U.S.C. 1396u-1), and the Texas Human Resources Code, §32.0255, who are denied because of new or increased earnings or loss of earned income deductions, may be eligible for 12 months post-Medicaid coverage, as provided by the Social Security Act, §1925 (42 U.S.C. 1396r-6).

(b) To remain eligible during the 12 months post-Medicaid coverage, recipients must report changes in the fourth, seventh, and tenth months.

(c) Recipients who report changes are denied only for one or more of the following reasons:

(1) no eligible child is in the home;

(2) on the seventh or tenth month report, the caretaker relative had no earnings in one of the previous three months; or

(3) the average monthly income, minus child-care costs, exceeds 185% of the federal poverty level on the seventh or tenth month report.

§14.5.Third-Party Resources.

Temporary Assistance for Needy Families (TANF)-level medical assistance recipients must comply with third-party resources requirements, as provided by the Social Security Act, §1902(a)(25) (42 U.S.C. 1396a(a)(25)).

§14.6.Failure to Comply.

A Temporary Assistance for Needy Families (TANF)-level medical assistance recipient who fails to comply with third-party resources requirements without good cause is ineligible for Medicaid, as provided by the Social Security Act, §1902(a)(25) (42 U.S.C. 1396a(a)(25)).

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 9, 2003.

TRD-200302947

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Chapter 50. §1915(c) CONSOLIDATED WAIVER PROGRAM

40 TAC §50.6

The Texas Department of Human Services (DHS) proposes to amend §50.6, concerning financial eligibility criteria, in its §1915(c) Consolidated Waiver Program chapter. The purpose of the amendment is to allow all eligible children under the age of 19 who are the financial responsibility of the Texas Department of Protective and Regulatory Services (PRS) to be financially eligible for Consolidated Waiver Program (CWP) services. The amendment allows PRS children currently in institutions or at risk of institutional placement access to CWP services, regardless of the level of foster care payment, if other eligibility criteria are met. The proposal deletes the requirement that the foster care payment of an applicant or participant not exceed Level II.

Bobby Halfmann, Chief Financial Officer, has determined that, for the first five-year period the proposed section is in effect, there are no fiscal implications for state or local government as a result of enforcing or administering the section.

Bettye M. Mitchell, Deputy Commissioner for Long Term Care, has determined that, for each year of the first five years the section is in effect, the public benefit anticipated as a result of enforcing the section is that children under the age of 19 who are the financial responsibility of PRS and are currently in institutions or at risk of institutional placement will have greater access to CWP services, regardless of the level of foster care payment. This will facilitate community placement for applicants or participants if other eligibility criteria are met. Community placement offers clients the opportunity to receive services in the community and in their own homes. There is no adverse economic effect on small or micro businesses as a result of enforcing or administering the section, because even though the proposal allows more children who are financially the responsibility of PRS to be eligible for CWP services, the number of available CWP slots will not increase. Providers will continue to be paid at current rates for services delivered. There is no anticipated economic cost to persons who are required to comply with the proposed section. There is no anticipated effect on local employment in geographic areas affected by this section.

Questions about the content of this proposal may be directed to Karen Kroyer at (512) 438- 3444 in DHS's Community Care section. Written comments on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-172, Texas Department of Human Services E-205, P.O. Box 149030, Austin, Texas 78714-9030, within 30 days of publication in the Texas Register .

Under §2007.003(b) of the Government Code, DHS has determined that Chapter 2007 of the Government Code does not apply to this rule. Accordingly, DHS is not required to complete a takings impact assessment regarding this rule.

The amendment is proposed under the Human Resources Code, Chapters 22 and 32, which authorizes DHS to administer public and medical assistance programs, and under Government Code, §531.021, which provides the Texas Health and Human Services Commission with the authority to administer federal medical assistance funds.

The amendment affects the Human Resources Code, §§22.001-22.038 and §§32.001-32.053; and the Government Code, §§531.0218, 531.02109, and 531.02191.

§50.6.Financial Eligibility Criteria.

An applicant or participant is financially eligible for the Consolidated Waiver Program (CWP) if he:

(1)-(4) (No change.)

(5) is under age 19 and financially the responsibility of the Texas Department of Protective and Regulatory Services (PRS) [ (TDPRS) ], in whole or in part [ (not to exceed Level II foster care payment) ], and is being cared for in a family foster home licensed or certified and supervised by:

(A) PRS [ TDPRS ]; or

(B) (No change.)

(6) (No change.)

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 12, 2003.

TRD-200302951

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Earliest possible date of adoption: June 22, 2003

For further information, please call: (512) 438-3734

Part 4. TEXAS COMMISSION FOR THE BLIND

Chapter 167. BUSINESS ENTERPRISES OF TEXAS

40 TAC §§167.2 - 167.4, 167.6 - 167.15, 167.17

The Texas Commission for the Blind proposes amendments to §§167.2-167.4, and §§167.6-167.15 pertaining to the administration of the agency's Business Enterprises of Texas. The Commission is also proposing new §167.17, pertaining to forms used in the program. The proposed actions reflect the results of meetings in which representatives of the Elected Committee of Managers (ECM) participated in discussions about the policies of Business Enterprises of Texas contained in TAC Chapter 167, which implements Texas Human Resources Code, Chapter 94 and U. S. C Annotated, Title 20, Chapter 6A (Randolph-Sheppard Act). The discussions were held in compliance with §107b-1 of the Act. The purpose of the amendments and new section are detailed as follows:

§167.2 is amended to clarify, in the definitions, the difference between the terms "licensee" and "manager," which are used throughout the chapter in many rules. The terms have been defined in line with federal regulations. The agency's use of "manager" for all purposes in the chapter is unsuitable because various rules pertain only to licensed individuals actually managing a facility and not to those licensed individuals who are not assigned to a facility. These clarifications are reflected throughout this proposal in the form of amendments to the following sections and will not be repeated in each explanation of the changes. At the ECM's request, we also added a specific definition for the term "proper and authorized instruction by Commission staff" where it is used in the chapter.

§167.3 contains several general program policies. Subsection (c), pertaining to what constitutes full-time employment, has been revised from at least 40 hours per week to the number of hours necessary to achieve satisfactory operation of the facility. Subsection (d) has been revised to clarify the agency's subcontracting policies, adding that the section does not apply to equipment and machines not owned by or arranged for by the Commission. A new policy on temporary management has been added as subsection (j), which sets the standards under which temporary assignments will be made.

§167.4, pertaining to BET program administration, has been amended only in line with revised definitions.

§167.6 sets forth the conditions for licensing and the nature of the license itself. Subsection (d) has been amended to clarify that copies of licenses must be displayed in each location to which the manager is assigned.

§167.7 contains the agency's procedures for making initial assignment and requirements for applying for career advancement assignments. This section also contains rules for interviewing and selecting from the managers applying for a career advancement assignment and the process for investigating reports of improper contact during the selection process. Subsection (c) has been amended to set a standard under which a facility will be used as an initial assignment without first advertising it as an available competitive assignment. Amendments have also been made to ensure that licensees receive notice of available permanent assignments within 30 business days. Several procedural rules pertaining to application contents have been clarified.

§167.8 contains the agency's rules for providing facilities with fixtures, furnishings, and equipment and rules governing maintenance, repairs, and replacement. The section also contains the requirements for obtaining advances for stocks and supplies when a manager chooses to apply for another facility after the manager's initial assignment. Subsection (i) is amended to add a policy to expedite changeovers in facilities. The policy requires the existing stock to become part of the required inventory stock level of the incoming manager. Subsection (j) is amended to allow managers to purchase merchandise and expendables on credit after being an active manager for three years. Subsection (k) has been amended to add a timeframe of 12 months in which managers must pay back advances to purchase merchandise.

§167.9 contains set-aside fee and monthly reporting policies. Subsection (c) has been amended to clarify that managers may not remove any items from the inventory or other stock items of the facility unless the manager pays for those items at the actual cost basis. Subsection (e) contains the procedure for reporting the manager's monthly statement of facility operations.

§167.10 contains the basic duties and responsibilities of managers. Several policies have been reworded for clarification to satisfy concerns of the Elected Committee of Managers and to improve the language. Subsection (d) has been revised to reflect new liability insurance requirements. Subsection (h) has been revised in line with new policies on work hours and availability of the manager for the purpose of advice, consultation, and inspections. Subsection (i) has been amended to be precise on when audit and review deficiencies must be corrected. Subsection (k) has been revised to reflect a new policy on notification to the Commission when the manager is absent from their assigned facility. Subsections (l)-(q) contain various routine procedural rules for providing the Commission with required information and notice that have heretofore been in various reporting forms.

§167.11 contains the basic responsibilities of the Commission. Subsection (b), pertaining to training, has been amended to correctly state that the Commission's responsibility on upward mobility seminars is to assist the Elected Committee of Managers in putting together the seminars. Subsection (c), clarifies the basis on which the Commission establishes operating conditions.

§167.12 creates and sets forth rules related to the BET Elected Committee of Managers. Subsection (g) has been amended to clarify that ECM districts are created with the active participation of the ECM. Subsection (h) has been rewritten to transfer the responsibility of establishing qualifications for ECM candidates from the Commission to the ECM. Subsections (i) and (j) have been eliminated from rules to allow the ECM to establish their own procedures for the nomination, election, replacement, and removal of representatives to the ECM. Subsection (l) is eliminated from rules to allow the ECM to conduct its own manner of electing officers. What was subsection (o), pertaining to travel expenses of ECM members has been simplified and now includes clarification that when representing a manager at a full evidentiary hearing, a ECM representative is be reimbursed for travel, meals, and lodging.

§167.13 contains the conditions for nondisciplinary termination of a BET license. The only changes made to this section are to amend terminology in line with new definitions.

§167.14 sets forth rules for disciplinary actions, including types of disciplinary actions and notices of disciplinary procedures. A new rule has been added within subsection (d) pertaining to types of administrative actions to include provisions for the emergency removal of a manager, including provisions for a speedy hearing by arbitration in such cases. A new subsection (f) has been added that addresses a manager's right to a full evidentiary hearing prior to termination of the manager's license.

§167.15 contains the procedures whereby managers who are dissatisfied with a Commission action arising from the operation of BET may appeal the action. Included are the timeframes in which the manager and commission must take action. Subsection (e), pertaining to informal reviews has been revised. Mediation procedures replace the current system of informally reviewing dissatisfactions and the timeframe in which a manager may file for informal resolution procedures has been extended to six months after the occurrence of a matter about which the manager is dissatisfied. The section has also been amended to correct terminology associated with new and clarified definitions. In addition, the Commission has clarified the order in which burden of proof is presented during evidentiary hearings.

A new section §167.17 is proposed that adopts by rule several operating forms used in the program.

Alvin Miller, Chief Financial Officer, has determined that for each year of the first five years the rules are in effect there may be some minimal fiscal implications to state government as a result of enforcing or administering the amended rules. The minimal fiscal implications may result from additional administrative costs to the Commission of obtaining the services of mediators and arbitrators in certain matters of disagreement. The number of mediated or arbitrated proceedings that may be requested by managers each year for five years cannot be predicted with certainty. The resulting costs are not predicted to be significant. For each year of the first five years the rules are in effect there will be no fiscal implications on local government. There will be no economic cost to small or micro-businesses as a result of enforcing these sections. There is no additional cost to individuals who are required to comply with the amended rules.

Michael Hooks, BET Director, has determined that the public benefit anticipated as a result of the amended rules as proposed will be the adoption of rules for operating BET facilities in Texas that reflect the additional involvement of the Elected Committee of Managers in their development and that provide clear guidance for the administration of the program pursuant to the Randolph-Sheppard Act.

Comments on the proposal may be submitted to Policy and Rules Coordinator, Texas Commission for the Blind, 4800 North Lamar, Austin, Texas 78756, or by e-mail to jean.crecelius@tcb.state.tx.us, or by fax (512) 377-2682. Comments must be received by the Commission no later than 30 days from the date this proposal is published in the Texas Register.

The amendments are proposed under Human Resources Code §94.012, which authorizes the Commission to promulgate rules for the administration of the program, and §94.016, which authorizes the Commission to administer the program in accordance with the provisions of the Randolph-Sheppard Act (20 U.S.C. Section 107 et seq.).

The proposal affects no other statutes.

§167.2.Definitions.

The following words and terms, when used in these rules, shall have the following meanings, unless the context clearly indicates otherwise. Unless expressly provided otherwise, words in the present or past tense include the future tense, and the singular includes the plural and the plural includes the singular. The masculine gender includes the feminine and neuter genders.

(1) (No change.)

(2) Application--The "BET Facility Assignment Application" form used by licensees [ managers ] to apply for a facility.

(3)-(19) (No change.)

(20) Manager-A licensee who is operating a BET facility, and which shall have the same meaning assigned to "vendor" in 34 CFR 395.1. [ Manager--A person licensed by the Commission to manage a BET facility in Texas. ]

(21) - (24) (No change.)

(25) Proper and authorized instruction by Commission staff--Instructions in accordance with applicable statutes and program rules, regulations, and procedures.

(26) Licensee - an individual who has been licensed by the Commission as qualified to apply for and operate a BET facility, and which shall have the same meaning assigned to "blind licensee" in 34 CFR 395.1.

§167.3.General Policies.

(a)-(b) (No change.)

(c) Full-time employment. Managing a BET facility shall constitute full-time employment. Full-time shall mean being actively engaged in the management of a BET facility for the number of hours necessary to achieve satisfactory operation of the facility. The manager shall be available for necessary visits by Commission staff to allow inspection, advice, and consultation as may be required to ensure satisfactory operation [ at least 40 hours a week unless a different period of time is approved subsequent to the effective date of this section or a different period of time has been approved by the Commission in writing prior to the effective date of this subsection ]. Management means the personal supervision of the day-to-day operation of the assigned BET facility by the assigned manager.

(d) Subcontracting [ Management subcontracting ]. The management of a BET facility shall not be subcontracted except for temporary periods of time approved by the Commission or in those circumstances in which the Commission deems that subcontracting the operation of some parts of the facility are in the best interest of BET. In all events, subcontracting shall require the prior written consent of the Commission. This subsection shall not affect subcontracts in existence on the effective date of this subsection. This subsection does not apply to equipment or machines allowed to be placed within the facility and not owned by or arranged for by the Commission.

(e) (No change.)

(f) BET manual. All BET policies adopted by the board shall be included in the BET manual. The BET director shall ensure that each licensee [ manager ] is provided with a copy of the manual and any revisions thereto. The licensee [ manager ] shall be responsible for reading the manual and acknowledging in writing that he or she has read and understands its contents. The BET director shall insure that the BET manual contains procedures whereby licensees [ manager ] may obtain assistance in understanding BET policies and procedures.

(g) Accessibility of BET materials. All information produced by and provided to licensees [ managers ] by the Commission shall be in an accessible format. When possible, materials will be sent in the format requested by the licensee [ manager ].

(h)-(i) (No change.)

(j) Temporary management. From time to time it becomes necessary to designate a temporary manager to an unassigned facility to ensure uninterrupted service to the host and customers. Temporary assignments shall be for the period stated in the assignment document. Subsequent to the expiration of the timeframe stated in the assignment, the BET director shall review the temporary assignment every 90 days to determine the need for continuation of the temporary assignment. The temporary arrangement shall terminate when a new manager is assigned to the facility. The Commission shall choose temporary managers from licensees; if a licensee is not available, the Commission may contract with a private entity. Before a licensee is offered a temporary opportunity, the regional BET staff and local ECM representative shall discuss which licensee in the geographical location has the requisite skills to successfully manage the facility temporarily. Preference shall be given to temporarily improving the income to lower income managers when more than one individual is qualified.

§167.4.BET Administration.

(a) (No change.)

(b) BET director. In addition to the responsibilities delegated to the BET director by the executive director, the BET director shall be responsible for:

(1) implementing BET personnel policies and development plans; and

(2) disseminating the information developed by the executive director related to BET plans and policies to all licensees [ managers ].

(c) Consultants.

(1)-(4) (No change.)

§167.6.BET Licenses.

(a)-(b) (No change.)

(c) Issuance. A license issued by the Commission shall bear the name of the licensee [ manager ], date of issue, and contain such other information as may be deemed to be appropriate from time to time by the executive director. The license shall be signed by the executive director on behalf of the Commission and State of Texas.

(d) Display. The license or a copy of the license shall be displayed prominently in each location of the enterprise to which the manager is assigned.

(e) Property right. A license shall not create any property right in the licensee [ manager ] to whom it is issued and shall be deemed only to inform the public and other interested parties that the licensee [ manager ] has successfully completed BET training and is qualified and authorized to operate a BET facility.

(f)-(g) (No change.)

§167.7.Initial and Career Advancement Assignment Procedures.

(a) (No change.)

(b) Initial assignment. Upon successful completion of BET training, the initial assignment for a newly-licensed licensee [ manager ] shall be made by the BET director. The initial assignment shall be for a minimum of 12 months. The BET director shall make the assignment based on the following:

(1) availability of a Level 1 facility;

(2) recommendations from the BET training specialist and the ECM chairperson;

(3) licensee's [ manager's ] training records;

(4) licensee's [ manager's ] geographical concerns; and

(5) any other circumstances on a case-by-case basis.

(c) Career advancement assignments.

(1) Availability. All career advancement opportunities are dependent upon the availability of BET facilities. No facility with a projected annual income equal to the annual median income level of all managers or $30,000, whichever is the greater after set-aside fees, shall be used for an initial assignment unless it has first been advertised and made available to all licensees in the BET Program and no one has been assigned to such facility as a result of the advertising process.

(2) Notice. As BET facilities become available and ready for permanent assignment, written notice of such availability shall be given to all licensees [ managers ] within 30 business days .

(3) On-site visits. An advertised facility shall be available for onsite visits upon reasonable notice by applicants.

(4) Eligibility. To apply for an available facility, a licensee [ manager ] must meet the following requirements:

(A) The licensee [ manager ] must have successfully managed a BET facility for a minimum of one year.

(B) The licensee [ manager ] must have been current on all accounts payable for the preceding 12 months prior to the date of the facility announcement.

(C) The licensee [ manager ] must not be on probation under the section of these rules relating to administrative actions.

(D) The licensee [ manager ] must meet eligibility requirements of the facility's host organization.

(E) The licensee [ manager ] must not have submitted two or more insufficient fund checks to the Commission within the 12 months prior to the date of the facility announcement.

(F) The licensee [ manager ] must not have submitted two or more late reports within the 12 months prior to the date of the facility announcement.

(G) If unassigned, the licensee [ manager ] must have fulfilled all resignation requirements in the licensee's [ manager's ] last facility or be displaced and eligible to apply for a facility.

(H) The manager must have an inventory of merchandise and expendables in the manager's current facility as the Commission has determined sufficient for its satisfactory operation.

(I) The licensee [ manager ] must satisfy the Commission that he can acquire the merchandise and expendables required for the available facility.

(J) A licensee [ manager ] who has been placed on probation is not eligible for promotion and transfer for 30 days following release from probation.

(K) A licensee [ manager ] who has been placed on probation twice within a twelve-month period is not eligible for promotion or transfer for six months following release from probation.

(L) A licensee [ manager ] who has been placed on probation three times within a two-year period is not eligible for promotion or transfer for one year following release from probation.

(5) BET application deadline. A licensee [ manager ] may apply for an available facility by submitting an application not later than the 12th business day (exclusive of date of mailing) after the date the facility notice was mailed. The submission date shall be:

(A) the date the application is delivered to the Commission; or

(B) 3 days after deposit of the application in the United States mail, whichever is earlier; or

(C) the date the application is delivered to an overnight courier.

(6) BET application contents. A copy of the current form of the application shall be included in the BET manual. The substance of the application form shall not be modified except by action of the Commission's board. Modifications shall be provided to all licensees [ managers ] prior to their effective date. Upon request by the manager and prior to the submission deadline, assistance is available from the local BET staff and ECM representative in completing the BET Application Form.

(7) Preliminary review of applications. Commission staff and the ECM representative in each geographic area in which the applying licensees [ managers ] are currently located shall review all applications from their areas and shall verify the applicant's [ applying manager's ] eligibility [ and the accuracy of the application ]. In the event an ECM representative is an applicant for an available BET facility, the ECM chairperson shall appoint another ECM member for the review. [ The reviewing Commission staff and ECM representative shall provide assistance upon request to enable the applicant to correctly complete the application. ] Completed applications shall then be forwarded to the BET director who shall provide copies to the ECM and Commission staff in the area in which the available facility is located.

(8) Level 1 assignments. Assignments to Level 1 facilities shall be made by the BET director after reviewing the recommendations and assessments of all applicants conducted by the ECM representative and Commission staff for the regions in which the available facilities are located.

(9) Level 2 assignments. For Level 2 assignments, the following additional procedures shall apply:

(A)-(H) (No change.)

(I) Reports of improper contact. Members of the selection panel must report improper contacts to the BET director or the executive director. Improper contact is defined as any communication with a member of the selection panel for the purpose of influencing or manipulating, directly or indirectly, the selection of an applicant for the facility being considered for assignment. Nothing contained in this section, however, shall be deemed to prohibit any licensee [ manager ] from endorsing or supporting any candidate for selection by furnishing a letter or other document to that effect to be included with the applying licensee's [ manager's ] application. At the conclusion of the selection panel's responsibilities, each panel member shall be required to sign a statement certifying whether the member had, or had knowledge of, an improper contact during the selection proceedings.

(J) (No change.)

(K) Exceptions to assignment and selection procedures. Unusual circumstances may require exceptions to assignment and selection procedures. Exceptions to these procedures shall be made only if the circumstance is not covered by assignment procedures and failure to react to the circumstance would be detrimental to BET or a licensee [ manager ]. Notwithstanding anything in this section, no exceptional procedure shall result in the removal of a manager from a facility except for reasons contained in policies pertaining to administrative actions. Assignment and selection decisions that are exceptions to these procedures shall be made by the BET director after discussing relevant information with the ECM chairperson and receiving the chairperson's recommendation. Should a decision contrary to the ECM chairperson's recommendation be made, the BET director shall provide a written explanation of the decision to the ECM chairperson.

§167.8.Fixtures, Furnishings, and Equipment; Initial Inventory and Expendables.

(a) Survey. When a BET facility becomes available for assignment [ to a manager ], Commission staff shall conduct a survey of the site to determine the fixtures, furnishings, and equipment required to allow the facility to operate in accordance with projections by Commission staff as to the potential for the facility. When such facility is an existing one, the survey shall consider the need for replacement or repair of fixtures, furnishings, and equipment.

(b)-(g) (No change.)

(h) Initial inventory of merchandise and expendables for newly-licensed managers. The Commission shall furnish without charge the initial inventory of merchandise and expendables for the initial assignment [ first facility ] of a newly-licensed licensee [ manager ]. The initial inventory of merchandise and expendables shall be sufficient, as projected by the Commission, to provide the manager with merchandise and expendables for 30 days.

(i) Subsequent inventory of merchandise and expendables.

(1) (No change.)

(2) Managers assigned to any facility other than their initial assignment in Texas shall acquire the merchandise and expendables as determined by the Commission to be sufficient to satisfactorily operate the facility. To effectively expedite the changeover in facilities, when a facility is already stocked with merchandise and expendables, the existing stock shall become part of the required inventory stock level of the incoming manager. The amount owed by the incoming manager for the existing stock shall be the amount agreed to by the affected parties. If the existing inventory is the property of the state, the amount owed by the incoming manager shall be the amount paid with state funds.

(j) Purchases on credit. During the first three years of being an active manager in the Program, managers [ Managers ] must notify the Commission in advance of any purchase of merchandise and expendables on credit.

(k) Obtaining an advance from the Commission for initial inventory. Managers may apply to the Commission for an advance to purchase an initial inventory of merchandise and expendables. The Manager must satisfy any advance received from the Commission to purchase merchandise on subsequent assignments within a 12-month period and make monthly payments in the amount established by the Commission. The granting of an advance is discretionary and may be granted only under the following conditions:

(1)-(4) (No change.)

(l) (No change.)

§167.9.Set-Aside Fees.

(a)-(b) (No change.)

(c) Method of computing net proceeds.

(1) Net proceeds is the amount remaining from the sale of merchandise of a BET facility, all vending machine income, and other income accruing to the manager from the facility after deducting the reasonable and necessary cost of such sale, but excluding set-aside charges required to be paid by the manager. Net sales are all sales, excluding sales tax. The manager may not remove any items from the inventory or other stock items of the facility unless the manager pays for those items at the actual cost basis.

(2)-(3) (No change.)

(d) (No change.)

(e) Payment of set-aside fee. The set-aside fee shall be submitted with the manager's monthly statement of facility operations. The manager shall use "BET Monthly Facility Report, BE-117," to report monthly activities. The BET director shall develop and implement procedures for the preparation and submittal of monthly statements.

(f) (No change.)

§167.10.Duties and Responsibilities of Managers.

(a)-(b) (No change.)

(c) Managers must not engage in conduct that demonstrably jeopardizes [ jeopardize ] the Commission's right, title, and interest in the BET facility, its equipment, or the lease or agreement with the property managers.

(d)-(e) (No change.)

(f) Managers must make payments for insurance provided by the Texas Commission for the Blind [ purchase and maintain in force liability and product liability insurance and shall name the licensee and the State of Texas as named insured ]. The host shall be added as an insured when required.

(g) (No change.)

(h) Managers must be actively engaged in the management of a BET facility the number of hours necessary to achieve satisfactory operation of the facility. With prior notice from the Commission, managers shall be available for all necessary visits to the facilities for the purpose of advice, consultation, and inspections. [ Managers must be actively engaged at least 40 hours a week in the management of the BET facility to which they are assigned unless a different period of time is approved by the Commission subsequent to the effective date of this section or a different period of time was approved by the Commission prior to the effective date of this section. ]

(i) Managers must take appropriate [ and timely ] actions to correct deficiencies noted on BET facility audits or reviews within 20 business days .

(j) (No change.)

(k) Managers shall notify the Commission in advance if they intend to be absent from their assigned facility for more than two days. [ Except in the case of an emergency, managers must provide prior notice to the Commission of leave due to illness, vacation, or for personal reasons. ]

(l) Managers must provide the Commission with the following information and must notify the Commission of any changes to any item no later than 10 business days after a change occurs:

(1) the BET facility telephone number;

(2) an address to which BET correspondence is to be sent;

(3) a phone number for use in emergencies; and

(4) the manager's preferred reading format.

(m) Managers are accountable to the Commission for the proceeds of the business.

(n) Managers must keep all records supporting the monthly facility report for a period of three calendar years.

(o) Managers shall report the actual value of resale inventory by taking a physical count in the facility each month and submit a written inventory quarterly (March, June, September, and December) with the monthly facility report;

(p) Managers, upon request by the Commission, must make available all records pertinent to the facilities to which they have been assigned for the purpose of audit or review.

§167.11.Responsibilities of the Commission.

(a) (No change.)

(b) Training. The Commission shall assist the ECM to conduct a special training seminar each year for all licensees [ managers ] to inform them of new BET developments and to provide instruction on new, relevant topics to enhance upward mobility.

(c) Facility operating conditions. The Commission shall establish the conditions for operation of a BET facility in accordance with these rules and any requirements of the host . The operating conditions shall include, among other things, pricing requirements, hours of operation, and menu items or product lines. The Commission may revise the operating conditions from time to time as market conditions warrant. The final authority and ultimate responsibility for determining the prices to be charged for products sold through BET facilities shall rest with the Commission.

(d) BET financial data. Upon request, the Commission shall provide licensees [ managers ] with access to BET financial data. Also upon request, the Commission staff shall provide assistance to the licensee [ manager ] in interpreting the data.

(e) (No change.)

§167.12.BET Elected Committee of Managers.

(a) (No change.)

(b) Relationship to Commission. The ECM shall be presumed as the sole representative of all licensees [ managers ] to the Commission in matters contained in the Act and implementing regulations requiring the active participation of the ECM. Active participation means an ongoing process of good faith negotiations between the Elected Committee of Managers and the Commission in the development of BET policies and procedures prior to implementation. The Commission shall have the ultimate responsibility for the administration and operation of all aspects of BET and has final authority in decisions affecting BET.

(c) Relationship to licensees [ managers ].

(1) It shall be the sole responsibility of the licensees [ managers ] who elect the members of the ECM to insure that the persons elected represent all licensees [ managers ].

(2) The ECM shall, in addition to all other matters set forth in these rules or by law or regulation affecting the administration of BET, act as advocates for licensees [ the managers and trainees ] and shall strive to improve, expand, and make profitable and successful BET to the greatest possible extent for the mutual benefit of the Commission and of the consumers who participate in the program.

(d)-(f) (No change.)

(g) Structure. The ECM shall, to the extent possible, be composed of licensees [ managers ] who are representative of all licensees [ managers ] in BET based on such factors as geography and facility type and size. One representative shall be elected from each designated ECM district created by the Commission with the active participation of the ECM and as may be revised or modified from time to time.

(h) Qualifications. The ECM shall establish qualifications for candidates, and the procedures for voting, tabulating, and announcing results. The Commission shall provide such advice and counsel as may be requested by the ECM to accomplish all elections of representatives to the ECM. [ Each candidate for election to the ECM must: ]

[ (1) be a manager in good standing;]

[ (2) have been an active, assigned manager for a minimum of one year prior to nomination; and]

[ (3) be assigned to a facility in the ECM district he or she is seeking to represent.]

[ (i) Nomination, election and replacement. The BET director and the ECM shall establish and implement written procedures for the nomination, election, and replacement of managers to the ECM. All such procedures shall be included in the BET manual. No changes in any procedure for the nomination, election, or replacement of ECM representatives shall be made without the concurrence of a majority of the ECM. At a minimum, procedures established pursuant to this subsection shall:]

[ (1) insure that all candidates are qualified;]

[ (2) insure that all managers receive notice of the election procedures and of all dates and times for actions related to such elections in a timely manner so as to allow full participation by managers in the nomination and election process;]

[ (3) insure that each manager is provided an opportunity to nominate and elect candidates from the manager's district;]

[ (4) allow for secret ballots; and]

[ (5) insure that only managers actually assigned to a facility in the district are elected to represent the district on the ECM.]

[ (j) Changing districts. A member of the ECM shall automatically be removed as a representative from a district when that member is no longer assigned to a BET facility within the district from which elected.]

(i) [ (k) ] Term of office. The term of office for ECM members shall be two years beginning on January 1 following the election. Even- and odd-numbered districts shall alternate election years. Any ECM member elected to fill a vacancy shall serve the remainder of the unexpired term of the manager who vacated a position.

[ (l) Officers. The ECM shall select from among its members at the first meeting of every year the chairperson and any other officers the ECM may from time to time elect.]

(j) [ (m) ] Meetings. The ECM shall meet once during each calendar year for the purpose of electing officers and again as it may establish by bylaw. It shall be the duty of the ECM chairman to provide to the BET director with a written meeting agenda ten business days in advance of each meeting.

(k) [ (n) ] Internal procedures of the ECM. The ECM shall establish bylaws to govern their internal operation and order of business and shall provide the Commission with a copy.

(l) [ (o) ] Travel expenses. [ Expenses for travel, meals, lodging, or other related expenses while the ECM representative is attending meetings approved by the Commission shall be reimbursed by the Commission at the rate allowed for travel by Commission staff. Travel for official business other than attendance at approved ECM meetings shall be reimbursed only when the travel is approved in advance by the BET director. ]

(1) Expenses for travel, meals, lodging, or other related expenses incurred by ECM representatives must be preapproved by the Commission.

(2) When representing a manager at a full evidentiary hearing, the ECM representative shall be reimbursed for travel, meals, and lodging at the rate allowed for travel by Commission staff.

§167.13.Termination of License for Reasons Other Than Unsatisfactory Performance.

(a) Causes for termination. The license of a licensee [ manager ] shall be terminated upon the occurrence of any one of the following:

(1) The licensee's [ manager's ] visual acuity is improved by any means to the point at which the licensee [ manager ] no longer satisfies the definition of blind.

(2) The licensee [ manager ] becomes otherwise permanently disabled and as a result of such permanent disability is unable to perform the essential functions of operating and maintaining a BET facility. Permanently disabled is a condition that is medically documented and has existed or is expected to exist for at least twelve months. The determination of permanently disabled shall be made by the executive director or his designee after review of medical documentation and other information relevant to the issue. Other information relevant to the issue shall include recommendations from Commission staff and the ECM, pertinent information from the licensee's [ manager's ] BET file or provided by the licensee [ manager ], and reports of examinations or evaluations, if any, obtained by the Commission and the licensee [ manager ].

(3) The licensee [ manager ] is unassigned and has not applied for an assignment for a period of 12 consecutive months.

(b) Examination and evaluation. In any situation in which the vision or other disability of a licensee [ manager ] is at issue with respect to termination of a license, the Commission or the licensee [ manager ] may require an examination or evaluation by professionals to determine whether the licensee [ manager ] is otherwise permanently disabled and as a result of such permanent disability is unable to perform the essential functions of operating and maintaining a BET facility. The reports of such professionals shall be furnished to the executive director and licensee [ manager ]. Any failure of the licensee [ manager ] to participate in required examinations or evaluations shall be grounds for administrative action.

(c) Restoration of license. A license terminated under the provisions of this section may be restored at the discretion of the executive director if the condition or conditions causing the termination have been satisfactorily resolved. In considering a decision whether to restore a license terminated according to this section, the executive director shall consult with appropriate BET staff, the ECM chairperson, and any advocate for the licensee [ manager ] and shall consider all pertinent information and/or documentation provided by any of the persons described in this subsection.

(d) (No change.)

§167.14.Administrative Action Based on Unsatisfactory Performance.

(a) Causes for administrative action based on unsatisfactory performance. The happening of any one or more of the following acts or omissions by a manager shall subject a manager to administrative action for unsatisfactory performance:

(1)-(9) (No change.)

(10) Operating a BET facility in a manner that demonstrably jeopardizes [ endangers ] the Commission's investment in the facility.

(11)-(15) (No change.)

(b) Acts of improper contact. The participation in any one or more of the following acts or omissions by a licensee [ manager ] shall result in termination of the licensee's [ manager's ] license:

(1)-(4) (No change.)

(c) (No change.)

(d) Types of administrative actions. There are five [ four ] types of administrative actions based on unsatisfactory performance:

(1) Written reprimand. Written reprimand means a formal statement describing violations of applicable law, these rules, the requirements of the BET manual, or any proper and authorized instruction by Commission personnel.

(2) Probation. Probation means allowing a licensee [ manager ] to continue in BET in an effort to satisfactorily remedy a condition that is not acceptable under these rules. If the condition causing probation is satisfactorily remedied within the time periods specified in the written notice of probation, the probation will be lifted. If the unacceptable condition is not remedied within the time specified, additional and more serious administrative actions may ensue. When a licensee [ manager ] who has been on probation three times in a three-year period qualifies for probation for the fourth time within said three years, the licensee's [ Licensed Manager's ] license may be revoked according to Commission procedures.

(3) Loss of facility. Loss of facility means the removal of a manager from the manager's current facility for administrative reasons when the manager's actions or inactions are endangering the state's investment in the facility.

(4) Termination. Termination means the cessation of a license issued to a licensee [ manager ] to operate a facility and the removal of the individual [ manager ] from BET.

(5) Emergency Removal of Manager.

(A) A manager may be summarily removed from a facility in an emergency. An emergency shall be deemed to exist when, in the reasonable judgment of the Commission, the Commission, with consultation with the ECM chairman, determines that some act or acts or some failure to act of that manager or any person who is an employee, servant or agent of such manager, will, if such removal does not occur:

(i) result in a clear danger to the health, safety or welfare of any person or to the property of any person in, on or around the facility; or

(ii) result in a deterioration of the existing or future relationship with the host, thereby putting the continuation of the facility in jeopardy; or

(iii) present a clear potential of substantial loss or damage to the property of the State of Texas.

(B) In any case in which a manager has been summarily removed from a facility on an emergency basis for any of the reasons set forth in subparagraph (A) of this subsection, the manager shall be entitled to have a hearing as to the issue of a necessity of the summary removal within ten days after the removal has occurred.

(C) The time period for such hearing may be extended only by mutual agreement of the manager and the Commission, provided that if an official holiday of the State of Texas falls within the time period then the period shall be extended by the time of such holiday; or if the services of an arbitrator cannot be obtained in time to afford the hearing within the time period, then the time period shall be extended by the time necessary to obtain the services of such arbitrator and schedule the hearing.

(D) If the manager desires to have such a hearing, the manager shall notify the Commission in writing within 48 hours following the removal. Such written notification need only state the name of the manager, the location of the facility, and that the manager desires to have a hearing as to the issue of the need for summary removal. The request may be delivered to the BET director, the executive director, or any local Commission BET staff member in the geographical area in which the facility is located.

(E) Upon receipt of any such request the BET director shall obtain the services of an arbitrator from the American Arbitration Association ("AAA") or other similar organization to conduct the hearing.

(F) The manager shall be notified of the date, time and place of the hearing. To the extent possible, the hearing shall be conducted in an area near the location of the facility.

(G) The hearing shall be conducted in accordance with the rules of the American Arbitration Association, except that the arbitrator shall be requested to announce orally a decision at the conclusion of the hearing.

(H) If the arbitrator determines that no emergency necessitating the removal of the manager existed, then the manager shall be forthwith restored to the operation of the facility.

(I) No determination made as a result of the hearing shall operate to prejudice the rights of the manager to proceed with a grievance in accordance with the terms of these rules and the Randolph-Sheppard Act.

(e) Administrative action procedures.

(1) The Commission shall make the decision as to what administrative action to take based upon the seriousness of the violation, the damage to BET, and the licensee's [ manager's ] record. The foregoing language notwithstanding, when the act or omission alleged to be a matter requiring administrative action is one or more of those described in subsection (b) of this section, the only administrative action available shall be termination of the license.

(2) Upon receipt of information which indicates that administrative action may be appropriate, the Commission shall take the following actions prior to making a determination as to taking administrative action:

(A) The Commission shall notify the licensee [ manager ] in writing of the allegations and reasons that administrative action is being considered. The notice shall either be hand delivered and read to the licensee [ manager ], or it shall be delivered to the licensee's [ manager's ] work or home address.

(B) The licensee [ manager ] shall have 5 business days to respond, either in person or in writing, to the notice. The response shall be made to the individual designated in the notice. After receiving the licensee's [ manager's ] response, the Commission shall decide what administrative action, if any, is appropriate. If no response is timely received from the manager, the Commission shall decide what administrative action, if any, is to be taken without the licensee's [ manager's ] response.

(C) If a decision is made to issue a written reprimand, the written reprimand will be accompanied by a brief summary of the evidence justifying the reprimand, suggested steps for correcting the violation, and consequences of not correcting the violation. All reprimands shall contain notice of the licensee's [ manager's ] right to appeal the reprimand and a statement that failure to correct the violation may result in further administrative action.

(D) If a decision is made to place a licensee [ manager ] on probation, the Commission shall deliver to the licensee [ manager ] a letter of probation containing the following:

(i) the specific reasons for probation;

(ii) the remedial action required to remove the licensee [ manager ] from probation;

(iii) the time within which said remedial action must take place;

(iv) the consequences of failure to take remedial action within the prescribed time frame; and

(v) notice of the licensee's [ manager's ] right to appeal.

(E) Upon satisfactory completion of the remedial action outlined in the letter of probation, a licensee [ manager ] shall be removed from probation.

(F) Failure of the licensee [ manager ] to complete remedial requirements within the prescribed time frame shall result in one or more of the following actions:

(i)-(v) (No change.)

(G) (No change.)

(H) If, after the licensee [ manager ] has had an opportunity to respond, a decision is made that sufficient grounds exist for termination, the Commission shall notify the manager in writing by hand delivery or certified U. S. Mail, return receipt requested, that the Commission has decided that sufficient cause exists to terminate the licensee's [ manager's ] license. The manager shall be instructed to vacate the facility if the licensee [ manager ] has not already done so. The termination letter shall contain the following information:

(i) specific reasons for termination;

(ii) actions required by the licensee [ manager ], if any;

(iii) procedures for applying for any other Commission services for which the person may be eligible; and

(iv) notice of the licensee's [ manager's ] rights under the Randolph-Sheppard Act.

(3) The provisions of paragraph (2) notwithstanding, pending a determination with respect to administrative action, a manager may be removed from a facility if the Commission considers such removal in the best interest of BET and efforts to correct the deficiencies have been unsuccessful .

(4) (No change.)

(f) Prior to termination of a license, the Commission shall afford the licensee an opportunity for a full evidentiary hearing.

§167.15.Procedures for Resolution of Licensee's [ Manager's ] Dissatisfaction.

(a) Appealable actions. These rules provide the procedures for licensees [ managers ] who are dissatisfied with a Commission action arising from the operation of BET.

(b)-(d) (No change.)

(e) Informal procedures to review dissatisfactions. At the request of a licensee, the Commission shall arrange for and participate in informal meetings in an effort to quickly resolve a matter of dissatisfaction arising from the operation or administration of BET. The informal process is for the purpose of quickly and amicably resolving an issue in controversy. It is not for the purpose of denying or delaying the manager's right to pursue resolution of a matter through a full evidentiary hearing. At any point during the informal process, either party may elect to terminate the following procedures: [ administrative review. The manager has the right to request an informal administrative review to resolve a dissatisfaction. The purpose of an informal administrative review is to allow a manager a quick means for resolving a dissatisfaction arising from the operation or administration of BET. The Commission shall attempt to resolve complaints at the informal administrative review level. Informal administrative reviews shall be conducted according to the following: ]

(1) A licensee may initiate informal procedures by notifying the Commission in writing through the BET Director that the licensee is dissatisfied with a matter arising from the operation or administration of BET. The written notice must describe with reasonable particularity the specific matter in controversy, the date the action occurred, or an approximate date if the exact date is not known, and the licensee's desired relief or remedy. If the licensee is dissatisfied with a series of the same or related actions over a period of time, the notice should describe to the best of the licensee's ability the timeframe of the events and include the date of the most recent event about which the licensee is dissatisfied. [ The manager or manager's representative must submit a written request for an informal administrative review no later than the 20th business day after the occurrence of the disputed action. The request shall be considered timely if it is either postmarked or delivered to the Commission within said 20 business days. ]

(2) To ensure that informal resolution is possible in a timely manner, the licensee's request to initiate informal proceedings must be filed with the Commission no later than six months after the most recent event specified in the request. The Commission shall within a reasonable time arrange a meeting at a location, date, and time satisfactory to all parties. [ An informal administrative review shall be conducted only by a member or members of the administrative staff of the Commission who have not participated in the Commission action in question. ]

(3) The licensee must notify the Commission when filing a request for informal proceedings if the licensee will be represented by counsel during mediation. The Commission will be represented by counsel only when the licensee is represented by counsel. [ The written request for an informal administrative review must describe with reasonable particularity the specific action sufficient to provide notice as to the action which is alleged to be unreasonable or in violation of applicable law, these rules, the requirements of the BET manual, or any proper and authorized instruction by Commission personnel. The request must, to the best of the Complainant's knowledge, contain the dates those actions occurred and the law or regulation must be reasonably identified if an action is alleged to be in violation of law, these rules, the requirements of the BET manual, or regulation. The request must also identify the desired relief or remedy. ]

(4) Meetings shall take place in an informal environment and shall be attended by the licensee, a BET staff person, and a neutral third party who shall serve as an informal mediator during the discussions. [ The informal administrative review shall be held during regular Commission working hours at a district or local office location. Unless agreed otherwise by the parties, an informal administrative review shall be conducted no later than the 45th business day after the date the Commission receives the request. ]

(5) The neutral third party shall be a person certified in conducting mediations. [ Reader or other communication services, if needed, shall be arranged for the manager by the Commission upon request by the manager at least three business days prior to the review date. ]

(6) The neutral third party's responsibility is to report to the executive director only that the effort to resolve the matter to the licensee's satisfaction was or was not successful. If an agreement is reached, then the actions agreed to with respect to the facility or licensee shall be forthwith taken. [ The Commission staff member conducting the informal administrative review shall determine whether the action arising out of the operation or administration of BET was in violation of applicable law, these rules, the requirements of the BET manual, any proper and authorized instruction by Commission personnel or is unreasonable. If the action is found to be not in violation of applicable law, these rules, the requirements of the BET manual, any proper and authorized instruction by Commission personnel or not unreasonable, the staff member shall not substitute his discretion for that of the discretion exercised by the Commission. ]

[ (7) The reviewing Commission staff member shall prepare brief findings of fact, conclusions, and recommendations no later than the 10th business day after the conclusion of the review. These shall be sent to the executive director, who shall review them and make his own determination as to whether to accept the findings, conclusions and recommendation of the reviewing staff member. The executive director shall inform the manager of his decision in writing no later than the 10th business day after receipt of the recommendation.]

[ (8) When an informal administrative review does not resolve a dispute to the satisfaction of a manager, such manager may request a full evidentiary hearing in accordance with the provisions of these rules and regulations.]

(f) Full evidentiary hearing. A manager has the right to request a full evidentiary hearing to resolve a dissatisfaction according to the following:

(1) A manager has the right to request a full evidentiary hearing without first going through mediated meetings described in subsection (e) of this section [ an informal administrative review ].

(2) (No change.)

(3) A manager requesting a full evidentiary hearing after the conduct of mediated meetings described in subsection (e) of this section [ an informal administrative review ] must request such hearing in writing no later than the 20th business day after receipt of the executive director's decision.

(4)-(10) (No change.)

(11) Licensees [ Managers ] bringing complaints shall have the burden of proving their cases by the preponderance of evidence. Licensees [ Managers ] shall present their evidence first. When a hearing is requested as a result of administrative action by the Commission against a licensee, the Commission shall have the burden of proving its case by a preponderance of the evidence and shall present its evidence first.

(12)-(17) (No change.)

(g) (No change.)

§167.17.Forms.

The Commission adopts the following forms by reference. Copies are available from any local Commission office or by calling the agency's toll-free line (1-800-252-5204) and requesting a copy.

(1) BET Application (BE-114) dated September 1, 2003.

(2) Business Enterprises of Texas Monthly Facility Report, (BE-117), dated September 1, 2003.

(3) BET Assignment - Requirements for Operation of a Vending Facility Under Randolph-Sheppard Act and Applicable State Statutes Between Texas Commission for the Blind and a Licensed Vendor (BE-121), dated September 1, 2003.

(4) Equipment Loan Agreement (BE-122) dated September 1, 2003.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State on May 7, 2003.

TRD-200302845

Terrell I. Murphy

Executive Director

Texas Commission for the Blind

Proposed date of adoption: August 1, 2003

For further information, please call: (512) 377-0611