Part 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION
Chapter 68. ELIMINATION OF ARCHITECTURAL BARRIERS
The Texas Commission of Licensing and Regulation ("Commission") adopts amendments to an existing rule at 16 Texas Administrative Code ("TAC") Chapter 68, §68.74 concerning continuing education requirements for registered accessibility specialists in the elimination of architectural barriers program as published in the January 18, 2008, issue of the Texas Register (33 TexReg 467), without changes, and will not be republished.
The Commission adopted §68.74 as a new rule effective March 1, 2007. The rule as adopted requires registered accessibility specialists to complete eight hours of continuing education as a condition of renewing the certificate of registration. Four of the hours must be in Department-approved courses offered by providers that are registered with the Department. Subsection (i) states that the rule applies to certificates of registration that expire on or after March 1, 2008.
The adopted amendment to subsection (i) require continuing education for those certificates of registration expiring on or after March 1, 2009. This change extends the time for registered accessibility specialists to comply with continuing education requirements. The change is needed because not enough continuing education providers have sought Department approval to offer continuing education courses to registered accessibility specialists. Because of this, registered accessibility specialists needing to renew their certificates of registrations beginning March 1, 2008, will have difficulty meeting the continuing education requirements. The Department expects that the extension of time will allow for additional providers to obtain approval for continuing education courses.
This rule is necessary to implement Texas Occupations Code, §51.405, which require the Commission to recognize, prepare, or administer continuing education programs for license holders.
The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposal was published in the Texas Register on January 18, 2008. The comment period closed on February 18, 2008.
One public comment was received in response to the proposal from a registered accessibility specialist who was in favor of the change. Additionally, six members of the Architectural Barriers Advisory Committee individually commented on the proposed amendment and were also in support of the change.
The amendments are adopted under Texas Government Code, Chapter 469 and Texas Occupations Code, Chapter 51, which authorize the Department to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. In particular, the rule implements Texas Occupations Code, §51.405.
The statutory provisions affected by the adoption are those set forth in Texas Government Code, Chapter 469 and Texas Occupations Code, Chapter 51. No other statutes, articles, or codes are affected by the adoption.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 25, 2008.
TRD-200801580
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Effective date: April 14, 2008
Proposal publication date: January 18, 2008
For further information, please call: (512) 463-7348
16 TAC §§85.1, 85.10, 85.20, 85.200 - 85.208, 85.400, 85.450 - 85.453, 85.650, 85.700 - 85.725, 85.800, 85.900, 85.1000 - 85.1003
The Texas Commission of Licensing and Regulation ("Commission") adopts new rules at 16 Texas Administrative Code ("TAC") §§85.1, 85.20, 85.201 - 85.208, 85.400, 85.450 - 85.453, 85.650, 85.700 - 85.703, 85.705, 85.707, 85.709, 85.711 - 85.718, and 85.720 - 85.724, 85.800, and 85.1000 - 85.1002 regarding the licensing and regulation of vehicle storage facilities and vehicle storage facility employees, as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1027), without changes, and will not be republished. The Commission also adopts new rules at 16 TAC, Chapter 85, §§85.10, 85.200, 85.704, 85.706, 85.708, 85.710, 85.719, 85.725, 85.900, and 85.1003 with changes from the rules as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1027) and are republished.
These rules are necessary to implement House Bill 2094, 80th Legislature, Regular Session, 2007.
New §85.1 provides statutory authority for rule adoption.
New §85.10 defines terms used in the statute and the rules, including "abandoned nuisance vehicle," "act," "affidavit of right of possession and control," "commission," "day," "department," "executive director," "fence," "immediate family," "impoundment," "license holder or "licensee," "main," "notice of right of possession for salvage," "person," "principal," "registered owner," "vehicle," "vehicle owner," "vehicle storage facility," and "vehicle transfer."
New §85.20 establishes exemptions to the rules.
New §85.200 provides that a vehicle storage license is required.
New §85.201 establishes the licensing and application requirements for vehicle storage facilities.
New §85.202 establishes criteria for the review of vehicle storage facility license applications.
New §85.203 establishes the annual renewal requirements for vehicle storage facility licenses.
New §85.204 establishes the application requirements for a vehicle storage facility employee license.
New §85.205 establishes the annual renewal requirements for a vehicle storage facility employee license.
New §85.206 provides notice to applicants of proposed denial of applications with an opportunity to cure.
New §85.207 provides additional method of notice to licensees using the last designated email address.
New §85.208 provides that a license is valid for one year.
New §85.400 establishes the insurance requirements for obtaining and renewing a vehicle storage facility license.
New §85.450 establishes the general requirement of a department initiated inspection of a vehicle storage facility.
New §85.451 provides for bi-annual inspections of a vehicle storage facility during normal business hours.
New §85.452 establishes the criteria for a risk-based inspection of a vehicle storage facility.
New §85.453 provides the procedures for corrective actions following a department initiated inspection of a vehicle storage facility.
New §85.650 provides for a Towing and Storage Advisory Board. This section list criteria of board membership, terms of office, meetings times, and board responsibilities.
New §85.700 places the burden of proving exemption from the rules on the licensee.
New §85.701 prohibits licensees from engaging in false, misleading, or deceptive advertising.
New §85.702 requires licensees to notify the department of changes in name, address, facility capacity, or the drug testing policy.
New §85.703 describes the procedures that a vehicle storage facility must initially follow to send notice to vehicle owners and lien holders.
New §85.704 describes the procedures that a vehicle storage facility must follow to provide a second notice for unclaimed vehicles before the vehicles may be disposed.
New §85.705 requires a vehicle storage facility to notify local law enforcement of every nonconsent-towed vehicle from private property stored at the facility.
New §85.706 lists the documents and information that a vehicle storage facility must retain, including the retention period.
New §85.707 requires a vehicle storage facility to give the vehicle owner the department's website and email address, mailing address, and telephone number, for purposes of directing complaints.
New §85.708 describes the rights of the vehicle owner to have access to stored vehicles.
New §85.709 prohibits un-permitted tow trucks from entering the grounds of a vehicle storage facility.
New §85.710 lists the types of documents required for release of a vehicle to the vehicle owner or representative.
New §85.711 lists the types of payment a vehicle storage facility must accept for release of a stored vehicle.
New §85.712 requires payment by lienholder and insurance company for release of vehicles regardless of when the charges accrued.
New §85.713 requires a vehicle storage facility to release a vehicle to the owner or representative regardless of whether law enforcement has paid charges resulting from a law enforcement hold, unless the charges result from a delinquent administrative penalty assessed against the vehicle owner.
New §85.714 requires a vehicle storage facility to provide to a vehicle owner or representative, on request, its liability insurance company contact information including the policy number.
New §84.715 establishes a requirement that a vehicle storage facility maintain a publicly listed telephone number and notify the department of any change to that number.
New §85.716 requires a vehicle storage facility to inspect a nonconsent towed vehicle, and, if necessary, correct erroneous information on the tow ticket.
New §85.717 describes the conditions under which a vehicle storage facility may remove parts from, dismantle, or demolish a stored vehicle.
New §85.718 prohibits the personal or business use of a stored vehicle by a vehicle storage facility without written owner consent.
New §85.719 requires reasonable efforts by a vehicle storage facility for the safe storage of vehicles and describes the circumstances under which impoundment fees may be charged.
New §85.720 prohibits a vehicle storage facility from repairing or altering a stored vehicle without written consent.
New §85.721 establishes procedures for transferring a stored vehicle from one vehicle storage facility to another vehicle storage facility.
New §85.722 prohibits a vehicle storage facility from charging fees except for those fees specifically authorized for owner notification, charged for daily storage, collected on behalf of government or law enforcement, and environmental hazard fees.
New §85.723 identifies statutory authority for the disposal of certain vehicles and requires the keeping of records after disposal.
New §85.724 describes the procedures for the public sale of abandoned nuisance vehicles.
New §85.725 provides a model drug testing policy for employees of a vehicle storage facility.
New §85.800 establishes the fees for initial applications, renewal applications, inspection fees, and late renewals.
New §85.900 provides for the imposition of administrative penalties and/or sanctions against a person that violates the statute or rules.
New §85.1000 establishes fencing and security requirements for a vehicle storage facility.
New §85.1001 provides that a vehicle storage facility must have an all-weather surface.
New §85.1002 provides vehicle storage facility minimum lighting requirements.
New §85.1003 provides for the location and content of signage at a vehicle storage facility.
The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposal was published in the Texas Register on February 8, 2008. The comment period closed on March 10, 2008.
February 20, 2008 Public Hearing
A public hearing on the proposed Chapter 85 was held at the John H. Reagan State Office Building on February 20, 2008, at 10:00 a.m. At the public hearing, the department received comments from: Larry Cernosek, Paul Martin, Jim Evans, Cathy Creamer, Dave England, Rhonda Hight, Charles Exley, Bill Campbell, Frankie Garcia, Chris Palm, Rick Merritt, Billy and Beverly Hrnric, Judy Macher, Michelle Vasquez, Donald McClure, Larry Cooksey, Conrad Gamboa, and Regina Sustaita.
The comments received during the public hearing were essentially identical to those submitted in writing. Therefore, responses to the comments received during the public hearing will be addressed in the section addressing written comments.
Public Comments Received During March 14, 2008 Advisory Board Meeting
During the March 14, 2008 meeting of the Towing and Storage Advisory Board, the department received comments from: Larry Cernosek, Paul Martin, Jim Evans, Cathy Creamer, Dave England, Rhonda Hight, Charles Exley, Rick Campbell, Frankie Garcia, Chris Palm, and Rick Merritt.
The comments received during the March 14, 2008 Advisory Board Meeting were essentially identical to those heard during the February 20, 2008 Public hearing and to those submitted in writing. Therefore, responses to the comments received during the March 14, 2008, Advisory Board meeting will be addressed in the section addressing written comments.
Written Comments
The department received written comments from the following individuals: Roderick M. Jones, Kay and Albert Winwood, Dave Reinhardt, Dan W., June Clay, Gary Allen, Ronald McHam, and Michael Tucker.
The following companies submitted written comments: Expert Towing, WHW Towing Companies, Tow Partners, Evans & Associates, Shannafelt Auto Company, Houston Metropolitan Repossessions, Cowboy Towing, B&B Auto Worx, CTAR, Inc., Texas Independent Auto Resellers Association, Farmers Insurance, Allstate Insurance, Pro-Tow Wrecker Service, Graham's Wrecker Service, Texas Apartment Association, Cernosek Wrecker/Deer Park Paint & Body, State Farm Insurance, Westside Wrecker Service, Edd's Towing, Garcia's Wrecker Service.
One commenter requests revision of §85.10(3) to allow use of computer generated forms. The rule has not been changed in response to this comment. The department-approved form provides certainty to VSF operators and the public.
One commenter states that it is not possible to comply with §85.706 because the original documents are filed with the Department of Transportation. The commenter requested the rule be changed to only require a copy of the original. The department agrees with the commenter and §85.706 has been changed to require original documents, unless the original is submitted to the state, in which event a copy of the original is required.
Several commenters suggested that agency staff create a model consent form for industry use to comply with the drug testing policy in §85.725. The department agrees with the commenters and staff will prepare and post a model drug testing consent form.
One commenter asked that the fees in §85.800 be lowered after the first year. The rule has not been changed in response to this comment. However, the department will review fees and adjust them as appropriate.
Three commenters suggested the rule be modified to prohibit companies with a revoked license from reapplying for five years. The rule has not been changed in response to this comment. The licensing requirements are statutory.
Many commenters requested the department create a combined license for tow operators and VSF employee. The rule has not been changed in response to these comments because under the statute the licenses are separate licenses. However, while the statutes do not provide for combined licenses, the department modified the application process by combining the application for both licenses on a single document.
Two commenters sought revisions to §85.204 to eliminate dual drug testing and background checks for licensees holding a VSF employee license and a towing operator license. The department agrees with these commenters and has modified the drug testing policy to require a single drug test for persons holding a VSF employee license and a towing operator's license. The department modified its processes to require a single background check for persons holding both licenses.
Insurance companies requested the creation of an authorization form to allow for inspection of vehicles by insurance companies processing claims. The department agrees that the revision is necessary. Section 85.708(c) is revised to allow insurance companies the right to inspect vehicles at the VSF for purposes of handling claims.
Several commenters asked that the rules adopt environmental hazard fees. One commenter suggested the rule include a requirement for VSFs charging an environmental hazard fee to itemize the bill and document the size and nature of the spill. Another commenter asked that the fee be set at $150 and be supported by pictures of the contaminated area. The rule has not been changed in response to the comments. The current rule will not provide for collection of an environmental hazard fee. These fees will be addressed in future rulemaking.
One commenter asked that the department explain the role of salvage pool operators in relation to compliance with the rules. The rule has not been changed in response to this comment. To the extent salvage pool operators operate VSFs, they are subject to the requirements of Chapter 85.
One commenter asked for a revision requiring additional rotation of advisory board member terms. The rule has not been changed in response to this comment. The terms of advisory board members are statutory.
Two commenters asked whether offsite VSFs (secondary storage lot) require separate VSF licenses. Although §85.201 requires the applicant to list the address of the facility, §85.200 has been changed to clarify that each geographic location require a separate VSF license.
One commenter asked for the justification for increasing the insurance limits for incident management towers. The rule has not been changed in response to this comment. The insurance limits in §85.400 are statutory.
Several commenters complained about the impossibility of verifying whether a person is actually a family member eligible to use the Affidavit of Right of Possession in §85.10(3). The rule has not been changed in response to this comment. The rule does not require the VSF to independently verify assertions or representations that the requestor is a family member.
Two commenters asked that the rules include provisions related to repossession companies. The rule has not been changed in response to this comment. To the extent repossession companies operate as VSFs, they are subject to the requirements of the rules.
Several commenters complained about the inability to obtain record checks required by Transportation Code, Chapter 683. The rule has not been changed in response to this comment. The department does not have jurisdiction to direct law enforcement to comply with the provisions of the Transportation Code.
One commenter states that requests under §85.703 should not be sent electronically. The rule has not been changed in response to this comment. The section does not require electronic notification. Electronic notification is one of the methods of providing notice but is not exclusive.
One commenter asked that the reference in §85.706(a)(6) to "receipt" be changed to "auction sales receipts" and the reference to "police" in subsection (b)(6) be changed to "law enforcement." The department agrees with these comments and the references have been changed accordingly.
One commenter questioned why §85.722(d) prohibits the charging of fees for vehicles registered out-of-state after five days unless notice is sent to the registered vehicle owner. The rule has not been changed in response to this comment. The time requirements provided in §85.722(d) are statutory.
Several commenters suggest that the rules for VSF employees are written for big companies. The rule has not been changed in response to this comment. The statute makes no distinction between large and small companies. However, the department is sensitive to the needs of small businesses and has taken care to minimize the impact on those businesses. For example, internal processes are in place to combine the application process and the rules are written to eliminate redundancies such as the dual drug testing of employees licensed as tow operators and VSF employees. Finally, the rule has been changed to reduce company costs by removing the alcohol-testing requirement.
Some commenters asked for clarification of whether someone answering the phone or performing some other causal function is an employee of the VSF. The rule has not been changed in response to this comment. Whether a person is an employee of a VSF is fact dependent. The department does not believe it appropriate to attempt by rule to determine factual issues in the absence of a full evidentiary record.
One commenter asked for clarification of when the when the hour starts for purposes of complying with §85.710(9). The department agrees and §85.710(9) has been revised to clarify that the one hour starts with the time of the call requesting release and documented on the customer receipt.
One commenter suggested that the rule contain a protocol to release vehicles to law enforcement. The rule has not been changed in response to this comment. The statute and rules do not contain special provisions for the release of vehicles to law enforcement. The general release provisions of the rules apply.
One commenter asked that the rules be enforced to ensure the licensing of drivers and trucks. The rule has not been changed in response to this comment. As with all of the programs under the department's jurisdiction, the agency will vigorously enforce all validated violations of its rules.
Several commenters suggested that §85.722(c) read "or" rather than "and." The rule has been revised to reflect these comments.
One commenter states that the definition of "day" in §85.10(5) conflicts with the definition of "day" found in §85.722(d)(1). The rule has not been changed in response to this comment. The definition in each section is intended to cover a different situation and is therefore contextually appropriate.
Two commenters stated that the model drug testing policy in §85.725 should contain a provision authorizing drug testing based on "reasonable cause or suspicion." The rule has not been changed in response to this comment. The statute authorizes drug testing under two circumstances, i.e., annual testing and random testing. Reasonable cause or suspicion testing is not authorized by statute. Moreover, the statute provides that a VSF may adopt a drug testing policy more stringent than the model policy.
One commenter suggests that the impoundment fees in §85.719 are low and do not recover costs. The rule has not been changed in response to this comment. Impoundment fees are statutory.
One commenter believes that the annual period for federal drug testing begins on the driver's birthday. The department believes that the model drug testing should clarify when the period starts for purposes of annual drug testing. Section 85.725(a)(6)(B) has been changed to clarify that the annual drug test must be within 12-months of the initial license issuance or renewal.
One commenter suggested that drug tests be conducted randomly. The rule has not been changed in response to this comment. The statute and rule provide for random testing.
One commenter suggested that employees have two hours to report for random drug testing. The rule has not been changed in response to this comment. The published rule provides that an employee must report for testing within fifteen minutes notice up to two hours.
On commenter believes that the model drug testing policy include the testing of hair specimens. The rule has not been changed in response to this comment. Testing of hair samples will add additional administrative costs for VSFs. If the testing of urine proves inadequate, the department may revisit this issue.
One commenter states that a positive drug test be reported to law enforcement or to the department. Section 85.725(a)(6)(E) has been changed in response to this comment. The revision requires that positive test results be reported to the department.
One commenter asked for a definition of the term "public sale." The rule has not been changed in response to this comment. Section 85.704 contains the requirements for providing notice to vehicle owners and disposing of vehicles. As long as the VSF complies with the notice requirements and conducts the sale accordingly, the sale is a public sale.
A commenter asked about the disposition of personal property left in abandoned vehicles that are sold at a public sale. Section 85.704 is clarified to require the published notice reference a sale of the vehicle and personal property.
One commenter states the vehicle owners should receive excess proceeds from the sale of abandoned vehicles without initiating a court proceeding. The department revised §85.704 to clarify that the VSF must pay excess proceeds to the vehicle owner. However, in the case of a dispute about the proceeds, the statute authorizes a suit in justice court.
Several commenters complained that towing and storage fees are extraordinarily expensive. The rule has not been changed in response to this comment. The department is without statutory authority to decrease rates.
Some commenters believe that the VSF employee license should be valid for more than one year. The rule has not been changed in response to this comment. The term of the VSF employee license is statutory.
One commenter suggested that the reference to "analogous" in §85.719(c) be changed to "other." The rule has not been changed in response to this comment. Vehicle records may be maintained by more than one state agency. The term "analogous" requires that the state agency be equivalent to the Texas Department of Public Safety.
The new rules are adopted under Texas Occupations Code, Chapter 2303, which directs the Department's governing body, the Commission, to adopt rules to establish the requirements for a person to be licensed to operate a vehicle storage facility, and to ensure that the facility maintains adequate standards for the care of stored vehicles; and Texas Occupations Code, Chapter 51, which authorizes the Commission to adopt rules as necessary to implement this chapter and any other law establishing a program regulated by the Department.
The statutory provisions affected by the adoption are those set forth in Texas Occupations Code, Chapter 2303, and Texas Occupations Code, Chapter 51. No other statutes, articles, or codes are affected by the adoption.
§85.10.Definitions.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Abandoned nuisance vehicle--A motor vehicle that is at least 10 years old and is of a condition only to be demolished, wrecked, or dismantled.
(2) Act--The Vehicle Storage Facility Act, Texas Occupations Code, Chapter 2303.
(3) Affidavit of Right of Possession--A form prescribed by the department and provided by the licensee for use by an immediate family member certifying right of possession to a vehicle stored at a vehicle storage facility.
(4) Commission--The Texas Commission of Licensing and Regulation.
(5) Day--Twenty-four continuous hours.
(6) Department--The Texas Department of Licensing and Regulation.
(7) Executive director--The executive director of the department.
(8) Fence--An enclosure of wood, chain link, metal, concrete, or masonry, placed around an area used to store vehicles and designed to prevent intrusion and escape.
(9) Immediate family--A vehicle owner's parents, spouse, children, brothers, and sisters.
(10) Impoundment--The following actions when performed on a stored vehicle:
(A) using materials such as plastic or canvas tarpaulins to ensure the preservation of a stored vehicle if doors, windows, convertible tops, hatchbacks, sunroofs, trunks, or hoods are broken or inoperative;
(B) conducting a written inventory of any unsecured personal property contained in a stored vehicle;
(C) removing and storing all unsecured personal property that is contained in a stored vehicle and for which safekeeping is necessary; or
(D) obtaining motor vehicle registration information for a specific vehicle from the Texas Department of Transportation, Vehicle Titles and Registration Division, or an equivalent out-of-state agency.
(11) License holder or Licensee--The person to which the department issued a license.
(12) Main entrance--The initial point from the public road onto the private property leading to the vehicle storage facility at which a consumer or service recipient enters a vehicle storage facility.
(13) Notice of Right of Possession for Salvage--A form prescribed by the department and executed by persons licensed under 16 Texas Administrative Code Chapter 86 as agents for an insurance company that has documented authority from the vehicle owner obtained prior to execution of the form, certifying right of possession of a total loss vehicle stored at a vehicle storage facility.
(14) Person--An individual, corporation, organization, business trust, estate, trust, partnership, association, or other legal entity.
(15) Primary lien holder--First lien holder named on the certificate of title in the motor vehicle registration records of the Texas Department of Transportation.
(16) Principal--An individual who:
(A) holds, whether personally, as a beneficiary of a trust, or by other constructive means:
(i) 10% of a corporation's outstanding stock; or
(ii) an ownership interest in a business that is equivalent to a fair market value of more than $25,000;
(B) has the controlling interest in a business;
(C) has a participating interest of more than 10% in the profits, proceeds, or capital gains of a business, regardless of whether the interest is direct or indirect, whether it is held through share, stock, or any other manner, or whether it includes voting rights;
(D) holds a position as a member of the board of directors or other governing body of a business; or
(E) holds a position as an elected officer of a business.
(17) Proof of loss claim form--A form prescribed by the department and submitted by an insurance company certifying right of possession to a vehicle stored at a vehicle storage facility.
(18) Registered owner--Each person in whose name a vehicle is titled under Transportation Code, Chapter 501, or in whose name a vehicle is registered under Transportation Code, Chapter 502.
(19) Vehicle--A motor vehicle subject to registration under Transportation Code, Title 7, Subtitle A, or any other device designed to be self-propelled or transported on a public highway.
(20) Vehicle owner--A person:
(A) in whose name a vehicle is registered under the Certificate of Title Act, Transportation Code, Chapter 501;
(B) in whose name a vehicle is registered under Transportation Code, Chapter 502, or a member of that person's immediate family;
(C) who holds a vehicle through a valid lease agreement;
(D) who is an unrecorded lienholder with a right to possession; or
(E) who is a lienholder that holds an affidavit of repossession and has the right to repossess a vehicle.
(21) Vehicle storage facility (VSF)--A garage, parking lot, or other facility owned or operated by a person other than a governmental entity for storing or parking 10 or more vehicles per year.
(22) Vehicle transfer--Any movement of a vehicle out of a VSF, prior to its release as prescribed in this chapter.
§85.200.License Required--Vehicle Storage Facility.
A person may not operate a VSF unless the person holds a VSF license issued by the department. For purposes of this section, each VSF physical location or lot is a separate facility and must obtain a VSF license.
§85.704.Responsibilities of Licensee--Second Notice; Consent to Sale.
(a) If a vehicle is not claimed by a person permitted to claim the vehicle or is not taken into custody by a law enforcement agency under Chapter 683, Transportation Code, before the 41st day after the date notice is mailed or published under §85.703, the operator of the VSF shall send a second notice to the registered owner and the primary lienholder of the vehicle.
(b) If a vehicle is not claimed by a person permitted to claim the vehicle before the 10th day after the date notice is mailed or published under §85.703, the operator of the VSF shall consider the vehicle to be abandoned and send notice of abandonment to a law enforcement agency under Chapter 683, Transportation Code.
(c) Notice under this section must include:
(1) the information listed in §85.703(i);
(2) a statement of the right of the facility to dispose of the vehicle under subsections (a) and (b);
(3) a statement that the failure of the owner or lienholder to claim the vehicle and personal property before the 30th day after the date the notice is provided is:
(A) a waiver by that person of all right, title, or interest in the vehicle and personal property; and
(B) a consent to the sale of the vehicle at a public sale.
(d) Notwithstanding subsection (b), if publication is required for notice under this section, the notice must include:
(1) the information listed in §85.703(i)(2); and
(2) a statement that the failure of the owner or lienholder to claim the vehicle before the date of sale is:
(A) a waiver of all right, title, and interest in the vehicle; and
(B) a consent to the sale of the vehicle at a public sale.
(e) The operator shall pay any excess proceeds to the person entitled to those proceeds.
§85.706.Responsibilities of Licensee--Documentation and Records.
(a) Retention of written documentation. Vehicle storage facility licensees must maintain a copy of the original written documentation regarding their operations for a period of two years from the date of the release or disposal of the vehicle. Written documentation shall be in the form of:
(1) motor vehicle registration checks;
(2) notification letters;
(3) certified return receipts;
(4) tow tickets (if applicable);
(5) bills for service;
(6) auction sales receipts;
(7) inventory (if applicable);
(8) certificates of authority to demolish; and
(9) any authorized document used to release a vehicle, including but not limited to a title, affidavit of right of possession and control, or court order.
(b) Minimum information. Each licensee shall keep written records on each vehicle kept or stored at the VSF. These records shall contain:
(1) the year, make, model, color, correct license plate number, state issuing the license, and correct vehicle identification number of the vehicle;
(2) the date, time and location from which the vehicle was towed, and name of person or company who authorized the tow;
(3) the name of the tow truck driver, driver TDLR license number, the name of the company that towed the vehicle, and the license plate numbers of plates issued to the tow truck under Transportation Code, §502.180, and §504.508;
(4) the date the vehicle was released, the name of the individual to whom the vehicle was released, and the type of identification (Texas drivers license or other state or federally issued photo identification) and identification number provided by the individual to whom the vehicle was released;
(5) the date of any vehicle transfer, and the address of the location to which the vehicle was transferred along with the name of the towing company and tow truck driver, with TDLR license number, who made the transfer;
(6) a copy of any certificate of title issued after the vehicle came into the possession of the VSF, any certificate of authority to demolish, any law enforcement auction sales receipt, or any transfer document issued by the State of Texas for the vehicle if vehicle ownership has been transferred due to any action of the VSF or if the vehicle has been disposed of or demolished; and
(7) all amounts received at the time the vehicle was released, including the specific nature of each charge.
(c) Nonconsent tow tickets. The VSF shall ensure that nonconsent tow tickets (if applicable) contain the registered name of the towing company, the towing company certificate of registration number, and the full printed name and TDLR license number of the towing operator on file with the department.
(d) Regulatory documents. A VSF may not accept a vehicle for storage unless the VSF makes and maintains a copy of the towing operator's valid TDLR operator's license and tow truck cab card for the driver and truck delivering the vehicle for storage. The copies required by this subsection must be current and valid on the date a vehicle is delivered to the VSF for storage.
(e) Availability of documentation. All documents required by this chapter shall be made available by the licensee, the licensee's agent, or the licensee's employee for inspection and copying upon request by department personnel, or a law enforcement officer, during the same hours the VSF must ensure that vehicles are available for release to the vehicle owner.
(f) Care and custody of records. Required records shall be kept under the care and custody of the licensee for at least two years from the date the vehicle was released or disposed of.
§85.708.Responsibilities of Licensee--Rights of Owner or Authorized Representative.
(a) A VSF must allow a person claiming to be the owner of a vehicle stored or parked at the facility to have access to the vehicle's glove compartment, console, or other interior storage area if documents necessary to establish the person's identity or ownership of the vehicle are located in the glove compartment, console, or other interior storage area.
(b) When a person demonstrates ownership or right to possession of a motor vehicle stored at a VSF, the person or his/her authorized representative shall:
(1) be entitled to inspect a copy of the tow ticket for the motor vehicle and shall not be required to pay any fees or charges before doing so (reasonable opportunity to view the tow ticket displayed behind a glass enclosure satisfies this requirement);
(2) be given access to, and be allowed to remove, any personal belongings in the vehicle, unless otherwise indicated by a law enforcement officer (the VSF must require a receipt from the person to whom the personal belongings are released for any such property removed from the stored vehicle by the vehicle owner or authorized representative);
(3) have access, during normal business hours, to the vehicle for the purposes of insurance and/or repair estimates; and
(4) have access to the current nonconsent towing fees schedule on file with the department, as prescribed in §85.1003(c) (relating to Required Posting at Vehicle Storage Facility), for the specific name of the company that towed the vehicle to the VSF.
(c) When right of possession is demonstrated by submission of a proof of loss claim form from an insurance company, subsection (b)(2) does not apply.
(1) For purposes of this subsection, when an insurance company presents a proof of loss claim form, the term "access" includes, but is not limited to:
(A) verifying the present existence of such vehicle,
(B) confirming the loss,
(C) taking measurements and photographs of the interior and exterior of said vehicle,
(D) recording or attempting to ascertain mileage,
(E) verifying the VIN plate or label,
(F) opening or attempting to open doors, hood or trunk panels,
(G) writing a repair estimate, documenting features, options and conditions, and
(H) when authorized by the owner, operator or lessee of the vehicle, removing the vehicle from the VSF.
(2) Upon the request of an insurer presenting a proof of loss claim form, or upon the request of a tow truck operator possessing a notice of right of possession for salvage form, a VSF shall provide a legible copy of the tow ticket created by the towing operator responsible for towing the vehicle to the VSF to either:
(A) the insurer, within three business days of the insurer presenting the proof of loss claim form; or
(B) the tow truck operator, at the time the tow truck operator presents a copy of the notice of right to possession for salvage form to the VSF.
(3) The VSF may provide the copy of the tow ticket to the insurer, via regular mail, facsimile, or by other electronic means, provided the insurer provides the VSF with a specific mailing address, facsimile phone number, web address or email address to which to send the tow ticket.
(d) A VSF may not request a vehicle owner or operator to sign an authorization form for a tow, repair or any other service if the storage of the vehicle is the result of a tow initiated by law enforcement.
§85.710.Responsibilities of Licensee--Release of Vehicles.
(a) Release of vehicles. The licensee shall comply with the following requirements when releasing vehicles.
(1) The licensee shall comply with all provisions of Texas Occupations Code, Chapter 2308, Subchapter J, relating to the rights of the owner of a stored vehicle, including providing the name, address, and telephone number of:
(A) the justice court that has jurisdiction in the precinct in which the VSF is located; and
(B) the name, address and telephone number of the person or law enforcement agency that authorized the tow.
(2) The licensee shall provide the owner or the owner's representative with a tow ticket.
(3) The VSF shall allow the vehicle owner or authorized representative to obtain possession of the vehicle at any time between the hours listed on the facility information sign posted as described in §85.1003, upon payment of all fees due, presentation of valid identification (Texas drivers license or other state or federally issued photo identification), and upon presentation of:
(A) a notarized power-of-attorney;
(B) a court order;
(C) a certificate of title;
(D) a tax collector's receipt and a vehicle registration renewal card accompanied by a conforming identification;
(E) executed proof of loss claim form from an insurance company to show a right to possession;
(F) name and address information corresponding to that contained in the files of the Texas Department of Transportation's Vehicle Titles and Registration Division; or
(G) a department approved Affidavit of Right of Possession, which is to be furnished by the VSF upon request (an Affidavit of Right of Possession is not to be used as a repossession instrument).
(4) A VSF may not refuse to release a vehicle to the owner or operator of the vehicle or require a sworn affidavit of the owner or operator of the vehicle solely because the owner or operator presents valid photo identification issued by this state, another state, or a federal agency that includes a different address than the address contained in the title and registration records of the vehicle.
(5) A VSF must accept evidence of financial responsibility (insurance card), as required by §601.051, Transportation Code, as an additional form of identification that establishes ownership or right of possession or control of the vehicle.
(6) Paragraph (3) does not require a VSF to release a vehicle to the owner or operator of the vehicle if the owner or operator of the vehicle does not:
(A) pay the charges associated with delivery or storage of the vehicle; and
(B) present valid photo identification issued by this state, another state, or a federal agency.
(7) If it accepts vehicles 24 hours a day, all VSFs shall have vehicles available for release 24 hours a day within one hour's notice.
(8) If a VSF does not accept vehicles 24 hours a day, such facility must have vehicles available for release within one hour between the hours of 8:00 a.m. and midnight Monday-Saturday and from 8:00 a.m. to 5:00 p.m. on Sundays except for nationally recognized holidays. It is not the intent of this section to require release of vehicles after midnight, and refusal to release after that time, even with notice after 11:00 p.m., is not a violation of this section.
(9) For purposes of determining when the one hour for release of a vehicle starts, the VSF must clearly note on the receipt the time of the call requesting vehicle release and have the person requesting release separately initial the notation.
(b) A VSF may not require an owner, operator or agent of an owner or operator of a vehicle to sign an authorization or release form to release the vehicle from the VSF if that form:
(1) changes the status of the law enforcement initiated tow from a nonconsent status to a consent tow status;
(2) changes the status of the storage resulting from a nonconsent tow from a nonconsent storage status to a consent storage status; or
(3) imposes any additional charges not regulated by the Department.
§85.719.Responsibilities of Licensee--Reasonable Storage Efforts; Impoundment of Stored Vehicles; Impoundment Fees.
(a) Reasonable storage efforts. A VSF operator shall make reasonable efforts necessary for the storage of a vehicle, such as locking doors, rolling up windows, and closing doors, hatchbacks, sunroofs, trunks, hoods, or convertible tops. Such actions are included in the storage fee as set forth in this chapter.
(b) Impoundment of stored vehicles. If doors, windows, convertible tops, hatchbacks, sun roofs, trunks, or hoods are broken or inoperative, materials such as plastic or canvas tarpaulins must be used to ensure the impoundment of the stored vehicle.
(c) Impoundment Fees. A VSF operator is entitled to charge a fee for impoundment if, in addition to the requirements set out in subsection (b), the VSF operator, at a minimum:
(1) conducts a written inventory of any unsecured personal property contained in the vehicle;
(2) removes and stores all such property for which safekeeping is necessary, and specifies such removal and storage on the written inventory; or
(3) obtains motor vehicle registration information for the vehicle from the Texas Department of Transportation or analogous state agency.
§85.725.Responsibilities of Licensee--Drug Testing Policy.
(a) A VSF adopting paragraphs (1) - (12) will comply with Texas Occupations Code, §2303.160.
(1) Purpose and Scope. This drug testing policy provides guidance to supervisors and VSF employees about their responsibilities under this policy. Except as stated in paragraph (12), this policy applies to all VSF employees and all VSF job applicants.
(2) Definitions. The words and terms used in this policy shall have their ordinary meaning unless the words or terms are used in Texas Occupations Code, Chapter 2303 or Title 49 Code of Federal Regulation Part 40, in which event the words or terms shall have the meaning designated in those regulations.
(3) Consent Form.
(A) Before a drug test is administered, VSF employees and applicants are required to sign a consent form authorizing the test and permitting release of test results to the medical review officer (MRO), the company, and the department. The consent form shall provide space for employees and applicants to acknowledge that they have been notified of the drug testing policy.
(B) The consent form shall set forth the following information:
(i) the procedure for confirming and verifying an initial positive test result;
(ii) the consequences of a verified positive test result; and
(iii) the consequences of refusing to undergo a drug test.
(C) The consent form also provides authorization for certified or licensed attending medical personnel to take and have analyzed appropriate specimens to determine if the tested drugs were present in the towing operator's and applicant's system.
(4) Compliance with Drug Testing Policy. The failure or refusal by a VSF employee or applicant to cooperate fully by signing necessary consent forms or other required documents or the failure or refusal to submit to any test or any procedure under this policy in a timely manner will be grounds for refusal to hire or for termination. The submission by an applicant or employee of a urine sample that is not his/her own or is a diluted specimen shall be grounds for refusal to hire or for termination.
(5) General Rules. This drug testing policy is governed by these general rules:
(A) VSF employees shall not take or be under the influence of any drugs unless prescribed by the employee's licensed physician.
(B) VSF employees are prohibited from engaging in the manufacture, sale, distribution, use, or unauthorized possession of illegal drugs at any time.
(C) all VSF property is subject to inspection at any time without notice. There should be no expectation of privacy in or on such property. VSF property includes, but is not limited to, vehicles, desks, containers, files, and lockers.
(D) any VSF employee convicted of violating a criminal drug statute shall inform his/her supervisor of such conviction (including pleas of guilty and nolo contendere) within five days of the conviction occurring. Failure to inform the supervisor subjects the employee to disciplinary action up to and including termination for the first offense. The VSF will notify the Texas Department of Licensing and Regulation of the conviction (including pleas of guilty and nolo contendere).
(6) Types of Tests.
(A) Pre-employment. All applicants for positions requiring a VSF employee license, who have received a conditional offer of employment, must take a drug test before receiving a final offer of employment.
(B) Annual. All VSF employees employed by a VSF must complete at least one scheduled drug test each 12-month period from the date of the initial license or renewal.
(C) Random Testing. In addition to annual testing, VSF employees are subject to random urine drug testing. Under this policy, annual random test for drugs of at least 25 percent of the total number of VSF employees is required.
(i) A minimum of 15 minutes and a maximum of two hours will be allowed between notification of a VSF employee for random urine drug testing and the actual presentation for specimen collection.
(ii) Random donor selection dates will be unannounced with unpredictable frequency.
(D) Return-to-Duty and Follow-Up.
(i) Any VSF employee who has violated this drug testing policy and is allowed to return to work must submit to a return-to-duty test. Follow-up tests will be unannounced, and at least six tests will be conducted in the first 12 months after a VSF employee returns to duty. Follow-up testing may be extended for up to 60 months following return to duty. The test results of all return to duty and follow-up must be negative.
(ii) The VSF employee will be required to pay for his or her return-to-duty and follow-up tests accordingly.
(7) Drug Testing. The drugs for which tests are required under this policy are marijuana, cocaine, amphetamines, phencyclidine (PCP), and opiates.
(8) Specimen Collection Procedures.
(A) All urine specimens will be collected by a laboratory that is certified and monitored by the federal Department of Health and Human Services (DHHS).
(B) Drug testing procedures include split specimen procedures. Each urine specimen is subdivided into two bottles labeled as a "primary" and a "split" specimen. Only the primary specimen is opened and used for the urinalysis. The split specimen bottle remains sealed and is stored at the laboratory.
(C) If the analysis of the primary specimen confirms the presence of drugs, the VSF employee has 72 hours to request sending the split specimen to another federal (DHHS) certified laboratory for analysis. The VSF employee will be required to pay for his or her split specimen test(s).
(D) For the VSF employee's protection, the results of the analysis will be confidential except for the testing laboratory. After the MRO has evaluated a positive test result, the VSF employee will be notified, and the MRO will notify the company.
(E) The VSF will notify the Department of the positive test result. Notification to the Department must occur within 3 days of receipt of the confirmed test results from the MRO. The notification must include the:
(i) VSF employee's name;
(ii) VSF employee license number;
(iii) date of the positive test;
(iv) substance detected by the drug test; and
(v) disciplinary action imposed for violation of the drug testing policy.
(9) Reporting and Reviewing of Drug Testing Results.
(A) The company shall designate a medical review officer (MRO) to receive, report, and store testing information transmitted by the laboratory. This person shall be a licensed physician with knowledge of substance abuse disorders.
(B) The laboratory shall report test results only to the designated MRO, who will review them in accordance with accepted guidelines and the procedures adopted by the federal Department of Transportation.
(C) Reports from the laboratory to the MRO shall be in writing or by fax. The MRO may talk with the VSF employee by telephone upon exchange of acceptable identification.
(D) Neither the company, the laboratory, nor the MRO shall disclose any drug test results to any other person except under written authorization from the VSF employee, unless such results are necessary in the process of resolution of accident (incident) investigations, requested by court order, or required to be released to parties having a legal right-to-know as determined by state and federal law.
(10) Distribution of Information to VSF Employee. The minimal distribution of information for all VSF employees will include the display and distribution of:
(A) informational material on the physical and mental effects of drugs;
(B) an existing community services hotline number, available drug counseling, rehabilitation, and assistance program;
(C) the company's policy regarding the use of prohibited drugs and/or alcohol; and
(D) the consequences or disciplinary action that may be imposed upon VSF employees for violating the drug policy.
(11) Consequences of a Confirmed Positive Drug Test.
(A) Job applicants will be denied employment if their initial positive pre-employment drug test results have been confirmed.
(B) If a VSF employee's positive drug test result has been confirmed, the VSF employee will stand down from VSF duties and may be subject to disciplinary action up to and including termination.
(C) The company may consider the following factors in determining the appropriate disciplinary response: the VSF employee's work history, length of employment, current work assignment, current job performance, and existence of past disciplinary actions.
(D) No disciplinary action may be taken pursuant to this drug policy against VSF employees who voluntarily identify themselves as drug users, obtain counseling, rehabilitation and comply with return to duty and follow-up drug testing.
(12) Exceptions.
(A) VSF employees subject to random drug testing under Title 49 Code of Federal Regulation, Part 40 who have been randomly tested in the 12-month reporting period are exempt from the annual test requirement, provided that the VSF employee tested negative and the negative test results are submitted to and verified by the MRO.
(B) VSF employees holding a valid towing operator license issued by the department who are tested for drugs in accordance with 16 Texas Administrative Code Chapter 86 are exempt from this section.
(b) Independent drug testing policy.
(1) A VSF may file an independent drug testing policy.
(2) The filing must describe how the independent drug testing policy is as stringent as each provision of the model policy set forth in subsection (a).
§85.900.Administrative Sanctions and Penalties.
A person that violates Texas Occupations Code, Chapter 2303, a rule, or an order of the Executive Director or Commission relating to Texas Occupations Code, Chapter 2303, will be subject to administrative sanctions and/or administrative penalties under Texas Occupations Code, Chapters 51 and 2303 and applicable agency rules.
§85.1003.Technical Requirements--Storage Lot Signs.
(a) Facility information. All VSFs shall have a clearly visible and readable sign at its main entrance. Such sign shall have letters at least 2 inches in height, with contrasting background, shall be visible at 10 feet, and shall contain the following information:
(1) the registered name of the storage lot, as it appears on the VSF license;
(2) street address;
(3) the telephone number for the owner to contact in order to obtain release of the vehicle;
(4) the facility's hours, within one hour of which vehicles will be released to vehicle owners; and
(5) the storage lot's state license number preceded by the phrase "VSF License Number."
(b) All VSFs shall have a sign setting out the charge for storage and all other fees, which may be charged by the storage lot, including notification and impoundment fees. The sign shall include all forms of payments the VSF accepts for any charge associated with delivery or storage of a vehicle. The sign must be located so it is clearly visible to a vehicle owner at the place of payment and shall have letters at least 1 inch in height with a contrasting background.
(c) Nonconsent towing fees schedule. All VSFs shall conspicuously place a sign, at the place of payment, which states in 1-inch letters that: "Applicable schedules of nonconsent towing fees will be provided for viewing upon request by persons claiming vehicles." The nonconsent towing fees provided for viewing must match the nonconsent towing fees schedule on file with the department, as provided in 16 Texas Administrative Code Chapter 86, §86.500 (relating to Reporting Requirements--Towing Company).
(d) Instruments accepted for release of vehicle. All VSFs shall have a sign describing the documents that may be presented by the vehicle owner or his/her authorized representative to obtain possession of the vehicle. This sign shall list all instruments as described these rules, and shall also state: "Affidavit of Right of Possession Furnished Upon Request." This sign shall be located so it is clearly visible to a vehicle owner at the place of payment, and have letters at least 1 inch in height with a contrasting background.
(e) Combination signs. A VSF may combine the signs described in subsections (b), (c), and (d), if the combination sign meets the requirements of each of the separate signs.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801609
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Effective date: April 15, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 463-7348
16 TAC §§86.1, 86.10, 86.200 - 86.215, 86.400, 86.450 - 86.453, 86.500, 86.600, 86.650, 86.700 - 86.710, 86.800, 86.900, 86.901, 86.1000 - 86.1002
The Texas Commission of Licensing and Regulation ("Commission") adopts new rules at 16 Texas Administrative Code ("TAC") Chapter 86, §§86.1, 86.10, 86.200 - 86.208, 86.210 - 86.215, 86.400, 86.450 - 86.453, 86.500, 86.600, 86.650, 86.702, 86.703, 86.707, 86.708, 86.901, and 86.1002 regarding the regulation and permitting of tow trucks, and the licensing of towing operators and towing companies, as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1040), without changes, and will not be republished. The Commission also adopts new rules at 16 TAC, Chapter 86, §§86.209, 86.700, 86.701, 86.704, 86.705, 86.706, 86.709, 86.710, 86.800, 86.900, 86.1000, and 86.1001, with changes from the rules as published in the February 8, 2008, issue of the Texas Register (33 TexReg 1040), with changes, and are republished.
New §86.1 provides statutory authority for rule adoption.
New §86.10 defines terms used in the statute and the rules, including "advisory board," "applicant," "certificate of insurance,"" commission," "consent tow," "conspicuous," "contested case," "department," "driver's license," "license holder or licensee," "nonconsent tow," "parking facility," "parking facility owner," "permit holder," "property owners' association," "public roadway," "tow truck," "towing company," "towing operator," "unauthorized vehicle," "vehicle," "vehicle owner," and "vehicle storage facility."
New §86.200 provides that a tow truck permit is required.
New §86.201 establishes the requirements for obtaining an incident management-towing permit.
New §86.202 establishes the requirements for obtaining a private property-towing permit.
New §86.203 establishes the requirements for obtaining a consent-towing permit.
New §86.204 establishes criteria for approval or denial of towing permit applications and the form of the issued permit.
New §86.205 establishes the annual permit renewal requirements for towing permits.
New §86.206 describes the content of a department issued cab card that is required for each tow truck. The section also provides for card replacement and surrender of the card on request of the department.
New §86.207 provides that a non-transferable towing operator's license is required and is valid statewide for one year from the date of issuance.
New §86.208 establishes the requirements for obtaining an incident management towing operator license.
New §86.209 establishes the requirements for obtaining a private property towing operator license.
New §86.210 establishes the requirements for obtaining a consent towing operator license.
New §86.211 establishes the annual license renewal requirements for towing operators.
New §86.212 provides that a towing company license is required and establishes the requirements for obtaining a license.
New §86.213 establishes criteria for approval or denial of a towing company license and the form of the license.
New §86.214 establishes the annual renewal requirements for a towing company license.
New §86.215 provides an additional method of notice to licensees and permit holders using the last designated email address.
New §86.400 establishes the insurance requirements for obtaining and renewing a tow truck permit.
New §86.450 establishes the general requirements of a department initiated inspection of a towing company.
New §86.451 provides for bi-annual inspections of a towing company during normal business hours.
New §86.452 establishes the criteria for a risk-based inspection of a towing company.
New §86.453 provides the procedures for corrective actions following a department initiated inspection of a towing company.
New §86.500 requires electronic filing of nonconsent-towing fee schedules for nonconsent tows.
New §86.600 requires the department to file conforming nonconsent towing fee schedules on the internet without making a determination of reasonableness.
New §86.650 provides for a Towing and Storage Advisory Board. This section lists criteria of board membership, terms of office, meeting times, and board responsibilities.
New §86.700 requires that a towing company tow vehicles subject to nonconsent towing to a licensed vehicle storage facility, unless the vehicle owner agrees to a different location.
New §86.701 lists the information that must be displayed on each side of a permitted tow truck.
New §86.702 requires permit holders and licensees to notify the department of changes in name, address, and drug testing policy.
New §86.703 requires a towing company to notify the department of a change in ownership.
New §86.704 prohibits a towing company from charging unauthorized fees without written authority from the vehicle owner.
New §86.705 establishes towing company standards of conduct including: prohibitions against giving gifts of value to parking facility owners, having monetary interests in parking facilities from which it tows vehicles, nonconsent tow charges in unincorporated areas, compliance with posting requirements, record keeping, towing only from authorized locations, and charging fess consistent with those on file with the department.
New §86.706 provides that a towing company post fees at each vehicle storage facility to which it tows vehicles, signs must be conspicuous, posted fees must be provided to vehicle owners, and match fees on file with the department.
New §86.707 requires each towing company to annually review towing fees on file with the department and correct any outdated fee.
New §86.708 requires each permitted tow truck display a current license plate that includes the words "Tow Truck."
New §86.709 requires a tow company to issue a tow ticket to the vehicle owner. The tow ticket must only contain charges directly related to towing the vehicle.
New §86.710 provides a model drug testing policy for employees of a towing company; protects privacy rights of employees; and contains due process requirements.
New §86.800 establishes the fees for initial applications, renewal applications, inspection fees, and late renewals.
New §86.900 provides for administrative penalties and/or sanctions against a person that violates the statute or rules.
New §86.901 provides for cease and desist orders issued by the executive director to a person that violates the statute or rules.
New §86.1000 lists the minimum safety equipment that must be carried by each tow truck and establishes minimum operating limits for trucks issued a tow truck permit by the department.
New §86.1001 lists the minimum safety clothing that must be worn by towing operators and specifies the forms of identification that must be carried by each towing operator issued a towing operator license by the department.
New §86.1002 requires a towing company keep records for two years, and that an out-of-state towing company maintain records in Texas, or reimburse the department for expenses incurred for the review of out-of-state records.
The Department drafted and distributed the proposed rules to persons internal and external to the agency. The proposal was published in the Texas Register on February 8, 2008. The comment period closed on March 10, 2008.
February 20, 2008, Public Hearing
A public hearing on the proposed Chapter 86 was held at the John H. Reagan State Office Building on March February 20, 2008, at 10:00 a.m. At the public hearing, the department received comments from: Larry Cernosek, Paul Martin, Jim Evans, Cathy Creamer, Dave England, Rhonda Hight, Charles Exley, Bill Campbell, Frankie Garcia, Chris Palm, Rick Merritt, Billy and Beverly Hrnric, Judy Macher, Michelle Vasquez, Donald McClure, Larry Cooksey, Conrad Gamboa, and Regina Sustaita.
The comments received during the public hearing were essentially identical to those submitted in writing. Therefore, responses to the comments received during the public hearing will be addressed in the section addressing written comments.
Public Comments Received During March 14, 2008, Advisory Board Meeting
During the March 14, 2008, meeting of the Towing and Storage Advisory Board Meeting, the department received comments from: Larry Cernosek, Paul Martin, Jim Evans, Cathy Creamer, Dave England, Rhonda Hight, Charles Exley, Rick Campbell, Frankie Garcia, Chris Palm, and Rick Merritt.
The comments received during the March 14, 2008, Advisory Board Meeting were essentially identical to those heard during the February 20, 2008 Public hearing and to those submitted in writing. Therefore, responses to the comments received during the March 14, 2008, Advisory Board meeting will be addressed in the section addressing written comments.
Written Comments
The department received written comments from the following individuals: Roderick M. Jones, Kay and Albert Winwood, Dave Reinhardt, Dan W., June Clay, Gary Allen, Ronald McHam, and Michael Tucker.
The following companies submitted written comments: Expert Towing, WHW Towing Companies, Tow Partners, Evans & Associates, Shannafelt Auto Company, Houston Metropolitan Repossessions, Cowboy Towing, B&B Auto Worx, CTAR, Inc., Texas Independent Auto Resellers Association, Farmers Insurance, Allstate Insurance, Pro-Tow Wrecker Service, Graham's Wrecker Service, Texas Apartment Association, Cernosek Wrecker/Deer Park Paint & Body, State Farm Insurance, Westside Wrecker Service, Edd's Towing, Garcia's Wrecker Service.
Several commenters suggested the commission clarify and prohibit the conversion of nonconsent tows to consent tows. Section 86.700 has been revised to include a new subsection (c) clarifying that regardless of the designation, the nonconsent tow remain a nonconsent tow and cannot convert to a consent tow.
Some commenters suggested the rules be revised to prohibit a person with a revoked license from obtaining another license for some determined period. The rule has not been changed in response to this comment. Licensing requirements are statutory.
Many commenters asked to reduce fees for a combined VSF employee and towing operator's license. The rule has not been changed in response to this comment. While the statutes do not provide for combined licenses, the department modified the application process by combining the application for both licenses on a single document. The department modified the model drug testing policy to require a single drug test for persons holding a VSF employee license and a towing operator's license.
A commenter requested clarification of how the rules apply to repossessors. The rule has not been changed in response to this comment. The department believes that repossessors engage in consent towing. As such, they must obtain permits for the trucks and consent tow operator license for drivers.
Some commenters expressed concern about background checks for drug convictions. The rule has not been changed in response to this comment. Background checks will be conducted in accordance with the criminal conviction guidelines under development by department staff.
One commenter suggested to grandfather existing companies by providing exemption in the rule. The rule has not been changed in response to this comment. The licensing requirements are statutory and do not contain grandfathering provisions.
One commenter asked about the ability of tow trucks to display apportioned license plates. The rule has not been changed in response to this comment. The appropriate license plate for tow trucks is a statutory requirement.
Several commenters suggested the department provide a model consent form for the drug testing policy. The commission agrees. Department staff will prepare and post a model drug testing consent form for use by the industry.
Several commenters suggested the department use the Vehicle Identification Number as part of the truck permit number. The rule has not been changed in response to this comment. Modifying the permit-numbering scheme will add additional costs to the fee structure. The department does not believe the additional costs will result in benefits justifying the expense.
One commenter asked why tow companies are allowed to operate a tow company from the seat of the tow truck. The commenter also asked about the offices and company records. The rule has not been changed in response to this comment. The rules require towing companies to list their physical address on the application and renewal forms. The rules also require that records be maintained at the principle place of business, unless a waiver is granted.
One commenter believes the rules are unconstitutional, e.g., requiring uniforms and the wearing of reflective vests. The rule has not been changed in response to this comment. The uniform requirement is designed for public safety by alerting the customers that the tow operator is licensed and identifies the company name on file with the department. The uniform requirement also provides safety for towing operators.
Another commenter disagreed with the annual renewal of licenses. Instead, the commenter suggested a license be valid for 5 years and cost about $75 or $15 per year. The rule has not been changed in response to this comment. The statute requires an annual renewal of all licenses and permits.
One commenter suggested changes to §86.709 because in that commenter's opinion there is no way the tow company can notify the vehicle owner under the definition of vehicle owner. The rule has not been changed in response to this comment. The definition vehicle owner is a statutory requirement.
Many commenters argue that towing and storage fees are exorbitant. The rule has not been changed in response to this comment. The department is without jurisdiction to regulate these fees.
One commenter asked what is the legal recourse if companies do not comply with the rules and statute. The rule has not been changed in response to this comment. Consumers have recourse via the agency complaint/enforcement process. In addition, the statute provides for judicial recourse in the justice courts.
Some commenters complained that car hauling trailers do not register and circumvent the rules. The rule has not been changed in response to this comment. Car haulers are covered under the existing rules and definition of tow trucks.
One commenter suggested elimination of the 90-day experience requirement so that drivers can be certified to get a license without prior experience. The rule has not been changed in response to this comment. The 90-day experience requirement is not statutory or mandated by commission rules. The department understands that certifying entities have eliminated this industry practice.
One commenter suggested that §86.1000(f) refer to state inspection rather than the Department of Transportation. The rule is changed to refer to state inspections.
Several commenters believe that the requirement in §86.1001(d) requiring the display of the towing operator license will present problems for operators working under equipment causing a need for continual replacement of the license. The rule has not been changed in response to this comment. Operator towing licenses are relatively small and can be easily and inexpensively enclosed.
Some commenters suggested revision to §86.1000 by waiving some of the equipment requirements for companies operating repossession companies: (1) fire extinguishers, (2) tow dollies, (3) wheel chocks, (4) trash receptacles, (5) crow bar, (6) reflectors, cones, safety lights, and (7) uniforms. The rule has been changed to eliminate some of the requirements for consent tow operators.
One commenter suggested that the tow truck permit number include an identifier designating the type of tow truck, e.g. CT for consent tow permit. The department agrees and has modified internal procedures so that tow truck permit numbers will include the following designations, CT for consent tow, IM for incident management, and PP for private property tow.
One commenter states that many older model tow trucks have had manufacturer-warning labels removed. Another commenter requests that trucks placed in service after 2008 be required to maintain manufacturers' warning labels. Section 86.1000 is modified to include a new subsection (g) requiring that tow trucks in service after May 1, 2008, retain the manufacturer's warning labels.
One commenter asked that the rules require refunds to consumers of all nonconsent tow fees collected in excess of the authorized amounts. The rule has not been changed in response to this comment. The department will establish an administrative penalty matrix which consider among other things, whether the company has been unjustly enriched.
One commenter requested a rule change to prohibit the tow operator from taking the vehicle to any destination other than a VSF or location agreed to with the owner. Section 86.700 has been modified to include a new subsection (c) requiring the vehicle be taken directly to the authorized location.
One commenter stated that §86.705 should explicitly authorize laws enforcement to inspect tow trucks for rule violations. The department agrees with this comment because the statute provides that law enforcement may conduct an arrest for violations of the towing statute. Section 86.705 has been modified to require tow operators submit the tow truck to law enforcement for inspection.
One commenter observed that §86.709 requires the tow ticket be given to the vehicle owner; however, the owner is usually not present at the time of the tow. Section 86.709 has been clarified to require delivery of the tow ticket to the owner only if the owner is present and available at the time of the tow.
One commenter requested the department add lien-holder to the definition of "consent tow." The rule has not been changed in response to this comment. The term "consent tow" is defined by statute.
One commenter requested the department add "or its agents" to the definition of "vehicle owner." The rule has not been changed in response to this comment. The term "vehicle owner" is defined by statute.
Some commenters believe that §86.201 and §86.203 are unfair because consent towers should also be required to carry cargo on hook insurance. The rule has not been changed in response to this comment. The insurance requirements are statutory.
One commenter suggested in §86.710 to delete "collected" and insert "tested." The rule has not been changed in response to this comment. Deletion of the word "collected" would allow the specimen to be collected by anyone without control to verify the specimen was actually collected from the appropriate person.
Another commenter suggested deletion of the second and third sentences in §86.710 which require preservation of the split sample. The rule has not been changed in response to this comment. Preservation of the split sample is fundamental to an employee's due process right to challenge and resolve disputes that may surround a positive drug test.
One commenter asked for deletion of the requirement that licensees report positive drug tests to the department. The commenter also believes that owner operators be required to enroll in a third party drug program and specify the reporting requirements. Some of the rule has been changed in response to this comment. The department has jurisdiction over the towing operators with a corresponding responsibility to know whether a licensee (towing operator) is complying with the rules. While owner operators are free to enroll in third party drug testing programs, the statute also allows self-administered programs. With respect to reporting requirements, §86.710 has been revised include specific reporting requirements.
One commenter suggested that in §86.710, the department delete "penalties" and insert "consequences or disciplinary action." This change has been made.
One commenter believes that §86.710 is confusing. The commenter asks does the exemption apply only to DOT commercial operators or does it equally apply to non-DOT random drug testing. The rule has been modified to adopt the alternative language with minor stylist changes.
One commenter objects to limiting the use of an affidavit of right of possession to family members. The commenter believes that anyone with permission should be able to use the form. The rule has not been changed in response to this comment. However, the department notes that release of stored vehicles has been expanded to include insurance companies and salvage operators. Each group obtaining possession thought different documents.
Another commenter objects to §86.700, which allows the tow company to refuse to take the vehicle to a shop or other location requested by the owner. The rule has not been changed in response to this comment. The provision is a statutory requirement.
Several commenters suggested that §86.203(a) make it clear that salvage operators qualify for consent tow permits. The rule has not been changed in response to this comment. Salvage pool operators meeting the requirements of §86.203(a) are entitled to obtain consent tow permits.
One commenter observed that some tow trucks do not have rating plates and the manufacturer is unknown. That commenter asked for guidance. The rule has not been changed in response to this comment. While the department understands the situation, the rating plate is a safety requirement that should not be waived. The department also understands that every situation will be different and believes it inappropriate to address this issue through rulemaking.
One commenter believes that §86.10(11) should clarify that a nonconsent tow may not be converted to a consent tow. The rule has not been changed in response to this comment. The definition of a nonconsent tow is statutory. However, the issue of conversion of a nonconsent tow to consent is resolved elsewhere in the rules.
One commenter fails to see the need for uniforms with the company name. The commenter stated that his company planned to sew the name on the reflective vest and placing it on the undergarment would be meaningless. The rule has not been changed in response to this comment. The rules as written provide flexibility to each company to devise an approach to compliance. That flexibility is illustrated by the commenter's plan to sew the name onto the reflective vest. In that case, the reflective vest is a part of the uniform and complies with the rule. Other companies may devise different approaches.
Another commenter suggested that §86.10(17)(D) be revised to expand the exemption to exclude trailers that carry four vehicles or less. The rule has not been changed in response to this comment. Section 86.10(17)(D) is identical to the rules enforced by the Texas Department of Transportation and has not changed in the proposed rule.
One commenter asked for waiver of safety clothing requirements as it applies to repossessors. The rule has not been changed in response to this comment. The technical requirements all relate to safety issues and should be equally applicable to all towing operators.
Several commenters suggested that the exemption in §86.10(17)(D) be revised to add the phrase "a trailer that can carry or haul four vehicles or less." The rule has not been changed in response to this comment. The definition of tow truck including the exemptions is identical to that used by the Texas Department of Transportation.
Some commenters asked that §86.10(17) clarify whether four loaders/auto haulers are tow trucks. The rule has not been changed in response to this comment. The definition of tow trucks is statutory. Whether a trailer used to carry a single vehicle or multiple vehicles is a question of fact. However, TDLR believes that, absent a statutory exemption, these vehicles are tow trucks subject to the requirements of these rules.
Several commenters requested a change from "driver openly displaying license" to "show license on request". The rule has not been changed in response to this comment. The requirement is a public safety requirement to assure the public that towing operators have a TDLR issued license and screened via background checks with drug screening. Operators have sufficient flexibility to individually determine how to comply based on individual working environments.
Some commenters suggested that §86.704 be revised to add that "an authorization for repairs may not be signed at the scene of the accident." With a slight modification, §86.704 has been revised to reflect this suggestion.
One commenter believes that the department authority to charge fees are be affected by §2308.201(d), which restricts fees charged by Political Subdivisions to $15. The rule has not been changed in response to this comment. The Commission's authority to recover program costs by way of fees is independent from the fee setting authority of Political Subdivisions.
Several commenters asked that §86.705(a) clarify prohibition from: (1) offering value to parking lot owners such as striping lot in exchange for contract; and (2) providing towing fee discounts to owners and employees. These commenters also asked for provision establishing penalties for rule violations. The rule has not been changed in response to this comment. The current rules prohibit the giving of value by towing companies to property owners. This prohibition applies to discounts. In addition, the rules also prohibit the charging rates not other than those posted with the department. Penalties for the rules in general will be included in the penalty matrix developed by the Enforcement Division and published by the Secretary of State and on the agency website.
One commenter asked for a new subsection §86.705(k)(1) requiring the towing company to provide a tow ticket to the insurance company on presentation of a loss of claim form. The rule has not been changed in response to this comment. Chapter 85 contains an identical provision requiring VSFs provide the tow tickets to insurance companies. The department believes it is not necessary to place this redundant obligation on the tow company.
Another commenter asked for a new subsection §86.709(c) to help consumers by clarifying charges and demonstrating that charges must they match fees on file with the department. Section 86.709 has been amended to add a new subsection (d) to help consumers by clarifying that charges must match fees on file with the department.
One commenter asserts that §86.705(h) goes beyond the statute by requiring the tow company receive documents demonstrating compliance with the notice provisions of §2308.253(e) of the Texas Occupations Code. While the department believes that §86.705(h) is within the requirements of Texas Occupations Code, §2308.253(e), the section has been amended to require the towing operator note compliance on the tow ticket.
One commenter states that tow companies will incur additional costs if the rules require replacing the signage on tow trucks. The rule has not been changed in response to this comment. The additional costs are imposed by statute via moving the industry from TxDOT to TDLR which necessitates removing references to TxDOT from vehicles to better inform the public of the regulatory authority with enforcement oversight.
The new rules are adopted under Texas Occupations Code, Chapter 2308, which directs the Department's governing body, the Commission, to adopt rules to establish the requirements for permitting tow trucks and licensing towing operators and towing companies, and to adopt standards of conduct for license and permit holders; and Texas Occupations Code Chapter 51, which authorizes the Commission to adopt rules as necessary to implement this chapter and any other law establishing a program regulated by the Department.
The statutory provisions affected by the adoption are those set forth in Texas Occupations Code, Chapter 2308, and Texas Occupations Code, Chapter 51. No other statutes, articles, or codes are affected by the adoption.
§86.209.Licensing Requirements--Private Property Towing Operator License.
(a) A private property towing operator's license is required to operate a tow truck permitted or required to be permitted under these rules.
b) An applicant for a private property towing operator's license must:
(1) submit a completed application on a department-approved form;
(2) be a licensed Texas driver;
(3) be certified by the National Drivers Certification Program of the Towing and Recovery Association of America or another certification program approved by the department;
(4) successfully pass a criminal background check; and
(5) pay the fee required under §86.800.
§86.700.Responsibilities of Tow Truck Permit Holder--Storage of Towed Vehicles.
(a) Unless the towing company agrees to take the vehicle to a location designated by the vehicle's owner, a towing company that makes a nonconsent tow shall tow the vehicle to a vehicle storage facility operated by a person who holds a vehicle storage facility license issued by the department.
(b) A towing company or towing operator may not request a vehicle owner or operator sign a tow ticket or authorization form for a tow if the tow is initiated by law enforcement.
(c) The towing company and towing operator must take the towed vehicle to the designated location using the most direct route reasonably available at the time of the tow.
§86.701.Responsibilities of Tow Truck Permit Holder--Tow Truck Signage.
(a) A tow truck permit holder must display on each permitted tow truck:
(1) the permit holder's name;
(2) the permit holder's publicly listed telephone number;
(3) the city and state where the permit holder is located; and
(4) the permit number for the tow truck.
(b) The information required to be displayed must be:
(1) printed in letters and numbers that are at least two inches high and in a color that contrasts with the color of the background surface; and
(2) permanently affixed in conspicuous places on both sides of the tow truck.
§86.704.Responsibilities of Towing Company License Holder--Unauthorized Fees.
An authorization for repairs may not be executed at the scene of an accident or included on a tow ticket authorized by law enforcement.
§86.705.Responsibilities of Towing Company License Holder--Standards of Conduct.
(a) A towing company may not directly or indirectly give anything of value to a parking facility owner in connection with the removal of a vehicle from a parking facility.
(b) A towing company may not have a direct or indirect monetary interest in a parking facility from which the towing company for compensation removes unauthorized vehicles.
(c) In an area in which no political subdivision regulates the fees that may be charged or collected for a nonconsent tow from private property, a towing company must comply with Texas Occupations Code, §2308.204.
(d) A towing company may not tow a vehicle to a vehicle storage facility unless the vehicle storage facility is in compliance with the required postings in Texas Occupations Code, §2308.207.
(e) A towing company may not remove and store an unauthorized vehicle unless authorized by Texas Occupations Code, §2308.255.
(f) A towing company may not perform a nonconsent tow unless the property from which the vehicle is towed is in compliance with Texas Occupations Code, §§2308.301 - 2308.305.
(g) Except as authorized by Texas Occupations Code, §§2308.351 - 2308.354, a towing company may not perform a nonconsent tow from:
(1) a leased right-of-way;
(2) an area between a parking facility and a public right-of-way;
(3) a public right-of-way; or
(4) a public roadway.
(h) A towing company may not contract for the removal from a parking facility of a vehicle that does not display an unexpired license plate or registration insignia or a valid inspection certificate, unless before the tow, the towing company notes on the tow ticket the:
(1) name of the person or company that authorized the tow,
(2) telephone number of the company or person that authorized the tow, and
(3) date of compliance with the notice provisions in Texas Occupations Code, §2308.253(e).
(i) A licensee or permit holder may not charge a fee for a nonconsent tow that is greater than the fee listed in the schedule most recently filed with the department.
(j) A licensee must keep record of every nonconsent tow including, but not limited to, the following information:
(1) vehicle description, including license or vehicle identification number, if available;
(2) the specific rule or statutory provision sanctioning the tow;
(3) each fact justifying the nonconsent tow;
(4) location vehicle towed from; and
(5) vehicle storage location.
(k) A towing operator must allow department personnel and law enforcement to inspect a tow truck permitted under these rules.
§86.706.Responsibilities of Towing Company License Holder--Required Postings at Vehicle Storage Facility (VSF).
(a) A towing company must provide its nonconsent towing fees schedule to all VSF's to which the towing company delivers vehicles for storage.
(b) The nonconsent towing fees schedule provided to the VSF and made available to the public at the VSF must match the nonconsent towing fees schedule on file with the department.
(c) A towing company may not collect nonconsent towing fees unless the VSF accepting nonconsent towed vehicles post a sign in one inch letters stating "Nonconsent tow fees schedules available on request."
(d) The nonconsent towing fees schedule must be made available to any requestor during normal business hours of the VSF.
§86.709.Responsibilities of Towing Company License Holder--Tow Ticket.
(a) A towing company must prepare and issue a tow ticket for each nonconsent tow.
(b) A copy of the tow ticket must be given to the vehicle owner, if the owner or operator is present and available at the time of the tow, and a copy delivered to the vehicle storage facility, or place agreed upon by the towing operator and vehicle owner.
(c) The tow ticket shall only authorize charges directly related to towing the vehicle to a designated location authorized by subsection (b).
(d) The tow ticket shall itemize each charge and must characterize the fees using the identical fee structure stated in the towing company's nonconsent towing fee schedule on file with the department.
(e) The tow ticket must contain the registered name of the towing company, publicly listed telephone number, towing company certificate of registration number, and the full printed name and TDLR license number of the towing operator on file with the department.
§86.710.Responsibilities of Towing Company Licensee--Drug Testing Policy.
(a) A towing company adopting paragraphs (1) - (12) of this subsection will comply with Texas Occupations Code, §2308.158.
(1) Purpose and Scope. This drug testing policy provides guidance to supervisors and towing operators about their responsibilities under this policy. Except as stated in paragraph (12), this policy applies to all towing operators and all towing operator job applicants.
(2) Definitions. The words and terms used in this policy shall have their ordinary meaning unless the words or terms are used in Texas Occupations Code, Chapter 2308 or Title 49 Code of Federal Regulation Part 40, in which event the words or terms shall have the meaning designated in those regulations.
(3) Consent Form.
(A) Before a drug test is administered, towing operators and applicants are required to sign a consent form authorizing the test and permitting release of test results to the medical review officer (MRO), the company, and the department. The consent form shall provide space for employees and applicants to acknowledge that they have been notified of the drug testing policy.
(B) The consent form shall set forth the following information:
(i) the procedure for confirming and verifying an initial positive test result;
(ii) the consequences of a verified positive test result; and
(iii) the consequences of refusing to undergo a drug test.
(C) The consent form also provides authorization for certified or licensed attending medical personnel to take and have analyzed appropriate specimens to determine if the tested drugs were present in the towing operator's or applicant's system.
(4) Compliance With Drug Testing Policy. The failure or refusal by a towing operator or applicant to cooperate fully by signing necessary consent forms or other required documents or the failure or refusal to submit to any test or any procedure under this policy in a timely manner will be grounds for refusal to hire or for termination. The submission by an applicant or employee of a urine sample that is not his/her own or is a diluted specimen shall be grounds for refusal to hire or for termination.
(5) General Rules. This drug testing policy is governed by these general rules:
(A) towing operators shall not take or be under the influence of any drugs unless prescribed by the employee's licensed physician.
(B) towing operators are prohibited from engaging in the manufacture, sale, distribution, use, or unauthorized possession of illegal drugs at any time.
(C) all towing company property is subject to inspection at any time without notice. There should be no expectation of privacy in or on such property. Towing company property includes, but is not limited to, vehicles, desks, containers, files, and lockers.
(D) any towing operator convicted of violating a criminal drug statute shall inform his/her supervisor of such conviction (including pleas of guilty and nolo contendere) within five days of the conviction occurring. Failure to inform the supervisor subjects the employee to disciplinary action up to and including termination for the first offense. The towing company will notify the Texas Department of Licensing and Regulation of the conviction (including pleas of guilty and nolo contendere).
(6) Types of Tests
(A) Pre-employment. All applicants for positions requiring a towing operator's license, who have received a conditional offer of employment, must take a drug test before receiving a final offer of employment.
(B) Annual. All towing operators employed by a towing company must complete at least one scheduled drug test each 12-month period from the date of the initial license or renewal.
(C) Random Testing. In addition to annual testing, towing operators are subject to random urine drug testing. Under this policy, annual random test for drugs of at least 25 percent of the total number of towing operators is required.
(i) A minimum of 15 minutes and a maximum of two hours will be allowed between notification of a towing operator for random urine drug testing and the actual presentation for specimen collection.
(ii) Random donor selection dates will be unannounced with unpredictable frequency.
(D) Return-to-Duty and Follow-Up.
(i) Any towing operator who has violated this drug testing policy and is allowed to return to work must submit to a return-to-duty test. Follow-up tests will be unannounced, and at least six tests will be conducted in the first 12 months after a towing operator returns to duty. Follow-up testing may be extended for up to 60 months following return to duty. The test results of all return to duty and follow-up must be negative.
(ii) The towing operator will be required to pay for his or her return-to-duty and follow-up tests accordingly.
(7) Drug Testing. The drugs for which tests are required under this policy are marijuana, cocaine, amphetamines, phencyclidine (PCP), and opiates.
(8) Specimen Collection Procedures.
(A) All urine specimens will be collected by a laboratory that is certified and monitored by the Federal Department of Health and Human Services.
(B) Drug testing procedures include split specimen procedures. Each urine specimen is subdivided into two bottles labeled as a "primary" and a "split" specimen. Only the primary specimen is opened and used for the urinalysis. The split specimen bottle remains sealed and is stored at the laboratory.
(C) If the analysis of the primary specimen confirms the presence of drugs, the towing operator has 72 hours to request sending the split specimen to another Federal Department of Health and Human Services (DHHS) certified laboratory for analysis. The towing operator will be required to pay for his or her split specimen test(s).
(D) For the towing operator's protection, the results of the analysis will be confidential except for the testing laboratory. After the MRO has evaluated a positive test result, the towing operator will be notified, and the MRO will notify the company.
(E) The towing company will notify the department of the positive test result. Notification to the department must occur within 3 days of receipt of the confirmed test results from the MRO. The notification must include the:
(i) tow operator's name;
(ii) tow operator's license number;
(iii) date of the positive test;
(iv) substance detected by the drug test; and
(v) disciplinary action imposed violation of the drug testing policy.
(9) Reporting and Reviewing of Drug Testing Results.
(A) The company shall designate a medical review officer (MRO) to receive, report, and store testing information transmitted by the laboratory. This person shall be a licensed physician with knowledge of substance abuse disorders.
(B) The laboratory shall report test results only to the designated MRO, who will review them in accordance with accepted guidelines and the procedures adopted by the Federal Department of Transportation.
(C) Reports from the laboratory to the MRO shall be in writing or by fax. The MRO may talk with the towing operator by telephone upon exchange of acceptable identification.
(D) Neither the company, the laboratory, nor the MRO shall disclose any drug test results to any other person except under written authorization from the towing operator, unless such results are necessary in the process of resolution of accident (incident) investigations, requested by court order, or required to be released to parties having a legal right-to-know as determined by state and federal law.
(10) Distribution of Information to Towing Operators. The minimal distribution of information for all towing operators will include the display and distribution of:
(A) informational material on the physical and mental effects of drugs;
(B) an existing community services hotline number, available drug counseling, rehabilitation, and assistance program;
(C) the company's policy regarding the use of prohibited drugs and/or alcohol; and
(D) the consequences or disciplinary action that may be imposed upon VSF employees for violating the drug policy.
(11) Consequences of a Confirmed Positive Drug Test.
(A) Job applicants will be denied employment if their initial positive pre-employment drug test results have been confirmed.
(B) If a towing operator's positive drug test result has been confirmed, the towing operator will stand down from towing operation duties and may be subject to disciplinary action up to and including termination.
(C) The company may consider the following factors in determining the appropriate disciplinary action: the towing operator's work history, length of employment, current work assignment, current job performance, and existence of past disciplinary actions.
(D) No disciplinary action may be taken pursuant to this drug policy against towing operators who voluntarily identify themselves as drug users, obtain counseling, rehabilitation and comply with return to duty and follow-up drug testing.
(12) Exceptions.
(A) Towing operators subject to random drug testing under Title 49, Code of Federal Regulation, Part 40 who have been randomly tested in the 12-month reporting period are exempt from the annual test requirement, provided that the towing operator's tested negative and the negative test results are submitted to and verified by the MRO.
(B) Towing operators holding a valid Towing Operator License issued by the department who are tested for drugs in accordance with 16 Texas Administrative Code Chapter 85 are exempt from this section.
(b) Independent drug testing policy.
(1) A towing company may file an independent drug testing policy.
(2) The filing must describe how the independent drug testing policy is as stringent as each provision of the model policy set forth in subsection (a).
§86.800.Fees.
(a) Application Fees
(1) Permit Tow Truck
(A) Original Application--$75
(B) Renewal--$75
(C) Duplicate Permit--No charge
(D) Permit Amendment--$25
(2) Tow Company License
(A) Original Application--$350
(B) Renewal--$350
(C) Duplicate License--$25
(D) Permit Amendment--$25
(3) Operator License
(A) Original Application--$100
(B) Renewal--$100
(C) Duplicate License--$25
(D) Operator License Amendment--$25
(b) Risk-based inspections--$150
(c) Late renewal fees for licenses and permits issued under this chapter are provided under §60.83 of this title (relating to Late Renewal Fees)
(d) All fees are nonrefundable except as provided for by commission rules or statute.
§86.900.Sanctions and Administrative Penalties.
A person that violates Texas Occupations Code, Chapter 2308, a rule, or an order of the Executive Director or Commission relating to Texas Occupations Code, Chapter 2308, will be subject to administrative sanctions and/or administrative penalties under Texas Occupations Code, Chapters 51 and 2308 and applicable agency rules.
§86.1000.Technical Requirements--Tow Truck Safety Equipment and Truck Operations.
(a) Except as provided in subsection (b), each tow truck must carry proper safety equipment. Proper equipment includes, but is not limited to, the following:
(1) At least one 10 pound or two 5 pound multiple purpose fire extinguisher, in good working condition;
(2) Magnetic tow lights, unless wireless, with appropriate cable and cushions to protect a vehicle's finish;
(3) Tow dollies as appropriate;
(4) Straps and tie downs as specified by the tow truck manufacturer;
(5) Gloves;
(6) Wheel chocks;
(7) Five gallon trash receptacle;
(8) Broom and shovel;
(9) Thirty-six inch crow bar; and
(10) Triangle reflectors, flares, cones, safety lights or other appropriate safety signals.
(b) Tow trucks permitted under §86.203 are exempt from the requirements of subsections (a)(3), (a)(7), and (a)(9).
(c) Each tow truck shall:
(1) have a legible manufacturer's data plate indicating the capacity of the boom, the winch or the carry mechanism; or
(2) have a document in the truck from the manufacturer stating the capacity of the boom, the winch or the carry mechanism.
(d) Every hydraulic line on each tow truck must be free of leaks and be in good working condition free of defects.
(e) The winch must not exceed the capacity of the boom or leak oil.
(f) The cables must be as specified by the manufacturer and be in good condition, within manufacturer guidelines.
(g) Each tow truck must have a copy of the annual state inspection.
(h) Tow trucks placed in service after May 1, 2008, must contain the original manufacturer's warning labels on the truck, truck bed, winches, and all other accessories.
§86.1001.Technical Requirements--Towing Operator Safety Clothing and Identification.
(a) Towing operators, as a condition of their license must comply with the protective clothing policy.
(b) Towing operators must wear at all times when using or assisting in the use or operation of a licensed tow truck on a road or road related area:
(1) a uniform, clearly marked with the tow company's name as it appears on department records.
(2) a reflective vest or reflective jacket at all times while working outside the tow truck; the reflective vest or reflective jacket must meet the ANSI/ISEA 207-2006 requirements for high visibility safety apparel.
(c) During daylight hours, a fluorescent shirt may be worn instead of the reflective vest or jacket; the fluorescent shirt must meet the ANSI/ISEA 207-2006 requirements for high visibility safety apparel.
(d) When performing towing operations, all tow truck operators must carry and openly display the appropriate TDLR issued original towing operator license.
(e) Tow operators permitted under §86.210 are exempt from the requirements of subsection (b)(1).
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801610
William H. Kuntz, Jr.
Executive Director
Texas Department of Licensing and Regulation
Effective date: April 15, 2008
Proposal publication date: February 8, 2008
For further information, please call: (512) 463-7348
Chapter 303. GENERAL PROVISIONS
Subchapter A. ORGANIZATION OF THE COMMISSION
The Texas Racing Commission adopts an amendment to 16 TAC §303.16, which relates to historically underutilized businesses, without changes to the proposal published in the October 26, 2007, issue of the Texas Register (32 TexReg 7637). The enactment of House Bill 3560 transferred from the Texas Building and Procurement Commission to the Comptroller of Public Accounts those powers and duties that relate to the historically underutilized businesses program. The rules were transferred and reorganized under Title 34, Chapter 20 of the Texas Administrative Code . This amendment brings §303.16 into conformity with the changes resulting from House Bill 3560.
The Commission received no comments in response to the published notice.
The amendment is adopted under the Texas Racing Act, Texas Civil Statutes, Article 179e, §3.02, which authorizes the Commission to adopt rules for conducting greyhound and horse racing and rules to administer the Act.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801601
Mark Fenner
General Counsel
Texas Racing Commission
Effective date: April 15, 2008
Proposal publication date: October 26, 2007
For further information, please call: (512) 833-6699
Chapter 401. ADMINISTRATION OF STATE LOTTERY ACT
Subchapter D. LOTTERY GAME RULES
The Texas Lottery Commission (Commission) adopts the repeal of Title 16, Part 9, Chapter 401, Subchapter D, §401.312 (relating to "Texas Two Step" On-Line Game), without changes to the proposed text as published in the February 1, 2008, issue of the Texas Register (33 TexReg 823).
The repeal is adopted concurrently with the adoption of new "Texas Two Step" On Line Game rule at 16 TAC §401.312. The purposes of the proposed new rule are to provide that no funds will be added to the Texas Two Step prize reserve fund, to allow for the depletion of the Texas Two Step prize reserve fund, to amend the prize structure to account for the fact that no funds will be added to the Texas Two Step prize reserve fund, and to make the language in the rule simpler and easier to read.
Two public comment hearings were held with regard to this repeal: one on February 5, 2008, and one on February 29, 2008. No one was present at either hearing. No written comments were received during the public comment period.
The repeal is adopted under Texas Government Code, §466.015, which authorizes the Commission to adopt rules governing the operation of the lottery. The repeal is also adopted under Texas Government Code, §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801603
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: May 26, 2008
Proposal publication date: February 1, 2008
For further information, please call: (512) 344-5012
The Texas Lottery Commission (Commission) adopts new Title 16, Part 9, Chapter 401, Subchapter D, §401.312 (relating to "Texas Two Step" On-Line Game), with changes to the proposed text as published in the February 1, 2008, issue of the Texas Register (33 TexReg 823). An effective date has been added to the adopted version of this rule at subsection (h), and extra word ("of") has been deleted from subsections (e)(6)(C) and (e)(7)(C). The proposed new rule is adopted concurrently with the adoption of the repeal of the existing "Texas Two Step" On-Line Game rule at 16 TAC §401.312.
The purposes of the adopted new rule are to provide for the elimination of the Texas Two Step prize reserve fund and to make the language in the rule simpler and easier to understand. A separate prize reserve fund for a specific lottery game is neither required by law nor necessary as a matter of practice. No other Texas Lottery on-line game rule provides for allocations to a prize reserve fund. Therefore, elimination of the prize reserve fund will result in increased consistency in Commission accounting practices in connection with on-line games. The elimination of the Texas Two Step prize reserve fund will also simplify the prize structure and may make the operation of the game easier for players to understand.
Two public comment hearings were held with regard to this new rule: one on February 5, 2008; and one on February 29, 2008. No one was present at either hearing. The Commission received no written comments during the public comment period.
The new rule is adopted under Texas Government Code, §466.015(c), which authorizes the Commission to adopt rules governing lottery games conducted by the Commission. The new rule is also adopted under Texas Government Code, §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction.
Texas Government Code, Chapter 466, is affected by this adoption.
§401.312."Texas Two Step" On-Line Game.
(a) Texas Two Step. The executive director is authorized to conduct a game known as "Texas Two Step." The executive director may issue further directives for the conduct of Texas Two Step that are consistent with this rule. In the case of conflict, this rule takes precedence over §401.304 of this title (relating to On-Line Game Rules (General)).
(b) Definitions. When used in this rule, the following words and terms shall have the following meanings, unless the context clearly indicates otherwise.
(1) Play--The selection of four different numbers from one through 35 and the selection of an additional number from one through 35 for one opportunity to win in Texas Two Step, and the purchase of a ticket evidencing that selection.
(2) Playboard--Two fields on a playslip, each with 35 numbers, for use in selecting numbers for a Texas Two Step play.
(3) Playslip--An optically readable card issued by the commission for use in selecting numbers for one or more Texas Two Step plays.
(4) Roll cycle--A series of one or more drawings that ends when there is a drawing for which one or more tickets are sold that match, in accordance with the provisions of subsection (e)(1)(A) of this section, the numbers drawn in the drawing. A new roll cycle begins with the next drawing after a drawing for which one or more jackpot tickets are sold that match, in accordance with the provisions of subsection (e)(1)(A) of this section, the numbers drawn in the drawing.
(c) Plays and tickets.
(1) A ticket may be sold only by an on-line retailer and only at the location listed on the retailer's license. A ticket sold by a person other than an on-line retailer is not valid.
(2) The price of a play is $1.
(3) A player may complete up to five playboards on a single playslip.
(4) A player may use a single playslip to purchase the same play(s) for up to 10 consecutive drawings, to begin with the next drawing after the purchase.
(5) A person may select numbers for a play either:
(A) by using a self-service terminal;
(B) by using a playslip to select numbers or the Quick Pick option;
(C) by requesting a retailer to use the Quick Pick option to select numbers; or
(D) by requesting a retailer to manually enter numbers.
(6) Playslips must be completed manually. A ticket generated from a playslip that was not completed manually is not valid.
(7) An on-line retailer may accept a request to manually enter selections or to make Quick-Pick selections only if the request is made in person.
(8) An on-line retailer shall issue a ticket as evidence of one or more plays. A ticket must show the numbers selected for each play, the number of plays, the draw date(s) for which the plays were purchased, and the security and transaction serial numbers. Tickets must be printed on official Texas Lottery paper stock.
(9) A playslip has no monetary value and is not evidence of a play.
(10) The purchaser is responsible for verifying the accuracy of the numbers and other selections shown on a ticket.
(11) An unsigned winning ticket is payable to the holder or bearer of the ticket if the ticket meets all applicable validation requirements.
(d) Drawings.
(1) Texas Two Step drawings shall be held each week on Monday and Thursday at 10:12 p.m., central time. The executive director may change the drawing schedule, if necessary.
(2) At each Texas Two Step drawing, the commission shall draw four different numbers from a set of numbers from one through 35, and the commission shall draw a single number from a separate set of numbers from one through 35.
(3) Numbers drawn must be certified by the commission in accordance with the commission's drawing procedures.
(4) The numbers selected in a drawing shall be used to determine all winners for that drawing.
(5) Each drawing shall be witnessed by an independent certified public accountant. All drawing equipment used shall be examined by a commission drawings representative and the independent certified public accountant immediately before each drawing and immediately after each drawing.
(e) Prizes.
(1) Jackpot prize (first prize).
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a share of the jackpot prize (first prize) for a drawing if:
(i) the four numbers the player selected from a field of 35 numbers match (in any order) the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers matches the single number selected from a set of 35 numbers at the drawing.
(B) The jackpot prize for a Texas Two Step drawing is the amount the commission establishes and authorizes vendors to publicize for the drawing.
(C) If 23.78 percent of Texas Two Step sales proceeds for a roll cycle are not sufficient to pay a jackpot prize, the commission shall use remaining funds in the Texas Two Step prize reserve fund to pay the prize. If 23.78 percent of Texas Two Step sales proceeds for a roll cycle and any remaining funds in the Texas Two Step prize reserve fund are not sufficient to pay a jackpot prize, the commission shall use funds from other authorized sources, including the State Lottery Account established by Government Code §466.355, to pay the prize.
(2) Second prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a share of the second prize for a drawing if:
(i) the four numbers the player selected from a field of 35 numbers match (in any order) the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers does not match the single number selected from a set of 35 numbers at the drawing.
(B) The second prize consists of 2.79 percent of the proceeds from Texas Two Step ticket sales for the drawing and any amounts carried forward under subparagraph (D) of this paragraph.
(C) A payment made to a person for a share of the second prize for a drawing shall be rounded to the closest whole dollar amount. An amount of fifty cents shall be rounded up to the nearest whole dollar amount.
(D) Any part of the second prize for a drawing that is not paid in prizes shall be carried forward and shall become part of the second prize for the next drawing.
(3) Third prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a share of the third prize for a drawing if:
(i) three of the four numbers the player selected from a field of 35 numbers match (in any order) three of the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers matches the single number selected from a set of 35 numbers at the drawing.
(B) The third prize consists of 0.34 percent of the proceeds from Texas Two Step ticket sales for the drawing and any amounts carried forward under subparagraph (D) of this paragraph.
(C) A payment made to a person for a share of the third prize for a drawing shall be rounded to the closest whole dollar amount. An amount of exactly fifty cents shall be rounded up to the nearest whole dollar amount.
(D) Any part of the third prize for a drawing that is not paid in prizes shall be carried forward and shall become part of the third prize for the next drawing.
(4) Fourth prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a share of the fourth prize for a drawing if:
(i) three of the four numbers the player selected from a field of 35 numbers match (in any order) three of the four numbers selected at the drawing from a set of 35 numbers; and
(ii) the single number the player selected from a field of 35 numbers does not match the single number selected from a set of 35 numbers at the drawing.
(B) The fourth prize consists of 4.60 percent of the proceeds from Texas Two Step ticket sales for the drawing and any amounts carried forward under subparagraph (D) of this paragraph.
(C) A payment made to a person for a share of the fourth prize for a drawing shall be rounded to the closest whole dollar amount. An amount of exactly fifty cents shall be rounded up to the nearest whole dollar amount.
(D) Any part of the fourth prize for a drawing that is not paid in prizes shall be carried forward and shall become part of the fourth prize for the next drawing.
(5) Fifth prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a share of the fifth prize for a drawing if:
(i) two of the four numbers the player selected from a field of 35 numbers match (in any order) two of the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers matches the single number selected from a set of 35 numbers at the drawing.
(B) The fifth prize consists of 3.04 percent of the proceeds from Texas Two Step ticket sales for the drawing and any amounts carried forward under subparagraph (D) of this paragraph.
(C) A payment made to a person for a share of the fifth prize for a drawing shall be rounded to the closest whole dollar amount. An amount of exactly fifty cents shall be rounded up to the nearest whole dollar amount.
(D) Any part of the fifth prize for a drawing that is not paid in prizes shall be carried forward and shall become part of the fifth prize for the next drawing.
(6) Sixth prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a $7 prize for a drawing if:
(i) one of the four numbers the player selected from a field of 35 numbers matches one of the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers matches the single number selected from a set of 35 numbers at the drawing.
(B) If 6.87 percent of sales proceeds for the drawing are not sufficient to pay all of the sixth prizes for that drawing, the commission shall use remaining funds in the Texas Two Step prize reserve fund to pay the prizes. If 6.87 percent of sales proceeds for a drawing and any remaining funds in the Texas Two Step prize reserve fund are not sufficient to pay all of the sixth prizes for a drawing, the commission shall use funds from other authorized sources, including the State Lottery Account established by Government Code §466.355, to pay the prize.
(C) To the extent that the total amount of sixth prizes for a Texas Two Step drawing is less than 6.87 percent of the proceeds from ticket sales for the drawing, the difference shall be carried forward to fund future sixth prize payments.
(7) Seventh prize.
(A) A person who holds a valid ticket for a Texas Two Step play is entitled to a $5 prize for a drawing if:
(i) none of the four numbers the player selected from a field of 35 numbers match any of the four numbers selected from a set of 35 numbers at the drawing; and
(ii) the single number the player selected from a field of 35 numbers matches the single number selected from a set of 35 numbers at the drawing.
(B) If 8.58 percent of sales proceeds for the drawing are not sufficient to pay all of the seventh prizes for that drawing, the commission shall use remaining funds in the Texas Two Step prize reserve fund to pay the prizes. If 8.58 percent of sales proceeds for a drawing and any remaining funds in the Texas Two Step prize reserve fund are not sufficient to pay all of the seventh prizes for a drawing, the commission shall use funds from other authorized sources, including the State Lottery Account established by Government Code §466.355, to pay the prize.
(C) To the extent that the total amount of seventh prizes for a Texas Two Step drawing is less than 8.58 percent of the proceeds from ticket sales for the drawing, the difference shall be carried forward to fund future seventh prize payments.
(8) A person may win only one prize per play per drawing. A player who holds a valid ticket for a winning play is entitled to the highest prize for that play.
(9) A share of a prize is determined by dividing the prize by the number of winning plays for that prize.
(10) A Texas Two Step prize payment shall be made upon completion of commission validation procedures.
(11) A claimant is not entitled to interest or other earnings on a prize, regardless of when a claim is actually presented and regardless of when payment is made.
(f) Texas Two Step prize reserve fund.
(1) There will be no allocations from Texas Two Step ticket sales to the Texas Two Step prize reserve fund.
(2) When all funds in the Texas Two Step prize reserve fund have been used, the fund shall be abolished.
(g) Jackpot information on Commission website. After the commission has approved an advertised estimated jackpot under subsection (e) of this section, the commission shall post the following information on the agency website:
(1) the amount of ticket sales, if any, for previous drawings in the roll cycle; and
(2) the amount of projected ticket sales for the upcoming drawing.
(h) This rule takes effect May 26, 2008.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801604
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: May 26, 2008
Proposal publication date: February 1, 2008
For further information, please call: (512) 344-5012
Subchapter E. BOOKS AND RECORDS
The Texas Lottery Commission (Commission) adopts new Title 16, Part 9, Chapter 402, Subchapter E, §402.500 (relating to General Records Requirements) with changes to the proposed text as published in the November 9, 2007, issue of the Texas Register (32 TexReg 8076). Specifically, the changes include: (1) Subsection (a) has been deleted and replaced with a new subsection (a) which reads, "Licensees shall retain for four years all information and records required to be maintained by the Bingo Enabling Act (Texas Occupations Code, Chapter 2001) or the Charitable Bingo Administrative Rules."; (2) At subsection (b), "the", "design and use of its own forms for records", and "they contain" have been deleted, and "rule", "maintain information in a form determined by the licensee", and "that form includes" have been added; and (3) Subsection (c) now reads, "Upon request of the Commission, a licensee shall make available any information required to be maintained by the Bingo Enabling Act and the Charitable Bingo Administrative Rules. Except in cases of emergency, the Commission shall provide reasonable advance notice of the specific information and records needed and the time and location at which they must be made available."
The purpose of the adopted new rule is to clearly set forth certain general records requirements in accordance with §2001.505(b) of the Bingo Enabling Act which requires licensees to keep records to substantiate each quarterly report. Specifically, the new rule addresses the length of time records must be maintained, the forms for records that may be used, and the requirement that licensees make records available upon request of the Commission. Although these requirements also appear in existing rules, the Commission is aware of no inconsistencies and plans to propose rulemaking to eliminate any unnecessary duplication.
A public comment hearing was held on November 13, 2007. Several members of the public were present at the hearing. Representatives from the Bingo Interest Group, All Saints Bingo Unit Trust, and American Veterans Post 52 commented against the new rule. Representatives from Fort Worth Bookkeeping, Super Bingo, 19 Charities, Family Bingo Center, Saginaw Lions Club, Thompson Allstate Bingo Supply, and several charities and a bingo hall commented on the new rule without stating whether they were in favor or against the rule as a whole. Additionally, written comments were received from Earl O. Silver III, Chairman of the Bingo Advisory Committee Rules Subcommittee.
Comment: The rule presents repetition and redundancy with other rules. There is concern about conflicting rules and about the regulated community being able to follow the rules easily without doing unnecessary work.
Agency Response: The Commission agrees and is reviewing other bingo rules to identify unnecessary provisions and propose rulemaking to eliminate redundancy.
Comment: Licensees are being required to write the same numbers over and over on several different pieces of paperwork.
Agency Response: The agency disagrees. Subsection (b) has been revised to clarify that a licensee may maintain information in a form determined by the licensee as along as it includes the required information.
Comment: There are going to be additional costs to persons required to comply with the proposed rule.
Agency Response: Subsection (a) has been changed to clarify that licensees must retain records required to be maintained by the Bingo Enabling Act (Texas Occupations Code Chapter 2001) or the Charitable Bingo Administrative Rules rather than "all information and records relating to bingo." The requirement to retain records for four years is already required in existing rules.
Comment: If this rule does, in fact, require something new to be done or to be done in a different form, then the rule should be amended to say that this will only apply to an occasion that occurs after a date certain.
Agency Response: The rule does not require anything new to be done or to be done in a different form.
Comment: Several persons expressed concern about the meaning of "all information and records" in subsection (a). It could require a lot of extra storage space and expense.
Agency Response: Subsection (a) has been modified to clarify that only records required to be maintained by the Bingo Enabling Act or the Charitable Bingo Administrative Rules must be maintained for four years.
Comment: Several persons commented that subsection (c) could be a problem when a licensee's records are being used by its accountant in order to complete IRS Form 990. The penalties are pretty stiff with the IRS if the 990 is filed late. The Commission should request information in advance to give organizations a reasonable time to gather the information.
Agency Response: The agency concurs and has made changes to subsection (c) to provide for the agency to provide reasonable advance notice of the need for records.
The new rule is adopted under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.
The adopted new rule implements Occupations Code, Chapter 2001.
§402.500.General Records Requirements.
(a) Licensees shall retain for four years all information and records required to be maintained by the Bingo Enabling Act (Texas Occupations Code, Chapter 2001) or the Charitable Bingo Administrative Rules.
(b) Unless otherwise prescribed by Commission rule, a licensee may maintain information in a form determined by the licensee as long as that form includes the information required by the Bingo Enabling Act and the Charitable Bingo Administrative Rules.
(c) Upon request of the Commission, a licensee shall make available any information required to be maintained by the Bingo Enabling Act and the Charitable Bingo Administrative Rules. Except in cases of emergency, the Commission shall provide reasonable advance notice of the specific information and records needed and the time and location at which they must be made available.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801602
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: April 15, 2008
Proposal publication date: November 9, 2007
For further information, please call: (512) 344-5012
The Texas Lottery Commission (Commission) adopts new Title 16, Part 9, Chapter 402, Subchapter E, §402.506 (relating to Disbursement Records Requirements) with changes to the proposed text as published in the November 9, 2007, issue of the Texas Register (32 TexReg 8076).
Specifically, the changes include: (1) At subsection (a), "licensee" is replaced with "licensed authorized organization or unit", "is required to" is replaced with "shall", and the phrase "cancelled check images may" has been added; (2) At subsection (b), "records that must be maintained" has been deleted and "for each type of expense listed" has been added; (3) At subsection (b)(1), "or similar documents" has been added, and "detailed", "Invoices or other appropriate supporting documents must", and "at least" have been deleted; (4) At subsection (b)(1)(A), ", address, and phone number" has been replaced with "and contact information"; (5) At subsection (b)(1)(B), "an adequate" replaces "a complete"; (6) Subsection (b)(1)(C) now reads, "the quantity of each product purchased or service received;"; (7) At subsection (b)(1)(D), "unit" has been deleted, and "product purchased or service received which may include the pricing information for services provided pursuant to a service agreement;" has been added; (8) At subsection (b)(2), "if any", "commercial", and "licensed authorized" have been added; (9) Subsection (b)(3) now reads, "Rent forgiveness letter or lease agreement signed by the commercial lessor stating the amount of any rent forgiven or permanently or temporarily reduced."; (10) Subsection (b)(4)(A) now reads "primary position worked;"; (11) At subsection (b)(5), "deposits, and receipts" has been replaced with "including related deposit slips and receipts or other documentation that the deposits were accepted."; (12) Subsection (b)(6) now reads, "Documentation of the payment of other federal, state, and local taxes, which may include tax returns, 1099's and property tax paid."; (13) Subsection (b)(8) has been deleted and the remaining provisions have been renumbered; (14) At new subsection (b)(8), "canceled" has been replaced with "cancelled" and "or cancelled check images" has been added; (15) Subsection (b)(10) has been deleted; and (16) Subsections (c) and (d) have been added to the rule.
The purpose of the adopted new rule is to set forth, in plain language, certain requirements for maintenance of records relating to disbursements from a licensed authorized organization's bingo account in accordance with §2001.505(b) of the Bingo Enabling Act which requires licensees to keep records to substantiate each quarterly report. Specifically, the new rule addresses the maintenance of records of bingo expenses, including invoices, itemized billing statements, sales receipts, or similar documents that have detailed information about the items purchased or services provided. The rule also requires maintenance of records regarding the lease agreement, if any, between the commercial lessor and the licensed authorized organization stating the amount of rent charged for the use of the bingo premises, the rent forgiveness letter or lease amendment, payroll records, federal and state payroll tax returns, including related deposit slips and receipts or other documentation that the deposits were accepted, and documentation of the payment of other federal, state, and local taxes, which may include tax returns, 1099's, and property tax paid. Commission loan approval letter for repayment of approved loans, bank statements, deposit slips and cancelled checks or cancelled check images, debit card transactions reports. The Commission believes that the requirements in the proposed new rule are consistent with existing Internal Revenue Service requirements for recordkeeping by non-profit organizations. If the Commission receives information indicating an inconsistency for a particular type of non-profit organization, the need for the requirement will be reevaluated.
A public comment hearing was held on November 13, 2007. Several members of the public were present at the hearing. Representatives from the Bingo Interest Group, All Saints Bingo Unit Trust, and American Veterans Post 52 commented against the new rule. Representatives from Fort Worth Bookkeeping, Super Bingo, 19 Charities, Family Bingo Center, Saginaw Lions Club, several charities and a bingo hall, and Thompson Allstate Bingo Supply commented on the new rule without stating whether they were in favor or against the rule as a whole. Additionally, written comments were received from Earl O. Silver, III, Chair of the Bingo Advisory Committee Rules Subcommittee.
Comment: The IRS takes cancelled checks to substantiate a purchase if there is not an invoice. So, a cancelled check should be able to substantiate a bingo expense.
Agency Response: The agency agrees that cancelled checks may substantiate a purchase if there is not an invoice.
Comment: Section 402.506: The rule contains requirements that are redundant.
Agency Response: The Commission agrees and is reviewing other rules to identify unnecessary provisions and propose rulemaking to eliminate redundancy.
Comment: In subsection (a), insert "or check images" after, "cancelled checks." Many banks do not return the actual cancelled check.
Agency Response: The agency agrees and has added "cancelled check images" to subsection (a).
Comment: Subsection (b) says, "The records listed below are acceptable records that must be maintained. . . ." It is almost like when you all started writing that you meant, "These would be acceptable for documenting expenses," but then you said, "They must be maintained." Well, if they must be maintained, it does not really make any difference whether they are acceptable or not, so I would suggest the deletion of the word "acceptable".
Agency Response: The agency agrees that subsection (b) should be clarified and has deleted "records that must be maintained" and added "for each type of expense listed."
Comment: Subsection (b)(1) that lists "Invoices, itemized billing statements, or" should include "or agreement" sales receipts," because some expenses are on agreement, not on invoice.
Agency Response: The agency agrees and has added "or similar documents."
Comment: In subsection (b)(1): The word "detailed" before "information" needs to be stricken. If you want information, if you will tell us what the information is, we will give it to you.
Agency Response: The agency agrees and has deleted the word "detailed in subsection (b)(1).
Comment: Subsection (b)(1)(A) is not broad enough to cover the type of contact information available for the person or entity selling goods or services, or providing the service. Sometimes on an invoice, the supplier does not list their phone number, or it may be the company name, the address and not a phone number. As long as they are able to be contacted in some way or form, it should suffice.
Agency Response: The agency agrees and has substituted "contact information" for "address, and phone number."
Comment: Include the concept of a service agreement in subsection (b)(1). Somebody may be charging per session.
Agency Response: The agency agrees and has included "service agreement" in subsection (b)(1)(D).
Comment: In subsection (b)(1)(B), delete "complete." A description of goods or services is enough.
Agency Response: The agency disagrees, but has changed "complete" to "adequate" to reduce the amount of detail required.
Comment: In subsection (b)(1)(C), it appears that the word "sold" is intended to say "purchased".
Agency Response: The agency agrees and has changed "sold" to "purchased" in subsection (b)(1)(C).
Comment: Subsections (b)(2) & (b)(3) need to be clearer on stating that just an invoice will support the changes that may accrue in rental charges. As it is written now the rule is very ambiguous for charities to know what exactly needs to be done.
Agency Response: The agency agrees and has clarified subsection (b)(2) by adding "if any" and (b)(3) by adding the language "or lease amendment" and "temporarily."
Comment: Every time the rule refers to an organization, it should refer to units as well.
Agency Response: The agency agrees and has made changes to subsection (a), (b)(2), and (c) to include reference to units.
Comment: The organization does not have room to keep the "Rent forgiveness letter signed by the commercial lessor stating the amount of any rent amount permanently reduced or forgiven." as required in subsection (b)(3). I do not understand why you need the paperwork to support it. If the check was not written, then obviously they are not getting the rent.
Agency Response: The agency disagrees. Documentation is necessary to substantiate bingo rent expenses, and the quantity of this documentation should not be overly burdensome.
Comment: Several commenters stated that subsection (b)(4)(A) requiring information on positions worked is burdensome and should be deleted because one particular worker may do three to four jobs in one day, just to be cost effective. They may act as an usher, a caller, and a cashier for the same occasion. When you have to break down and list every little thing they did it seems like a lot of extra stuff to keep up with just to run a bingo session.
Agency Response: Subsection (b)(4)(A) has been changed to say "primary position worked;".
Comment: Two persons commented that subsection (b)(5) regarding payroll tax returns, deposits and receipts is confusing and should be clarified. It is assumed that since a taxpayer does not get federal or state payroll tax receipts, the agency means a receipt for a deposit of those things.
Agency Response: The agency agrees and has changed the language to clarify that (b)(5) concerns federal and state payroll tax returns, including deposit slips and receipts or other documentation that the deposits were accepted.
Comment: Subsection (b)(6) is not clear as to what "other federal, state, and local documentation" is required.
Agency Response: The agency agrees and has revised (b)(6) to clarify that documentation of the payment of other federal, state, and local taxes paid is acceptable to substantiate bingo expenses. If there is not such expense, no documentation is required.
Comment: One person interpreted the word "other" in subsection (b)(6) as including 990's and the organization's state franchise tax returns and stated that this is a problem.
Agency Response: The agency agrees with the interpretation that "other" includes 990's and state franchise tax returns. If a licensed authorized organization wants credit for federal, state, and local taxes as an expense, it must have documentation to support the claim.
Comment: One person stated that there has got to be a better way to say subsection (b)(8) because people cannot figure out what it means.
Agency Response: The agency agrees and has deleted subsection (b)(8) and added revised language in new subsections (c) and (d) to provide clearer information on what is required.
Comment: Several persons asked that subsection (b)(9) be revised to insert "or check images" after the words "cancelled checks."
Agency Response: The agency agrees and has added "or cancelled check images" to new subsection (b)(8).
Comment: Subsection (b)(9): The Federal Law states that a financial institution is not required to return the checks to its customers. To reproduce these items would come at a very high expense to the charities. A large number of charities make deposits through the night deposit. Deposit slips and cancelled checks need to be removed from this line.
Agency Response: Texas Occupations Code §2001.452(c) requires that a "licensed authorized organization shall keep and account for all checks and withdrawal slips, including voided checks and withdrawal slips."
Comment: Proposed subsection (b)(11) concerning game schedules and pricing structure documents does not relate to disbursement records and does not fit in this rule. If it needs to be addressed, it needs to be addressed somewhere else. Commenters are opposed to addressing it anywhere else because those things change frequently, and there is no reason that they should not be able to be changed. Having to try to keep game pricing and structures every time you make a little change would create a huge amount of paperwork.
Agency Response: Proposed subsection (b)(11), now subsection (b)(10) due to renumbering has been deleted. Game schedules and pricing structure documents may be addressed in a future proposed rule relating to bingo occasions.
The new rule is adopted under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.
The adopted new rule implements Occupations Code, Chapter 2001.
§402.506.Disbursement Records Requirements.
(a) The licensed authorized organization or unit shall maintain records to substantiate bingo expenses. Bank statements, cancelled checks and cancelled check images may not be adequate to substantiate bingo expenses.
(b) The records listed below are acceptable to substantiate bingo expenses for each type of expense listed:
(1) Invoices, itemized billing statements, sales receipts or similar documents that have information about the items purchased or services provided and contain the following details:
(A) The name and contact information of the person or entity selling the goods or providing the service;
(B) an adequate description of goods or services purchased;
(C) the quantity of each product purchased or service received;
(D) the price of each product purchased or service received which may include the pricing information for services provided pursuant to a service agreement;
(E) the total dollar amount billed; and
(F) the date of the transaction.
(2) Written lease agreement, if any, between the commercial lessor and the licensed authorized organization or unit stating the amount of rent charged for the use of bingo premises. If there is no written agreement, the organization must support the rental payments with an invoice from the lessor stating location, rental dates, and rental amounts by occasion.
(3) Rent forgiveness letter or lease amendment signed by the commercial lessor stating the amount of any rent forgiven or permanently or temporarily reduced.
(4) Payroll records that include a listing for each employee showing:
(A) primary position worked;
(B) date and occasion number worked (if more than one occasion held on a single day);
(C) total number of hours worked per occasion (if paid hourly);
(D) rate and criteria (hourly, per occasion, etc.);
(E) gross wages;
(F) all taxes and payroll deduction amounts; and
(G) net payroll amount.
(5) Federal and state payroll tax returns, including related deposit slips and receipts or other documentation that the deposits were accepted.
(6) Documentation of the payment of other federal, state, and local taxes, which may include tax returns, 1099's and property tax paid.
(7) Commission loan approval letter for repayment of approved loans.
(8) Bank statements, deposit slips and cancelled checks or cancelled check images.
(9) Debit card transactions reports.
(c) The licensed authorized organization or unit shall maintain records to document the allocation method for bingo expenses which are shared by organizations in a hall.
(d) The licensed authorized organization or unit shall maintain records to document the allocation method for expenses that are divided between bingo and non-bingo expense or between bingo expense and charitable distribution.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801605
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: April 15, 2008
Proposal publication date: November 9, 2007
For further information, please call: (512) 344-5012
The Texas Lottery Commission (Commission) adopts new Title 16, Part 9, Chapter 402, Subchapter E, §402.511 (relating to Required Inventory Records) with changes to the proposed text as published in the November 9, 2007, issue of the Texas Register (32 TexReg 8076).
Specifically, the changes include: (1) At subsection (a) the phrase "or unit", the word "shall", and a colon at the end of the subsection have been added; (2) Also at subsection (a), the word "must" and the language "all disposable bingo cards and pull-tab bingo tickets:" has been deleted; (3) New language at subsections (a)(1) and (a)(2) have been added to the rule; (4) At subsection (b), the word "The" has been replaced with "Each" and the word "must" has been replaced with "shall"; (5) At subsection (c), the language, "for reimbursing its bingo account with non-bingo funds" has been deleted; (6) Subsection (d) has been modified to read as, "The perpetual inventory of disposable bingo cards shall contain:"; (7) Subsection (d)(1)(A) has been renumbered as subsection (d)(1) and the phrase, "or unit's" has been added; (8) Subsection (d)(1)(B) has been renumbered as subsection (d)(2); (9) Subsection (d)(1)(C) has been deleted; (10) Subsection (d)(1)(D) has been renumbered as subsection (d)(3), and the following has been added, "and the color of the paper or border"; (11) Subsection (d)(1)(E) has been renumbered as subsection (d)(4); (12) Subsection (d)(1)(F) has been renumbered as subsection (d)(5), and "packs in package" has been replaced with "UPS pads for each serial and series number remaining after each occasion"; (13) Subsections (d)(1)(G) and (d)(1)(H) have been deleted; (14) Subsection (d)(1)(I) has been renumbered as subsection (d)(6), and the words "the" and "was" have been added; (15) Subsections (d)(1)(J) and (d)(1)(K) have been deleted; (16) Subsection (d)(1)(L) has been renumbered as subsection (d)(7), and the word "sold" has been added; (17) Subsections (d)(1)(M) through (d)(1)(P) have been deleted; (18) Subsection (d)(1)(Q) has been renumbered as subsection (d)(8); (19) Subsection (d)(2) has been renumbered as subsection (e) and reads, "The perpetual inventory of pull-tab bingo tickets shall contain:"; (20) Subsection (d)(2)(A) has been renumbered as subsection (e)(1) and adds the phrase, "or unit's"; (21) Subsection (d)(2)(B) has been renumbered as subsection (e)(2) and adds the word "and" and deletes, "and address"; (22) Subsections (d)(2)(C) and (d)(2)(D) have been deleted; (23) Subsection (d)(2)(E) has been renumbered as subsection (e)(3); (24) Subsection (d)(2)(F) has been renumbered as subsection (e)(4); (25) Subsections (d)(2)(G) and (d)(2)(H) have been deleted; (26) Subsection (d)(2)(H), which was listed twice in error in the proposed version, has been renumbered as subsection (e)(5) and replaces the word "tabs" with the word "tickets"; (27) Subsection (d)(2)(I) has been deleted; (28) Subsection (d)(2)(J) has been renumbered as subsection (e)(6) and now reads, "number of tickets sold, missing, or damaged by occasion date"; (29) Subsection (d)(2)(K) has been renumbered as subsection (e)(7) and replaces "after the occasion" with "if the deal is closed"; and (30) Subsections (d)(2)(L) and (d)(2)(M) have been deleted.
The purpose of the adopted new rule is to clearly set forth certain requirements for maintenance of a licensed authorized organization's inventory records in accordance with §2001.505(b) of the Bingo Enabling Act which requires licensees to keep records to substantiate each quarterly report. Specifically, the new rule requires a licensed authorized organization to maintain a perpetual inventory of all disposable bingo cards and pull-tab bingo tickets. The perpetual inventory must account for all sold and unsold disposable bingo cards and pull-tab tickets as well as inventory items designated for destruction. The new rule also provides that the licensed authorized organization may be held responsible for gross receipts, prizes and prize fees associated with missing or unaccounted for disposable bingo cards and pull-tab bingo tickets. Additionally, the new rule requires the maintenance of a perpetual inventory of disposable bingo cards and pull-tab bingo tickets. Although some of these requirements may also appear in existing rules, the Commission is aware of no inconsistencies and plans to propose rulemaking to eliminate any unnecessary duplication.
A public comment hearing was held on November 13, 2007. Representatives from the Bingo Interest Group, All Saints Bingo Unit Trust, Thompson Allstate Bingo Supply, and American Veterans Post 52 commented against the new rule. Representatives from Fort Worth Bookkeeping, Super Bingo, 19 Charities, Family Bingo Center, Saginaw Lions Club, and several charities and a bingo hall commented on the new rule without stating whether they were in favor or against the rule as a whole. Additionally, written comments were received from Earl O. Silver III, Chair of the Bingo Advisory Committee Rules Subcommittee.
Comment: Compliance with Section 402.511 will be burdensome if it is retroactive.
Agency Response: The Commission has specified in new Section 402.500(b) that unless otherwise prescribed by Commission rule, a licensee may maintain information in a form determined by the licensee as long as that form contains the information required by the Bingo Enabling Act and the Charitable Bingo Administrative Rules.
Comment: Section 402.511 is redundant because it includes requirements already in existing bingo rules.
Agency Response: The Commission agrees and is reviewing other rules to identify unnecessary provisions and propose rulemaking to eliminate redundancy.
Comment: Several commenters stated that the proposed section 402.511 seems to require unnecessary, repetitive entry of information on two different forms such as the disposable card sale summary and the perpetual inventory. What appears to be additional terminology for a perpetual inventory causes confusion.
Agency Response: The Commission agrees and has changed the rule to clarify that the disposable card sales summary and the perpetual inventory for disposable card sales are the same document. Likewise, the pull-tab sales summary and the perpetual inventory for pull-tab bingo tickets are one document. Specifically, subsection (a) has been revised to clarify the perpetual inventory is the disposable card sales summary. In addition, subsections (d) and (e) have been modified to eliminate the terms "Disposable Card Sales Summary" and "Pull-tab Sales Summary."
Comment: In regards to subsection (c), several commenters stated that there should be some allowance for nominal slippage due to human error such as misplacement, cards sticking together, and manufacturer error.
Agency Response: The agency agrees and has deleted "is" and added "may be held", and deleted "for reimbursing its bingo account with non-bingo funds" from subsection (c) so that determination of the appropriate remedy for an organization's failure to account for all gross receipts, prizes and prize fees for disposable bingo cards and pull-tab bingo tickets will be based on specific fact situations.
Comment: Numerous commenters stated that the rule should permit several series to be logged on one sheet in order to save time and eliminate errors in filling out the information.
Agency Response: The agency concurs and has deleted from language from subsection (d)(1) requiring that each serial number must be recorded on a separate sheet.
Comment: Requiring the invoice date and number on the perpetual inventory creates a redundant task because this information is already captured on the invoice. Furthermore, a lot of times the people that get the inventory in check it off of the sales sheet or the packing list that is sent to a bookkeeper. When the bookkeeper has the invoice, the information is not readily available.
Agency Response: The agency agrees and has deleted the requirement in proposed subsection (d)(1)(C) that the perpetual inventory must include invoice date and number.
Comment: Subsections (d)(1)(E) and (d)(1)(F) seem to require the same information.
Agency Response: The agency disagrees that proposed subsections (d)(1)(E) and (d)(1)(F) require the same information. "Number of faces (ON) and number of sheets (UP)" describes the type of paper. "Number of sheets or packs" describes the quantity for each serial and series number. The agency has renumbered the provisions as (d)(4) and (d)(5), and has revised language in (d)(5) to clarify the meaning.
Comment: Subsection (d)(1)(G) requiring the color of the paper and border is redundant because it is the commenter's understanding that in industry standards, the color of the paper is the border color.
Agency Response: The agency disagrees. The color of the paper and the color of the border are two distinct items. Subsection (d)(1)(G) has been deleted, and similar language has been included in subsection (d)(3).
Comment: Subsection (d)(1)(P) relating to cumulative number of sheets sold is basically providing the same information as the number of sheets remaining.
Agency Response: The agency agrees and has deleted the provision requiring the number of sheets remaining.
Comment: The requirements in subsection (d)(1)(N) and (d)(1)(P) for providing information on the selling price per occasion and the total gross sales per occasion should be deleted because they have nothing to do with inventory.
Agency Response: The agency agrees and has deleted the provisions requiring information on the selling price per occasion and the total gross sales per occasion.
Comment: Subsections (d)(2)(H), (L), and (M) pertaining to total prize payout per deal, number of pull-tab tickets remaining after the occasion, and total gross sales per occasion are all information that should be kept in daily paperwork but have nothing to do with inventory. An inventory should be a thorough and accurate number showing what was used and what is left after each and every occasion.
Agency Response: The agency agrees as to (d)(2)(H) and (M) and has removed the language requiring total prize payout per deal and total gross sales per occasion. The language in subsection (d)(2)(L), now subsection (e)(7) due to renumbering, "after the occasion" has been revised to "if the deal is closed" in order to account for unsold tickets.
The new rule is adopted under Occupations Code §2001.054, which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act, and under Government Code §467.102, which authorizes the Commission to adopt rules for the enforcement and administration of this chapter and the laws under the Commission's jurisdiction.
The adopted new rule implements Occupations Code, Chapter 2001.
§402.511.Required Inventory Records.
(a) A licensed authorized organization or unit shall maintain a perpetual inventory of:
(1) disposable bingo cards described in subsection (d) of this section; and
(2) pull-tab bingo tickets described in subsection (e) of this section.
(b) Each perpetual inventory shall account for all sold and unsold disposable bingo cards and pull-tab bingo tickets, as well as inventory items designated for destruction.
(c) The licensed authorized organization may be held responsible for the gross receipts, prizes and prize fees associated with missing or unaccounted for disposable bingo cards and pull-tab bingo tickets.
(d) The perpetual inventory of disposable bingo cards shall contain:
(1) organization's or unit's name and taxpayer number;
(2) distributor's name and taxpayer number;
(3) serial and series number and the color of the paper or border (For UPS pad, use the top sheet for obtaining color, serial and series numbers.);
(4) number of faces (ON) and number of sheets (UP);
(5) number of sheets or UPS pads for each serial and series number remaining after each occasion;
(6) occasion date(s) the paper was used;
(7) number of sheets or packs sold, missing or damaged by date; and
(8) initials of person entering the information per occasion.
(e) The perpetual inventory of pull-tab bingo tickets shall contain:
(1) organization's or unit's name and taxpayer number;
(2) distributor's name and taxpayer number;
(3) form number;
(4) serial number;
(5) number of tickets per deal;
(6) number of tickets sold, missing, or damaged by occasion date; and
(7) number of pull-tab tickets remaining if the deal is closed.
This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on March 26, 2008.
TRD-200801606
Kimberly L. Kiplin
General Counsel
Texas Lottery Commission
Effective date: April 15, 2008
Proposal publication date: November 9, 2007
For further information, please call: (512) 344-5012