Proposed Rules Title 1

TITLE 1. ADMINISTRATION

PART 2. TEXAS ETHICS COMMISSION

CHAPTER 12. SWORN COMPLAINTS

SUBCHAPTER B. FILING AND INITIAL PROCESSING OF A COMPLAINT

1 TAC §12.57

The Texas Ethics Commission proposes an amendment to §12.57, relating to the requirements for filing a complaint.

The proposed amendment to §12.57 would require a complainant to provide the mailing address of the person against whom a complaint is filed. A sworn complaint filed with the commission is required to comply with form requirements that are found in statute and in a commission rule. Currently, the rule requires a complaint to include the mailing address of each respondent, if known to the complainant. Occasionally, complaints do not include a valid address and sometimes do not include an address at all. The lack of an address makes it difficult to comply with the statutory requirement to notify a respondent of a complaint.

David A. Reisman, Executive Director, has determined that for each year of the first five years that the rule is in effect there will be no fiscal implication for the state and no fiscal implication for local government as a result of enforcing or administering the rule as proposed. Mr. Reisman has also determined that the rule will have no local employment impact.

Mr. Reisman has also determined that for each year of the first five years the rule is in effect, the anticipated public benefit will be clarity in what is required by the law.

Mr. Reisman has also determined there will be no direct adverse effect on small businesses or micro-businesses because the rule does not apply to single businesses.

Mr. Reisman has further determined that there are no economic costs to persons required to comply with the rule.

The Texas Ethics Commission invites comments on the proposed rule from any member of the public. A written statement should be mailed or delivered to Natalia Luna Ashley, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070, or by facsimile (FAX) to (512) 463-5777. A person who wants to offer spoken comments to the commission concerning the proposed rule may do so at any commission meeting during the agenda item "Communication to the Commission from the Public" and during the public comment period at a commission meeting when the commission considers final adoption of the proposed rule. Information concerning the date, time, and location of commission meetings is available by telephoning (512) 463-5800 or, toll free, (800) 325-8506.

The amendment to §12.57 is proposed under Government Code, Chapter 571, §571.062, which authorizes the commission to adopt rules concerning the laws administered and enforced by the commission.

The proposed amendment to §12.57 affects Chapter 571, Subchapter E of the Government Code.

§12.57.Contents of a Complaint.

(a) In addition to the contents set out in Government Code §571.122, a complaint must include the following information:

(1) the telephone number of the complainant; [~~and~~]

(2) the mailing address of each respondent; and

(3) [~~(2)~~] if known to the complainant, the [~~mailing address and~~ ] telephone number of each respondent.

(b) A complaint must include the position and title of a respondent only if the alleged violation is related to the position or title of the respondent.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803353

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

CHAPTER 20. REPORTING POLITICAL CONTRIBUTIONS AND EXPENDITURES

SUBCHAPTER J. REPORTS BY A CANDIDATE FOR STATE OR COUNTY PARTY CHAIR

1 TAC §20.577

The Texas Ethics Commission proposes an amendment to §20.577, relating to reporting requirements for a candidate for state chair of a political party.

The amendment to §20.577(c)(2) provides in relevant part that a candidate for state chair must file a report covering "the period that begins on either the day after the committee filed a campaign treasurer appointment with the commission or the first day after the period covered by the last report required to be filed, as applicable, and ends on the 10th day before the convening." (Emphasis added). Instead of "the day after" the rule should state "the day." Also, instead of "committee" the rule should state the "candidate." The proposed amendment to §20.577(c)(2) would amend the existing rule to correct the typographical errors.

Mr. Reisman has also determined that for each year of the first five years the rule is in effect, the anticipated public benefit will be clarity in what is required by the law.

Mr. Reisman has also determined there will be no direct adverse effect on small businesses or micro-businesses because the rule does not apply to single businesses.

Mr. Reisman has further determined that there are no economic costs to persons required to comply with the rule.

The amendment is proposed under Government Code, Chapter 571, §571.062, which authorizes the commission to adopt rules concerning the laws administered and enforced by the commission.

The proposed amendment affects Chapter 257 of the Election Code.

§20.577.Reporting Schedule for a Candidate for State Chair.

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

(1) A candidate for state chair of a political party shall file a report not earlier than the 39th day before the convening of the state convention and not later than the 30th day before the convening of the state convention. The report shall cover the period that begins on either the day the candidate filed a campaign treasurer appointment with the commission or the first day after the period covered by the last report required to be filed, as applicable, and ends on the 40th day before the convening.

(2) A candidate for state chair of a political party shall file a report not earlier than the ninth day before the convening of the state convention and not later than the eighth day before the convening of the state convention. The report must cover the period that begins on either the day the candidate [ ~~after the committee~~] filed a campaign treasurer appointment with the commission or the first day after the period covered by the last report required to be filed, as applicable, and ends on the 10th day before the convening.

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

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803354

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

CHAPTER 34. REGULATION OF LOBBYISTS

The Texas Ethics Commission proposes amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22, relating to the reporting requirement by a lobbyist or an entity and the permissibility of contingent fees.

The lobby law requires a person to register as a lobbyist if the person exceeds either a compensation threshold ($1,000 in a calendar quarter) or an expenditure threshold ($500 in a calendar quarter). Section 34.5 creates exceptions from that requirement for purposes of the compensation threshold. The proposed amendment to §34.5 would provide that the exception in §34.5(11) would not apply if a person is compensated on a contingent fee basis for communicating with a state agency concerning purchasing decisions of a state agency.

The proposed amendment to §34.45 would provide that an entity that avoids the requirement to register as a lobbyist by having a lobbyist report on its behalf is subject to §305.024 of the Government Code.

The proposed amendment to §34.65 would require a registered lobbyist reporting compensation on behalf of an entity that is avoiding registration to report the compensation by the date on which the entity, if registered, would have been required to report the compensation.

The proposed amendment to §34.85 would set a criteria that must be satisfied before a registered lobbyist may report an expenditure on behalf of an entity in order for the entity to avoid the requirement to register as a lobbyist.

The new §34.22 would provide that contingent fees are permissible for efforts to influence state agency purchasing decisions of a product and would provide what the term "product" consists of.

David A. Reisman, Executive Director, has determined that for each year of the first five years that the rules are in effect there will be no fiscal implication for the state and no fiscal implication for local government as a result of enforcing or administering the rules as proposed. Mr. Reisman has also determined that the rules will have no local employment impact.

Mr. Reisman has also determined that for each year of the first five years the rules are in effect, the anticipated public benefit will be clarity in what is required by the law.

Mr. Reisman has also determined there will be no direct adverse effect on small businesses or micro-businesses because the rules do not apply to single businesses.

Mr. Reisman has further determined that there are no economic costs to persons required to comply with the rules.

The Texas Ethics Commission invites comments on the proposed rules from any member of the public. A written statement should be mailed or delivered to Natalia Luna Ashley, Texas Ethics Commission, P.O. Box 12070, Austin, Texas 78711-2070, or by facsimile (FAX) to (512) 463-5777. A person who wants to offer spoken comments to the commission concerning the proposed rules may do so at any commission meeting during the agenda item "Communication to the Commission from the Public" and during the public comment period at a commission meeting when the commission considers final adoption of the proposed rules. Information concerning the date, time, and location of commission meetings is available by telephoning (512) 463-5800 or, toll free, (800) 325-8506.

SUBCHAPTER A. GENERAL PROVISIONS

1 TAC §34.5

The amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 are proposed under Government Code, Chapter 571, §571.062, which authorizes the commission to adopt rules concerning the laws administered and enforced by the commission.

The proposed amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 affect Chapter 305 of the Government Code.

§34.5.Certain Compensation Excluded.

Compensation received for the following activities is not included for purposes of calculating the registration threshold under Government Code §305.003(a)(2), and this chapter and is not required to be reported on a lobby activity report filed under Government Code, Chapter 305, and this chapter:

(1) - (10) (No change.)

(11) communicating to a member of the executive branch concerning state agency purchasing decisions of a product, a service, or a service provider, [ ~~of a state agency,~~] or negotiations regarding such decisions if the compensation for the communication is not totally or partially contingent on the outcome of any administrative action.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803355

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

1 TAC §34.22

The proposed amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 affect Chapter 305 of the Government Code.

§34.22.Contingent Fees for Influencing Purchasing Decisions.

(a) Government Code §305.022, does not prohibit contingent fees to an employee of a vendor of a product for efforts to influence state agency purchasing decisions of a product.

(b) For purposes of this section and Government Code §305.022 , the term "product" consists of goods acquired for direct consumption or use by the agency in the day-to-day support of the agency's administrative operations, such as office supplies and equipment, and does not include "services" or the "selection of a service provider."

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803356

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

SUBCHAPTER B. REGISTRATION REQUIRED

1 TAC §34.45

The proposed amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 affect Chapter 305 of the Government Code.

§34.45.Entity Registration.

(a) (No change.)

(b) An entity that avoids registration under subsection (a) of this section becomes subject to Government Code, §305.024 on the earlier of the date the entity makes the expenditure that would have required the entity to register as a lobbyist or the date the entity receives, or is entitled to receive compensation or reimbursement that would have required the entity to register as a lobbyist.

(c) [~~(b)~~] Registration by an entity does not relieve any individual of the requirement to register if that individual meets one of the registration thresholds in Government Code, §305.003.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803357

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

Subchapter C. COMPLETING THE REGISTRATION FORM

1 TAC §34.65

The proposed amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 are proposed under Government Code, Chapter 571, §571.062, which authorizes the commission to adopt rules concerning the laws administered and enforced by the commission.

The amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 affect Chapter 305 of the Government Code.

§34.65.Compensation Reported by Lobby Firm Employee.

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

(c) The individual registrant shall report the compensation by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a registration or amended registration, as applicable, that he has reported compensation and/or reimbursement paid to an entity for lobby activity by one or more persons other than the registrant.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803358

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

SUBCHAPTER D. LOBBY ACTIVITY REPORTS

1 TAC §34.85

The amendments to §§34.5, 34.45, 34.65, and 34.85, and new §34.22 affect Chapter 305 of the Government Code.

§34.85.Individual Reporting Expenditure by Entity.

(a) An individual registrant may report an expenditure made by a lobby entity if the entity requests that the individual do so in order for the entity to avoid registration; and [.]

(1) the entity makes the expenditure in order for the individual to act on the entity's behalf to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action; or

(2) the entity compensates or reimburses the individual to act on behalf of the entity or on behalf of the entity's clients to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.

(b) The individual registrant shall report the expenditure by the date on which the entity, if registered, would have been required to report it. The individual registrant shall indicate on a lobby activity report that he or she has reported expenditures made by an entity and indicate the specific amount reported on behalf of the entity.

(c) For purposes of Government Code, §305.0021(b), an expenditure made by an entity under subsection (a) of this section, is not a joint expenditure for purposes of Government Code, §305.0021(b) if the entity makes the entirety of the expenditure at issue.

(d) [~~(b)~~] In this provision "lobby entity" means a corporation, association, firm, partnership, committee, club, organization, or other group of persons voluntarily acting in concert that meets one of the registration thresholds in Government Code, §305.003.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803359

Natalia Luna Ashley

General Counsel

Texas Ethics Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5800

PART 4. OFFICE OF THE SECRETARY OF STATE

CHAPTER 78. ATHLETE AGENTS

The Office of the Secretary of State proposes amendments to 1 TAC §§78.1, 78.11, 78.13, 78.21, 78.31, 78.50, 78.51, 78.53, 78.60 and new §78.32 and §78.33, relating to athlete agents. The amendments and new rules are proposed in order to correct erroneous citations to rules and statutes relating to athlete agents, to specify the location of forms on the Office of the Secretary of State's web site; to clarify the procedures for renewal of registrations; and to conform the rules to existing practices and procedures related to athlete agents.

Mike Powell, Attorney, Business and Public Filings Division, has determined that for the first five years the proposal is in effect there will be no fiscal impact to the state or local government as a result of the adoption of the amendments and new sections.

Mr. Powell has also determined that for each year of the first five years the proposal is in effect the public benefit is to provide an accurate, more detailed, and clearer understanding of the policies and procedures for filing athlete registrations with the Office of the Secretary of State. There will be no additional cost to small business or individuals as a result of the adoption of the amendments and new sections.

Mike Powell has been designated to receive comments. Written comments should be addressed to Mr. Powell at Office of the Secretary of State, Business and Public Filings Division, P.O. Box 13297, Austin, Texas 78711-3697; or by e-mail to mpowell@sos.state.tx.us. To be considered, comments must be delivered to the Office of the Secretary of State no later than 12 noon, on August 11, 2008.

SUBCHAPTER A. REGISTRATION

1 TAC §§78.1, 78.11, 78.13, 78.21

The amendments are proposed under the authority of §2051.051 of the Texas Occupations Code which provides that the secretary may adopt rules necessary to administer the chapter.

Chapter 2051 of the Texas Occupations Code is affected by the proposal.

§78.1.Registration of Athlete Agents.

(a) Chapter 2051 of the Texas Occupations Code provides for the registration of athlete agents with the secretary of state.

(b) [~~(a)~~] The application for registration by an athlete agent will be accepted for filing only upon submission of a completed registration form and payment of the applicable filing fee stated in §78.21 of this title (relating to Filing Fees).

(c) [~~(b)~~] Except as provided in subsection (d) [~~Subsection (c)~~] of this section, an application for an athlete agent shall be made on forms prescribed by the secretary of state. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550 [ ~~12887~~], Austin, Texas 78711-3550. The form may also be found on the Secretary of State's website [ ~~at www.sos.state.tx.us~~]. See Form 2501 at http://www.sos.state.tx.us/statdoc/statforms.shtml.

(d) [~~(c)~~] A person who holds a certificate of registration or license as an athlete agent in another state may submit a copy of the other state application and certificate or license instead of submitting the application required by this section if the application to the other state:

(1) was submitted to the other state not earlier than the 180th day before the date the application is submitted in this state and the applicant certifies that the information contained in the application is current;

(2) contains information substantially similar to or more comprehensive than the information required by Chapter 2051 of [0f] the Texas Occupations Code; and

(3) was signed by the applicant under penalty of perjury.

(e) [~~(d)~~] The registration under Chapter 2051 of the Texas Occupations Code [~~the Act~~] is valid for one year from the date of issuance of the certificate of registration. [ ~~When application for registration is made and the registration process has not been completed, the secretary of state may issue a provisional registration certificate valid for not more than 90 days.~~]

(f) [~~(e)~~] An agent that is a corporation, an association, a partnership, a limited liability company, or other entity, and not an individual or sole proprietorship, shall file a statement setting forth the names and addresses of all individuals who will recruit or solicit an athlete to enter into an agent contract, a professional sports services contract, or a financial services contract with the agent. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. The form may also be found on the Secretary of State's website. See Form 2504 at http://www.sos.state.tx.us/statdoc/statforms.shtml. [~~The statement shall be filed on a form prescribed by the secretary of state and available from the Statutory Documents Section referenced previously.~~]

(g) When the application for registration is submitted but determined by the secretary of state to be incomplete or not accompanied by any necessary supplemental application, affidavit or surety bond, the secretary of state may issue a provisional registration certificate valid for not more than 90 days. The secretary of state will not issue a provisional certificate if the filing fee for the application for registration has not been paid. If the deficiencies in the registration are cured within the time specified by the secretary of state, the secretary will issue a certificate of registration that relates back to the first date of receipt of the application for registration.

§78.11.Renewal for Registration of Athlete Agent.

(a) Except as provided in subsection [~~Subsection~~ ] (b) of this section, an application for renewal to be an athlete agent shall be made on the same form and in the same manner as the original application for registration [~~forms prescribed by the secretary of state~~]. [A copy of the prescribed form or the requirements of the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 12887, Austin, Texas 78711. The form may also be found on the Secretary of State's website at www.sos.state.tx.us.]

(b) A person who has submitted an application for renewal of registration or license as an athlete agent in another state may submit a copy of the application and certificate of registration or license from the other state instead of submitting the application required by this section. The secretary of state shall accept the application for renewal from the other state as an application for renewal under this section if the application to the other state:

(1) was submitted to the other state not earlier than the 180th day before the date the renewal application is submitted in this state and the applicant certifies that the information contained in the application is current;

(2) contains information substantially similar to or more comprehensive than the information required by Chapter 2051 of the Texas Occupations Code; and

(3) was signed by the applicant under penalty of perjury.

(c) A renewal application for an athlete agent shall be submitted to the secretary of state on or before the expiration of the registration term but no earlier than 90 days before expiration.

(d) Renewal under Chapter 2051 of the Texas Occupations Code extends the registration for an additional one year term. [ the Act is valid for one year from the date of issuance. When application for renewal is made and the renewal process has not been completed, the secretary of state may issue a provisional renewal certificate valid for not more than 90 days.]

(e) An agent that is a corporation, an association, a partnership, a limited liability company, or other entity, and not an individual or sole proprietorship, shall file a statement with the renewal application setting forth the names and addresses of all individuals who will recruit or solicit an athlete to enter into an agent contract, a professional sports services contract, or a financial services contract with the agent on the same form and in the same manner as the statement filed with the original registration. [~~The statement shall be filed on a form prescribed by the secretary of state and available from the Statutory Documents Section referenced previously.~~]

(f) When the application for renewal is submitted but determined by the secretary to be incomplete or not accompanied by any necessary supplemental application, affidavit or surety bond, the secretary of state may issue a provisional renewal certificate valid for not more than 90 days. The secretary of state will not issue a provisional certificate if the required filing fee has not been paid. If the deficiencies in the renewal registration are cured within the time specified by the secretary of state, the secretary will issue a certificate of registration.

§78.13.Updates.

An athlete agent entity that has filed a statement under §78.1(f) [~~§78.1(d)~~] or §78.11(e) [~~§78.11(d)~~ ] of this title (relating to Registration of Athlete Agents; Renewal for Registration of Athlete Agent) shall file an updated statement reporting [~~that reports~~] any additions to, deletions of or change in the name or address of the individuals who recruit or solicit athletes on behalf of the entity. The statement shall be filed no later than the 30th day after the date the change occurs. The updates shall be made on the same form and in the same manner as the original statement. [~~It shall be on a form prescribed by the secretary of state and available from the Statutory Documents Section.~~]

§78.21.Filing Fees.

(a) The filing fee for filing an application for registration as [~~registering~~] an athlete agent is $1,000.

(b) The filing fee for filing an application for renewal of registration as an athlete agent [~~renewing a registration~~] is $1,000.

(c) The fee for filing [~~each individual that is listed in~~] the statement [~~statements~~] described in §78.1(f) [~~§78.1(d)~~] and §78.11(e) [~~§78.11(d)~~] of this title (relating to Registration of Athlete Agents; Renewal for Registration of Athlete Agent) is $100 for each individual listed in the statement.

(d) The fee for [~~each individual listed in~~] the statement update described in §78.13 of this title (relating to Updates) is $100 for each individual [,] who was not reported in the entity's most recent [~~prior~~] statement[~~, is $100~~]. If no new individuals are named, there is no filing fee for the statement.

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

Filed with the Office of the Secretary of State on June 25, 2008.

TRD-200803338

Lorna Wassdorf

Director of Business and Public Filings Division

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-9856

SUBCHAPTER B. SURETY BONDS AND AFFIDAVITS

1 TAC §§78.31 - 78.33

The amendments and new rules are proposed under the authority of §2051.051 of the Texas Occupations Code which provides that the secretary may adopt rules necessary to administer the chapter.

Chapter 2051 of the Texas Occupations Code is affected by the proposal.

§78.31.Affidavit of Athlete Agent.

If an application for registration or renewal does not include [~~Any athlete agent who does not post~~ ] a $100,000 surety bond because the agent does not enter into financial services contracts with athletes, the athlete agent must execute [~~with their initial application or renewal must execute~~] an affidavit affirming that the agent has not entered into a financial services contract and has not provided financial services to an athlete. The affidavit shall be filed with the Office of the Secretary of State with the submission of the application for registration or the application for renewal of registration. [If the initial application or renewal was filed prior to April 7, 1989, the athlete agent shall execute and file an affidavit with the secretary of state within 10 days from receiving notice of the required affidavit.] A copy of the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550 [~~12887~~], Austin, Texas 78711-3550. The form may also be found on the Secretary of State's website. See Form 2502 or 2502A, as applicable, at http://www.sos.state.tx.us/statdoc/statforms.shtml.

§78.32.Surety Bond for Financial Services Contract.

If an agent will enter into a financial services contract with an athlete, the application for registration or any renewal must be accompanied by a properly issued and executed athlete agent surety bond in the amount of $100,000 on the form prescribed by the secretary of state. The form or specifications pertaining to the prescribed form may be obtained by writing to the Statutory Documents Section, Office of the Secretary of State, P.O. Box 13550, Austin, Texas 78711-3550. The form may also be found on the Secretary of State's website. See Form 2503 at http://www.sos.state.tx.us/statdoc/statforms.shtml.

§78.33.Failure to Provide Bond or Affidavit.

Failure to provide the surety bond or the affidavit in lieu of the security bond will result in rejection of the application or renewal of application for registration.

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

Filed with the Office of the Secretary of State on June 25, 2008.

TRD-200803339

Lorna Wassdorf

Director of Business and Public Filings Division

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-9856

SUBCHAPTER C. CONTRACTS

1 TAC §78.50, §78.51

The amendments are proposed under the authority of §2051.051 of the Texas Occupations Code which provides that the secretary may adopt rules necessary to administer the chapter.

Chapter 2051 of the Texas Occupations Code is affected by the proposal.

§78.50.Initial Filing Date.

Each registered athlete agent shall file with the secretary of state a copy of each agent contract and/or financial services contract entered into with an athlete by the athlete agent no later than the fifth day after the date the contract is signed by the athlete. Failure to timely file a contract is a violation of Chapter 2051 of the Texas Occupations Code and may subject the agent to administrative penalties or other disciplinary actions as permitted under Chapter 2051 of the Texas Occupations Code.

§78.51.Contract Form.

(a) The secretary of state has the authority to approve the form of all agent and financial services contracts. All contracts must comply with §2051.203 and §2051.204 of the Texas Occupations Code (Code). All such contracts shall:

(1) include the amount and method of computing the fees the agent may charge to and collect from the athlete and a description of the various services to be rendered in return for each fee;

(2) specify any other consideration the athlete agent received or will receive from any other source for entering into the contract; or for providing the services;

(3) identify the name of any person not listed in the application for registration or renewal of registration who will be compensated because the athlete signed the contract;

(4) describe any expenses of the athlete agent that the athlete agrees to reimburse;

(5) [~~(4)~~] contain the disclosure statements specified in §2051.204 of the Code [~~the Athlete Agents Act, §5(b)(1), (2), (3), (4) and (5)~~];

(6) [~~(5)~~] indicate the date that the athlete signs the contract;

(7) [~~(6)~~] identify the institution of higher education where the athlete attended and participated in intercollegiate sports contests; and

(8) [~~(7)~~] specify the time-period covered by the contract.

(b) The secretary of state will accept agent contracts on forms required by or approved by professional players' associations provided that the contract includes, as part of the body of the contract or in an addendum to the contract, the information related to fees and services required by §2051.203 of the Code and the disclosure statements required by §2051.204 of the Code. The disclosure language required by §2051.204 of the Code must be reproduced in the contract without change.

(c) [~~(b)~~] If a contract fails to contain the information stated in §2051.203 or §2051.204 of the Code or this section [ ~~this rule or if the contract is not filed within the time specified in §78.50 of this title (relating to the Initial Filing Date)~~], an athlete agent may be subject to administrative penalties and other disciplinary actions permitted by Chapter 2051 of the Code [ ~~action by the secretary of state~~].

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

Filed with the Office of the Secretary of State on June 25, 2008.

TRD-200803340

Lorna Wassdorf

Director of Business and Public Filings Division

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-9856

SUBCHAPTER D. ADMINISTRATIVE PENALTIES

1 TAC §78.53, §78.60

The amendments are proposed under the authority of §2051.051 of the Texas Occupations Code which provides that the secretary may adopt rules necessary to administer the chapter.

Chapter 2051 of the Texas Occupations Code is affected by the proposal.

§78.53.Late Contract Filings.

(a) An athlete agent or financial services contract is deemed filed when it is properly addressed and placed in the United States Post Office or in the hands of a common or contract carrier or successfully transmitted by fax or by e-mail. The post office cancellation mark, [or] the receipt mark of a common or contract carrier, a fax transmission report, or confirmation of receipt of e-mail is prima facie evidence of the date the contract was deposited with the post office or carrier or transmitted by fax or e-mail.

(b) Contracts not filed within the time period established by §78.50 of this title (relating to Initial Filing Date) are late.

(c) Contracts not received by the Office of the Secretary of State within ten days of the date the athlete signs the contract are subject to an administrative penalty. Said penalty will be assessed on the following basis:

(1) a fine of $100, plus;

(2) $20/day for each day that the contract is late.

(d) Assessment of the fine described in subsection (c) of this section does not preclude the secretary of state from taking other disciplinary action authorized by Chapter 2051 of the Texas Occupations Code [~~the Act~~].

§78.60.Administrative Penalties.

(a) If the secretary of state determines that a violation of Chapter 2051 of the Texas Occupations Code [~~the Athlete Agents Act~~ ] has occurred and an administrative penalty is to be assessed, the following factors shall be considered by the secretary in calculating the amount of the penalty:

(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the prohibited act;

(2) the economic harm to the public's interest or confidences caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter future violations;

(5) efforts to correct the violation;

(6) whether the violation was intentional or unintentional; and

(7) any other matter that justice may require.

(b) The secretary of state may assess a penalty of not more than $25,000 for each violation.

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

Filed with the Office of the Secretary of State on June 25, 2008.

TRD-200803341

Lorna Wassdorf

Director of Business and Public Filings Division

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-9856

CHAPTER 81. ELECTIONS

SUBCHAPTER B. EARLY VOTING

1 TAC §81.38

The Office of the Secretary of State proposes new §81.38, concerning Administration of Voter Registration Associated with Address Confidentiality Program, which is necessary to implement the voting procedures necessary to allow certified participants in the new address confidentiality program described in Chapter 56, Subchapter C, Texas Code of Criminal Procedure (§§56.81 - 56.93 (Vernon Supp. 2008)) to vote by mail in Texas elections without disclosing their actual residence address.

Ann McGeehan, Director of Elections, has determined that for each year of the first five-year period following the adoption of this rule there will be no fiscal implications for state or local government as a result of the proposed rule.

Ms. McGeehan has also determined that for each year of the first five-year period following the adoption of this rule the public benefit will be the uniform and secure preservation of voting rights of participants in the Address Confidentiality Program administered by the Texas Attorney General.

Ms. McGeehan has further determined that there will be no effect on individuals or large, small, and micro-businesses as a result of the proposed rule. Consequently, an Economic Impact Statement and a Regulatory Flexibility Analysis, pursuant to Texas Government Code, §2006.002 (Vernon Supp. 2008), are not required.

In addition, Ms. McGeehan has determined that for each year of the first five-year period following the adoption of the proposed rule there should be no effect on a local economy; therefore, no local employment impact statement is required under Administrative Procedure Act, Texas Government Code, §2001.022 (Vernon Supp. 2008).

Interested persons may submit written comments on the proposed rule to the Elections Division, Office of the Secretary of State, P.O. Box 12060, Austin, Texas 78711-2060. Comments may also be sent via email to: elections@sos.state.tx.us. For comments submitted electronically, please include "Proposed Adoption of Rule 81.38" in the subject line. Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register. Comments should be organized in a manner consistent with the organization of the proposed rule. Questions concerning the proposed rule may be directed to Elections Division, Office of the Secretary of State, at (512) 463-5650.

Statutory Authority: The new rule is proposed under Texas Election Code Annotated §13.002(e) (Vernon Supp. 2008), which authorizes the Secretary of State to adopt administrative rules as needed to administer the voting procedures for participants in the address confidentiality program described in Chapter 56, Subchapter C, Texas Code of Criminal Procedure (§§56.81 - 56.93 (Vernon Supp. 2008)).

Cross Reference to Statute: The statutory provisions affected by the proposed new rule are Texas Code of Criminal Procedure §§56.81 et seq. (Vernon Supp. 2008); Texas Election Code §§13.002, 18.005, 18.0051, 82.007, and 84.0021 (Vernon Supp. 2008).

§81.38.Administration of Voter Registration Associated with Address Confidentiality Program.

(a) Definitions. For purposes of this section, the following words and phrases have the following meanings:

(1) Protected applicant--A certified participant or an eligible spouse or dependent of a certified participant in an address confidentiality program administered by the Office of the Attorney General as authorized by Chapter 56, Subchapter C, Texas Code of Criminal Procedure.

(2) Eligible household member--A person who is living in the same household or dwelling of a certified participant in an address confidentiality program administered by the Office of the Attorney General as authorized by Chapter 56, Texas Code of Criminal Procedure, and who is otherwise eligible to vote using a confidential ballot application, without regard to whether they are related to the certified participant.

(3) Early Voting Clerk--The election officer for a county, and any other local political subdivision, who bears responsibility for the administration of early voting, as specified in Chapter 83, Texas Election Code.

(4) Confidential application for ballot by mail--An application for a confidential ballot by mail completed and signed by a protected applicant. The confidential application for ballot by mail also acts as a temporary voter registration application while the applicant is in the address confidentiality program.

(5) Confidential roster of protected applicants--A list of voters who have voted by means of a confidential ballot by mail.

(6) Substitute post office box address--A post office box address supplied to a certified participant in an address confidentiality program administered by the Office of the Attorney General.

(7) True residence address--The address of the permanent fixed place of habitation of a certified participant in an address confidentiality program administered by the Office of the Attorney General.

(8) Confidential ballot--A ballot marked and voted by a protected applicant or any eligible household member of an applicant.

(b) Process for Completing the Confidential Application for Ballot by Mail. As required by §13.002(e) of the Texas Election Code, a protected applicant is not eligible to vote early by mail unless:

(1) the person submits by personal delivery a Confidential application for ballot by mail to the early voting clerk.

(2) To complete the application process and qualify to receive confidential ballots by mail, a protected applicant must point to a specific location on an official map of the political subdivision if able to do so, or may orally describe the location in sufficient detail to permit identification of the political subdivisions in which the protected applicant resides. The protected applicant must then swear or affirm to the early voting clerk that the protected applicant's place of residence as defined in §1.015 of the Texas Election Code is located within that specifically identified location.

(3) Upon the protected applicant's indication or description of the geographic location of the voter's residence, the early voting clerk must record the jurisdictional codes for every political subdivision in which the protected applicant resides on the protected applicant's confidential application for ballot by mail.

(4) Components of a confidential application for ballot by mail.

(A) A confidential ballot application must include:

(i) the protected applicant's full name and former name, if any;

(ii) the month, day, and year of the applicant's birth;

(iii) a statement that the protected applicant is a United States citizen;

(iv) a statement that the protected applicant is a resident of the county;

(v) a statement that the protected applicant has not been determined by a final judgment of a court exercising probate jurisdiction to be mentally incapacitated or partially incapacitated without the right to vote;

(vi) a statement that the protected applicant has not been finally convicted of a felony, or if convicted, that the protected applicant is eligible to register to vote as authorized by §13.001, Texas Election Code;

(vii) a protected applicant's substitute post office box address (which for uniformity's sake may be pre-printed on an application form);

(viii) the protected applicant's Texas driver's license number, personal identification number, or last four digits of the protected applicant's social security number, or a statement that the protected applicant has not been issued either number; and

(ix) an affidavit of confidentiality stating, "I swear or affirm that I am a certified participant or eligible household member of a certified participant in an address confidentiality program administered by the Texas Attorney General as described in Chapter 56, Texas Code of Criminal Procedure. I understand that by completing this application, it is my responsibility to cancel my voter registration in any county in which I may have been registered to vote, if my voter registration was not previously canceled. It is also my responsibility to cancel any confidential application for ballot by mail that was filed in a county of previous residence. I understand that I am requesting a ballot by mail for every election conducted by the early voting clerk within the boundaries of the territories in which I reside until my address confidential certificate expires (three (3) years after the application is submitted) or your office receives notice that I am no longer in the program or my ballot by mail has been returned as undeliverable, whichever occurs first."

(B) The early voting clerk may not transcribe, copy, or otherwise record a confidential application for a ballot by mail. The application is not a public record, and must be stored in a secure manner that does not compromise the privacy of the information therein.

(C) Upon notification in writing from the Texas Attorney General that a particular protected applicant has not been re-certified for participation in the address confidentiality program or upon return of a protected applicant's ballot by mail as undeliverable, the early voting clerk may not mail additional mail ballots to the protected applicant until receipt of a new application filed by the applicant in person. Any confidential applications shall be preserved for the 22-month period following the expiration or cancellation of the confidential application in the same manner as precinct election records pursuant to §66.058, Texas Election Code. After the preservation period expires, the early voting clerk will destroy the application and any written reference to the jurisdictional codes assigned to the applicant.

(c) Confidential Status of Protected Applicant's Identity. In compliance with §56.88, Texas Code of Criminal Procedure, the true residence address of a protected applicant shall not be solicited and is not required as part of the application process. No record may be made of any accidental revelation of the true residence address (whether implied by the protected applicant's oral description of his or her residence within the county, revealed by the applicant's silent indication of residence location on a county map or as the result of some other disclosure furnished on a confidential application), and the applicant's true residence address is confidential and does not constitute public information for purposes of Chapter 552, Texas Government Code, or §1.012, Texas Election Code.

(d) Restriction on Voting by Personal Appearance. The confidential application for ballot by mail shall constitute the protected applicant's application to register to vote for so long as the protected applicant remains in the program, or until such time as the protected applicant's application for ballot by mail remains valid. A protected applicant shall not be permitted to vote by personal appearance either during early voting or on Election Day in any election for so long as the applicant's application for ballot by mail remains valid.

(e) Local Election Ballots. The county early voting clerk is responsible for providing ballots to the protected applicant for any elections conducted by the county. In order to receive a ballot for an election conducted by a local political subdivision other than a county, the protected applicant must appear in person at the office of the local political subdivision's early voting clerk and submit a confidential application for ballot by mail.

(f) Voting Procedure for Protected Applicant.

(1) On the later of either 45 days before any election conducted in the protected applicant's territory or as soon as ballots are available and ready to be mailed to any by mail, overseas citizen, or military voters, the early voting clerk shall mail a ballot for that election to the protected applicant at the substitute post office box address provided.

(2) The ballot, carrier envelope, and other by mail voting materials supplied to a protected applicant shall be the same as provided to voters who vote by mail due to absence from the county during early voting, except that the county early voting clerk shall number the carrier envelope with the number representing the protected applicant's place on the confidential roster of protected applicants.

(3) The early voting clerk shall also mark and initial the carrier envelope to indicate that the ballot is voted under this administrative rule.

(4) The protected applicant must mark and seal the ballot in the same manner as any voter voting by mail. The protected applicant completes the carrier envelope in the regular manner.

(g) Confidential Roster of Protected Applicants. Upon acceptance of a confidential application for ballot by mail, the early voting clerk shall list the applicant's name on the early voting roster of protected applicants, the date the ballot was mailed out, and the date the voted ballot was received by the early voting clerk. A protected applicant to whom a ballot is provided is not included on the regular early voting roster.

(h) Confidential Roster Not Subject to Disclosure. In compliance with §56.88, Texas Code of Criminal Procedure, the names of protected applicants listed on the confidential roster of protected applicants are not available for public inspection or copying, and are categorized as confidential records that are not subject to public disclosure in reply to requests under the Texas Public Information Act.

(i) Processing Confidential Ballots Voted by Protected Applicants. Upon receipt of a carrier envelope containing a ballot from a protected applicant, the early voting clerk shall make a note on the confidential roster of protected applicants showing the date of receipt. The results shall be processed in accordance with the procedures applicable to processing early voting ballots voted by mail, except that the comparison of the signatures on the confidential ballot application and the carrier envelope shall be conducted by the early voting clerk. The early voting clerk shall record on the confidential roster all ballots accepted for counting after the signature review is completed. If the signature on the carrier envelope and signature on the confidential application are determined not to have been made by the same person, the clerk shall treat the ballot as not timely returned in accordance with §86.011, Texas Election Code and indicate this reason on the confidential roster. The carrier envelopes from voters in the Address Confidentiality Program shall be delivered to the early voting ballot board in an envelope designated as "Envelopes for Confidential Ballots" together with the Early Voting Roster of Protected Voters. The confidential applications for ballot by mail are not delivered to the board but are kept by the county early voting clerk. The early voting ballot board shall verify the carrier envelopes received with the early voting roster of Protected Applicants to ensure that the number of carrier envelopes do not exceed the number of names on the roster. If there is no date of receipt indicated on the roster, there will not be a carrier envelope for that person.

(j) Early Voting Ballot Board Review. Notwithstanding the absence of comparing signatures, the early voting ballot board shall treat as valid all carrier envelopes marked as containing confidential ballots voted pursuant to this section that were received in the envelope for confidential ballots. The carrier envelopes shall be opened and set aside, and the security envelopes containing the voted confidential ballots shall be set aside with all other accepted ballots by mail. The ballots shall be counted with the other accepted ballots by mail. The number of ballots voted and counted under this section would have already been recorded on the Confidential Roster of Protected Applicants pursuant to subsection (i) of this section.

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

Filed with the Office of the Secretary of State on June 30, 2008.

TRD-200803403

Ann McGeehan

Director of Elections

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5640

1 TAC §81.39

The Office of the Secretary of State proposes new §81.39, concerning Procedures for Pilot Program for Emailing Ballots to FPCA Voters, which is necessary to implement a pilot program which was enacted by the 80th Legislature to allow military voters who are overseas and who applied by FPCA to receive their November 2008 general election for state and county officers ballots via email if their regular ballot and balloting materials have not been received in sufficient time to cast their ballots by mail.

Ann McGeehan, Director of Elections, has determined that for the implementation of this program, which occurs in conjunction with the November 4, 2008 general election for state and county officers, there will be no fiscal implications for state or local government as a result of the proposed rule.

Ms. McGeehan has also determined that for the duration of this pilot program the public benefit will be the increased efficiency of providing balloting materials to FPCA voters casting their votes while stationed overseas.

In addition, Ms. McGeehan has determined that for the duration of this pilot program following the adoption of the proposed rule there should be no effect on a local economy; therefore, no local employment impact statement is required under Administrative Procedure Act, Texas Government Code, §2001.022 (Vernon Supp. 2008).

Interested persons may submit written comments on the proposed rule to the Elections Division, Office of the Secretary of State, P.O. Box 12060, Austin, Texas 78711-2060. Comments may also be sent via email to: elections@sos.state.tx.us. For comments submitted electronically, please include "Proposed Adoption of Rule 81.39" in the subject line. Comments must be received no later than 30 days from the date of the publication of the proposal in the Texas Register . Comments should be organized in a manner consistent with the organization of the proposed rule. Questions concerning the proposed rule may be directed to the Elections Division, Office of the Secretary of State, at (512) 463-5650.

Statutory Authority: The new rule is proposed under Texas Election Code Annotated, §101.0071(j) (Vernon Supp. 2008), which authorizes the Secretary of State to adopt administrative rules as needed to administer the pilot program which allows for certain FPCA voters to receive their ballots for the November 2008 general election for state and county officers via email. The pilot program is described in §101.0071 of the Texas Election Code.

Cross Reference to Statute: The statutory provisions affected by the proposed new rule are Texas Election Code Annotated, §101.0071 (Vernon Supp. 2008); and Texas Government Code Annotated, Chapter 255 (Vernon Supp 2008).

§81.39.Procedures for Pilot Program for Emailing Ballots to FPCA Voters.

(a) Participation in pilot program.

(1) A county is a "participating county" if they return the Request to Participate form, supplied by the Office of the Secretary of State, by the deadline of September 5, 2008.

(2) Upon receiving a participating county's Request to Participate form, the Office of the Secretary of State will respond to the early voting clerk via email to notify them that their participation is approved.

(b) Voters are eligible to receive ballots via email if the following conditions in paragraphs (1) - (8) of this subsection are met:

(1) Balloting materials have been provided to a voter in accordance with §101.0071(a) of the Texas Election Code;

(2) The voter is a member of the armed forces and is an FPCA registrant who is eligible for early voting by mail;

(3) The voter provides a current address that is located outside of the United States and is voting from outside of the United States;

(4) The voter provides an email address that contains the voter's name, to the extent that the name provided on the FPCA and in the email address are substantially the same;

(5) The email address provided also ends with the suffix ".mil;"

(6) The voter requests balloting materials to be sent to them via email because they did not receive the balloting materials provided by mail;

(7) The voter requests that their ballot is emailed to them on or after Monday, September 22, 2008; and

(8) The voter requests that their ballot is emailed to them no later than Tuesday, October 28, 2008.

(1) Voters who meet the eligibility requirements in subsection (b) of this section may request that their balloting materials be sent to them via email by sending an email from his or her .mil account to the early voting clerk.

(2) If the voter emails the early voting clerk to request balloting materials by mail, the early voting clerk shall update the voter's FPCA with their email address, if this information is not on the voter's current FPCA.

(3) Email addresses are not subject to public disclosure under Chapter 552, Texas Government Code. Early voting clerks shall ensure that the voter's email address is excluded from public disclosure.

(4) If balloting materials are sent to one eligible voter under these rules, then balloting materials must be sent to each eligible voter under these rules.

(5) The following materials must be sent to each eligible voter:

(A) the appropriate ballot;

(B) ballot instructions;

(D) information about how to print a ballot secrecy envelope from the Federal Voting Assistance Program (FVAP) website;

(E) information about how to print a carrier envelope from the FVAP website; and

(F) list of certified write-in candidates, if applicable.

(d) Permissible method of returning ballot sent to voter via email.

(1) Voters who receive balloting materials from the early voting clerk via email must return their marked ballots by regular mail.

(2) Marked ballots may not be returned via email. Any ballot returned via email may not be counted.

(e) Processing and qualifying ballots.

(1) Upon receipt of a voted emailed ballot, the early voting clerk shall place the carrier envelope containing the marked ballot, and the signature sheet, into a jacket envelope, which also contains the voter's FPCA.

(2) The early voting clerk shall note on the early voting by mail roster any ballots emailed to overseas military voters under this program.

(3) All jacket envelopes containing marked ballots voted under this program must be delivered to the early voting ballot board when they convene for the second time, to count provisional and overseas ballots.

(4) The board should make sure that each jacket envelope contains:

(A) the voter's FPCA;

(B) the envelope in which the voter returned their ballot;

(D) the carrier envelope containing the marked ballot.

(5) The board must compare the voter's signature as it appears on the signature sheet with the voter's signature as it appears on the FPCA. If the board determines that the signatures could have been written by the same person, the ballot should be accepted.

(6) If the voter returned both the original mail ballot ("mail ballot") and the ballot which was emailed to them ("emailed ballot"), then only the emailed ballot may be accepted.

(7) If the voter only returned the mail ballot, then that ballot may be accepted if the early voting clerk received an email from the voter stating that their regular mail ballot arrived.

(f) Counting ballots. The qualified, accepted ballot is handled in the following manner:

(1) Open the carrier envelope and remove the ballot envelope.

(2) Place the unopened ballot envelope in a ballot box.

(3) Enter the voter's name on the poll list for early voters.

(4) Place the FPCA, the carrier envelope, the signature sheet, and any accompanying papers back in the jacket envelope.

(g) Rejected ballots.

(1) If an FPCA, signature sheet and carrier envelope do not meet all the requirements outlined above, the ballot must be rejected and may not be counted.

(2) The rejected ballot should be processed by:

(A) Writing the word "Rejected" on the carrier envelope;

(B) Writing the word "Rejected" on the corresponding jacket envelope;

(C) Placing the unopened carrier envelope containing the rejected ballot in the large envelope or container marked "Rejected Early Ballots";

(D) Having the presiding judge sign and seal the "Rejected Early Ballot" envelope;

(3) The presiding judge must also write the date and nature of the election on the envelope.

(4) A record must be kept of the number of rejected ballots placed in the "Rejected Early Ballot" envelope.

(5) A notation must be made on the carrier envelope of any ballot which was rejected after the carrier envelope was opened, stating the reason the carrier envelope was opened and rejected; and

(6) The FPCA, signature sheet, and any accompanying papers and affidavits must be placed in the jacket envelope.

(7) The presiding judge of the board must deliver notice of the reason for the rejection to the voter's listed residence address within ten days of the election.

(h) Expiration of this section. This section expires February 16, 2009.

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

Filed with the Office of the Secretary of State on June 30, 2008.

TRD-200803404

Ann McGeehan

Director of Elections

Office of the Secretary of State

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 463-5640

PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION

CHAPTER 372. TEXAS WORKS

The Health and Human Services Commission (HHSC) proposes amendments to §372.2, concerning the meaning of words and terms used in the chapter; §372.404, concerning income HHSC counts when determining eligibility for Temporary Assistance for Needy Families (TANF); §372.753, concerning the difference in determining eligibility for the TANF State Program (TANF-SP) as compared to the TANF Program; and §372.754, concerning the difference in determining the amount of benefits in TANF-SP as compared to the TANF Program, in Chapter 372, Texas Works.

Background and Justification

The purpose of the amendments is to implement Rider 21 of the 2008-09 General Appropriations Act (Article II, Health and Human Services Commission, Rider 21, H.B. 1, 80th Legislature, Regular Session, 2007), which authorizes HHSC and the Office of the Attorney General to increase up to $75 the monthly child support disregard "pass-through" payments to TANF families, effective October 1, 2008. Rider 21 was passed in response to the Deficit Reduction Act of 2005, which authorizes the federal government to waive its share of child support collections (up to $100 per month for one child and $200 per month for two or more children), if the State, when determining eligibility and benefits, passes through and disregards some or all of the monthly child support payments a TANF family may receive.

The amendments are also proposed to correct agency names and rule cross-references made obsolete during the consolidation of health and human services agencies in 2004.

Section-by-Section Summary

The amendment to §372.2 revises the definition of "DHS" to mean HHSC, because HHSC is now the agency that administers the TANF and Food Stamp programs in Texas. The amendment also adds a definition for the acronym "HHSC" and renumbers the subsequent paragraphs in the section.

The amendment to §372.404 changes the maximum amount of regular child support payments that HHSC excludes as income when determining TANF eligibility from $50 to $75, and corrects agency names and rule cross-references.

The amendment to §372.753 changes the maximum amount of monthly child support payments received by a participant that HHSC disregards as unearned income when determining TANF-SP eligibility from $50 to $75, and corrects agency names.

The amendment to §372.754 changes the maximum amount of monthly child support payments received by a participant that HHSC disregards as unearned income when determining a household's benefits for TANF-SP from $50 to $75, and corrects agency names.

Fiscal Note

Thomas M. Suehs, Deputy Executive Commissioner for Financial Services, has determined that several changes authorized by Rider 21 and changes to the availability of federal TANF match under the federal Deficit Reduction Act of 2005 work together for a net reduction of costs of $904 in federal TANF each year. During the first five-year period the proposed amendments are in effect, there will be a reduction of cost in federal TANF of $904 in Fiscal Year (FY) 2009, $904 in FY 2010, $904 in FY 2011, $904 in FY 2012, and $904 in FY 2013. Other fiscal impacts were considered by the legislature in the appropriation process. There is no foreseeable fiscal implication for local governments.

Small Business and Micro-business Impact Analysis

Mr. Suehs has determined that there will be no effect on small businesses or micro-businesses to comply with the proposal, because the proposal affects eligibility of individuals for the TANF and TANF-SP programs and does not affect businesses. There are no anticipated economic costs to persons who are required to comply with the proposed rules. There is no anticipated negative impact on local employment.

Public Benefit and Costs

Anne Heiligenstein, Deputy Executive Commissioner for Social Services, has determined that, for each year of the first five years the proposed amendments are in effect, the anticipated public benefit as a result of enforcing the proposed amendments is that TANF families receiving more than $50 in child support will receive up to an additional $25 in benefits.

Regulatory Analysis

HHSC has determined that this proposal is not a "major environmental rule" as defined by §2001.0225 of the Texas Government Code. "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risks to human health from environmental exposure and that may adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure.

Takings Impact Assessment

HHSC has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under §2007.043 of the Texas Government Code.

Public Comment

Written comments on the proposal may be submitted to Julie Regan, Health and Human Services Commission, Office of Family Services, MC-2039, 909 West 45th Street, Austin, Texas 78751, or by e-mail to julie.regan@hhsc.state.tx.us, within 30 days after publication of this proposal in the Texas Register.

SUBCHAPTER A. OVERVIEW AND PURPOSE

1 TAC §372.2

Statutory Authority

The amendment is proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapter 32, which authorizes HHSC to administer financial assistance programs.

The amendment affects Texas Government Code, Chapter 531 and Texas Human Resources Code, Chapter 32. No other statutes, articles, or codes are affected by this proposal.

§372.2.What do certain words and terms in this chapter mean?

The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

(1) Authorized representative--In the Temporary Assistance for Needy Families (TANF) Program, a person whom the certified group authorizes to apply for or manage the TANF benefits on behalf of the certified group but who is not included in the certified group. In the Food Stamp Program, a person whom the household authorizes to apply for or manage the food stamp benefits on behalf of the household. References in this chapter to a certified group, client, or household include an authorized representative, unless the context indicates otherwise.

(2) Budgetary needs amount--In the TANF program, a set dollar amount that represents the monthly amount needed by the certified group to pay for food, clothing, housing, utilities, and incidental expenses (which include day-to-day transportation, telephone, laundry, unreimbursed medical expenses, recreation, and household supplies).

(3) Caretaker--In the TANF Program, a person who cares for a dependent child, whom HHSC [~~DHS~~] includes in the certified group, and who ordinarily receives and manages the TANF benefits for the certified group.

(4) Certified group--The person or group of relatives whose needs HHSC [~~DHS~~] includes together in a TANF case.

(5) CFR--The Code of Federal Regulations.

(6) Child--A person who is under 18 years of age. In the TANF Program, a child also includes a person who is under 19 years of age so long as the person is a full-time student in a secondary school (or participant in an equivalent vocational or technical training program) and the person is reasonably expected to complete the school (or the training) before the person's 19th birthday.

(7) Client--In the TANF Program, the member of the certified group who receives benefits for the certified group. In the Food Stamp Program, the member of the household who receives benefits for the household.

(8) Dependent child--In the TANF Program, a child as described in the Texas Human Resources Code, §31.002(b). The term also means a child who has been deprived of parental support because of the death, absence, or incapacity of a parent who does not have enough income or resources for a reasonable subsistence compatible with health and safety, and who is living with a caretaker.

(9) DHS--Formerly, this referred to the [~~The~~ ] Texas Department of Human Services. It now refers to the Texas Health and Human Services Commission (HHSC) (which is the state agency that administers the TANF and Food Stamp programs in Texas).

(10) Federal Poverty Guidelines--The household income guidelines issued periodically and published in the Federal Register by the U.S. Department of Health and Human Services that determine income eligibility for the Food Stamp Program and certain other public assistance programs.

(11) HHSC--The Texas Health and Human Services Commission.

(12) [~~(11)~~] Household--The person or persons whose needs HHSC [~~DHS~~] includes in a Food Stamp Program case for benefits. In the TANF Program, the family members who live together.

(13) [~~(12)~~] Parent--A mother or father, as established through biological relationship or legal process.

(14) [~~(13)~~] Payee--In the TANF Program, a person who receives and manages the TANF benefits for a certified group and who otherwise qualifies as a caretaker, except HHSC [~~DHS~~ ] does not include the person in the certified group. HHSC [ ~~DHS~~] designates a payee when no one in the household qualifies or wants to be caretaker.

(15) [~~(14)~~] PRA--Personal Responsibility Agreement. In the TANF Program, a written agreement that defines the responsibilities of participants and of the state.

(16) [~~(15)~~] Protective payee--In the TANF Program, a person whom HHSC [~~DHS~~] selects to receive and manage benefits for the certified group instead of the caretaker. HHSC [~~DHS~~] may designate a protective payee whenever HHSC [~~DHS~~] determines that the caretaker has failed to comply with one or more program requirements.

(17) [~~(16)~~] Recognizable needs amount--In the TANF program, a set dollar amount that is 25% of the budgetary needs amount for the certified group.

(18) [~~(17)~~] Sibling--A brother, sister, half brother, or half sister, as established by biological relationship or legal process. A sibling does not include a stepbrother or stepsister.

(19) [~~(18)~~] SNAP--Simplified Nutritional Assistance Program.

(20) [~~(19)~~] SSI--Supplemental Security Income.

(21) [~~(20)~~] TANF--Temporary Assistance for Needy Families.

(22) [~~(21)~~] TANF Non-Cash Program--A program that is a component of the TANF Program that provides TANF-funded services relating to such matters as education, employment, and the prevention and treatment of substance abuse, but that does not provide benefits (for example, cash assistance).

(23) [~~(22)~~] TANF Program--A program that provides temporary benefits (cash assistance) and work opportunities to families with needy dependent children. References in this chapter to the TANF Program also include the TANF State Program (TANF-SP), unless the context clearly indicates otherwise.

(24) [~~(23)~~] TANF-SP--Means TANF State Program, the state-created and state-funded program that is the same as the TANF Program except it is limited to certain Texas counties and two-parent households. References in this chapter to TANF include TANF-SP, unless the context clearly indicates otherwise.

(25) [~~(24)~~] U.S.--The United States of America.

(26) [~~(25)~~] U.S.C.--United States Code.

(27) [~~(26)~~] Work subsidy--Refers to a component of the TANF Program in which HHSC [~~DHS~~] does not directly pay benefits to the household but instead diverts to a participating employer a subsidy equal to the household's TANF benefits (and any food stamp benefits), and the employer pays the program participant a wage that equals or exceeds this subsidy. HHSC [~~DHS~~] is authorized to administer the work subsidy program in coordination with the Texas Workforce Commission. At any given time, the work subsidy program may not operate or may not be available in certain areas of the state.

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803344

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 424-6900

SUBCHAPTER B. ELIGIBILITY

DIVISION 7. INCOME

1 TAC §372.404

Statutory Authority

The amendment affects Texas Government Code, Chapter 531 and Texas Human Resources Code, Chapter 32. No other statutes, articles, or codes are affected by this proposal.

§372.404.What income does HHSC [ ~~DHS~~ ] count when determining TANF eligibility?

In the TANF program, HHSC [~~DHS~~] counts all income of the persons described in §372.403 [ ~~§3.403~~] of this chapter (relating to Whose income does DHS count in the TANF Program?), except HHSC [~~DHS~~] excludes the following:

(1) any income that federal law excludes;

(2) the earned income of a child who is:

(A) a full-time student, as defined by the school (regardless of how many hours the child works); or

(B) a part-time student employed less than 30 hours a week;

(3) up to $300 per federal fiscal quarter in cash gifts and contributions that are from private, nonprofit organizations and are based on need;

(4) up to $75 [~~$50~~] per month in regular child support payments per household (except HHSC [~~DHS~~ ] counts all child support payments to a household that HHSC [ ~~DHS~~] determines has violated an agreement to assign child support to the state);

(5) income that is legally diverted before actual receipt, such as payments a parent makes for alimony, child support, and to dependents outside the home;

(6) proceeds from claims on insurance policies to compensate for a loss or that are used to pay medical expenses;

(7) payments from federal volunteer programs for volunteer service, such as payments:

(A) for volunteer service in a senior citizen volunteer program, under the Domestic Volunteer Service Act (42 U.S.C. §5000 et seq.);

(B) for volunteer service to Volunteers in Service to America (VISTA), under 42 U.S.C. §§4951 - 4960; and

(8) payments from federal programs for on-the-job training that are made to a child who is under the parental control of another household member, including such payments made under any of the laws described in paragraph (7) of this section, or under such law as the Workforce Investment Act of 1998;

(9) the value of any benefits received under a government nutrition assistance program that is based on need, including benefits under the Food Stamp Program, the Child Nutrition Act of 1966, the National School Lunch Act, and the Older Americans Act of 1965;

(10) foster care payments;

(11) payments made under a government housing assistance program that is based on need;

(12) energy assistance payments;

(13) job training payments:

(A) that are earmarked as reimbursement for training-related expenses; and

(B) that do not duplicate payment for an item that is covered by budgetary needs;

(14) a lump sum provided and used to pay burial, legal, or medical bills, or to replace damaged or lost possessions. HHSC [~~DHS~~ ] does not exclude amounts from lump sums used for another purpose;

(15) reimbursements for monies spent on items not covered by budgetary needs;

(16) amounts deducted from royalties for production expenses and severance taxes;

(17) all income of Supplemental Security Income recipients;

(18) third-party funds received and used for a third-party beneficiary who is not a household member;

(19) vendor payments made from funds not legally obligated to the household;

(20) veterans benefits for special needs that are not items covered by budgetary needs;

(21) workers' compensation payments legally obligated to the recipient that are earmarked and used for medical expenses;

(22) for households with farms generating income of at least $1,000 annually that also receive nonfarm self-employment income, the amount of any nonfarm self-employment income that offsets a tax deduction taken that year for a farm loss;

(23) any income described in §372.357(b) [~~§3.357(b)~~ ] of this chapter (relating to What resources does DHS count in the Food Stamp Program?);

(24) any income described in §372.356(4), (13), (17), and (18) [~~§3.356(4), (13), (17), and (18)~~] of this chapter (relating to What resources does DHS count in the TANF Program?);

(25) the earned income of a person who marries a caretaker or payee, for the first six months from the date of the marriage, if:

(A) the caretaker or payee is receiving TANF benefits on the date of the marriage; and

(B) the combined income of the person and the caretaker or payee that is countable under this section does not exceed 200% of the Federal Poverty Guideline, as calculated based on the total number of the following persons:

(i) the caretaker or payee;

(ii) the person who marries the caretaker or payee; and

(iii) each child living in the household who is related to the caretaker, payee, or person within the degree described in §372.102(b)(2) [~~§3.102(b)(2)~~ ] of this chapter (relating to Who is a caretaker under the TANF program?).

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803343

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 424-6900

SUBCHAPTER C. ASSOCIATED PROGRAMS

DIVISION 4. TANF STATE PROGRAM

1 TAC §372.753, §372.754

Statutory Authority

The amendments are proposed under Texas Government Code, §531.0055, which provides the Executive Commissioner of HHSC with rulemaking authority; and Texas Human Resources Code, Chapter 32, which authorizes HHSC to administer financial assistance programs.

The amendments affect Texas Government Code, Chapter 531 and Texas Human Resources Code, Chapter 32. No other statutes, articles, or codes are affected by this proposal.

§372.753.Is there any difference in determining eligibility for TANF-SP as compared to the TANF Program?

HHSC [~~DHS~~] determines eligibility for TANF-SP in exactly the same way as the TANF Program, except HHSC [~~DHS~~ ] counts the amount of any monthly child support payments above $75 [~~$50~~] that are received by a participant as unearned income in determining the household's income eligibility under Subchapter B, Division 7, of this chapter (relating to Income).

§372.754.Is there any difference in determining the amount of benefits for TANF-SP as compared to the TANF Program?

HHSC [~~DHS~~] determines the amount of benefits for TANF-SP participants in exactly the same way as the TANF Program, except HHSC [~~DHS~~] counts the amount of any monthly child support payments above $75 [~~$50~~] that are received by a participant as unearned income in determining the household's amount of benefits under Subchapter F, Division 1, of this chapter (relating to Benefits in General).

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

Filed with the Office of the Secretary of State on June 26, 2008.

TRD-200803342

Steve Aragón

Chief Counsel

Texas Health and Human Services Commission

Earliest possible date of adoption: August 10, 2008

For further information, please call: (512) 424-6900