Proposed Sections
Before an agency may permanently adopt a new or amended section, or repeal an 
existing section, a proposal detailing the action must be published in the Texas 
Register at least 30 days before any action may be taken. The 30-day time period 
gives interested persons an opportunity to review and make oral or written 
comments on the section. Also, in the case of substantive sections, a public 
hearing must be granted if requested by at least 25 persons, a governmental 
subdivision or agency, or an association having at least 25 members.
Symbology in proposed amendments. New language added to an existing section is 
indicated by the use of bold text. [Brackets] indicate deletion of existing 
material within a section.
TITLE 4. AGRICULTURE
Part I. Texas Department of Agriculture
Chapter 18. Organic Food Standards and Certification
4 TAC sec.sec.18.1-18.4, 18.7, 18.8, 18.20, 18.21, 18.23, 18.26, 18. 30, 18.33, 
18.34, 18.37, 18.39
The Texas Department of Agriculture (TDA) proposes amendments to sec.sec.18.1, 
18.2, 18.3, 18.4, 18.7, 18.8, 18.18, 18.20, 18.21, 18.23, 18.26, 18.30, 18.33, 
18.34 and 18.37 concerning a voluntary program for the certification of organic 
food and new sec.18.39 concerning the collection of fees for the certification 
of organic food. The purpose of the amendments is to clarify the definitions and 
simplify the administrative procedures governing the Texas Department of 
Agriculture's Organic Certification Program. New sec.18.39 is proposed in 
accordance with the authority provided by House Bill 11, 72nd Legislature, First 
Called Special Session (1991) in order to allow the TDA to recover some of its 
costs of inspection for certification of organic food.
In 1988, the Sunset Commission recommended that new fees be established for 
organic food certification. During the 71st Legislature in 1989, fees were 
authorized for organic certification, however, collection efforts were not 
implemented. In view of the recommendations made by Comptroller John Sharp, the 
Legislature has encouraged all state agencies to move towards full cost 
recovery.
The amendments remove some provisions of the regulations that the department's 
certification experience since 1988 has shown to be unnecessary and/or 
unworkable. The amendments also reflect that organic certification is no longer 
administered by TDA's Consumer Services Program and clarify that drugs, drug 
ingredients, and products advertised as possession medicinal qualities are not 
eligible for certification under this chapter. All amendments proposed, except 
those pertaining to sec.sec.18.33, 18.34, 18.37, and 18.39 have been recommended 
to the department by the Certification Review and Standards Advisory Committee 
in accordance with that committee's responsibilities set out in sec.18. 33(f). 
New sec.18.39 provides for an inspection fee to be paid by producers, retailers, 
distributors, and processors at the time of application or renewal of 
certification.
Brent Wiseman, coordinator for organic programs, has determined that for the 
first five-year period that the proposed sections are in effect, there will be 
fiscal implications for state government as a result of enforcing or 
administering the sections. The effect on state government for the first five-
year period the sections are in effect is an estimated increase in cost of 
$5,800 per year and increase in revenue of $39,150 per year. There will be no 
fiscal implications for local government or local government as a result of 
enforcing or administering the sections. The effect on small and large business 
for the first five year period this section is in effect will be an increase in 
cost of $150 to $500 per year.
Mr. Wiseman also has determined that for each year of the first five years the 
sections are in effect, the public benefit anticipated as a result of enforcing 
the sections will be increased consumer protection for purchasers of TDA 
Certified Organic food; increased marketability of such food for producers; more 
effective administration of organic certification; improved public understanding 
of organic food and organic certification; and recovery of some costs to the 
state for certification of organic food. The effect on persons who are required 
to comply with the section as proposed is an increase in costs of $150 to $500 
per year.
Comments may be submitted to Keith Jones, Director for Agri-Systems, Texas 
Department of Agriculture, P.O. Box 12847, Austin, Texas 78711. Comments must be 
received no later than 30 days from the date of the publication of the proposal 
in the Texas Register.
The amendments and new section are proposed under the Texas Agriculture Code, 
Title 2, Chapter 12, sec.12.002, which provides the Texas Department of 
Agriculture with the authority to encourage the proper development of 
agriculture, horticulture, and related industries, and the Texas Agriculture 
Code, Title 2, Chapter 12, sec.12.016, which authorizes the department to adopt 
rules as necessary for the administration of the Code; sec.sec.12.001-12.015; 
and sec.12.0175 as amended by House Bill 11, 72nd Legislature (1991) which 
provides the department with the authority to charge an annual fee not to exceed 
$500 for each participant certified by the department under an organic 
certification program, as a processor, and a fee not to exceed $150 for each 
participant certified by the department as a producer, distributor, or retailer.
sec.18.1. Definitions.  The following words and terms, when used in this 
chapter, shall have the following meanings, unless the context clearly indicates 
otherwise.
 Cover crop-A crop planted <nl>primarily to prevent soil erosion, <ol> [usually 
in late summer and fall but also at other times, primarily to cover the soil 
surface, prevent erosion, and] recover nutrients from the subsoil <nl>, increase 
water infiltration, and increase the levels of nitrogen and organic matter in 
the soil<ol>.
 Distributor-A person who is engaged in the business of selling food <nl>or 
fiber<ol> including, but not limited to, a wholesaler, broker, packer, repacker, 
shipper, or agent.
 Farm plan-All documents relevant to the <nl>previous three years', <ol> 
current<nl>,<ol> and future management of an organic farm, including but not 
limited to written plans to rotate crops, build humus, and stabilize soil 
nutrients.
 [Farm unit-All agricultural land in a contiguous tract that is leased, owned, 
or otherwise held by and under the management of a certified producer or 
applicant for certification and that adjoins no other land leased or owned by or 
under the management of the producer or applicant.]
 Field-A  <nl>clearly demarcated, contiguous <ol> tract of agricultural land 
leased, owned, or otherwise held by and under the management of a certified 
producer or applicant for certification.
 Green manure crop-A <nl>cover crop or other crop planted primarily to be plowed 
under to increase soil tilth and fertility.
<nl>   Illegal quantities -Amounts that are not lawful under federal, state, or 
local statutes or regulations.
 Low ecological profile-As applied to a soil-, crop-, or pest-management 
practice, means a practice that has a low degree of or no adverse effects on 
<nl>human health or the environment<ol> [soil, water, or air quality].
 Manuring-The application to soil of the excreta of agricultural animals, 
including stable litter and paunch wastes, [or the plowing under of uncomposted 
plants (green manure crops)] to increase tilth and fertility.
 Organic food-Food that is produced under a system of organic farming and that 
is processed, packaged, transported, and stored [so as to retain maximum 
nutritional value] without the <nl>application<ol> [use] of artificial 
preservatives, coloring or other additives, ionizing radiation, or synthetic 
pesticides.
<nl>   Participant-Each producer, processor, retail store or distributor 
location certified to use the Texas Department of Agriculture Certified Organic 
loqo and/or the Texas Department of Agriculture Organic Certification Pending-
Transitional logo.
<nl>   Pesticide-A substance or mixture of substances intended to prevent, 
destroy, repel, or mitigate any pest, or any substance or mixture of substances 
intended for use as a plant regulator, defoliant, or desiccant. (Texas 
Agriculture Code, sec.76.001(18)).
 Processor-A person who is engaged in the business of manufacturing raw 
agricultural commodities into food <nl>, feed, or fiber  <ol>products.
 Producer-A person who is engaged in the business of growing or producing 
food<nl>,<ol> [or] feed<nl>, or fiber.
 [Proper tillage -Tillage that promotes the free movement of air (carbon 
dioxide, oxygen and nitrogen) and water through the soil and facilitates 
biological decay processes within the soil.]
 [Soil health-A condition in which minerals, organic matter (e.g., humus, 
bacteria, fungi, etc.), water, and air coexist free of toxic contaminants, in 
proportions and with a profile, texture, structure, and porosity capable of 
supporting vigorous plant growth.]
sec.18.2. Organic Production Practices. For the purposes of this chapter, 
production practices are classified as permitted, prohibited, or regulated by 
the department.
(1)-(2) (No change.)
(3) The department may approve the temporary use of regulated practices upon 
demonstrated need, if a farm plan<nl>, use report,<ol> or other written plan 
submitted by a certified person or an applicant for certification shows that 
these regulated practices will be discontinued over time<nl>, or if no 
alternative material is available.
sec.18.3. Soil Management. <ol> Fertility must be fostered primarily by managing 
soil's organic content through [proper tillage,] crop rotation[,] and manuring.
[(1) Tillage. Tillage systems must incorporate crop residues and other organic 
wastes into topsoil. Farming that minimizes or eliminates tillage, such as 
mowing, grazing, or permacultural systems, is permitted.]
<nl>(1)<ol>[(2)] Crop rotation. Producers must rotate according to a written 
rotation plan all crops that are not:
(A)  perennials;
(B) included in permaculture systems;
(C)  grown in containers; or
(D) grown on a nonrotating basis in accordance with accepted regional organic 
practices.
<nl>(2)<ol>[3]  Rotation plan. A rotation plan may include:
(A) alternation of sod <nl>or forage <ol> and row crops;
(B)-(G) (No change.)
<nl>(3) <ol>[(4)] Manuring.
(A)-(D) (No change.)
sec.18.4. Soil Amendments and Fertilizers.
[(a) Additives. Mineral or other additives must enhance soil health as well as 
promote plant growth.]
<nl>(a)<ol>[(b)] Nitrogen.
(1) Sources permitted. A producer may use as a source of nitrogen: green 
manures, nitrogen-fixing or cover crops, composted materials, nitrogen-fixing 
microorganisms, and other methods of supplying plants with nitrates at low 
concentrations.
(2)  Sources prohibited. Except as specified elsewhere in this chapter, a 
producer may not use as a source of nitrogen: anhydrous ammonia, ammonium 
nitrate, sewage sludge, contaminated organic materials, or mined or synthetic 
sources of soluble nitrates at high concentrations for the sole purpose of 
increasing production.
(3) Sources regulated. Before using any supplemental nitrogen, a producer must 
ascertain that it is free of contamination. Evidence that the material is not 
contaminated must be available to the department on request. If supplemental 
nitrogen is needed, the following materials may be used in the context of an 
overall farm plan:
(A)  vegetable meals;
(B) hides, blood meal, or meals made of other animal byproducts; or
(C) fish emulsion.
(4) Sources regulated, one-time use. To start a soil-building program, 
transitional producers only may use no more than one of the following materials 
one time only on each field, to start a green-manure crop:
(A) sodium nitrate;
(B) potassium nitrate;
(C) urea; or
(D) ammonium sulfate.
<nl>(b) <ol>[(c)] Phosphorus.
(1) Sources permitted. A producer may use as a source of phosphorus: colloidal, 
soft-rock, and hard-rock phosphate; bone meal; bat guano.
(2) Sources prohibited. A producer may not use as a source of phosphorus: 
ordinary or triple superphosphate or other excessively soluble and/or acidifying 
materials with a high salt index.
(3) Sources regulated. If supplemental phosphorus is needed, the following 
materials may be used as temporary measures in the context of an overall farm 
plan:
(A)  food-grade orthophosphoric acid in foliar formulations and fish-emulsion 
processing;
(B) soap phosphates; or
(C) basic slag.
<nl>(c)<ol>[d] Potassium.
(1) Sources permitted. A producer may use as a source of potassium: wood ashes; 
rock dusts (granite, feldspar, greensand); sulfate of potash magnesia 
(langbeinite); natural potassium sulfate; kainite; and recycled potassium-rich 
organic matter.
(2) Sources prohibited. A producer may not use as a source of potassium: muriate 
of potash (potassium chloride) or other sources with excessive solubility, high 
salt index, and chloride content.
(3) Source regulated. If supplemental potassium is needed, potassium sulfate 
from industrial processes may be used as a temporary measure in the context of 
an overall farm plan.
<nl>(d)<ol>[(e)]  Calcium.
(1) Sources permitted. A producer may use as a source of calcium: agricultural 
limestone; agricultural gypsum (hydrated calcium sulfate); kiln dust; calcified 
seaweed; corn calcium; [and calcium oxide].
(2)  Sources prohibited. A producer may not use as a source of calcium: 
<nl>calcium oxide, <ol> quicklime; or slaked or hydrated lime applied to the 
soil.
(3) Sources regulated. If supplemental calcium is needed, calcium-chloride-based 
foliar materials or ground oyster shell may be used as temporary measures in the 
context of an overall farm plan.
<nl>(e)<ol>[(f) ] Magnesium.
(1) Sources permitted. A producer may use as a source of magnesium: dolomitic 
limestone; kieserite; and sulfate of potash magnesia (langbeinite).
(2) Sources regulated. If supplemental magnesium is needed, Epsom salts 
(hydrated magnesium sulfate) may be used as a temporary measure in the context 
of an overall farm plan.
<nl>(f)<ol>[(g)]  Sulfur. Application to soil of elemental sulfur from mined 
sources is permitted.
<nl>(g)<ol>[(h)] Micronutrients.
(1) Sources permitted. A producer may use as a source of micronutrients: liquid 
or powdered seaweed extract that is not chemically fortified; kelp meal; and 
rock powders.
(2)  Sources prohibited. A producer may not use as a source of micronutrients: 
chemically fortified liquid or powdered seaweed extract; or excessive doses of 
any micronutrient.
(3) Sources regulated. If supplemental micronutrients are needed, the following 
materials may be used as temporary measures in the context of an overall farm 
plan:
(A) fritted trace elements or chelated minerals;
(B) acid-treated (sulfate or oxide) zinc, boron, copper, iron, manganese, or 
molybdenum; or
(C) fish emulsions.
sec.18.7. Crop Management.
(a) (No change.)
(b) Seeds and seedlings. Producers should use plant materials produced without 
synthetic pesticides. Other materials may be used if justified and authorized in 
writing by the department.
(1)-(2) (No change.)
(3) Regulated. If justified and approved in writing by the department, a 
producer may use:
(A) synthetic-fungicide-treated seeds[, unless authorized by the department];
(B) (No change.)
(C) commercial soil mixes, vermiculite, or other media containing small amounts 
of soluble fertilizers<nl>, but not containing synthetic pesticides,<ol> for 
farm-produced seedlings;
(D) (No change.)
(c)-(d) (No change.)
(e) Pest control. Pest prevention must be a primary consideration in planning 
production schedules, choosing crops, locating and sizing plantings, and 
deciding soil-management practices. If prevention fails, only control methods 
with low ecological profiles may be used.
(1)-(2)  (No change.)
(3) Regulated. If justified and authorized in writing by the department, a 
producer may use [:
(A)] botanical insecticides, such as pyrethrum, rotenone, sabadilla, quassia, 
and ryania
[(B) Traps containing prohibited pesticides, if these pesticides do not contact 
and are not added to soil or water].
(f)  (No change.)
sec.18.8. Post-Harvest Handling.
[(a) Methods of harvesting, storing, transporting, and marketing organic foods 
must insure freshness and nutritional quality.]
<nl>(a)<ol>[b] Permitted. A producer, shipper, packer, or other handler of 
organic food may:
[(1) harvest crops only at proper maturity and in appropriate weather 
conditions;]
<nl>(1)<ol>[(2)]  handle perishable items only so as to avoid injuring them 
physically;
<nl>(2)<ol>[(3)] dry and cure field crops to appropriate moisture levels by 
natural field drying, aeration, or other mechanical drying apparatus;
<nl>(3)<ol>[(4)] chill perishable crops by means of uncontaminated water baths, 
cold rooms, or icing, and maintain constant low temperatures at every stage of 
transportation and distribution;
<nl>(4)<ol>[(5)] use controlled-atmosphere (carbon dioxide or nitrogen) storage;
<nl>(5) <ol>[(6)] disinfest crops of spoilage organisms or fruit flies by hot-
water dipping or vapor-heat treatments; <nl>and
<nl>(6)<ol>[(7)] repel storage pests with non-toxic materials such as rock 
powders, diatomaceous earth, herbal preparations, or natural biological 
controls.[; and
(8) monitor tissue nitrate levels in leafy crops grown under low light 
conditions].
[(c)] Prohibited. A producer, shipper, packer, or other handler of organic food 
may not apply to certified products at any point during post-harvest handling, 
transportation, or storage:
(1) synthetic fumigants;
(2) sprouting inhibitors, ripeners, or growth regulators;
(3) preservatives;
(4) coloring agents;
(5) ionizing radiation; or
(6) waxes (except beeswax) or oils.
<nl>(c)<ol>[(d) ] Regulated. If justified and approved in advance by the 
department in writing, a producer, shipper, packer, or other handler of organic 
food may:
(1) apply specifically named disinfectants to storage containers and handling 
equipment. In such cases, the department may require a waiting period that must 
expire before the handler uses the container or equipment for certified food.
(2) apply specifically named post-harvest sulfur-based fungicides or botanical 
insecticides.
sec.18.18. Laboratory Analysis.
(a) Residue testing. The department shall require tests of <nl>certified<ol> 
produce that it has reasonable cause to suspect may have become contaminated.
(1)-(2) (No change.)
(b)-(c) (No change.)
sec.18.20. Farm Certification.
[(a) Whenever possible, the department shall certify whole farms.]
[(b)] An applicant for certification must document [a clear intent to] <nl>that 
land to be certified will be managed<ol> [manage a farm] organically.
(1)-(2) (No change.)
sec.18.21. [Farm-Unit or] Field Certification.
(a) The department may certify [farm units or] individual fields.
(b)  Documentation for [farm-unit or] field certification shall be in the form 
of a detailed, three-year farm plan that has been reviewed and accepted by the 
department.
(c)-(f) (No change.)
sec.18.23. Recertification.
(a) (No change.)
(b)  <nl>During a period of 12 months following application of any prohibited 
substance<ol> [While recertification is pending], produce from such a field may 
not be sold under a TDA transitional label.
sec.18.26. Recordkeeping.  The following records must be kept for each farm, 
[farm unit,] field, or other production unit for which application for 
certification is made:
(1)-(2) (No change.)
sec.18.30. Verification Documents.
(a)-(d) (No change.)
(e) Inspection [Reports] <nl>of Producers and Processors<ol>.
(1) -(2) (No change.)
<nl>(3) The department may conduct unannounced insections of certified producers 
and certified processors.
(f)-(g)  (No change.)
sec.18.33. Application for Permission To Use the Texas Department of Agriculture 
"Certified Organic" Logo or the Texas Department of Agriculture "Organic 
Certification Pending-Transitional" Logo.
(a)-(b) (No change.)
(c) Submission of applications.
(1)-(2) (No change.)
(3)  Applications and verification documents shall be submitted to 
<nl>Coordinator, Organic Programs, Producer Relations Division, <ol> [Organic 
Program Specialist, Consumer Services Program,] Texas Department of Agriculture, 
P.O. Box 12847, Austin, Texas 78711.
(d)-(f) (No change.)
sec.18.34. Action on Application.
(a) The <nl>department<ol> [director, Consumer Services Program, Texas 
Department of Agriculture], within 60 days of receipt of an application for 
permission to use the TDA "Certified Organic" logo or the TDA "Organic 
Certification Pending-Transitional" logo, shall schedule an inspection of the 
applicant's operation.
(b)-(h) (No change.)
sec.18.37. Use of Logos.
(a)-(e) (No change.)
<nl>(f)  Drugs and medicinal claims. The department may not certify drugs or 
drug ingredients under this chapter.
<nl>(1) No person may use a Texas Department of Agriculture "Certified Organic" 
or "Organic Certification Pending-Transitional" logo in connection with, nor 
represent as TDA certified, any product or any ingredient of a product that is 
regulated as a drug or that has been determined by a state or federal agency of 
competent jurisdiction to be subject to regulation as a drug.
<nl>(2) No person may use a TDA logo or represent any product or ingredient as 
TDA certified in an advertisement (including, but not limited to, a printed or 
broadcast advertisement, "advertorial," flier, point-of-purchase material, 
signage, or other printed material) that makes medicinal claims.
sec.18.39. Organic Certification Inspection Fees.
(a) Effective January 1, 1992, participants in the department's organic 
certification program will be charged an inspection fee. Producers and 
processors will be charged an annual fee and retailers and distributors a one-
time application fee for the inspection conducted by the department in 
accordance with sec.18.33 of this title (relating to Application for Permission 
Too Use the Texas Department of Agriculture "Certified Organic" Logo or the 
Texas Department of Agriculture "Certified Organic Pending-Transitional" Logo).
(b) The inspection fee shall be paid by the new applicant and those applicants 
renewing certification, and shall be paid in accordance with the following 
schedule:
(1)  producer-$150;
(2) retailer-$150;
(3)  distributor-$150;
(4) processor-$500.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 18, 1991.
TRD-9116048
Dolores Alavarado Hibbs
Chief Administrative Law Judge
Texas Department of Agriculture
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-7583
       
4 TAC sec.18.25
(Editor's note: The text of the following section proposed for repeal will not 
be published. The section may be examined in the offices of the Texas Department 
of Agriculture or in the Texas Register office, Room 245, James Earl Rudder 
Building, 1019 Brazos Street, Austin.)
The Texas Department of Agriculture (the department) proposes the repeal of 
sec.18.25 concerning a voluntary program for the certification of organic food. 
While TDA agrees that organic producers must comply with all applicable state 
and federal labor laws, the department has determined that it is inappropriate 
to make such compliance a legal basis for certification of organic food. Other 
state and federal agencies already enforce labor laws. TDA believes that 
repealing sec.18.25 would simplify the organic food certification program and 
help eliminate unworkable regulations. The repeal of sec.18.25 was recommended 
to the department by the Certification Review and Standards Advisory Committee 
in accordance with that committee's responsibilities set out in sec.18.33(f).
Brent Wiseman, coordinator, organic programs, has determined that for the first 
five-year period the repeal is in effect there will be no fiscal implications 
for state or local government as a result of enforcing or administering the 
repeal.
Mr. Wiseman also has determined that for each year of the first five years the 
repeal is in effect there will be no public benefit as the public is relatively 
unaffected by the repeal. There will be no effect on small businesses. There is 
no anticipated economic cost to persons who are required to comply with the 
repeal as proposed.
Comments on the proposal may be submitted to Keith Jones, Director, AgriSystems 
Programs, Texas Department of Agriculture, P.O. Box 12847, Austin, Texas 78711. 
Comments must be received no later than 30 days from the date of publication of 
the proposal in the Texas Register.
The repeal is proposed under the Texas Agriculture Code, Title 2, Chapter 12, 
sec.12.002, which provides the Texas Department of Agriculture with the 
authority to encourage the proper development of agriculture, horticulture, and 
related industries, and the Texas Agriculture Code, Title 2, Chapter 12, 
sec.12.016, which authorizes the department to adopt rules as necessary for the 
administration of the Code, sec.sec.12.001-12.015.
sec.18.25. Labor Practices.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 18, 1991.
TRD-9116049
Dolores Alvarado Hibbs
Chief Administrative Law Judge
Texas Department of Agriculture
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-7583
       
TITLE 16. ECONOMIC REGULATION
Part I. Railroad Commission of Texas
Chapter 3. Oil and Gas Division
Conservation Rules and Regulations
16 TAC sec.3.76
The Railroad Commission of Texas proposes an amendment to 16 T.A.C. sec.3.76, 
concerning fees for drilling activities and other oil and gas operations, 
performance bonds, and alternate forms of financial security. The rule 
amendments, proposed pursuant to Senate Bill 1103 (Chapter 603, 1991 Session 
Laws, 72nd Legislature), set out the statutorily required fee amounts to be 
charged by the commission in order to drill, deepen, plug back or reenter a 
well; to file for an extension of time to plug a well; to discharge to surface 
water; to renew a canceled certificate of compliance, and to haul oil and gas 
waste; the definition language relating to the fee for expediting a permit 
application is also deleted. The proposed amendments set out the types of bonds 
or alternate forms of financial security, required by Senate Bill 1103 of all 
persons performing oil and gas operations and regulated by the commission. 
Options include an individual or blanket performance bond, a nonrefundable $100 
fee for those persons with acceptable records of compliance with commission 
safety and pollution rules, a nonrefundable fee of 3.0% of the bond that 
otherwise would be required, or a first lien on tangible oil and gas property. 
The proposed amendments establish deadlines for filing financial security; 
eligibility for bonds and alternate forms of financial security; and bond 
requirements and conditions, including expiration of bond obligations. Under the 
proposed amendments, persons performing oil and gas operations may also be 
required to file a compliance certification in order to choose the nonrefundable 
$100 fee. Definitions of the terms violation, outstanding violation," and 
"acceptable record of compliance are also provided.
The existing language in 16 T.A.C. sec.3.76 was adopted by the Railroad 
Commission on February 10, 1986, to be effective on March 10, 1986, and the 
complete text of the rule was published in the October 22, 1985, issue of the 
Texas Register (10 TexReg 4113). 16 T.A.C. sec.3.76 was also the subject of an 
emergency rule, adopted on August 20, 1991, by the Railroad Commission, 
effective September 1, 1991, and the complete text of the emergency rule was 
published in the August 30, 1991, issue of the Texas Register (16 TexReg 4711). 
The emergency rules set the amount of fees for permits, bonds, and alternate 
forms of financial security.
Rita E. Percival, systems analyst for the Oil and Gas Division, has determined 
that for the first five-year period the proposed rule revision will be in 
effect, there will be fiscal implications as a result of enforcing or 
administering it. The effect on state government for the first five-year period 
that revised sec.3.76 will be in effect is an estimated revenue of $3,760,019 a 
year fiscal years 1992-1996. There will be no fiscal implications for local 
government. The cost of compliance with the proposed rule revision for small 
businesses as a result of enforcing or administering it will be an estimated 
$25, $50, or $100 additional for drilling permit applications depending upon 
proposed total depth, $200 for each application for a permit to discharge to 
surface water, and, if either of the following two financial security options is 
selected, $100 or three percent of the value of a performance bond (letter of 
credit) otherwise required by an organization filing an organization report.
Brenda Loudermilk, special counsel and Barbara Epstein, hearings examiner, have 
determined for each year of the first five years, the section as proposed is in 
effect, the public benefit anticipated as a result of enforcing the section will 
be to increase compliance with the Railroad Commission's safety and pollution 
rules the goal of which is to ensure clean water for Texas. Additionally, the 
requirement of up-front financial security for all persons performing 
commission-regulated operations will provide a source of funds for well-
plugging, pollution control and clean-up, with the anticipated benefit of fewer 
expenditures from the State Oilfield Cleanup Fund for these purposes. The 
anticipated economic cost to persons who are required to comply with the 
proposed section is determined by the fees set in the proposed section for each 
type of activity covered and by the particular activities of each individual, 
which may vary from person to person. Reference may be made to each provision in 
the section specifying required costs for fees or financial security. It is 
anticipated that those persons with an acceptable record of compliance with 
commission rules relating to safety and pollution will have an anticipated cost 
of $100 a year plus an additional $100 per inactive well per year to comply with 
the financial security requirements. Those who have no record or have an 
unacceptable record of compliance may have to bear the cost of a more expensive 
type of financial security option required by the Texas Natural Resource Code, 
Chapter 91.
Comments on the proposed amendments may be submitted to Barbara Epstein, 
Hearings Examiner, Oil and Gas Section, Legal Division, Railroad Commission of 
Texas, P.O. Drawer 12967, Austin, Texas 78711-2967. The docket number for this 
proposal is 20-97,153. All comments must be submitted by 5 p.m. on January 23, 
1992.
The amendment is proposed pursuant to the requirements of the Texas Natural 
Resource Code, sec.sec.85.167, 85.2021, 91.1013, 91.103, 91.104, 91.1041, 
91.1042, 91.105, and 91.107 and the Texas Water Code, sec.29.015; these sections 
also provide authority to the Railroad Commission of Texas to adopt rules for 
fees, bonds, and alternate forms of financial security.
sec.3.76. Fees<nl>, Performance Bonds and Alternate Forms of Financial Security  
Required To Be Filed.
<nl>(a) Definitions. The following words and terms when used in this section 
shall have the following meanings unless the context clearly indicates 
otherwise.
<nl>(1) Violation-Non-compliance with a commission rule order license permit or 
certificate relating to safety or the prevention or control of pollution.
<nl>(2) Outstanding violation-A violation for which:
<nl>(A)  either:
<nl>(i)<nl> a commission order finding a violation has been entered and all 
appeals have been exhausted; or
<nl>(ii)<nl> an agreed order between the commission and the organization 
relating to a violation has been entered; and
<nl>(B) one or more of the following conditions still exist:
<nl>(i)<nl> the conditions that constituted the violation have not been 
corrected;
<nl>(ii)<nl> all administrative civil and criminal penalties if any relating to 
the violation of such commission rules orders licenses, permits, or certificates 
have not been paid; or
<nl>(iii)<nl> all reimbursements of any costs and expenses assessed by the 
commission relating to the violation of such commission rules orders licenses 
permits, or certificates have not been paid.
<nl>(3) An acceptable record of compliance-A record of compliance showing:
<nl>(A) no referrals to the commission's legal enforcement section relating to a 
violation;
<nl>(B) no pending legal enforcement action relating to a violation: and
<nl>(C) no outstanding violations.
<nl>(b) Filing fees. The following filing fees are required to be paid to the 
Railroad Commission:
<nl>(1)<ol>[(a)] With each application or materially amended application for a 
permit to drill, deepen, plug back, or reenter a well, the applicant shall 
submit to the commission a nonrefundable fee of<nl>:
<nl>(A) $100[.]  <nl>if the proposed total depth of the well is 2, 000 feet or 
less;
<nl>(B) $125 if the proposed total depth of the well is greater than 2,000 feet 
but less than or equal to 4,000 feet;
<nl>(C) $150 if the proposed total depth of the well is greater than 4, 000 feet 
but less than or equal to 9,000 feet; or
<nl>(D) $200 if the proposed total depth of the well is greater than 9,000 feet.
(2) An application will be considered materially amended if the amendment 
requires the issuance of a new permit. A materially amended application includes 
an application in which an additional field or a change in location or field is 
sought for a previously permitted well. However, if a new application and/or 
permit becomes necessary because of commission action, the [$100] fee may be 
waived.
<nl>(3) An applicant shall submit an additional non-refundable fee of $50 when 
requesting that the commission expedite the application for a permit to drill 
deepen, plug back or reenter a well.
[(b) With each request to expedite the application for a permit to drill, 
deepen, plug back, or reenter the well, the applicant shall submit to the 
commission a nonrefundable fee of $50. Expedite the application means hand-
filing and walking the application through the entire permitting process.]
<nl>(4) With each application for an extension of time to plug a well pursuant 
to commission rules an applicant shall submit to the commission a nonrefundable 
fee of $100 unless the applicant has filed a bond or letter of credit pursuant 
to subsection (c) of this section.
<nl>(5)<ol>[(c)] With each application for an exception to any commission 
statewide rule, the applicant shall submit to the commission a nonrefundable fee 
of $50. If the permit application is for an exception to Statewide Rule 37, 38, 
or 39, or for any combination of exceptions to such rules, the applicant shall 
submit one nonrefundable fee of $50.
<nl>(6)<ol>[(d)] With each application for an oil and gas waste disposal well 
permit, the applicant shall submit to the commission a nonrefundable fee of $100 
per well.
<nl>(7)<ol>[(e)] With each application for a fluid injection well permit, the 
applicant shall submit to the commission a nonrefundable fee of $100 per well. 
Fluid injection well means any well used to inject fluid or gas into the ground 
in connection with the exploration or production of oil or gas other than an oil 
and gas waste disposal well.
<nl>(8) With each application for a permit to discharge to surface water other 
than a permit for a discharge that meets National Pollutant Discharge 
Elimination System (NPDES) requirements for agricultural or wildlife use, the 
applicant shall submit to the commission a nonrefundable fee of $200.
<nl>(9) If a certificate of compliance has been canceled, the operator shall 
submit to the commission a nonrefundable fee of $100 before the commission may 
reissue the certificate pursuant to sec.3.58 of this title (relating to Oil, 
Gas, or Geotherml Resource Producer's Reports) (Statewide Rule 58).
<nl>(10) With each application for issuance, renewal, or material amendment of 
an oil and gas waste hauler's permit, the applicant shall submit to the 
commission a nonrefundable fee of $100.
<nl>(11)<ol>[(f)] With each Natural Gas Policy Act (15 United States Code 
sec.sec.3301-3432) application, the applicant shall submit to the commission a 
nonrefundable fee of $50.
<nl>(12)<ol>[(g)] A check or money order for any of the aforementioned fees 
shall be made payable to the State Treasurer of Texas. If the check accompanying 
an application is not honored upon presentment, the permit issued on the basis 
of that application, the allowable assigned, the exception to a statewide rule 
granted on the basis of the application, the extension of time to plug a well, 
or the Natural Gas Policy Act category determination made on the basis of the 
application may be suspended or revoked.
<nl>(c)  Financial Security. Any person, including any firm, partnership, joint 
stock association, corporation, or other organization, required to file an 
organization report with the commission must also file a performance bond or 
alternate form of financial security. A person may choose to file:
<nl>(1) an individual performance bond;
<nl>(2) a blanket performance bond;
<nl>(3) a non-refundable annual fee of $100 if the person can demonstrate to the 
commission an acceptable record of compliance with all commission rules, orders, 
licenses, permits, or certificates that relate to safety or the revention or 
control of pollution for the previous 48 months and the person has no 
outstanding violations; additionally, if the person is a firm, partnership, 
joint stock association, corporation or other organization, its officers, 
directors, general partners or owners of more than 25% ownership interest or any 
trustee must also not have any outstanding violations;
<nl>(4) a nonrefundable annual fee equal to three percent of the bond that 
otherwise would be required; or
<nl>(5) a first lien on tangible personal property associated with oil and gas 
production whose salvage value equals the value of the bond that otherwise would 
be required.
<nl>(d)  Letter of credit. A letter of credit may be submitted in lieu of either 
an individual or blanket performance bond subject to the same requirements for 
bonds where applicable.
<nl>(e) Forms for financial security. Performance bonds, liens, and letters of 
credit shall be submitted on forms prescribed by the commission.
<nl>(f) Filing deadlines for financial security. Performance bonds or an 
alternate form of financial security shall be filed at the time of filing an 
initial organization report or upon yearly renewal.
<nl>(g) New well operators. A person filing an organization report for the first 
time in order to operate wells is a new organization and is not eligible to file 
an individual bond for the first year of operation.
<nl>(h) Bond amount.
<nl>(1) A person required to file a bond who operates one or more wells may file 
an individual bond in an amount equal to $2.00 for each foot of well depth for 
each well.
<nl>(2) A person required to file a bond may file a blanket bond to cover all 
wells and other commission-regulated operations for which a bond is required as 
follows:
<nl>(A) a person who operates 10 or fewer wells or performs other operations 
shall file a $25,000 blanket bond;
<nl>(B)  a person who operates more than 10 but fewer than 100 wells shall file 
a $50, 000 blanket bond; and
<nl>(C) a person who operates 100 or more wells shall file a $250,000 blanket 
bond.
<nl>(3) A person operating wells and performing other operations, who chooses to 
cover all operations by a blanket performance bond, shall file a bond in an 
amount determined by the total number of wells, but not less than $25,000. Only 
one blanket performance bond is required for a person performing multiple 
operations.
<nl>(4) Bond amounts are the minimum amounts required by law to be filed. A 
person may file a bond in a greater amount if desired.
<nl>(i)  Expiration of bond obligations. Obligations to pay part or all of a 
bond amount are deemed released after four years from the expiration date of the 
bond if no non-compliant operations or activities subject to a bond have been 
discovered by the commission within that four-year period, and no enforcement 
action against any operations or activities subject to a bond is pending. A 
person whose activities are covered by a bond, as the principal, and the surety 
on a bond may also be relieved of their obligations to pay part or all of a bond 
amount by written agreement between the Railroad Commission of Texas, principal 
and surety.
<nl>(j) Bond conditions. Each performance bond required under this section is 
subject to the conditions that the principal will plug and abandon all wells and 
control abate and clean up pollution associated with the oil and gas operations 
and activities covered under the bond in accordance with applicable state law 
and permits, rules, and orders of the commission.
<nl>(k) Eligibility for nonrefundable $100 fee.
<nl>(1) A person filing an organization report for the first time in order to 
perform any commission-regulated operations is a new organization and is not 
eligible to choose to file the nonrefundable fee of $100 under subsection (c)(3) 
of this section.
<nl>(2) A person that filed an initial organization report less than 48 months 
prior to the current filing is not eligible to choose to file the nonrefundable 
fee of $100 under subsection (c)(3) of this section.
<nl>(3) A change in name, without any other organizational change, of a person 
registered with the commission does not indicate a new organization. If the 
commission or its representative determines that only a name change has 
occurred, a person operating under a new name may choose to file under 
subsection (c)(3) of this section if otherwise qualified.
<nl>(4) An individual, registered with the commission as a sole proprietor or 
who is a general partner of a partnership that is registered with the 
commission, and who reorganizes his or her oil and gas operations under a new 
legal entity or establishes a new and separate entity. will be considered 
eligible to choose to file under subsection (c)(3) of this section, if otherwise 
qualified based on the individual's existing record of compliance as well as the 
records of any other owners or officers of the new entity.
<nl>(5) A surviving or new corporation or other entity resulting from a merger 
under Texas Business Corporation Act, Part Five, may choose to file under 
subsection (c)(3) of this section, only if otherwise qualified on the basis of 
the existing records of compliance, considered as a whole, of all corporations 
and other entities that are parties to the merger as well as the records of the 
officers and owners of the surviving or new entities. The number of surviving or 
new corporations or other entities eligible under this paragraph is limited to 
no more than the total number of parties to the merger who were currently 
registered with the commission at the time of the merger.
<nl>(6) For the purposes of this subsection, "officers and owners" include 
directors, general partners, owners of more than 25% ownership interest or any 
trustee of an organization.
<nl>(1) Compliance certification. The commission or a commission representative 
may require an applicant organization in connection with filing the non-
refundable $100 fee under subsection (c)(3) of this section.
<nl>(1) The certification shall include a statement that:
<nl>(A)  the applicant organization at the time of application or during the 48 
months prior to the application has no referrals to the commission's legal 
enforcement section relating to a violation, or has no pending legal enforcement 
action relating to a violation; and
<nl>(B) the applicant organization or any officer, director, general partner, or 
owner of more than 25% ownership interest, or trustee of the named organization 
has no outstanding violations.
<nl>(2) If the certification is signed by an agent of an applicant organization, 
the certification is binding on the agent and the organization as if signed by a 
person holding a position of ownership or control in the organization.
<nl>(m) Dismissed violations. In any legal enforcement proceeding, if a person 
is determined not to be the responsible party for a violation and is dismissed 
from the proceeding for that reason, that violation shall not be considered in 
determining whether that person has an acceptable record of compliance.
<nl>(n) Fee for inactive wells subject to 16 T.A.C. sec.3.14, Statewide Rule 
14(B)(2). A person who chooses to file a form of financial security other than a 
bond or letter of credit shall also submit, pursuant to subsection (b)(4) of 
this section, a fee of $100 for each well for which an application to extend the 
time to plug a well has been filed under 16 T.A.C. sec.3.14(b)(2) (relating to 
Plugging) (Statewide Rule 14).
<nl>(o) Well transfer. A transfer of any well is not complete unless the 
operator acquiring the well has on file with the commission an approved form of 
financial security covering the well. An existing bond or alternate form of 
financial security remains in effect and the prior operator of the well remains 
responsible for compliance with all laws and commission rules covering the 
transferred well until the commission determines that the well is covered by 
proper financial security and the acquiring operator has assumed full 
responsibility for the well in accordance with all applicable statutes and 
commission rules.
<nl>(p) Reimbursement liability. Filing a bond or alternate form of financial 
security does not extinguish a person's liability for reimbursement for the 
expenditure of state oilfield clean-up funds pursuant to the Texas Natural 
Resource Code,  s89.083 and sec.91. 113.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116068
Martha V. Swanger
Hearings Examiner-Gas Utilities/LP Gas Section, Legal Division
Railroad Commission of Texas
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-6918
       
Part VI. Texas Motor Vehicle Commission
Chapter 105. Advertising
16 TAC sec.sec.105.1-105.27
The Texas Motor Vehicle Commission proposes amendments to 16 TAC sec.sec.105. 1-
105.3, 105.5-105.9, 1 05.11-105.24 and new sec.sec.105.4, 105.10, 105.25-105.27, 
concerning a comprehensive revision of the commission's rules pertaining to the 
advertising of motor vehicles by new motor vehicle dealers, manufacturers and 
distributors. New sec.105.4 adds a section of definitions necessary and 
pertinent to the advertising rules, including a definition of "bait 
advertising," now contained in the current sec.105.4 which is being repealed. 
New sec.105.10 sets forth specific requirements for new vehicle price 
advertising by dealers, replacing the existing dealer price advertising section 
which is being repealed. New 105.25 contains specific disclosure requirements 
for advertisements of payments and other financing terms. New sec.105.27 is 
identical to the existing sec.105.25, which is being repealed to renumber the 
section. The amendments and new sections are proposed by the commission in 
response to a petition requesting the adoption of amendments to the commission's 
advertising rules filed by the Texas Automobile Dealers Association pursuant to 
Section 11 of the Administrative Procedure and Texas Register Act. The 
amendments and new sections are intended to provide clarification of the 
sections and greater certainty in the requirements of the sections for 
compliance purposes by licensees subject to the sections, as well as aiding the 
commission in enforcing the sections and prohibiting the false, deceptive, and 
misleading advertising of motor vehicles.
Russell Harding, executive director, has determined that for the first five year 
period the sections are in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the sections.
Mr. Harding also has determined that for each year of the first five years the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be increased compliance by licensees with the agency's 
advertising rules resulting in more truthful and accurate advertising for the 
benefit of the public. There will be no effect on small businesses, other than 
the requirement of becoming familiar with the amended sections as a result of 
enforcing the sections. There is no anticipated economic cost to persons who are 
required to comply with the sections as proposed.
Comments on the proposal may be submitted in writing to Russell Harding, 
Executive Director, Texas Motor Vehicle Commission, P.O. Box 2293, Austin, Texas 
78768.
The amendments and new sections are proposed under the Texas Motor Vehicle 
Commission Code, sec.3.06, which provides the commission with authority to adopt 
rules necessary and convenient to effectuate the provisions of the act.
sec.105.1. Objective.<nl> The<ol> [It is the] objective of these sections 
<nl>is<ol> to implement the intent of the legislature as declared in the Texas 
Motor Vehicle Commission Code by <nl>regulating<ol> [providing for the 
regulation of] the advertising of <nl>commission licensees by requiring<ol> [by 
licensed new motor vehicle dealers, manufacturers, and distributors, in the 
interest of furthering] truthful and accurate advertising practices for the 
benefit of the citizens of this state.
sec.105.2. General Prohibition. <nl> A licensee<ol> [Licensees] shall not use 
false, deceptive, unfair, or misleading advertising. [As used in this section, 
the term "advertising" includes, but is not limited to, any form of public 
notice or statement however disseminated or utilized.]
sec.105.3. Specific Rules. <ol> [The following are specific rules relating to 
the advertising of motor vehicles in the State of Texas by licensed new motor 
vehicle dealers, manufacturers, and distributors.] The violation of <nl>an 
advertising rule<ol> [any of such rules] shall be considered by the commission 
as a prima facie violation of the Texas Motor Vehicle Commission Code[, 
sec.5.01(2) or sec.5.02(4)]. In addition to <nl>a violation of a<ol> [the] 
specific  <nl>advertising rule<ol> [rules set forth as follows], any other 
advertising or advertising practices found by the commission to be false, 
deceptive, or misleading shall be deemed violations of the Code, [sec.5.01(2) or 
sec.5.02(4), as applicable,] and shall also be considered violations of the 
general prohibition [set forth in sec.105.2 of this title (relating to General 
Prohibition)].
sec.105.4. Definitions.  The following words and terms, when used in this 
section, shall have the following meanings, unless the context clearly indicates 
otherwise.
 Advertisement-An oral, written, graphic, or pictorial statement made in the 
course of soliciting business, including, without limitation, a statement or 
representation made in a newspaper, magazine, or other publication, or contained 
in a notice, sign, poster, display, circular, pamphlet, or letter, or on radio 
or on television.
 Bait advertisement -An alluring but insincere offer to sell a product of which 
the primary purpose is to obtain leads to persons interested in buying 
merchandise of the type advertised and to switch consumers from buying the 
advertised product in order to sell some other product at a higher price or on a 
basis more advantageous to the advertiser.
 Buyers guide-A form as required by the Federal Trade Commission under 16 Code 
of Federal Regulations Part 455. This form is to be completed and displayed on 
the side window of a vehicle that has been driven more than the limited use 
necessary in moving or road testing a new vehicle prior to delivery to a 
consumer.
 Clear and Conspicuous -The statement, representation, or term being disclosed 
is of such size, color, contrast, and audibility and is presented so as to be 
readily noticed and understood. All language and terms, including abbreviations, 
shall be used in accordance with their common or ordinary usage and meaning. 
This standard may be met by the following.
(A) In a print advertisement:
(i) a type size is used which is at least one-third the size of the largest type 
size used for the price in the advertisement; however, it need not be larger 
than 10-point type in advertisements that are 117 column inches or less, or 12-
point type in advertisements that are larger than 117 column inches; and
(ii) the statement is disclosed in the body of the advertisement or adjacent to 
the price or in a box with a heading such as "Restrictions" or "Disclosures." If 
the statement is in the body copy of the advertisement, it may be in the same 
size type as the largest type used in the body copy.
(B) In a broadcast commercial:
(i) the statement is made orally and is clear and understandable in pace and 
volume; or
(ii) the statement is in visual form and viewers can easily read and understand 
it.
 Dealership addendum -A form which is to be displayed on a window of a motor 
vehicle when the dealership installs special features, equipment, parts or 
accessories, or charges for services not already compensated by the manufacturer 
or distributor for work required to prepare a vehicle for delivery to a buyer. 
The addendum is to disclose:
(A) that it is supplemental;
(B) any added feature, service, equipment, part, or accessory charged and added 
by the dealership and the retail price therefore;
(C) any additional charge to the selling rice such as additional dealership 
markup; and
(D) the total dealer selling price. The dealership addendum form shall not be 
deceptively similar in appearance to the manufacturer's label, which is required 
to be affixed by every manufacturer to the windshield or side window of each new 
motor vehicle under the Automobile Information Disclosure Act.
 Demonstrator-A new motor vehicle that is currently in the inventory of the 
automobile dealership and available for test drives by customers during the 
dealership's normal business hours. It does not include a vehicle purchased or 
leased by a dealer or dealership personnel and used as their personal vehicle.
 Disclosure-Required information that is clear, conspicuous, and accurate.
 Factory Executive/Official Vehicle-A new motor vehicle that has been used 
exclusively by an executive or official of the dealer's franchising 
manufacturer, distributor, or their subsidiaries.
 Licensee-Any person required to obtain a license from the Texas Motor Vehicle 
Commission.
 Manufacturer's label -The label required by the Automobile Information 
Disclosure Act, 15 United States Code 1231-1233, to be affixed by the 
manufacturer to the windshield or side window of each new automobile delivered 
to the dealer.
 Rebate or Cash back-A sum of money refunded to a purchaser or for the benefit 
of the purchaser after full payment has been rendered. The purchaser may choose 
to reduce the amount of the purchase price by the sum of money or the purchaser 
may opt for the money to be returned to himself or for his benefit subsequent to 
payment in full.
sec.105.5. Availability of Vehicles.
<nl>(a) A licensee may advertise a specific vehicle or line-make of vehicles for 
sale if:
<nl>(1) the specific vehicle or line is in the possession of the licensee at the 
time the advertisement is placed, or the vehicle may be obtained from the 
manufacturer or distributor or some other source, and this information is 
disclosed in the advertisement; and
<nl>(2)  The advertisement sets forth the number of vehicles available if the 
dealer does not have a supply of the advertised vehicles available to satisfy a 
reasonable expectable public demand. If an advertisement pertains to only one 
specific vehicle, then the advertisement must disclose that vehicle's stock 
number.<ol> [Where a specific vehicle is advertised by a dealer as being for 
sale, that vehicle shall be in the possession of the dealer advertising same and 
shall be willingly shown and sold as advertised, illustrated, or described at 
the advertised price and terms, at the advertised address. A dealer must have on 
hand a reasonable expectable public demand of all vehicles advertised with the 
equipment advertised at the price advertised. If an advertisement pertains to 
one specific vehicle only, this fact must be clearly disclosed and a stock 
number identifying the vehicle must also be disclosed in the advertisement. In 
the event that a dealer does not have a reasonable expectable public demand of 
vehicles advertised, the advertisement must disclose a limitation of quantity. 
If, in order to make delivery of the advertised vehicle, the dealer must obtain 
the vehicle from the manufacturer or some other source, such fact shall be 
disclosed.]
(b) This section <nl>does<ol> [shall] not [be construed to] prohibit general 
advertising of vehicles by a manufacturer <nl>, dealer advertising association, 
<ol> or distributor and the inclusion [therein] of the names and addresses of 
the <nl>dealers<ol> [dealer] selling such vehicles in the particular area.
sec.105.6. Accuracy.  All advertised statements[, including those specifying 
year, make, engine size, model, type, equipment, price, trade-in allowance, 
terms, or other claims or conditions pertaining to the offer for sale of any 
vehicle, or to the vehicle itself,] shall be accurate<nl>,<ol> [and] clear<nl>, 
and conspicuous <ol>.
sec.105.7. Untrue Claims. <ol> The following statements <nl>are prohibited<ol> 
[shall not be used in any advertising by any dealer]:
(1) -(4) (No change.)
sec.105.8. Layout[; Type Size]. The layout, headlines, illustrations, or type 
size of a printed advertisement and the broadcast words or pictures of radio/TV 
advertisements shall not convey or permit an erroneous or misleading impression 
as to which vehicle or vehicles are offered at featured prices. No advertised 
offer, expression, or display of price, terms, down payment, trade-in allowance, 
cash difference, savings, or other such material terms shall be misleading and 
any necessary qualifications shall be clearly, conspicuously, and accurately set 
forth to prevent misunderstanding. [For purposes of these rules, qualifying 
terms and phrases will be considered to be clearly, conspicuously and accurately 
set forth if they are:
[(1) in bold print and in type of such size that is capable of being read 
without unreasonable extra effort;
[(2) expressed in terms that are understandable to the buying public; and
[(3) in close proximity to the qualified representation and not separated or 
buried by asterisk in some other part of the advertisement.]
sec.105.9. Manufacturer's Suggested Retail Price. The suggested retail price of 
a new motor vehicle when advertised by a manufacturer or distributor shall 
include all costs and charges for the vehicle advertised, except that 
destination and dealer preparation charges, and state and local taxes, title, 
<nl>deputy fees, documentary fees,<ol> and license fees may be excluded from 
such price, provided that the advertisement conspicuously states that such costs 
and charges are excluded. However, with respect to advertisements placed with 
local media in Texas by a manufacturer or distributor which include the names of 
the local dealers for the vehicles advertised, if the price of a vehicle is 
stated in the advertisement, such price must include all costs and charges for 
the vehicle advertised, including destination and dealer preparation charges and 
may exclude only state and local taxes, license, title fees, and documentary 
fees.
sec.105.10. Dealer Price Advertising.
(a) The price of a new motor vehicle, when advertised by a dealer, must be the 
full cash price for which the dealer will sell the vehicle. The only charges 
that may be excluded from the advertised price are:
(1) state and local taxes;
(2) license;
(3) title;
(4) deputy;
(5) and documentary fee.
(b) A qualification may not be used when advertising the price of a vehicle such 
as "with trade," "with acceptable trade," "with dealer-arranged financing," 
"rebate assigned to dealer" or "with down payment."
(c) If a price advertisement discloses a rebate, cash back, discount savings 
claim, or other incentive, the full cash price of the vehicle must be disclosed 
as well as the price of the vehicle after deducting the incentive. The following 
is an acceptable format for advertising a price with rebates and other 
deductions:
[graphic]
sec.105.11. Identification.
<nl>(a) When the [cash price or time] price of a [new] vehicle is 
<nl>advertised, the following must be disclosed: <ol> [stated in any 
advertisement, the vehicle shall be clearly identified as to]
<nl>(1)  model<ol> year[,] <nl>;
<nl>(2) make[,]<nl>, <ol>[engine size, model, and commonly accepted]
<nl>(3) trade, brand, or style name[, ]<nl>; <ol> and
<nl>(4) whether the vehicle is a used, demonstrator, or a factory 
executive/official vehicle.<ol> [all optional equipment included in the 
advertised price shall be listed in the advertisement. No dealer shall advertise 
a new vehicle at a price which does not include equipment with which it is 
fitted or certain standard equipment with which it is ordinarily fitted, without 
disclosing such fact.]
<nl>(b) Expressions such as "fully equipped," "factory equipped," "loaded," and 
other such terms [can be deceptive and misleading and] shall not be used in any 
advertisement [which] <nl>that <ol> contains the price of a vehicle unless the 
optional equipment of the vehicle is listed in the advertisement.
<nl>(c) An<ol> [Any] illustration <nl>of a motor vehicle<ol> used in [any 
advertising media, including television,] <nl>an advertisement<ol> must be that 
of the motor vehicle advertised. <nl>If an illustration of the advertised 
vehicle is not available, then the dealer must clearly and conspicuously 
disclose the difference between the illustration and the vehicle being 
advertised.
sec.105.12. Advertising at Cost or Invoice.
<nl>(a) The term "dealer's cost" or other reference to the cost of the vehicle 
to the dealer shall not be used [in advertising since the actual net cost to the 
dealer for the vehicle is dependent upon a number of variables not known to the 
dealer at the time the advertisement is placed].
<nl>(b) The use of the term "invoice" or "invoice price" in advertising must be 
in reference to the manufacturer's or distributor's total invoice price on a 
vehicle  <nl>without dealer added accessories and services<ol> and such 
advertisement shall clearly and conspicuously include <nl>one of<ol> the 
following  <nl>disclosures<ol> [disclosure]:
<nl>(1)  "The invoice may not represent actual dealer cost<nl>;" or,
<nl>(2) "The factory invoice refers to the manufacturer's or distributor's total 
invoice price."
sec.105.13. Trade-In Allowances. <nl> No guaranteed<ol> [Since the amounts of 
trade-in allowances will vary depending on the condition, model, mileage, or age 
of a buyer's vehicle, no specific] trade-in amount or range of amounts shall be 
featured in advertising.
sec.105.14. Used Vehicles. <nl> A used vehicle<ol> [Used vehicles] shall not be 
advertised in any manner [which] <nl>that <ol> creates the impression that [they 
are] <nl>it is<ol> new.
sec.105.15. Demonstrators, Executives', and Officials' Vehicles.  <nl> If a 
demonstrator or factory executive/official vehicle is<ol> [The word 
"demonstrator" shall be understood to refer to a vehicle which has never been 
sold or leased to a member of the public shall include vehicles used by new 
vehicle dealers or their personnel for demonstrating performance ability but not 
vehicles purchased or leased by such dealers or their personnel and used as 
their personal vehicles. Demonstrators may be] advertised<nl>, the advertisement 
must so disclose. A demonstrator or factory executive/official vehicle may 
be<ol> [for sale as such] <nl>sold<ol> only by a dealer franchised <nl>and 
licensed to sell that line-make of new motor vehicle<ol> [for the sale of such 
make of new vehicles. ["Executives"' and "officials"' vehicles, when so 
advertised, shall have been used exclusively by executives of the dealer's 
franchising manufacturer or distributor, or by an executive of the franchised 
dealership. These vehicles, so advertised, shall not have been sold or leased to 
a member of the public prior to the appearance of the advertisement. 
"Demonstrators," "executives'," and "officials"' vehicles shall be clearly and 
prominently qualified as such in immediate conjunction with the year, make, and 
model offered.]
sec.105.16. Auction.  Terms such as "auction" or "auction special" and other 
terms of similar import shall be used only in connection with <nl>a vehicle<ol> 
[vehicles] offered or sold at a bona fide auction.
sec.105.17. Free Offers. <ol> No <nl>merchandise or enticement<ol> [equipment, 
accessory, or other merchandise]  <nl>may<ol> [shall] be described as "free" if 
the vehicle can be purchased for a lesser price without <nl>the merchandise or 
enticement<ol> [such equipment, accessory, or merchandise,] or if the price of 
the vehicle has been increased to cover the cost or any part of the cost of 
[such equipment, accessory, or] <nl>the<ol> merchandise <nl>or enticement. The 
advertisement<ol> [Advertising] shall [describe] <nl>clearly and conspicuously 
disclose<ol> the conditions under which the "free" offer may be obtained[, in 
direct and conspicuous connection with the term "free," e.g., "Free with the 
purchase of______."]<nl>.
sec.105.19. Authorized Dealer. <ol> The term "authorized dealer" or <nl>a<ol> 
similar <nl>term<ol> [terms] shall not be used [in any way so as to mislead as 
to the make or makes of vehicles for the sale of which the advertising dealer is 
franchised.] <nl>unless the advertising dealer holds both a franchise and a 
Texas Motor Vehicle Commission license to sell those vehicles he is holding 
himself out as "authorized" to sell.
sec.105.20. Manufacturer and Distributor Rebates. It <nl>is<ol> [shall be] 
unlawful for <nl>a<ol> [any] manufacturer or distributor[, either directly or 
indirectly.] to advertiser, publicize, or represent to the public by any means 
or in any medium,] any offer [to purchasers of vehicles sold by the manufacturer 
or distributor,] of a rebate, refund, discount, or other financial inducement or 
incentive, which is either payable to or for the benefit of the purchaser [of 
the vehicle] or which reduces the amount to be paid [by the purchaser] for the 
vehicle, whether <nl>the<ol> [such] amount is the vehicle purchase price, the 
interest or finance charge expense, or any other cost accruing to the purchaser 
<nl>if <ol> [in connection with the purchase of the vehicle, where] any portion 
of such rebate, refund, discount, or other financial incentive or inducement is 
paid [by] or financed [by] or in any manner contributed to by the dealer selling 
the vehicle, unless <nl>the advertisement<ol> [such advertising or publicizing] 
discloses [clearly and conspicuously the following:
[(1) the maximum dealer portion or contribution of any rebate, refund, discount, 
or other financial inducement or incentive stated in numerical form (either 
dollar amount or percentage); and,] that the dealer's contribution may affect 
the final negotiated price of the vehicle<nl>.<ol>[; or
(2) ]<nl>With<ol> [with] respect to interest or finance charge expense programs 
[only], <nl>the advertisement shall disclose<ol> that participating dealers 
contribute to the reduction of the financing rate and that the dealer's 
contribution may affect the final negotiated price of the vehicle.
sec.105.21. Rebate and Financing Rate Advertising by Dealers.
(a) It <nl>is<ol> [shall be] unlawful for <nl>a <ol> [any] dealer[, either 
directly or indirectly,] to advertise[, publicize, or represent to the public by 
any means or in any medium,] <nl>an<ol> [any] offer [to purchasers of vehicles 
sold by the dealer,] of a manufacturer's or distributor's rebate, refund, 
discount, or other financial inducement or incentive <nl>if the dealer 
contributes to the manufacturer's or distributor's program<ol> [of the type 
described in sec.105.20 of this title (relating to Manufacturer and Distributor 
Rebates),] unless such advertising [or publicizing clearly and conspicuously] 
discloses [the following:
[(1) the maximum dealer portion or contribution of any rebate, refund, discount, 
or other financial inducement or incentive stated in numerical form (either 
dollar amount or percentage); and,] that the dealer's contribution may affect 
the final negotiated price of the vehicle<nl>.<ol>[; or
(2) ]<nl>With<ol> [with] respect to interest or finance charge expense programs 
[only], [that] <nl>if a<ol> participating <nl>dealer contributes<ol> [dealers 
contribute] to the reduction of  <nl>a<ol> [the] financing rate<nl>, then a 
disclosure must state<ol> [and] that the dealer's contribution may affect the 
final negotiated price of the vehicle.
(b) <nl>An<ol> [Any] advertisement containing an offer [by a dealer] of an 
interest or finance charge incentive <nl>that<ol> [to purchasers of vehicles 
sold by the dealer, which] is paid for or financed by the dealer rather than the 
manufacturer or distributor, shall [clearly and conspicuously] disclose that the 
dealer pays for or finances the interest or finance charge rate reduction<nl>, 
the amount of the dealer's contribution in either a dollar or percentage amount, 
<ol> and that such arrangement may affect the final negotiated price of the 
vehicle.
(c) <nl>A dealer may not advertise, offer to pay, promise to pay or tender cash 
to a buyer of a motor vehicle as in a rebate or cash back program, unless it is 
offered and paid in part by the motor vehicle manufacturer or distributor 
directly to the retail purchaser or assignee of the retail purchaser and unless 
the advertisement sets forth the disclosures required by this Act.<ol> [The term 
"rebate" may be used by a dealer in advertising the sale of new motor vehicles 
only when the rebate is in fact a rebate offered by and paid entirely by the 
motor vehicle manufacturer or distributor direct to the retail purchaser of the 
vehicle or to the assignee of the retail purchaser.]
sec.105.22. Lease Advertisements. <ol> Vehicle lease advertisements shall 
clearly and conspicuously disclose that the advertisement is for the lease of a 
vehicle. Statements such as "alternative financing plan," "drive away for 
$________ per month," or other terms or phrases that do not use the term "lease, 
" do not constitute adequate disclosure of a lease. Lease advertisements shall 
not contain the phrase "no down payment" or words of similar import if any 
outlay of money is required to be paid by the customer to lease the vehicle. 
Lease terms that are not available to the general public shall not be included 
in advertisements directed at the general [consuming] public, or all limitations 
and qualifications applicable to the lease terms advertised shall be clearly and 
conspicuously disclosed.
sec.105.23. Manufacturer Sales; Wholesale Prices.<nl> A dealer <ol> [Dealers] 
shall not advertise the sale of <nl>a new vehicle in any manner that creates the 
impression that it is<ol> [vehicles in any manner that conveys to the public, 
either directly or by implication, that the vehicles advertised are] being 
offered for sale by the manufacturer or distributor of the <nl>vehicle <ol> 
[vehicles]. Advertisements by dealers shall not contain terms such as "factory 
sale," "wholesale prices <nl>," "factory approved," "factory sponsored,"<ol> or 
any other similar terms which indicate sales other than <nl>from the dealer<ol> 
[retail sales].
sec.105.24. Savings Claims; Discounts.
<nl>(a) A<ol> [Specific] savings <nl>claim<ol> [claims] or discount <nl>offer is 
prohibited except to advertise a<ol> [offers shall not be used in advertising 
any motor vehicles other than] new or demonstrator <nl>vehicle, and the 
advertisement must<ol> [vehicles and then only to] show the difference between 
the dealer's [own current] selling price and the manufacturer's or distributor's 
total suggested list or retail price.
<nl>(b) If a dealer has added a factory available option and disclosed the 
option and price on a dealership addendum sticker prior to offering the vehicle 
for sale at retail, the dealer may advertise a savings claim on that vehicle as 
long as the difference is shown between the dealer's selling price and the total 
selling price as disclosed on the dealership addendum sticker. <ol> [A full 
explanation of the discount or savings claim shall be given, as for example, 
"save $_______ from manufacturer's suggested list (or retail) price."]
(c) Statements such as "up to," "as much as," "from," shall not be used in 
connection with savings <nl>or discount<ol> claims.
sec.105.25. Payment Disclosures. <ol> An advertisement that contains any one of 
the following messages, statements or terms:
(1) the amount of a down payment, in either a percentage or dollar amount;
(2) the amount of any payment, in either a percentage or dollar amount;
(3) the number of payments;
(4) the period of repayment; or
(5) the amount of any finance charge must include the following: payment;
(A)  the amount or percentage of the down payment;
(B) the terms of repayment; and
(C) the annual percentage rate or A.P.R.
sec.105.26. Payment of Buyer's Taxes. It is unlawful for any seller to advertise 
or hold out to the public that the seller will assume, absorb, or refund any 
portion of the tax, or that the seller will not add the tax to the selling price 
of the taxable items being sold.
sec.105.27. Finding of Violation. No licensee shall be held to be in violation 
of the foregoing rules, including the general prohibition, except upon a finding 
thereof made by the commission after notice and hearing as provided in the Texas 
Motor Vehicle Commission Code.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115987
Russell Harding
Executive Director
Texas Motor Vehicle Commission
Proposed date of adoption: March 31, 1992
For further information, please call: (512) 476-3587
       
16 TAC sec.sec.105.4, 105.10, 105.25
(Editor's note: The text of the following sections proposed for repeal will not 
be published. The sections may be examined in the offices of the Texas Motor 
Vehicle Commission or in the Texas Register office, Room 245, James Earl Rudder 
Building, 1019 Brazos Street, Austin.)
The Texas Motor Vehicle Commission proposes the repeal of sec.105.4 concerning 
bait advertising, sec.105.10 concerning dealer price advertising, and sec.105.25 
concerning the findings of violations of the commission's advertising rules.
The repeals are proposed in conjunction with a separate proposal which is a 
comprehensive revision of the commission's rules pertaining to the advertising 
of motor vehicles by new motor vehicle dealers, manufacturers and distributors. 
The proposed revision includes a definition of "bait advertising" in a new 
sec.105.4, which is a section of definitions; clarification of the requirements 
for new vehicle price advertisements by dealers in a new sec.105.10; and a new 
sec.105.27, the text of which is identical to the existing sec.105.25.
Russell Harding, executive director, has determined that for the first five-year 
period the repeals are in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the repeals.
Mr. Harding also has determined that for each year of the first five years the 
repeals are in effect there are no public benefits anticipated. There will be no 
effect on small businesses. There is no anticipated economic cost to persons who 
are required to comply with the repeals as proposed.
Comments on the proposal may be submitted in writing to Russell Harding, 
Executive Director, Texas Motor Vehicle Commission, P.O. Box 2293, Austin, Texas 
78768.
The repeals are proposed under Texas Civil Statutes, Article 4413(36), sec.3. 06 
of the Texas Motor Vehicle Commission Code, which provides the Commission with 
the authority to adopt rules necessary and convenient to effectuate the 
provisions of the act.
sec.105.4. Bait Advertising.
sec.105.10. Dealer Price Advertising.
sec.105.25. Finding of Violation.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115986
Russell Harding
Executive Director
Texas Motor Vehicle Commission
Proposed date of adoption: March 31, 1992
For further information, please call: (512) 476-3587
       
TITLE 22. EXAMINING BOARDS
Part X. Texas Funeral Service Commission
Chapter 203. Licensing and Enforcement-Specific Substantive Rules
22 TAC sec.203.4
The Texas Funeral Service Commission proposes an amendment to sec.203.4, 
concerning transfer of licenses. This rule is being amended to insure change of 
establishment name or change of funeral director in charge is submitted on 
amended form within 30 days of the date of change.
Larry A. Farrow, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Mr. Farrow also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be the requirement of an amended form be submitted on change of 
establishment name or change of funeral director in charge within 30 days of the 
date of change. There will be no effect on small businesses. There is no 
anticipated economic cost to persons who are required to comply with the section 
as proposed.
Comments on the proposal may be submitted to Larry A. Farrow, Executive 
Director, Texas Funeral Service Commission, 8100 Cameron Road, Suite B-550, 
Austin, Texas 78753.
The amendment is proposed under Texas Civil Statutes, Article 4582b, sec.5, 
which provide the Texas Funeral Service Commission with the authority to 
promulgate rules and regulations.
sec.203.4. Transfer of Licenses [Prohibited].
<nl>(a) No license issued under the provisions of Texas Civil Statutes, Article 
4582b, sec.4, is transferable as to location. Licenses may be transferred as to 
ownership if an amended application showing a majority change of ownership is 
filed with the commission within 30 days of the date of transfer of ownership.
<nl>(b) A change of establishment name or change of funeral director in charge 
(FDIC) must be submitted on an amended form within 30 days of the date of 
change.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 12, 1991.
TRD-9115985
Larry A. Farrow
Executive Director
Texas Funeral Service Commission
Earliest possible date of adoption: January 24, 1991
For further information, please call: (512) 834-9992
       
22 TAC sec.203.6.
Texas Funeral Service Commission proposes an amendment to  s203.6, concerning 
apprenticeships. This rule is amended to insure apprentices are fully informed 
of apprenticeship programs.
A. Farrow, executive director, has determined that there will not be fiscal 
implications as a result of enforcing or administering the section.
Farrow also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be to insure apprentice is fully informed of all requirements of 
the program. There will be on effect on small businesses.
on the proposal may be submitted to Larry A. Farrow, Executive Director, 8100 
Cameron Road, Suite B-550, Austin, Texas 78753.
amendment is proposed under Texas Civil Statutes, which provide the Texas 
Funeral Service Commission with the authority to promulgate rules and 
regulations.
sec.203.6. Apprenticeships.
(a)-(b) (No change.)
<nl>(c) A case report will be submitted on all cases performed each month by the 
apprentice.
<nl>(1) The case report will be made on a form prescribed by the commission.
<nl>(2) No more than two apprentices will receive credit due for work on the 
same body.
<nl>(3) All case reports will be submitted to the commission by the 10th day of 
each succeeding month.
<nl>(4) The apprentice shall report on at least one case each calendar month. In 
any month that the apprentice does not perform a case, a report shall be made to 
the commission, notwithstanding. Any month where a notwithstanding case report 
is submitted, will not be credited to the 12-month apprenticeship.
<nl>(5) The commission may start an apprenticeship over any time the apprentice 
has submitted notwithstanding reports for two or more consecutive months.
<nl>(6) The commission may start an apprenticeship over after the second time an 
apprentice has failed to either file a case report or has failed to file the 
case report in a timely manner.
<nl>(7) Of the 40 cases required, at least 10 of the cases must be complete 
cases and reported during the last three months of the apprenticeship. A 
complete case is defined as a case where the apprentice takes the responsibility 
for the case and handles all major actions from the time of first call through 
interment or other disposition of the body.
<nl>(8)  The funeral director's and embalmer's apprenticeship must be served for 
a minimum of 12 consecutive months and may be served simultaneously.
<nl>(9) <ol>[(d)] <nl>Each case report submitted will be certified by the 
licensee under <ol>[whom the]<nl> which the apprentice performed the work. The 
supervising license well as the apprentice is subject to disciplinary action if 
the information submitted is misrepresented.
[(c) Case reports must be filed by the apprentice for each month of the 
apprenticeship. Penalties for failure to file these case reports in a timely 
manner will lie against the apprentice.]
[(e) The funeral director's and embalmer's apprenticeship must be served in 12 
consecutive months.]
<nl>(d)<ol>[(f)] A student may register as a funeral director apprentice upon 
completion of a minimum of 60 quarter hours or 40 semester hours in an 
accredited college of mortuary science and achieving a minimum cumulative grade 
point average of 3.0. The student must be engaged in learning the practice of 
funeral directing in a licensed funeral establishment during regular employment, 
such employment<nl>, during the period of time the apprentice is enrolled in 
school shall consist<ol> (consisting) of a minimum of 20 hours per week. Upon 
completion of this required study, the student will receive credit not to exceed 
<nl>10<ol> [(15)] required case reports and three months required 
apprenticeship.
[(d) Each case report submitted will be certified by the licensee under whom the 
apprentice performed the work. The supervising licensee as well as the 
apprentice is subject to disciplinary action if the information submitted is 
misrepresented.]
<nl>(e)<ol>[(g)] Any funeral director apprentice that begins the apprenticeship 
during attendance at mortuary school will apply for and take the written 
examination given by the commission upon graduation from mortuary school unless 
<nl>the apprentice<ol> (that individual) petitions the commission for 
authorization to delay taking the examination.
<nl>(f)<ol>[(h)] The commission may hear testimony or receive evidence as to why 
standards or requirements of apprenticeship cannot be met by an apprentice. 
Where, because of hardship, the applicant has been unable to meet such standards 
in spite of diligent effort, the commission can make a finding of substantial 
compliance by such apprentice.
<nl>(g)<ol>[(i)]  An embalmer apprentice shall be required to assist in the 
embalming of six autopsied remains during the course of the embalming 
apprenticeship, with the provisions that a certificate from a mortuary college 
stating the number of autopsied cases had been completed during the course of 
the college program, would count towards the six required cases. However, any 
autopsied cases completed during the course of mortuary college, would not count 
towards the stated <nl>40 <ol> [(60)] cases required to complete the embalmer 
apprenticeship.
<nl>(h)<ol>[(j)] In order to ensure the maximum exposure possible to all aspects 
of funeral directing, the one-year funeral director apprenticeship will not be 
served in a commercial embalming establishment.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 12, 1991.
TRD-9115984
Larry A. Farrow
Executive Director
Texas Funeral Service Commission
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 834-9992
       
22 TAC sec.203.7
The Texas Funeral Service Commission proposes amendments to sec.203.7 concerning 
applicants for licensure. This rule is amended to insure funeral directors 
and/or embalmer apprentices demonstrate proficiency related to their duties.
Larry A. Farrow, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Mr. Farrow also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be to satisfactorily demonstrate proficiency related to the duties 
of a funeral director and/or embalmer. There will be no effect on small 
businesses. There is no anticipated economic cost to persons who are required to 
comply with the section as proposed.
Comments on the proposal may be submitted to Larry A. Farrow, Executive 
Director, Texas Funeral Service Commission, 8100 Cameron Road, Suite B-550, 
Austin, Texas 78753.
The amendment is proposed under Texas Civil Statutes, Article 4582b, sec.5, 
which provide the Texas Funeral Service Commission with the authority to 
promulgate rules and regulations.
sec.203.7. Applicants for Licensure.<nl> Upon completion of the initially 
prescribed term of apprenticeship, an applicant for licensure as a funeral 
director and/or embalmer may be interviewed by a licensed representative of the 
commission in order that the apprentice may demonstrate proficiency related to 
the duties of a funeral director and/or embalmer. Failure to satisfactorily 
demonstrate such proficiency may result in the extension of the apprenticeship 
term and/or the number of case reports required. Any apprentice that fails to 
satisfactorily demonstrate proficiency and wishes to contest the extension, may 
request that a licensed representative of the commission travel to the place of 
employment of the apprentice and personally observe the actual work of the 
apprentice. <ol> [An applicant for licensure as an embalmer must pass a 
practical examination administered by a member or representative of the 
commission. Grading shall be on a pass/fail basis and reexamination will be 
allowed at subsequent testing periods.]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 12, 1991.
TRD-9115983
Larry A. Farrow
Executive Director
Texas Funeral Service Commission
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 834-9992
       
22 TAC sec.203.24
The Texas Funeral Service Commission proposes new sec.203.24, concerning 
apprentice sponsors. This rules sets requirements for apprentice sponsors.
Larry A. Farrow, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Mr. Farrow also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be to set requirements for apprentice sponsors. There will be no 
effect on small businesses. There is no anticipated economic cost to persons who 
are required to comply with the section as proposed.
Comments on the proposal may be submitted to Larry A. Farrow, Executive 
Director, Texas Funeral Service Commission, 8100 Cameron Road, Suite B-550, 
Austin, Texas 78753.
The new section is proposed under Texas Civil Statutes, Article 4582b, sec.5, 
which provide the Texas Funeral Service Commission with the authority to 
promulgate rules and regulations.
sec.203.24. Apprentice Sponsors.
(a) Each registered apprentice shall have a sponsor who is licensed in the 
specific discipline of the apprenticeship by the State of Texas.
(b) In those cases where it is likely that the apprentice will be unable to 
acquire sufficient cases at one funeral establishment during the course of the 
apprenticeship, the apprentice may obtain additional sponsors so long as the 
commission is notified, in writing, by each additional sponsor.
(c) In order to serve as an apprentice sponsor, an individual must hold an 
appropriate Texas license and must have been licensed for a minimum of two 
consecutive years prior to the date that the individual enters into the 
sponsorship of the apprentice.
(d) An individual may not serve as the sponsor of more than two individuals at 
any time.
(e) A sponsor shall insure that direct supervision is provided in order to 
provide firsthand and factual documentation of work accomplished by the 
apprentice on each case report submitted.
(f) The sponsor shall be ultimately responsible for providing a work environment 
and assigning duties to be performed by the apprentice that are conducive to the 
apprentice acquiring proficiency in the work required of a funeral director 
and/or embalmer.
(g) Prior to the apprentice's attendance at the interview required by sec.203.7 
of this title (relating to Applicant's for Licensure) the sponsor shall execute 
and provide to the commission a sworn affidavit attesting to the proficiency of 
the apprentice in all required skills.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 12, 1991.
TRD-9115982
Larry A. Farrow
Executive Director
Texas Funeral Service Commission
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 834-9992
       
22 TAC sec.203.25
The Texas Funeral Service Commission proposes new sec.203.25 concerning 
establishment license. This rule insures that all facilities can be properly 
identified and that a revocation of license cannot be evaded.
Larry A. Farrow, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Mr. Farrow also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be to ensure that all facilities can be properly identified, and 
that a revocation of license cannot be evaded. There will be no effect on small 
businesses. There is no anticipated economic cost to persons who are required to 
comply with the section as proposed.
Comments on the proposal may be submitted to Larry A. Farrow, Executive 
Director, Texas Funeral Service Commission, 8100 Cameron Road, Suite B-550, 
Austin, Texas 78753.
The new section is proposed under Texas Civil Statutes, Article 4582b, sec.5, 
which provide the Texas Funeral Service Commission with the authority to 
promulgate rules and regulations.
sec.203.25. Establishment License.
(a) All names used in the course of business must be listed on the application 
for license and changes or additions must be submitted on an amended form within 
30 days of the change or addition.
(b) The intentional submission of false information by any applicant for an 
original or renewed license shall constitute grounds for denial or revocation of 
license.
(c) The use of subterfuge or other evasive means, such as a filing for license 
through a second party when an individual is disqualified for licensing, shall 
constitute grounds for denial or revocation of license.
(d) All licensed funeral establishments shall display their state license in a 
conspicuous location in an area of the establishment that is open to the general 
public.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 12, 1991.
TRD-9115981
Larry A. Farrow
Executive Director
Texas Funeral Service Commission
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 834-9992
       
Part XVI. Texas State Board of Physical Therapy Examiners
Chapter 337. Display of License
22 TAC sec.337.2
The Texas State Board of Physical Therapy Examiners proposes an amendment to 
sec.337.2, concerning consumer information sign. This section is being amended 
because the office in Austin has moved.
Sherry L. Lee, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Ms. Lee also has determined that for each year of the first five years the 
section is in effect there will be no public benefit anticipated as a result of 
enforcing the section. There is no anticipated economic cost to persons who are 
required to comply with the section as proposed.
Comments on the proposal may be submitted to Sherry L. Lee, 3001 South Lamar 
Boulevard, Suite 101, Austin, Texas 78704.
The amendment is proposed under Texas Civil Statutes, Article 4512e, sec.3(e), 
which provide the Texas State Board of Physical Therapy Examiners with the 
authority to adopt rules consistent with the Texas Physical Therapy Practice Act 
to carry out its duties in administering the Act.
sec.337.2. Consumer Information Sign. The consumer information sign shall read: 
Complaints regarding noncompliance with the Texas Physical Therapy Practice Act 
can be directed to the Texas State Board of Physical Therapy Examiners, <nl>3001 
South Lamar Boulevard, Suite 101, Austin, Texas 78704<ol> [313 East Rundberg 
Lane, Suite 113, Austin, Texas 78753]. The minimum size of the sign shall be 
five inches by seven inches.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 13, 1991.
TRD-9115974
Sherry L. Lee
Executive Director
Texas State Board of Physical Therapy Examiners
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 443-8202
       
Part XXIX. Texas Board of Professional Land Surveying
Chapter 661. General Rules of Procedures and Practices
Applications, Examinations, and Licensing
22 TAC sec.661.41
The Texas Board of Professional Land Surveying proposes an amendment to 
sec.661.41, concerning applications. The Texas Board of Professional Land 
Surveying proposes an amendment to sec.661.41(b) concerning filing an 
application for certification as a Surveyor-In-Training or registration as a 
Registered Professional Land Surveyor. The section clearly defines what a person 
must do to file an application.
Sandy Smith, executive director, has determined that for the first five-year 
period the section is in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the section.
Ms. Smith also has determined that for each year of the first five years the 
section as proposed is in effect the public benefit anticipated as a result of 
enforcing the section as proposed will be none, as the public relatively 
unaffected by the section. There will be no effect on small businesses. There is 
no anticipated economic cost to person who are required to comply with the 
section as proposed.
Comments on the proposal may be submitted to Sandy Smith, Executive Director, 
7701 North Lamar Boulevard, Suite 400, Austin, Texas 78752. Written public 
comment is invited for 30 days from the date of this register.
The amendment is proposed under Texas Civil Statutes, Article 5282c, sec.9, 
which provides Texas Board of Professional Land Surveying with the authority to 
make and enforce all reasonable and necessary rules, regulations, and bylaws not 
inconsistent with the Texas Constitution, the laws of this state and this Act.
sec.661.41. Applications.
(a) (No change.)
(b) The application shall be neatly typed or lettered and all questions must be 
answered. If the answer is negative, the applicant shall use the word "no" or 
"none". It is the applicant's responsibility to see that certified transcripts 
of college work and any other information required or requested by the board are 
received in the office of the board on or before <nl>July 15<ol> [June 30] or 
<nl>January 15<ol> [December 1] in order for the applicant's file to be 
considered for the ensuing examination. Experience time will be counted only up 
to the date of the filing of the application with fee. Applications will not be 
considered if essential information is lacking. It is important that the 
experience record of the applicant be completed in detail giving character of 
work performed, particularly with respect to percentage of time engaged in 
boundary land surveying as opposed to engineering surveying, title of position, 
employer, amount of time, and responsibility in each engagement listed. 
Experience in responsible charge will be counted only if under the direct 
supervision of a registered professional land surveyor. Give total time in 
actual land boundary surveying in each engagement. If the space provided in the 
forms is not sufficient, the applicant may attach as many sheets as necessary. 
If the experience is of the character that it cannot be described properly in 
the tabulated form, the applicant may submit a complete narrative account of his 
education, professional, or business career. All documents filed with the 
application shall remain in the permanent files of the board.
(c)-(e)  (No change.)
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 13, 1991.
TRD-9115956
Sandy Smith
Executive Director
Texas Board of Professional Land Surveying
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 452-9427
       
Chapter 663. Standards of Responsibility and Rules of Conduct
Professional and Technical Standards
22 TAC sec.sec.663.13-663.19
The Texas Board of Professional Land Surveying proposes new sec.sec.663.13-6613. 
19, concerning professional and technical standards. The proposed rules will 
prescribe minimum standards for professional surveyors.
Sandy Smith, executive director, has determined that there will be fiscal 
implications as a result of enforcing or administering the section. The proposed 
rules require the physical presence of a RPLS on all land surveyed. However the 
cost for state and local government not formally complying will be minimal.
Ms. Smith also has determined that for each year of the first years the section 
as proposed is in effect the public benefit anticipated as a result of enforcing 
the section as proposed will be all surveyors will be required to adhere to 
minimum standards, thus providing the public with a better surveying product. 
The effect on small businesses will be minimal for the businesses that are not 
presently complying. There is no anticipated economic cost to persons who are 
required to comply with the sections as proposed will be minimal for persons 
that are not presently complying. The proposed rules require the physical 
presence of a RPLS on all land surveyed. The cost for individuals that were not 
formerly complying will be minimal.
Comments on the proposal may be submitted to Sandy Smith, Executive Director, 
7701 North Lamar Boulevard, Suite 400, Austin, Texas 78752. Written public 
comment is invited for 30 days from the date of this register.
The new sections are proposed under Texas Civil Statutes, Article 5282c, sec.9, 
which provides the Texas Board of Professional Land Surveying with the authority 
to make and enforce all reasonable and necessary rule, regulations, and bylaws 
not inconsistent with the Texas Constitution, the laws of this state and this 
Act.
sec.663.13. Introduction.  To better serve the general public in regulating the 
practice of land surveying in Texas, these minimum standards of practice 
(Standards) are established. All surveys performed by Registered Professional 
Land Surveyors in Texas shall adhere to these standards by meeting or exceeding 
the requirements hereof.
sec.663.14. Enforcement.  Failure to satisfy these minimum standards as 
promulgated by the Texas Board of Professional Land Surveying and/or as 
certified otherwise may be considered by the Board as evidence of gross 
negligence, incompetence and/or fraud.
sec.663.15. Precision.
(a) The actual relative location of corner monuments found or set within the 
corporate limits of any cities in Texas shall be reported within a positional 
tolerance of 1:10,000 + O.05'.
(b)  The actual relative location of corner monuments found or set within the 
extraterritorial jurisdiction (ETJ) of any cities in Texas shall be reported 
within a positional tolerance of 1:7,500 + 0.05'.
(c) The actual relative location of corner monuments found or set in all rural 
areas outside extraterritorial jurisdiction areas of all cities in Texas shall 
be reported within a positional tolerance of 1:5,000 + 0.05'.
(d) Areas shall be produced, recited, and/or shown only to the least significant 
number compatible with the precision of closure.
(e) Survey measurement shall be made with equipment and methods of practice 
capable of attaining the tolerances specified by these standards.
(f) Positional tolerance of any monument is the distance that any monument may 
be mislocated due to random errors.
sec.663.16. Boundary Construction.
(a) When delineating a property or boundary line as an integral portion of a 
survey, the surveyor shall respect junior/senior property rights, footsteps of 
the original surveyor, intent of the parties involved, the proper application of 
the rules of dignity or the priority of calls, and applicable statutory and case 
law of Texas.
(b) Appropriate deeds and/or other documents including those for adjacent 
parcels shall be relied upon for the location of the boundaries of the subject 
parcel(s).
(c) A land surveyor assuming the responsibility of performing a boundary survey 
also assumes the responsibility for required research of appropriate records. 
The surveyor may rely on record data furnished by Title or Abstract Company 
provided he/she considers such data sufficient and notes, references, or credits 
the documentation by which it is furnished.
(d) All boundaries shall be related to identifiable physical monuments of record 
dignity.
sec.663.17. Monumentation.
(a) All monuments set by Registered Professional Land Surveyors shall be set at 
sufficient depth to retain a stable and distinctive location and be of 
sufficient size to withstand the deteriorating forces of nature and shall be of 
such material that in the surveyor's judgment will best achieve this goal.
(b) When boundary monuments are set, such monuments shall be affixed with 
durable marker or cap bearing the Texas Registration Number of the surveyor 
responsible for the boundary location.
(c) When delineating a property or boundary line as an integral portion of a 
survey (survey being defined in the Act, sec.2, subsection (1) or (3)), the land 
surveyor shall set, or leave as found, sufficient, stable and reasonably 
permanent survey markers to represent or reference the property or boundary 
corner, angle points, and points of curvature or tangency. All survey markers 
shall be shown and described with sufficient evidence of the location of such 
markers on the surveyors' plat. If the land surveyor shall prepare a written 
description of the surveyed premise, he/she shall include in that written 
description:
(1) reference to and a description of the survey markers as shown on the plat; 
and
(2) the seal and signature of a registered or licensed surveyor.
sec.663.18. Certification.
(a) The Registered Professional Land Surveyor shall apply his/her seal to all 
documents representing professional surveying as defined in the Act.
(b) The surveyor's certification shall state that such survey conforms to or 
exceeds the current standards as adopted by the Texas Board of Professional Land 
Surveying.
(c) If the surveyor certifies, or otherwise indicates, that his/her product or 
service meets a standard of practice in addition to that promulgated by the 
Texas Board of Professional Land Surveying, then both standards will be used as 
the measure of the registrants minimum required performance. If the standards 
conflict, the Texas Board of Professional Land Surveying will decide which items 
of which standard controls such performance.
(d) The surveyor shall not certify to the location of the boundaries of any 
property unless he/she has personally been on the property.
sec.663.19. Plat/Description/Report. <ol> For the purposes of these rules the 
word "report" shall mean any or all of the following survey plat, descriptions 
or separate narratives.
(1) All report. shall delineate the relationship between record monuments and 
the location of boundaries surveyed, such relationship shall be shown on the 
survey plat and/or separate report, if a plat is prepared, and recited in the 
description with the appropriate record references recited thereon and therein.
(2) Every description prepared for the purpose of defining boundaries shall 
provide a definite and unambiguous identification of the location of such 
boundaries and shall describe all pertinent monuments found or placed.
(3) Every survey plat prepared shall be to a convenient scale, and provide a 
definite and unambiguous representation of the location of the surveyed land 
according to its record description. Where material discrepancies are found 
between the record and the conditions discovered, the surveyor shall apprise 
his/her client in the following manner:
(A) if a plat of survey is prepared, the surveyor shall:
(i) make specific reference to the discrepancy on the plat of survey; or
(ii) make a general reference to the discrepancy on a plat of survey and 
specific reference to a report of survey which more specifically describes the 
discrepancy;
(B) if a survey plat is not prepared, the surveyor shall notify his/her client 
of any material discrepancy by report of survey or other written notice.
(4) Courses shall be referenced by notation upon the survey plat to an 
identifiable line for directional control.
(5) The survey plat shall bear the name of the land surveyor responsible for the 
land survey, his/her official seal, his/her original signature, date surveyed, 
and certification required herein.
(6) Monuments found or placed by the surveyor shall be described upon the survey 
plat, including those controlling monuments to which the survey may be 
referenced. The surveyor shall note upon the survey plat which monuments were 
found and which monuments were placed as a result of his/her survey.
(7) All adjoining parcels when appropriate, shall be clearly shown on the survey 
plat and recited in the description prepared.
(8) If any report consists of more than one part, each part shall note the 
existence of the other part or parts.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on January 24, 1992.
TRD-9115957
Sandy Smith
Executive Director
Texas Board of Professional Land Surveying
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 452-9427
       
TITLE 25. HEALTH SERVICES
Part I. Texas Department of Health
Chapter 128. Licensure and Regulation of Marriage and Family Therapists
Subchapter A. Introduction.
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections is in the Emergency Rules section of this issue.)
The Texas Department of Health (department) proposes new  ssec.128.1 , 128. 2, 
128.11-128.20, 128.41-128.51, 128.71-128.73, 128.91-128.94, 128.111-128.114, 
128.141-128.144, 128.171-128.174, 128.201-128.203, 128.231-128.237, 128.261-128. 
270, 128.291-128.295, 128.321, 128.322, 128.331-128.339, concerning licensure 
and regulation of marriage and family therapists. The new sections will 
implement the Licensed Marriage and Family therapists Act, Acts 1991, 72nd 
Legislature, Chapter 824 (Senate Bill 181) concerning the licensure and 
regulation of marriage and family therapists. The new sections will cover the 
following areas: purpose; definitions; procedure and duties of the Texas State 
Board of Examiners of Marriage and Family Therapists; a code of ethics for 
therapists; application procedures for examination and licensure; criteria for 
determining fitness of applicants for examination and licensure; academic and 
experience requirements for examination and licensure; licensure examinations; 
issuance of licenses; license renewal and inactive status; continuing education 
requirements; complaints and violations; licensing persons with criminal 
backgrounds; and hearing procedures for denial, suspension, or revocation of 
licenses.
Mr. Stephen Seale, Chief Accountant III, budget office, has determined that 
there will be fiscal implications as a result of administering these sections 
for each of the first five years that the sections will be in effect. The effect 
on state government will be an estimated additional cost of $206,728 for fiscal 
year 1992, and $163,345 each year for fiscal years 1993-1996. There will be an 
estimated increase in revenue equal to the additional cost amounts for those 
fiscal years which will compensate for the additional expenditures. There will 
be no fiscal implications for local governments.
Mr. Seale also has determined that for each year of the first five years the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be that the regulation of licensed marriage and family 
therapists will safeguard public health, safety, and welfare by providing a 
means by which the public can identify providers of marriage and family therapy 
services that meet minimum standards of competence. The anticipated economic 
cost to who are required to comply with these sections as proposed will be $30 
per year. There will be no cost to small businesses and no effect on local 
employment.
Comments on the proposal may be submitted to Bobby D. Schmidt, Program 
Administrator, Professional Licensing and Certification Division, Texas 
Department of Health, 1100 West 49th Street, Austin, Texas 78756-3183, (512) 
459-2912. Comments will be accepted for 30 days after publication in the Texas 
Register.
25 TAC sec.128.1, sec.128.2
The new sections are proposed under Acts 1991, 72nd Legislature, Chapter 824, 
(Senate Bill 181), sec.13, which provides the Texas Board of Health, with the 
advice of the Texas State Board of Examiners of Marriage and Family Therapists, 
with the authority to adopt rules concerning the regulation and licensure of 
marriage and family therapists; and Health and Safety Code, sec.12. 001, which 
provides the Texas Board of Health with the authority to adopt rules to 
implement every duty imposed by law on the Texas Board of Health, the 
department, and the commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115939
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter B. The Board
26 TAC sec.sec.128.11-128.20
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular Chapter 
824, (Senate Bill 181), which provides the Texas Board of Health, with the 
advice of the Texas State Board of Examiners of Marriage and Family Therapists 
with the authority to adopt rules concerning the regulation and licensure of 
marriage and family therapists; and Health and Safety Code, sec.12. 001, which 
provides the Texas Board of Health with the authority to adopt rules to 
implement every duty imposed by law on the board of health, the department, and 
the commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115940
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter C. Code of Ethics.
25 TAC sec.sec.128.41-128. 51
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Chapter 824, 
(Senate Bill 181), which provides the Texas Board of Health, with the advice of 
the Texas State Board of Examiners of Marriage and Family Therapists with the 
authority to adopt rules concerning the regulation and licensure of marriage and 
family therapists; and Health and Safety Code, sec.12.001, which provides the 
Texas Board of Health with the authority to adopt rules to implement every duty 
imposed by law on the Texas Board of Health, the department, and the 
commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115941
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter D. Application Procedures.
25 TAC sec.sec.128.71-128.73
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections is in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular Chapter 
824, (Senate Bill 181), which provides the Texas Board of Health, with the 
advice of the Texas State Board of Examiners of Marriage and Family Therapists 
with the authority to adopt rules concerning the regulation and licensure of 
marriage and family therapists; and Health and Safety Code, sec.12. 001, which 
provides the Texas Board of Health with the authority to adopt rules to 
implement every duty imposed by law on the Board of Health, the department, and 
the commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115942
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter E. Criteria for Determining Fitness of Applicants for Examination and 
Licensure.
25 TAC sec.sec.128.91-128.94
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections is in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Texas Board of Health with the authority to adopt 
rules to implement every duty imposed by law on the Texas Board of Health, the 
department, and the commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115943
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter F. Academic Requirements for Examination and Licensure.
25 TAC sec.sec.128.111-128.114
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections is in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Chapter 824, 
(Senate Bill 181), which provides the Texas Board of Health, with the advice of 
the Texas State Board of Examiners of Marriage and Family Therapists with the 
authority to adopt rules concerning the regulation and licensure of marriage and 
family therapists; and Health and Safety Code, sec.12.001, which provides the 
Texas Board of Health with the authority to adopt rules to implement every duty 
imposed by law on the Texas Board of Health, the department, and the 
commissioner of health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115944
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter G. Experience Requirements for Examination and Licensure.
25 TAC sec.sec.128.141-128.144
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115945
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter H. Licensure Examinations.
25 TAC sec.sec.128.171-128.174
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115946
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter I. Issuance of License.
25 TAC sec.sec.128. 201-128.203
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115947
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter J. License Renewal and Inactive Status
25 TAC sec.sec.128.231-128.237
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115948
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter K. Continuing Education Requirements.
25 TAC sec.sec.128.261-128.270
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115949
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter L. Complaints and Violations
25 TAC sec.sec.128.291-128.295
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115950
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter M. Licensing of Persons with Criminal Backgrounds.
25 TAC sec.128.321, sec.128.322
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115951
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Subchapter N. Formal Hearings
25 TAC sec.sec.128. 331-128.339
(Editor's Note: The Texas Department of Health proposes for permanent adoption 
the new sections it adopts on an emergency basis in this issue. The text of the 
new sections are in the Emergency Rules section of this issue.)
The new sections are proposed under Acts 1991, 72nd Legislature, Regular 
Session, Chapter 824, (Senate Bill 181), which provides the Texas Board of 
Health, with the advice of the Texas State Board of Examiners of Marriage and 
Family Therapists with the authority to adopt rules concerning the regulation 
and licensure of marriage and family therapists; and Health and Safety Code, 
sec.12.001, which provides the Board of Health with the authority to adopt rules 
to implement every duty imposed by law on the Board of Health, the Department, 
and the Commissioner of Health.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115952
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 459-2912
       
Chapter 337. Water Hygiene
Water Saving Performance Standards
25 TAC sec.sec.337.251-337.256, 337.260, 337.265, 327.266
The Texas Department of Health (department) proposes new  s337.251-sec.337. 256, 
sec.337.260, and sec.sec.337.265, 327.266, concerning water saving performance 
standards. The sections cover purpose, authority and definitions; design 
standards; plumbing fixture list; removal from list; fees; exemptions; labeling; 
administrative penalties; civil penalties; and injunctions. The new sections 
will implement Senate Bill 587, 72nd Legislature, 1991, concerning plumbing 
fixtures, and related labeling requirements, which became effective on September 
1, 1991.
Stephen Seale, Chief Accountant III, Budget Office, has determined that for the 
first five-year period the sections will be in effect there will be fiscal 
implications as a result of administering and enforcing the sections as 
proposed. The effect on state government for the first year will be an estimated 
additional cost of $50,000 based on additional department staff needed for the 
implementation and enforcement of the proposed sections. The estimated 
additional cost for the following four years will be $48,000 each year for 
employment of staff to continue administering and enforcing the proposed 
sections. These cost will be covered by the collection of fees as specified in 
the sections. There will be no fiscal implementations to local government.
Stephen Seale also has determined that for each year of the first five years the 
sections as proposed are in effect the public benefit anticipated as a result of 
enforcing the sections as proposed will be to assure more information is 
provided to purchasers of plumbing fixtures on the amount of water each fixture 
uses. This will promote water conservation within the State. There should only 
be a minimal additional cost of $50 for small or large businesses who replace 
present plumbing fixtures. There should only be a minimal additional cost of 
$150 each year to individuals who replace their present plumbing fixtures. There 
will be no impact on local employment.
Comments on the proposal may be submitted to James E. Pope, P.E., Director, 
Division of Water Hygiene, 1100 West 49th Street, Austin, Texas 78756-3199, 
(512) 458-7533. Public comments will be accepted for 30 days after publication 
of the sections in the Texas Register.
The new sections are being proposed under the Health and Safety Code, Chapter 
421, which provides the Texas Board of Health with authority to adopt rules 
concerning water saving performance standards; and sec.12.001, which provides 
the board with authority to adopt rules to implement its statutory duties.
sec.337.251. Purpose, Authority, and Definitions.
(a) Purpose. The purpose of these sections is to establish water saving 
performance standards and labeling requirements for sink and lavatory faucets, 
shower heads, drinking water fountains, urinals, toilets, and flushometer 
toilets that are manufactured, imported or otherwise supplied for sale in the 
State of Texas, and to establish labeling requirements for commercial or 
residential clothes-washing and dishwashing machines and lawn sprinklers to 
assist the consumer in making an informed purchasing decision. These sections 
apply to manufacturers, importers and major suppliers of plumbing fixtures, who 
sell, offer for sale, distribute or import plumbing fixtures into the State. 
These sections do not apply to plumbing fixtures manufactured in the State for 
sale outside of the state.
(b) Authority. The authority for these sections is the Health and Safety Code, 
Chapter 421, titled, "Water Saving Performance Standards".
(c)  Definitions. The following words and terms, when used in these sections, 
shall have the following meanings, unless the context clearly indicates 
otherwise.
 ANSI-The American National Standards Institute.
 Board-The Board of Health.
 Commissioner-The Commissioner of Health.
 Department-The Texas Department of Health.
 Plumbing fixture -A sink faucet, lavatory faucet, faucet aerator, shower head, 
urinal, toilet, flush valve toilet, or drinking water fountain.
 Toilet-A toilet or water closet except a wall mounted toilet that employs a 
flushometer valve.
 APTRA-The Administrative Procedure and Texas Register Act, Texas Civil 
Statutes, Article 6252-13a.
sec.337.252. Design Standards.
(a) A person may not sell, offer for sale, distribute, or import into the State 
of Texas a plumbing fixture for use in the state unless the plumbing fixture 
meets the water saving performance standards provided by subsection (b) of this 
section and the plumbing fixture is listed in sec.332.253 of this title 
(relating to Plumbing Fixture List).
(b)  The water saving performance standards for a plumbing fixture are those 
established by the American National Standards Institute (ANSI), current 
revision, or the following standards, whichever are the more restrictive.
(1) The maximum flow from a sink or lavatory faucet or a faucet aerator shall 
not exceed 2.20 gallons of water per minute at a pressure of 60 pounds per 
square inch when tested in accordance with ANSI testing procedures.
(2)  The maximum flow from a shower head shall not exceed 2.75 gallons of water 
per minute at a constant pressure equal to 80 pounds per square inch when tested 
in accordance with ANSI testing procedures.
(3) The maximum volume of water per flush from a urinal and the associated flush 
valve, if any, shall not exceed an average of one gallon when tested in 
accordance with ANSI testing procedures.
(4) The maximum volume of water per flush from a toilet shall not exceed an 
average of 1.60 gallons when tested in accordance with ANSI testing procedures.
(5) The maximum volume of water per flush from a wall mounted toilet that 
employs a flushometer valve shall not exceed an average of 2.00 gallons when 
tested in accordance with ANSI testing procedures.
(6)  All drinking water fountains shall be operated by a self-closing valve.
sec.337.253. Plumbing Fixture List.
(a) The Texas Department of Health (department) shall make and maintain a 
current list of plumbing fixtures that are certified to the department by the 
manufacturer or importer to meet the water saving performance standards 
established by  s337.252(b) of this title (relating to Design Standards). To 
have a plumbing fixture included on the department's current list, a 
manufacturer or importer must:
(1) furnish identification method and testing data from an American National 
Standards Institute (ANSI) certified testing facility which clearly indicates 
that the plumbing fixture complies with the flow requirements established in 
sec.337.252(b) ;
(2) submit an identified sample plumbing fixture to the department for testing 
and verification of water saving performance standards by the department; and
(3) pay the appropriate fee as listed in sec.337.255 of this title (relating to 
Fees).
(b) The department retains the right to request a sample of the plumbing fixture 
for testing.
sec.337.254. Removal from List.
(a) A plumbing fixture listed in sec.337.253 of this title (relating to Plumbing 
Fixture List) shall be removed from the list if:
(1) the Texas Department of Health (department) finds the manufacturer's or 
importer's certification to be inaccurately certified;
(2) the manufacturer or importer is delinquent in paying the fee as set forth in 
sec.337.255 of this title (relating to Fees); or
(3) the department finds that the fixture does not meet the standards set forth 
in sec.337.252(b) of this title (relating to Design Standards).
(b) Prior to removal of the plumbing fixture from the list, a manufacturer or 
importer shall have the right to seek a hearing with the department in 
accordance with the department's formal hearing procedures in Chapter 1 of this 
title (relating to Board of Health).
(c) A plumbing fixture reinstated on the list after being removed due to a 
delinquent renewal fee will be considered a new product on the list.
sec.337.255. Fees.  An initial fee of $50 per plumbing fixture will be assessed 
for certification review, inspection, identification and listing by the 
Department of Health (department). An annual renewal fee of $25 per plumbing 
fixture will also be assessed for maintenance of current listing. This fee will 
be payable to the department by the manufacturer or importer of the listed 
plumbing fixture before October 31 of each year.
sec.337.256. Exemptions.  These sections do not apply to a plumbing fixture:
(1) that has been ordered by or is in the inventory of a building contractor or 
a wholesaler or retailer in the State of Texas of plumbing fixtures on or before 
January 1, 1992;
(2) such as a safety shower or aspirator faucet, that, because of the fixture's 
specialized function, cannot meet the standards established by these sections 
(example: fixtures in handicapped modified showers, etc.);
(3) originally installed before January 1, 1992, that is removed and reinstalled 
in the same building on or after that date; or
(4) imported only for use at the importer's domicile.
sec.337.260. Labeling.
(a) Labeling requirements. A person may not sell, offer for sale, distribute or 
import into the State of Texas a plumbing fixture unless the plumbing fixture, 
including each component of a toilet, flush valve toilet or urinal and the 
associated packaging are marked and labeled in accordance with these sections. 
The labeling requirements in these sections shall take effect on March 1, 1993.
sec.337.265. Administrative Penalty.
(a) A person who violates these sections shall be assessed an administrative 
penalty by the Texas Department of Health (department) in an amount described in 
paragraphs (1)-(3) of this subsection but not to exceed $5,000 for each 
violation and for each day of a continuing violation.
(1) The penalty for sale, offering for sale, distributing or importing a 
plumbing fixture which does not meet the requirements of these sections shall be 
a minimum of $25 and a maximum $500 for each unit sold, offered for sale, 
distributed, or imported. The amount of the assessed penalty will be based upon 
subsequent cooperation by the violators with the department.
(2) The penalty for sale, offering for sale, distributing, or importing a 
plumbing fixture not labeled in accordance with these sections shall be a 
minimum of $25 and a maximum $500 for each unit sold, offered for sale, 
distributed, or imported. The amount of assessed penalty will be based upon 
subsequent cooperation by the violators with the department.
(3) The penalty for willful and continuing violation of paragraphs (1) and/or 
(2) of this subsection shall be above $5,000 for each violation.
(b)  A person against whom an administrative penalty is assessed is entitled to 
a notice and hearing on the assessment of the penalty in accordance with the 
Administrative Procedure and Texas Register Act, Texas Civil Statutes, Article 
6252-13a, and the department's formal hearing procedures in Chapter 1 of this 
title (relating to Board of Health).
(c) Not later than the 30th day after the date on which the Commissioner of 
Health's (commissioner) order assessing the administrative penalty is final, the 
person assessed the penalty shall pay the full amount of the penalty or file a 
petition for judicial review. If the person seeks judicial review, the person 
shall send the amount of the penalty to the commissioner for placement in escrow 
or post with the commissioner a bond in a form acceptable to the commissioner 
for the amount of the penalty. The bond shall be effective until the judicial 
review of the order is final. A person who fails to comply with this subsection 
waives judicial review.
sec.337.266. Civil Penalty; Injunction.
(a) A person who violates these sections is subject to civil penalty not to 
exceed $5,000 for each violation and for each day of a continuing violation.
(b) If it appears that a person has violated, is violating, or is threatening to 
violate these sections, the Department of Health (department), a county, or a 
municipality may bring a civil action in a district court in Travis County, the 
county in which the defendant resides or the county where the violation 
occurred, is occurring or is threatened for:
(1) injunctive relief to restrain the person from continuing the violation or 
threat of violation;
(2)  assessment of a civil penalty for a violation; or
(3) both injunctive relief and a civil penalty.
(c) The department is an indispensable party in a suit brought by a county or 
municipality under this section.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 16, 1991.
TRD-9115965
Robert A. MacLean, M.D.
Deputy Commissioner
Texas Department of Health
Proposed date of adoption: February 22, 1992
For further information, please call: (512) 458-7533
       
TITLE 34. PUBLIC FINANCE
Part I. Comptroller of Public Accounts
Chapter 1. Central Administration
Practice and Procedure
34 TAC sec.1.1
The Comptroller of Public Accounts proposes an amendment to sec.1.1, concerning 
intent and scope of rules. The purpose of the amendment is to revise and clarify 
the language concerning the intent and scope of the rules.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no fiscal impact on state or local 
government. This section is adopted under the Tax Code, Title 2, and does not 
require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the proposed section.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.1. Intent and Scope of Rules. The rules of practice and procedure are 
intended to provide <nl>fair methods for hearing and resolving a taxpayer's<ol> 
[a uniform and understandable process by which] disagreements with certain 
official actions of the comptroller of public accounts [of the State of Texas 
are pursued, and to provide for the fair and just disposition of these cases]. 
<nl>These rules<ol> [They] govern all contested case proceedings before the 
[comptroller, the] administrative law judges[, or other designees].
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115998
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.2
The Comptroller of Public Accounts proposes an amendment to sec.1.2, concerning 
construction of rules. The purpose of the amendment is to revise and clarify the 
language concerning construction of the rules of practice and procedure.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no fiscal impact on state or local 
government. This section is adopted under the Tax Code, Title 2, and does not 
require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the proposed section.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.2. Construction of Rules.<nl> These<ol> [The] rules [of practice and 
procedure] will be given their most reasonable meaning taken in their total 
context, and will be construed to secure a just [and proper] resolution or 
decision for every controversy. They <nl>will <ol> [may] not be construed to 
limit or repeal rights afforded or requirements imposed by law. Unless otherwise 
expressly provided, the past, present, or future tense each includes the other; 
the masculine, feminine, or neuter gender each includes the other; and the 
singular and plural number each includes the other. Definitions of <nl>some of 
the <ol> words used in these <nl>rules<ol> [sections] are contained in sec.1.42 
of this title (relating to Definitions).
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115999
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.3
The Comptroller of Public Accounts proposes an amendment to sec.1.3, concerning 
contested cases. The purpose of the amendment is to return penalty and interest 
waiver issues to the hearings process.
The amendment will be applied prospectively. Only penalty and interest waiver 
denials occuring on or after the effective date of the amendment may be appealed 
through the hearings process.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the proposed section.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.8.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.3. Contested Cases.
[(a)] A <nl>"<ol>contested case <nl>"or "case"<ol> is a proceeding in which the 
legal rights, duties, or privileges of a party are to be determined by the 
agency after an opportunity for adjudicative hearing. It includes a request for 
redetermination or refund, as well as actions initiated by the agency to revoke 
or suspend permits or licenses administered by  <nl>the<ol> [this] agency on 
grounds other than failure to pay a final tax deficiency or failure to file a 
tax security. <nl>Contested cases are within the jurisdiction of the 
administrative law judges. Forfeitures<ol> [It does not include forfeitures] of 
rights to do business, of certificates of authority, of articles of 
incorporation, or requests for or revocation of exemptions from taxation <nl>are 
not contested cases and are not within the jurisdiction of the administrative 
law judges.<ol> [Requests for settlement of amounts assessed or paid as penalty 
or interest for failure to timely pay a tax assessment or file a report are not 
contested cases. Requests for settlement of amounts of civil penalty assessed 
due to fraud or an intent to evade the Tax Code or application of the rules made 
under the Tax Code are contested cases. Requests for settlement of amounts of 
penalty or interest that accrue after the beginning of an administrative 
proceeding or that result from following written advice or instructions of the 
agency are also contested cases. If a contested case results in an adjustment to 
a tax liability, the corresponding penalty and interest adjustment will also be 
made. Contested cases are within the jurisdiction of the agency's administrative 
law judges.
[(b) If a taxpayer's contentions are fully accepted or if the parties agree on a 
resolution of all contentions, an amended determination or a final billing will 
be mailed to the taxpayer and the case will be dismissed.
[(c) If prior to hearing the agency grants a requested refund or credit or 
accepts an amended return filed by the taxpayer, the case will be dismissed 
without prejudice or it may never be docketed. The refund or credit may be later 
reclaimed by the comptroller with penalty and interest, if an audit or other 
investigation concludes that the refund or credit was not due.]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116000
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.4
The Comptroller of Public Accounts proposes an amendment to sec.1.4, concerning 
representation and participation. The purpose of the amendment is to revise and 
clarify the language concerning representation and participation in 
administrative hearings.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.4. Representation and Participation.<nl> A<ol> [In a contested case a] 
taxpayer may represent himself at any state of <nl>a contested case<ol> 
[proceedings,] or <nl>he<ol> may be represented by an authorized 
representative<nl>,<ol> such as an attorney<nl>, <ol> [or] accountant<nl>, or 
other person of his choice<ol>. <nl>Hearings on contested cases<ol> 
[Proceedings] are not open to the public. Any person desiring to observe or 
participate at any state of <nl>a contested case <ol> [proceedings] who is not a 
party, not employed by a party, or not called as a witness, must obtain the 
permission of <nl>the assigned<ol> [an] administrative law judge and the 
agreement of all parties.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116001
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.5
The Comptroller of Public Accounts proposes an amendment to sec.1.5, concerning 
initiation of a hearing. The purpose of the amendment is to revise and clarify 
the language concerning the initiation of a hearing. In addition, duplicative 
material has been deleted.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
Comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.5. Initiation of a Hearing.
(a) Redetermination of a deficiency or jeopardy determination. A taxpayer may 
request a redetermination [within the time limits provided by the 
determination]. The <nl>time<ol> limit <nl>for filing a request<ol> is 30 days 
for a deficiency determination and 20 days for a jeopardy determination. The 
request <nl>must<ol> [is defined to] include a statement of grounds <nl>that<ol> 
[which] sets out in detail the reasons the taxpayer does not agree with the 
determination. If the statement of grounds is not received within the time limit 
or an extension of the <nl>time limit<ol> [statement of grounds due date] 
granted prior to the expiration of the time limit, <nl>a<ol> [no] hearing will 
<nl>not<ol> be <nl>granted<ol> [commenced] and the taxpayer <nl>must <ol> [will 
be required to] pay the <nl>determination <ol> [deficiency] and request a refund 
before any objection to the <nl>determination can be<ol> [assessment is] 
considered.
(b) Required documentary evidence. <nl>The agency's<ol> [if the] auditor [has 
requested documentary evidence on any issue relating to a tax assessment in an 
audit or if a taxpayer has indicated it has possession or control of documentary 
evidence on any issue relating to a tax assessment in an audit and such 
documentary evidence has not been provided by the taxpayer to the auditor, the 
auditor] may request in writing that the taxpayer produce [such] documentary 
evidence  <nl>on any issue<ol> for inspection. The written request must be 
<nl>served<ol> [made] no later than <nl>five<ol> [two] working days following 
the exit conference and <nl>must <ol> [shall] identify with specificity the 
nature of the documents sought, including the schedule or examination to which 
the documents relate. If such documentary evidence is not submitted within 60 
days <nl>after <ol> [from which] a petition for redetermination is acknowledges, 
such documentary evidence  <nl>will<ol> [shall] be in admissible for purposes of 
the redetermination hearing [in all audits begun on or after November 1, 1987].
(c) Refund of tax paid. Within the time limits provided in the Tax Code, 
sec.111.104(c), a taxpayer may request a refund of any tax, penalty, or interest 
paid to the comptroller by sending the agency a written request. The request 
<nl>must <ol> [is defined to] include a statement of grounds <nl>that<ol> 
[which] sets out in detail the grounds on which the claim is founded. If no 
grounds are stated as a basis for the claim, <nl>a <ol> [no] hearing will 
<nl>not<ol> be  <nl>granted<ol> [commenced] and the claim will be denied. If the 
claim is granted <nl>for<ol> [as to] any tax amount, <nl>any <ol> [the] 
corresponding penalty and interest amount previously paid will be refunded.
(d) Hearings involving licenses and permits. The agency will initiate hearings 
concerning the denial, suspension, or revocation of licenses or permits by 
sending written notice to the taxpayer<nl>, which notice will include<ol> 
[including] a statement of the matters asserted and procedures to be followed.
[(e) Request for a redetermination. If the request for a redetermination is 
based exclusively on a factual dispute for which documentary evidence is the 
best evidence and the documentary evidence requested in accordance with 
subsection (b) of this section is not submitted in accordance with subsection 
(b) of this section on any audit begun on or after November 1, 1987, no hearing 
will be granted.]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116002
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.6
The Comptroller of Public Accounts proposes an amendment to sec.1.6, concerning 
extensions of time. The purpose of the amendment is to revise and clarify the 
language concerning extensions of tiem to make certain filing in an 
administrative proceeding.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.6. Extensions of Time.
[(a) A statutory deadline for requesting redetermination or claiming a refund 
will not be waived.]
<nl>(a)<ol>[(b)] <nl>Motions for extension<ol> [Extensions] of the due date for 
submitting a <nl>request for redetermination and<ol> statement of grounds [for 
redetermination only,] may be <nl>granted<ol> [extended] in case of emergency or 
extraordinary circumstances. <nl>Motions for extension <ol> [Extensions for 
statement of grounds] will not be routinely granted and each <nl>motion<ol> 
[request] will be closely scrutinized to insure that the taxpayer has made every 
effort to comply with the original deadline. <nl>Motions<ol> [Requests] received 
after the expiration of the original due date will not be considered. The 
Comptroller's Office will not be responsible for delay in delivery of mail, 
messenger service, or other carriers. <nl>Motions must<ol> [Requests may be made 
orally or in writing and should] be directed to the <nl>chief hearings attorney 
or his designee<ol> [director of legal services], who will grant or deny the 
extension. [In the absence of the director of legal services, the director of 
hearings will consider the request.]
<nl>(b)<ol>[(c)] A <nl>motion <ol> [request] for an extension of any other 
deadline [established] in  <nl>these sections will<ol> [this subchapter may] not 
be granted unless good cause is established and the need for the extension is 
not <nl>due to <ol> the <nl>moving<ol> party's neglect, indifference, or lack of 
diligence. A <nl>motion<ol> [request] must be made in writing [and should be 
made] at least seven days prior to the expiration of the time period. In the 
event of an emergency, a <nl>motion<ol> [request] may be accepted if its is 
postmarked<nl>, sent by facsimile transmission, or deposited with a private mail 
or courier service, postage or delivery charges paid,<ol> not later than the 
date of the original deadline. Prior to the setting of a hearing the hearings 
attorney may approve one extension  <nl>of the time to reply to a position 
letter<ol> of not more than 14 days. Any additional extension may be granted, 
for good cause shown, only by the <nl>chief hearings attorney<ol> [director of 
legal services] or, in his absence, by <nl>his designee<ol> [the director of 
hearings]. After a hearing is set, a  <nl>motion<ol> [request] for an extension 
<nl>of filing deadlines<ol> should be addressed to the <nl>assigned <ol> 
administrative law  <nl>judge<ol> [judges,] and will be ruled upon by 
<nl>him<ol> [them]. [See sec.1.20 of this title (relating to Continuances).] A 
copy of <nl>a motion for extension of a filing deadline must<ol> [the request 
should] be provided to all [other] parties.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116003
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.7
The Comptroller of Public Accounts proposes an amendment to sec.1.7, concerning 
content of statement of grounds. In addition to revising the language for the 
purposes of clarification, the amendment allows a taxpayer to amend the 
pleadings (statement of grounds), with permission of the administrative law 
judge, at any time before a comptroller's decision becomes final.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.7. Content of Statement of Grounds.
(a) The statement of grounds must contain the reasons the taxpayer disagrees 
with the action of the agency. The taxpayer must list and number the items, 
individually or by category, with which <nl>he disagrees,<ol> [there is 
disagreement] and list and number the factual and legal grounds why the tax 
should not be assessed or should be refunded. [Any documentary evidence required 
under sec.5.1 of this title (relating to Initiation of a Hearing) to support 
each ground must be submitted in accordance with sec.1.5(b) of this title 
(relating to Initiation of a Hearing).] Legal authority <nl>must <ol> [should] 
be cited if the taxpayer disagrees with the agency's interpretation of the law.
(b) If a taxpayer's statement of grounds raises issues <nl>that<ol> [which] 
cannot be resolved from the material contained in the audit or statement of 
grounds, additional evidence may be obtained through:
(1) (No change.)
(2) discovery as <nl>described<ol> [discussed] in sec.1.33 of this title 
(relating to Discovery);
(3)-(4) (No change.)
(c) Time limits will be established for the completion of each of the 
[preceding] procedures <nl>set out in subsection (b) of this section, either by 
agreement of the parties, or by the assigned administrative law judge if the 
parties cannot reach agreement.
(d) The statement of grounds may be amended up to the time that a reply to the 
position letter is required, <nl>and not later, unless by<ol> [or, with] 
permission of the <nl>assigned<ol> administrative law judge, <nl>and unless all 
evidence on which the proving party intends to rely is filed with the proposed 
amendment<ol> [until the record closes].
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116004
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.8
The Comptroller of Public Accounts proposes an amendment to sec.1.8, concerning 
preliminary conference. The purpose of the amendment is to revise and clarify 
the language concerning a preliminary conference between the taxpayer and the 
agency.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.8. Preliminary Conference. <ol> If [both] the  <nl>parties<ol> [hearings 
attorney and the taxpayer] agree a preliminary conference would be beneficial, a 
conference will be scheduled <nl>as soon as is practical<ol> [within 10 days of 
such agreement]. [This will be an informal conference, the purposes of which 
will be to try to resolve the controversy or to narrow disagreement as to facts 
and define legal issues involved.]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116005
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.9
The Comptroller of Public Accounts proposes an amendment to sec.1.9, concerning 
position letter. The purpose of the amendment is to revise and clarify the 
language concerning the agency's position letter.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.9. Position Letter.
(a) Following receipt of the taxpayer's statement of grounds, documentary 
evidence, and any additional evidence requested by the hearings attorney, a 
position letter will be sent to the taxpayer. The position letter will accept or 
reject, in whole or in part, each contention of the taxpayer. The position 
letter will set forth what the hearings attorney[, after consultation with the 
tax division,] finds is properly subject to or exempt from taxation [according 
to his or her understanding of the facts and the law. No position will be taken 
on the basis of expediency, hazards of litigation, nuisance value, or other form 
of settlement, compromise, or abatement where not authorized by law. The 
position letter will be sent to the taxpayer after its contentions are fully 
presented to the hearings attorney and reviewed by the audit and tax divisions].
(b) The agency [or the hearings attorney] may elect to amend the 
determination<nl>,<ol> [or] to issue <nl>an amended <ol> [a final] billing, 
<nl>or agree to a refund or credit request <ol> rather than issue a position 
letter, if the taxpayer's contentions are fully accepted or if the parties agree 
on a resolution of all contentions. If the determination  <nl>or billing<ol> is 
amended <nl>, or a refund or credit is issued<ol>, <nl>the action<ol> [it] will 
become final <nl>20 <ol> [15] days after mailing [and payable 20 days later]. 
<nl>An amended <ol> [A final] billing <nl>or determination<ol> is payable 20 
days after mailing unless otherwise specified.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116006
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.sec.1.10, 1.11, 1.14-1.16
The Comptroller of Public Accounts proposes amendments to sec.sec.1.10, 1.11, 
and 1.14-1.16, concerning acceptance or rejection of position letter (motion to 
dismiss petition or set for hearing); modification of the position letter; 
notice of setting; and taxpayers reply to the position letter. The purpose of 
the amendments is to revise and clarify the language concerning: a taxpayer's 
acceptance or rejection of the agency's position letter; modification of the 
agency's position letter; the notice of setting, in an administrative hearing; 
the taxpayer's reply to the agency's position letter; and the tax division's 
response to the taxpayer's reply to the position letter.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the sections are in effect there will be no significant revenue impact on 
state or local government. The sections are adopted under the Tax Code, Title 2, 
and do not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be in providing new information regarding tax 
responsibilities. There is no anticipated economic cost to persons who are 
required to comply with the sections as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendments proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.10. Acceptance or Rejection of Position Letter (Motion to Dismiss Petition 
or Set for Hearing).
(a) The taxpayer must accept or reject, in whole or in part, the position letter 
within 15 days after the day the  <nl>position<ol> letter is dated<nl>; however, 
note the extension exception in sec.1.6(b) of this title (relating to Extensions 
of Time)<ol>. A form for this purpose will be enclosed with the <nl>position 
<ol> letter. Expiration of the 15-day period without <nl>the taxpayer<ol> filing 
[of] a motion to set or dismiss [by the taxpayer] will result in the filing of a 
motion to dismiss the hearing and dispose of the case according to the tax 
division's position.
(b) The taxpayer is not required to respond to an amended determination or a 
final billing, other than by payment, unless the <nl>taxpayer disagrees with 
the<ol> amount of the <nl>amended determination or final billing<ol> [assessment 
is incorrect]. An amended final determination or final billing concludes the 
administrative proceeding unless the taxpayer notifies the agency within 
<nl>20<ol> [15] days of the mailing date that <nl>he disagrees with<ol> the 
amount [is in error].
sec.1.11. Modification of the Position Letter.<nl> The<ol> [it is permissible 
for the] position letter <nl>may<ol> [to] be [supplemented or] modified [prior 
to filing the motion to set/dismiss]. Any  <nl>modifications to<ol> 
[modification of] the position letter will be reduced to writing by the hearings 
attorney and sent to the taxpayer. A <nl>new<ol> 15-day period for acceptance or 
rejection <nl>by the taxpayer <ol> begins on the day the <nl>modified position 
letter<ol> [last modification] is dated <nl>if it is issued prior to the notice 
of setting being issued<ol>.
sec.1.14. Notice of Setting. Upon receipt of a motion to set,  <nl>the 
assigned<ol> [the clerk of the] administrative law <nl>judge<ol> [judges] will 
<nl>sent a<ol> [acknowledge receipt of the motion by sending] notice to the 
parties giving:
(1) the date, time, <nl>and<ol> place[, and nature] of the oral hearing, [if one 
is requested] <nl>the date the record will close in a written submission 
hearing, or other disposition of the hearing<ol>;
(2) the legal authority and jurisdiction under which the hearing is to be held; 
[and]
(3) the date any legal brief <nl>or additional facts<ol> in reply to the 
position letter is due<nl>; and<ol> [.]
<nl>(4) The date any response by the hearings attorney to the taxpayer's reply 
to the position letter is due.
sec.1.15. Taxpayer's Reply to the Position Letter. <ol> If a taxpayer desires to 
present additional facts or legal arguments for consideration by the 
administrative law judge, a reply to the position letter should be filed. All 
<nl>of a taxpayer's<ol> documentary evidence [which has not been requested under 
sec.1.5 of this title (relating to Initiation of a Hearing) and is under the 
possession or control of the taxpayer] that is not submitted on or before the 
due date for the reply to the position letter is in admissible for purposes of a 
[redetermination] hearing unless an extension to present additional evidence  
<nl>is<ol> [has been] granted by the <nl>assigned administrative law judge<ol> 
[director of legal services] because of an emergency or extraordinary 
circumstances. The notice of setting will specify a due date not sooner than 20 
days <nl>after the issuance of the notice of setting<ol> for this reply. If any 
issues are raised or presented for the first time at the hearing, a party may 
plead surprise and move for a continuance <nl>, or move that the issues not be 
considered, which motion shall be granted at the discretion of the 
administrative law judge.
sec.1.16. Response of the Tax Division. If the taxpayer presents additional 
facts or legal arguments in a reply to the position letter, the hearings 
attorney should file a response by the date specified <nl>in<ol> [by] the notice 
of setting. If the taxpayer files a reply to the position letter containing no 
additional facts or legal arguments, the hearings attorney is not required to 
file a response. Any response filed <nl>must<ol> [will] state the legal position 
of the tax division, and any factual disagreement, <nl>on<ol> [with respect to] 
each issue or argument raised by the taxpayer.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116007
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.13
(Editor's note: The text of the following section proposed for repeal will not 
be published. The section may be examined in the offices of the Comptroller of 
Public Accounts or in the Texas Register office, Room 245, James Earl Rudder 
Building, 1019 Brazos Street, Austin.)
The Comptroller of Public Accounts proposes the repeal of sec.1.13, concerning 
request for more definite or detailed basis of agency action. The purpose of the 
repeal is that present language was deemed unnecessary in light of 34 TAC 
sec.1.33, concerning discovery.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the repeal is in effect there will be no fiscal implications for state or 
local government as a result of enforcing or administering the repeal.
Dr. Plaut also has determined that for each year of the first five years the 
repeal is in effect the public benefit anticipated as a result of enforcing the 
repeal will be no cost or benefit to the public from the repeal of this section. 
There is no anticipated economic cost to person who are required to comply with 
the repeal as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The repeal is proposed under Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116009
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.sec.1.17, 1.18, 1.20-1.23, 1.25
The Comptroller of Public Accounts proposes amendments to sec.sec.1.17, 1.18, 1. 
20-1.23, and 1.25, concerning administrative law judge to hear case; filing of 
documents; continuances (postponement of hearings); conduct of hearing; rules of 
evidence; oral evidence, witnesses, and penalty for false statements; and 
evidence by official notice. The purpose of the amendments is to revise and 
clarify the language concerning: the administrative law judge's being designated 
to hear contested cases; the filing of documents in contested case; 
continuances; the conduct of a contested case hearing; the rules of evidence 
applied during contested case hearings; oral evidence, witnesses, and the 
penalty for false statements; and to inform the public that in contested cases, 
official notice may be taken of various matters.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the sections are in effect there will be no significant revenue impact on 
state or local government. The sections are adopted under the Tax Code, Title 2, 
and do not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be in providing new information regarding tax 
responsibilities. There is no anticipated economic cost to person who are 
required to comply with the sections as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendments are proposed under Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.17. Administrative Law Judge to Hear Case.  Hearings will be conducted by 
an administrative law judge who has authority to examine witnesses, to rule on 
motions, and to rule upon the admissibility of evidence. The administrative law 
judge has the authority to continue or recess any hearing, to control the 
record, and to propose decisions to the comptroller of public accounts. If for 
any reason <nl>the assigned<ol> [an] administrative law judge cannot continue on 
a contested case, another administrative law judge will become familiar with the 
record and perform any function remaining to be performed without the necessity 
of repeating any previous proceedings in the case.
sec.1.18. Filing of Documents. All documents submitted after the notice of 
setting [in a contested case] has been issued must be filed with the 
<nl>assigned<ol> [clerk of the] administrative law <nl>judge<ol> [judges] with a 
copy to each party. <nl>See sec.1.32 of this title (relating to Service) for the 
manner in which filings may be made.
sec.1.20. Continuances (Postponement of Hearing). A motion for continuance of a 
contested case set for oral hearing must be in writing and filed with the 
<nl>assigned<ol> [clerk of the] administrative law <nl>judge<ol> [judges] at 
least seven days prior to the date that the matter is to be heard. If an 
emergency occurs less than seven days prior to the hearing date, a motion for 
continuance may be filed. <nl>The <ol> [A] motion must show that there is good 
cause for the continuance and that the need is not caused by neglect, 
indifference, or lack of diligence. A copy of <nl>the <ol> [any] motion must be 
served upon all other parties of record at the time of filing. If the tax 
division increases the amount of tax deficiency at or before the time of 
hearing, the taxpayer is entitled to a  <nl>30-day<ol> continuance to obtain and 
produce further evidence applicable to the items upon which the increase is 
based.
sec.1.21. Conduct of Hearing. The hearing will be convened by the  
<nl>assigned<ol> administrative law judge, appearances will be noted, any 
motions or preliminary matters will be taken up, and then each party will have 
<nl>the <ol> opportunity to present its case, generally on an issue-by-issue 
basis, by calling and examining witnesses <nl>, offering<ol> [an introducing] 
documentary evidence <nl>, and making legal arguments<ol>. Each party will have 
<nl>the<ol> opportunity to cross-examine opposing witnesses on any matter 
relevant to the issues even through the matter was not covered in direct 
examination. Any objection to testimony or evidentiary offers <nl>must<ol> 
[should] be <nl>stated timely, along with<ol> [made, and] the basis for the 
objection [stated]. The administrative law judge may question any party or any 
witness. The parties may agree to the order of proceeding or the administrative 
law judge may establish it, but in all cases, a taxpayer is entitled to conclude 
in presenting evidence and [in] argument. The length of each hearing is limited 
to two hours; each party may use one hour to present its case. Upon a showing of 
good cause, the administrative law judge may schedule a hearing for a period 
longer than two hours. [A request for an extended hearing must be made in 
writing at the time the motion to set is filed.] The administrative law judge is 
responsible for closing the record and may hold it open for stated purposes. 
Parties may submit proposed findings of fact any time after notice of setting 
and prior to <nl>the<ol> [14 days after] closing of the record. In an oral 
hearing, the administrative law judge may <nl>hold the record open to<ol> allow 
the parties to file proposed findings of fact [after the records has closed].
sec.1.22. Rules of Evidence. [The rules of evidence set forth in the 
Administrative Procedure and Texas Register Act, Texas Civil Statutes, Article 
6252-13a, apply to all contested cases. Section 14 of that act provides, in 
part: "In contested cases, irrelevant, immaterial, or unduly repetitious 
evidence shall be excluded. The rules of evidence as applied in nonjury cases in 
the district courts of this state shall be followed. When necessary to ascertain 
facts not reasonable susceptible of proof under those rules, evidence not 
admissible thereunder may be admitted, except where precluded by statute, if it 
is of a type commonly relied upon by reasonably prudent men in the conduct of 
their affairs. Agencies shall give effect to the rules of privilege recognized 
by law. Objections to evidentiary offers may be made and shall be noted in the 
record. Subject to these requirements, if a hearing will be expedited and the 
interests of the parties will not be prejudiced substantially, any part of the 
evidence may be received in written form." It is specifically provided 
documentary evidence not timely submitted by the taxpayer on audits begun on or 
after February 1, 1987, will not be considered unless such evidence was obtained 
by the comptroller's office or at the request of the hearings attorney.] The 
rules of evidence promulgated by the Supreme Court of Texas apply to all oral 
hearings<nl>, except as provided by the Administrative Procedure and Texas 
Register Act, Texas Civil Statutes, Article 6252-13a, sec.14<ol> [held on or 
after September 1, 1983].
sec.1.23. Oral Evidence, Witnesses, and Penalty for False Statements.  Any party 
may request <nl>the assigned<ol> [an] administrative law judge to subpoena 
witnesses or require the production of documents related to the subject matter 
of the hearing, or the administrative law judge may do so [acting] 
independently. <nl>The<ol> [An] administrative law judge may require the parties 
to indicate the persons they expect to call as witnesses. The testimony of 
witnesses <nl>will be<ol> [is] made under oath or affirmation [pursuant to 
authority granted by the Administrative Procedure and Texas Register Act, 
sec.14(b),] and the making of false statements may subject a person to criminal 
prosecution under the Texas Penal Code, sec.37.02 and sec.37.03. [Further, the 
testimony of a taxpayer is part of the claim with the agency within the meaning 
of the Tax Code,  s111.059.]
sec.1.25. Evidence by Official Notice. The administrative law judge may take 
official notice, on request of a party or acting independently, of matters which 
trial judges can judicially notice and of facts [within the judge's personal 
knowledge or] within the specialized knowledge of the agency. The taking of 
official notice must be stated on the record, and the parties must have an 
opportunity to contest the material noticed. A party requesting the official 
notice must give sufficient information to enable the administrative law judge 
to comply.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116013
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
<nl>        
278>34 TAC sec.sec.1.27-1.29, 1.31-1.33, 1.37, 1.39, 1.40
The Comptroller of Public Accounts proposes amendments to sec.sec.1.27-1.29, 1. 
30-1.33, 1.37, 1.39, and new 1.40, concerning proposed decision; comptroller's 
decision; motion for rehearing; computation of time; service; discovery; joint 
hearings; dismissal of case; and burden of proof. The purpose of the amendments 
is to revise and clarify the language concerning: the proposed decision in a 
contested case; the comptroller's decision in a contested case; the motion for 
rehearing in a contested case; the computation of time in contested case 
matters; service of documents in a contested case proceeding; discovery 
procedures in a contested case proceeding; joint or consolidation hearings; 
dismissals of contested case proceedings; and concerning burden of proof, which 
is being repealed simultaneously in order that a substantially revised section 
dealing with the same subject matter may be adopted. The burden of proof in 
exemption cases and fraud penalty cases has been changed from "preponderance" of 
the evidence to "clear and convincing" evidence.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the proposed section will be in effect there will be no significant 
revenue impact on the state or local government. This section is adopted under 
the Tax Code, Title 2, and does not require a statement of fiscal implications 
for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
sections are effect the public benefit anticipated as a result of enforcing the 
sections will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the proposed sections.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendments and new section are proposed under the Tax Code, sec.111.002, 
which provides the comptroller with the authority to prescribe, adopt, and 
enforce rules relating to the administration and enforcement of the provisions 
of the Tax Code, Title 2.
sec.1.27. Proposed Decision. <nl> The assigned<ol> [An] administrative law judge 
will prepare a proposed decision within 30 days after the record is closed. The 
proposed decision will set out each finding of fact and conclusion of law 
necessary to the decision. The proposed decision will be served on the 
parties<nl>,<ol> and any party [adversely affected] may file exceptions and 
briefs within 15 days, serving copies on all [other] parties. If a party files 
exceptions, the other parties will have 15 days after the filing to reply. The 
proposed decision will be reviewed <nl>after considering<ol> [in light of] the 
exceptions, briefs, and replies.
sec.1.28. Comptroller's Decision.
(a) The proposed decision of <nl>the assigned <ol> [an] administrative law judge 
must be approved by the comptroller of public accounts before it is given [any] 
effect. The comptroller's decision will be sent to the taxpayer and any 
authorized representative <nl>. It<ol> [and] is final <nl>20<ol> [15] days from 
the date  <nl>mailed<ol> [issued], unless a motion for rehearing is filed on or 
before midnight of the <nl>20th <ol> [15th] day. If the motion for rehearing is 
granted, the decision is vacated pending a subsequent decision upon rehearing. 
If the motion for rehearing is overruled, whether by order or operation of law, 
the decision is final on the date it is overruled.
(b) The administrative law judge may issue a comptroller's decision without the 
issuance of a proposed decision if the  <nl>parties<ol> [taxpayer and the 
hearings attorney] are in agreement on all contested issues <nl>or if the 
parties agree to waive issuance of a proposed decision.
[(c) The administrative law judge will not issue a proposed decision or a final 
decision if the dispute ceased to be a contested case and either an amended 
determination or a final billing was sent.]
sec.1.29. Motion for Rehearing. A motion for rehearing may be filed by any 
party[, but to be timely, it must be filed] with the <nl>assigned <ol> [clerk of 
the] administrative law <nl>judge<ol> [judges] within <nl>20<ol> [15] days from 
the date the comptroller's decision is  <nl>mailed<ol> [issued]. The motion must 
state each specific ground upon which the party believes the comptroller's 
decision is erroneous. In addition, a motion for rehearing on a refund claim 
must state the amount of the refund sought. Any reply to a motion for rehearing 
must be filed within <nl>30<ol> [25] days after the date the decision is 
<nl>mailed<ol> [rendered]. The motion will be acted on within 45 days after the 
date the decision is <nl>mailed<ol> [rendered] <nl>, or the motion will be 
overruled by operation of law<ol>. These times may be varied [only] as provided 
by the Administrative Procedure and Texas Register Act, sec.16(e) and (f). If a 
rehearing is granted, a notice will be issued to the parties setting out all 
pertinent information.
sec.1.31. Computation of Time. In computing any period of time prescribed or 
allowed by these  <nl>rules<ol> [sections], by order of an administrative law 
judge, or by any applicable statute, the period begins on the day after the act, 
event, or default identified and concludes on the last day of the computed 
period, unless it is a Saturday, Sunday, or legal holiday, in which event the 
period runs until the end of the next day which is neither a Saturday, Sunday, 
nor a legal holiday. Documents required to be filed or served are  
<nl>considered<ol> filed or served when actually received or are deemed filed or 
served when deposited with the United States Postal Service or private mail 
service, postage or delivery charges paid<nl>, or sent by facsimile 
transmission<ol>. The postmark <nl>or shipping or transmission<ol> date 
indicated on a document is presumed to be the date of <nl>service,<ol> [mailing] 
but this is a rebuttable presumption.
sec.1.32. Service.<nl> Any<ol> [When any] document [is] required to be  
<nl>served<ol> on other parties[, this] may be <nl>served<ol> [accomplished] by 
personal delivery or by mailing the document addressed to the party or the 
authorized representative at the last known address, postage paid. Facsimile 
transmission is acceptable. The document <nl>must<ol> [should] indicate on its 
face that copies have been served on parties of record. Filings with the 
administrative law judges may be made by facsimile transmission<nl>, personal 
delivery, or public or private mail service.
sec.1.33. Discovery.
(a) (No change.)
(b) Scope of discovery. Except for the exemptions from discovery provided in 
Texas Rules of Civil Procedure, Rule 166b(3), unless <nl>further<ol> [otherwise] 
limited by order of  <nl>an<ol> [the] administrative law judge, the scope of 
discovery is as follows: parties may obtain discovery regarding any non-
confidential matter relevant to the subject matter in the pending action. It is 
not ground for objection that the information sought will be inadmissible at the 
hearing if the information sought appears reasonably calculated to lead to the 
discovery of admissible evidence.
(c) (No change.)
(d) Objections. On or prior to the date on which a response to a discovery 
request is due, a party may serve written objections to a specific request or 
portions thereof. Objections served after the date on which the response to a 
discovery request is due are waived unless an extension of time has been 
obtained by agreement or order of the administrative law judge for good cause 
shown for failure to object within such period; however, objections by the 
comptroller to discovery requests requiring the disclosure of confidential 
information cannot be waived. Responses only to those discovery requests or 
portions thereof to which objection is made are deferred until the objections 
are ruled upon<nl>,<ol> and for such additional time thereafter as the 
administrative law judge may direct. Either party may request a hearing on [as 
to such] objections at the earliest possible time.
(e) Interrogatories to parties. Any party may serve upon any other party written 
interrogatories to be answered by the party served, or, if the party served is a 
public or private corporation or partnership or association, by an officer or 
agent who must furnish such information as is available to the party. 
Interrogatories may be served at any time after a contested case has been 
assigned to a hearings attorney. Interrogatories served upon the comptroller may 
be answered by his designee.
(1)  <nl>Interrogatories and answers to interrogatories<ol> [Service]. Service 
of interrogatories and answers to interrogatories must be made on the authorized 
representative of a party unless service upon the party is ordered by the 
administrative law judge.
(2) Time to answer. The party upon whom the interrogatories have been served 
must serve answers on the party submitting the interrogatories within 30 days 
after the service of the interrogatories, unless the parties agree in writing to 
a longer or shorter period of time. The administrative law judge, on <nl>a 
showing of<ol> [motion and notice for] good cause [shown], may lengthen or 
shorten the time for serving answers or objections.
(3) Number of interrogatories. The number of questions including subsections in 
a set of interrogatories must [be limited so as] not [to] require more than 30 
answers. No more than two sets of interrogatories may be served by a party, 
except by agreement. Interrogatories must be answered separately and fully in 
writing under oath. Answers to interrogatories must be preceded by the question 
or interrogatories to which the answer pertains. Copies of the interrogatories, 
and answers and objections thereto, must be served on all parties or their 
representatives. The answers must be signed and verified by the person making 
them.
(f) Subpoenas, depositions, and orders to allow entry. An administrative law 
judge, acting independently or on motion by any party, may<nl>, for good 
cause<ol>:
(1)-(3) (No change.)
sec.1.37. Joint Hearings. <ol> A party may file a written motion to have two or 
more cases joined for purposes of hearing[, whether on written or oral 
submission]; or an <nl>assigned<ol> administrative law judge, acting 
independently, may join two or more cases. Proceedings involving more than one 
taxpayer may not be joined if any party objects. A motion for joinder must state 
the basis for joinder.
sec.1.39. Dismissal of Case.<nl> If a<ol> [A] motion to dismiss <nl>is<ol> [may 
be] filed by a taxpayer based upon agreement reached among the parties as 
reflected in the position letter or any supplement to it, or upon the taxpayer's 
decision to abandon the case, [and] a decision will be issued which conforms 
with the position letter <nl>or the agreement reached among the parties <ol>. 
<nl>The<ol> [A tax division, acting through a] hearings attorney[,] may move to 
dismiss a case based upon agreement reached among the parties or for want of 
prosecution. The motion must be  <nl>served on<ol> [sent to] all parties and 
their authorized representatives at their last known address. [The chief 
administrative law judge may move to dismiss a case, notifying the parties by 
mail.] If there is no reply from the taxpayer within 15 days <nl>to the hearings 
attorney's motion to dismiss<ol>, a decision will be issued either dismissing 
the case and fixing the deficiency as the amount determined by the tax division 
or otherwise disposing of the case according to the position last taken by the 
tax division. <nl>All motions to dismiss that are based upon a representation 
that both parties have agreed to dismiss a contested case, on the basis that all 
issues have been settled, shall be in writing and signed by both parties or 
their authorized representatives.
sec.1.40. Burden of Proof. In a contested case:
(1) the burden of proof is on the tax division:
(A) by a preponderance of the evidence, if the issue is whether the suspension 
or revocation of a license is warranted; or
(B) by clear and convincing evidence, if the issue is whether the imposition of 
additional penalty for willful or fraudulent failure to pay tax is warranted.
(2) the burden of proof is on the taxpayer:
(A) by clear and convincing evidence, if he claims a transaction is exempt from 
taxation; or
(B) by a preponderance of the evidence, if he contends that an action, or 
proposed action, of the tax division is otherwise unwarranted.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116020
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.1.30, sec.1.40
(Editor's note: The text of the following sections proposed for repeal will not 
be published. The sections may be examined in the offices of the Comptroller of 
Public Accounts or in the Texas Register office, Room 245, James Earl Rudder 
Building, 1019 Brazos Street, Austin.)
The Comptroller of Public Accounts proposes the repeals of sec.1.30 and sec.1. 
40, concerning court suit for refund and burden of proof. The purpose of the 
repeals is to delete unnecessary material and in order that a substantially 
revised sec.1.40 dealing with the same subject matter may be adopted.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the repeals are in effect there will be no fiscal implications for state 
or local government as a result of enforcing or administering the repeals. The 
repeals are promulgated under the Tax Code, Title 2, and do not require a 
statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
repeals are in effect the public benefit anticipated as a result of enforcing 
the repeals will be no cost or benefit to the public from the repeal of this 
section. There is no anticipated economic cost to person who are required to 
comply with the repeals as proposed.
Comments on the repeals may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The repeals are proposed under Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.1.30. Court Suit for Refund.
sec.1.40. Burden of Proof.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9116023
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
Chapter 3. Tax Administration
Subchapter Y. Controlled Substances Tax
34 TAC sec.3.681
The Comptroller of Public Accounts proposes an amendment to sec.3.681, 
concerning imposition and rate of tax. This amendment is proposed to conform 
with changes made to the Controlled Substances Tax by the 72nd Legislature, 
1991. It creates a new category of taxable substances not sold by weight and 
provides a definition for that term. The changes are effective September 1, 
1991.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
state or local government. This section is adopted under the Tax Code, Title 2, 
and does not require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.3.681. Imposition and Rate of Tax.
(a)-(d) (No change.)
(e) The rate of the tax is:
(1) for taxable substances other than marihuana, and for taxable substances 
containing both marihauna and another taxable substance, $200 per gram or part 
of a gram; [and]
(2) for marihuana, $3.50 per gram or part of a gram <nl>; and<ol> [.]
<nl>(3) for taxable substances not sold by weight, $2,000 on each 50 dosage 
units, or portion thereof.
(f)-(g) (No change.)
(h) The phrase "taxable substances not sold by weight" used in this chapter, 
shall include substances sold in tablet, capsule, pill, vial, ampule, or sheet 
form. If a taxable substance could be sold either by weight or dosage unit, the 
comptroller shall assess the taxable substance in the manner which will produce 
the largest assessment.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115996
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028
       
34 TAC sec.3.682
The Comptroller of Public Accounts proposes an amendment to sec.3.682, 
concerning tax payment certificates. This amendment is proposed to conform with 
changes made to the Controlled Substances Tax by the 72nd Legislature, 1991. It 
provides for the creation of a new tax payment certificate for taxable 
substances not sold by weight. The amendment is effective September 1, 1991.
Tom Plaut, chief revenue estimator, has determined that for the first five-year 
period the section is in effect there will be no significant revenue impact on 
the state or local government as a result of enforcing or administering the 
section. This section is adopted under the Tax Code, Title 2, and does not 
require a statement of fiscal implications for small businesses.
Dr. Plaut also has determined that for each year of the first five years the 
section is in effect the public benefit anticipated as a result of enforcing the 
section will be in providing new information regarding tax responsibilities. 
There is no anticipated economic cost to persons who are required to comply with 
the section as proposed.
Comments on the proposal may be submitted to Lucy Glover, Manager, Tax 
Administration Division, P.O. Box 13528, Austin, Texas 78711.
The amendment is proposed under the Tax Code, sec.111.002, which provides the 
comptroller with the authority to prescribe, adopt, and enforce rules relating 
to the administration and enforcement of the provisions of the Tax Code, Title 
2.
sec.3.682. Tax Payment Certificates.
(a)-(g) (No change.)
<nl>(h) Tax payment certificate for taxable substances not sold by weight will 
be available in the following category:
[graphic]
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's authority to adopt.
Issued in Austin, Texas, on December 17, 1991.
TRD-9115997
Martin Cherry
Chief, General Law Section
Comptroller of Public Accounts
Earliest possible date of adoption: January 24, 1992
For further information, please call: (512) 463-4028