Adopted Sections An agency may take final action on a section 30 days after a proposal has been published in the Texas Register. The section becomes effective 20 days after the agency files the correct document with the Texas Register, unless a later date is specified or unless a federal statute or regulation requires implementation of the action on shorter notice. If an agency adopts the section without any changes to the proposed text, only the preamble of the notice and statement of legal authority will be published. If an agency adopts the section with changes to the proposed text, the proposal will be republished with the changes. TITLE 4. AGRICULTURE Part I. Texas Department of Agriculture Chapter 11. Herbicide Regulations 4 TAC sec.11.1, sec.11.2 The Texas Department of Agriculture adopts amendments to sec.11.1 and sec.11.2, concerning herbicide regulations, without changes to the proposed text as published in the May 15, 1992, issue of the Texas Register (17 TexReg 3525). The amendment to sec.11.1 is adopted to make this section consistent with recent orders issued by county officials establishing Archer, Clay, and Wichita Counties as counties regulated under the Texas Herbicide Law. The amendment to sec.11.2 is adopted to minimize the risk of exposure to susceptible crops in Archer, Clay, and Wichita Counties to 2,4-D esters and to allow the use of regulated herbicides for weed control without requirement of a permit for the first year of regulation. The amendment to sec.11.1 adds Archer, Clay, and Wichita Counties to the list of counties regulated under the Texas Herbicide Law. The amendment to sec.11.2 adds special provisions for Archer, Clay, and Wichita Counties providing for a prohibition period for the spraying of 2,4-D esters in those counties and providing that no permits be required for the application of regulated herbicides for the calendar year of 1992. No comments were received regarding adoption of the amendments. The amendments are adopted under the Texas Agriculture Code, sec.75.018, which provides the Texas Department of Agriculture with the authority to consider a request for revision of a section, an exemption from a requirement of Chapter 75, or prohibition of spraying in one area and to adopt rules as the department deems appropriate. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 13, 1992. TRD-9209626 Dolores Alvarado Hibbs Chief Administrative Law Judge Texas Department of Agriculture Effective date: August 3, 1992 Proposal publication date: May 15, 1992 For further information, please call: (512) 463-7583 TITLE 16. ECONOMIC REGULATION Part VIII. Texas Racing Commission Chapter 309. Operation of Racetracks Subchapter B. Horse Racetracks Operations 16 TAC sec.309.198 The Texas Racing Commission adopts an amendment to sec.309.198, concerning official program, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3682). The amendment is adopted to ensure that the wagering public has adequate notice of the conditions under which horses are racing. The amendment adds a requirement that the official programs at pari-mutuel horse racetracks contain information regarding the use of furosemide in race horses. Written comments were received by one individual who opposes the authorization of the use of furosemide on race day. The commission disagrees with the comment on the ground that the use of furosemide should increase the number of race horses eligible to race in Texas and that sufficient testing procedures have been developed to discourage abuse of the medication. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; under sec.6.06, which authorize the commission to adopt rules relating to the operation of racetracks; and under sec.14.03, which authorize the commission to adopt rules to prohibit the illegal influencing of the outcome of a race through the use of medication. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209517 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 794-8461 Chapter 313. Officials and Rules of Horse Racing Subchapter B. Entries, Declarations, and Allowances Entries 16 TAC sec.313.103 The Texas Racing Commission adopts an amendment to sec.313.103, concerning eligibility requirements, without changes to the proposed text as published in the April 17, 1992, issue of the Texas Register (17 TexReg 2670). The amendment is adopted to ensure that horses participating in pari-mutuel races are fit and ready to run in races currently being conducted. The amendment clarifies the eligibility requirements for entering a horse in a race. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.6.06, which authorizes the commission to adopt rules relating to the operation of racetracks. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209514 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: April 17, 1992 For further information, please call: (512) 794-8461 Chapter 319. Veterinary Practices and Drug Testing Subchapter A. General Provisions 16 TAC sec.319.3 The Texas Racing Commission adopts an amendment to sec.319.3, concerning medication restricted, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3683). The amendment is adopted to increase the number of horses that are physically able to race competitively in this state, which will result in increased wagering, increased revenue to the state, and increased peripheral economic benefits from pari-mutuel racing. The amendment authorizes the presence of furosemide in race horses during the running of a pari-mutuel race. The amendment also prohibits the administration of prohibited drugs, chemicals, or other substances via nasogastric intubation. Written comments were received by one individual who opposes the authorization of the use of furosemide on race day. The commission disagrees with the comment on the ground that the use of furosemide should increase the number of race horses eligible to race in Texas, thereby enhancing the overall benefits of pari-mutuel racing, and that sufficient testing procedures have been developed to discourage abuse of the medication. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.14.03, which authorize the commission to adopt rules to prohibit the illegal influencing of the outcome of a race through the use of medication. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209515 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 794-8461 16 TAC sec.319.5 The Texas Racing Commission adopts an amendment to sec.319.5, concerning report by veterinarians, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3684). The amendment is adopted to ensure the administration of medication to race horses is monitored effectively. The amendment requires veterinarians administering furosemide to race horses to report the administration to the commission veterinarian. Written comments were received by one individual who opposes the authorization of the use of furosemide on race day. The commission disagrees with the comment on the ground that the use of furosemide should increase the number of race horses eligible to race in Texas, thereby enhancing the overall benefits of pari-mutuel racing, and that sufficient testing procedures have been developed to discourage abuse of the medication. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.14.03, which authorize the commission to adopt rules to prohibit the illegal influencing of the outcome of a race through the use of medication. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209520 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 794-8461 Subchapter B. Treatment of Horses 16 TAC sec.319.110 The Texas Racing Commission adopts an amendment to sec.319.110, concerning Coggins test and health certificate, without changes to the proposed text as published in the April 17, 1992, issue of the Texas Register (17 TexReg 2670). The amendment is adopted to ensure that horses participating in pari-mutuel races are healthy and that the potential for spreading certain equine diseases is minimized. The amendment clarifies the health documentation for a horse to be admitted to an association's grounds. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.6.06, which authorizes the commission to adopt rules relating to the operation of racetracks. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209518 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: April 19, 1992 For further information, please call: (512) 794-8461 16 TAC sec.319.111 The Texas Racing Commission adopts an amendment to sec.319.111, concerning bleeders and furosemide (Lasix) program, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3684). The amendment is adopted to ensure the administration of medication to race horses is monitored effectively. The amendment establishes a furosemide (Lasix) program and specifies the requirements for a race horse to be admitted and participate in the program. Written comments were received by one individual who opposes the authorization of the use of furosemide on race day. The commission disagrees with the comment on the ground that the use of furosemide should increase the number of race horses eligible to race in Texas, thereby enhancing the overall benefits of pari-mutuel racing, and that sufficient testing procedures have been developed to discourage abuse of the medication. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.14.03, which authorize the commission to adopt rules to prohibit the illegal influencing of the outcome of a race through the use of medication. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209519 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 794-8461 Subchapter D. Drug Testing Provisions for Horses 16 TAC sec.319.365 The Texas Racing Commission adopts an amendment to sec.319.365, concerning laboratory for testing splits, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3685). The amendment is adopted to ensure that pari-mutuel racing is conducting with the utmost integrity. The amendment eliminates the requirements that split labs be licensed by the commission. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 179e, sec.3.02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act and under sec.14.03, which authorize the commission to adopt rules to prohibit the illegal influencing of the outcome of a race. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 6, 1992. TRD-9209516 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 794-8461 TITLE 19. EDUCATION Part II. Texas Education Agency Chapter 67. Instructional Resources Subchapter A. State Textbook Program General Content Requirements and Manufacturing Standards 19 TAC sec.67.21 The Texas Education Agency (TEA) adopts amendments to sec.67.21 and sec.67. 66, concerning the state textbook program, without changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3686). The amended sections help ensure that textbooks are free of errors. The amendment to sec.67.21 requires publishers to perform an editorial review of textbooks submitted for consideration. The amendment to sec.67.66 requires publishers to submit lists of editorial corrections, in lieu of hand corrected sample books, that would be made in textbooks under consideration. They also require publishers to certify that submitted textbooks have been edited for accuracy, content, and compliance with state guidelines. No comments were received regarding adoption of the amendments. The amendment is adopted under the Texas Education Code, sec.12.16, which authorizes the State Board of Education to promulgate rules prescribing textbook selection methods and rules under which adopted and approved textbooks will be introduced or used by or in the public schools of the state. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1992. TRD-9209576 Criss Cloudt Coordinator, Policy Planning and Evaluation Texas Education Agency Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 463-9701 State Adoption, Acquisition, and Custody of Textbooks 19 TAC sec.67.66 The amendment is adopted under the Texas Education Code, sec.12.16, which authorizes the State Board of Education to promulgate rules prescribing textbook selection methods and rules under which adopted and approved textbooks will be introduced or used by or in the public schools of the state. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1992. TRD-9209575 Criss Cloudt Coordinator, Policy Planning and Evaluation Texas Education Agency Effective date: August 3, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 463-9701 TITLE 22. EXAMINING BOARDS Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct General Provisions 22 TAC sec.501.2 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 2, concerning definitions, without changes to the proposed text as published in the May 15, 1992, issue of the Texas Register (17 TexReg 3539). The definitions of "partnership" and "person" are necessary in order to ensure that the public will be able to refer to clear definitions of commonly used terms. The amendment changes the definitions of "partnership" to specifically set forth guidelines for determining whether or not a partnership exists. The definition of "person" has been amended to include limited liability entities. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6(a), which provides the Texas State Board of Public Accountancy with the authority to promulgate rules relating to definitions used in the Rules of Professional Conduct. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 14, 1992. TRD-9209668 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: August 4, 1992 Proposal publication date: May 15, 1992 For further information, please call: (512) 450-7066 Chapter 515. Licenses 22 TAC sec.515.5 The Texas State Board of Public Accountancy adopts an amendment to sec.515. 5, concerning reinstatement, without changes to the proposed text as published in the January 21, 1992, issue of the Texas Register (17 TexReg 459). The amendment is necessary in order to ensure that the rule cites to the current statute and reflects the fact that licenses are now processed on a biennial basis. The section sets forth criteria for reinstatement. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6(a), which provide the Texas State Board of Public Accountancy with the authority to promulgate rules relating to the reinstatement of licenses. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 14, 1992. TRD-9209670 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: August 4, 1992 Proposal publication date: January 21, 1992 For further information, please call: (512) 450-7066 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 73. Laboratories Fees for Services for Drinking Water Systems 25 TAC sec.73.41 (Editor's Note: This adopted rule was filed with the Texas Register on June 29, 1992, to be effective 20 days after the filing date. The rule was to appear in the July 7, 1992, issue of the Texas Register). The Texas Department of Health (department) adopts new sec.73.41, concerning fees for services for drinking water systems, without changes to the proposed text as published in the March 20, 1992, issue of the Texas Register (17 TexReg 2092). This section will provide chemical and bacteriological testing services for public drinking water systems at an approved laboratory. This testing must be done for compliance purposes under the requirements of 31 TAC Chapter 290, sec.sec.290.1-290.19, and the Safe Drinking Water Act and the primary drinking water regulations promulgated thereunder as found in Title 40, Code of Federal Regulations, sec.141.81 and sec.141.86. The jurisdiction and regulation of water quality in public drinking water supplies now rests with the Texas Water Commission as provided in Senate Bill 2, First Called Session, 72nd Legislature. These duties were transferred on March 1, 1992. The department retains its laboratory and its approved laboratory status for performing services as required under the Safe Drinking Water Act, thus providing analytical services to the regulated community with the Texas Water Commission making determinations as to the number and frequency of lab tests to be done. The department received eight comments with a majority addressing the high cost of performing testing, especially as it impacts the small water systems. There were also comments on the nature of funding state government by additional and escalating fees being imposed on the regulated community, which in this case are water utilities. The department understands this view, but the department believes that the fees are appropriate and justified. Several commenters requested that costs for testing be kept to a minimum and the impact of the fees on systems, especially small water utilities, be considered. The department agrees; however, the Texas Water Commission will determine frequency of testing as mentioned at the beginning of this preamble. The department understands that the commission will exercise due diligence to keep analytical fees to a minimum. One commenter felt that the fees and charges were reasonable and justifiable; however, he expressed concern at not being able to utilize contract laboratories and requested the department consider certifying other laboratories to perform the work. The department has discussed this option in the past and will continue to consider this option in the future. The commenters were Arvey Park Water System, Chapel of the Hills Baptist Church, the City of Sabinal, Sunday Canyon Water Supply Corporation, the City of Coppell, Oak Terrace Mobile Home Park, Kendall County Utility Company, and the Citizens Group from Liberty County. The commenters were neither for or against the section in its entirety; however, they did express concerns as earlier mentioned. The new section is adopted under the Health and Safety Code, sec.sec.12. 031- 12.032, which provides the Board of Health (board) with the authority to adopt rules concerning fees for public health services; and sec.12.001, which provides the board with authority to adopt rules to implement every duty imposed by law on the board, the department, and the commissioner of health. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on June 29, 1992. TRD-9209455 Robert A. MacLean, M.D. Deputy Commissioner Texas Department of Health Effective date: July 20, 1992 Proposal publication date: March 20, 1992 For further information, please call: (512) 834-6640 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 1. General Administration Subchapter A. Rules of Practice and Procedure Subpoenaing Witnesses and Materials 28 TAC sec.1.36 The State Board of Insurance of the Texas Department of Insurance adopts an amendment to sec.1.36, concerning the subpoenaing of witnesses and materials, with changes to the proposed text as published in the January 17, 1992, issue of the Texas Register (17 TexReg 378). The amendment is necessary to eliminate language in the existing rule which conflicts with the Insurance Code, Article 1.19-1, as amended by House Bill 62, Second Called Session, 72nd Legislature. The changes include clarification regarding who can serve subpoenas, and regarding who can administer oaths and take testimony. Three editorial changes have been made in the language of the proposed amendments to clarify the manner in which they will be implemented by the Texas Department of Insurance. First, the term "issued" has been added in subsection (b) to clarify that the persons signing such subpoenas have discretion concerning the signature of investigative subpoenas. Second, the last complete sentence of subsection (b)(2), as amended, will now include within the term "investigator" any authorized person designated by the commissioner of insurance. Third, the first sentence of subsection 1.36(b)(4) will allow the testimony of a subpoenaed witness to be taken in the presence of a notary public. The amendments to subsection (b) will specify the persons who must sign any subpoena issued under the authority of the Insurance Code, Article 1.19-1; will specify the new name of this agency as the Texas Department of Insurance; will specify which individuals are considered as investigators for the purpose of serving an investigative subpoena issued under the Insurance Code, Article 1.19- 1; and will specify who can take the testimony of a subpoenaed witness. The amendments incorporate the changes to Article 1.19-1 made by the passage of House Bill 62 during the Second Called Session of the 72nd Legislature regarding the issuance of investigative subpoenas by this department. No comments were received regarding adoption of the amendment. The amendment is adopted under the Insurance Code, Articles 1.19-1 and 1.04, and Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5. The Insurance Code, Article 1.19-1, specifies procedures for the issuance of investigative subpoenas. Article 1.04(b) authorizes the State Board of Insurance to determine rules and regulations in accordance with the laws of this state for uniform application. Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5, authorize and require each state agency to adopt rules of practice setting forth the nature and requirement of available procedures, and prescribe the procedures for adoption of rules by a state administrative agency. The adopted amendment affects regulation through subpoenaing witnesses and materials under the Insurance Code, Article 1.19-1. sec.1.36. Subpoenaing Witnesses and Materials. (a) (No change.) (b) Investigations. The commissioner and at least one member of the board must sign any subpoenas issued in the course of an investigation. A subpoena includes a subpoena duces tecum. (1) (No change.) (2) Service of subpoena. A subpoena shall be addressed to and served by any sheriff, constable, or Texas Department of Insurance investigator of the State of Texas. For the purposes of this paragraph, a Texas Department of Insurance investigator includes any authorized person designated by the commissioner of insurance. (3) (No change.) (4) Receipt of testimony and materials. The testimony of a subpoenaed witness shall, at the option of the commissioner and at least one member of the board, be taken in the presence of a certified shorthand reporter having the authority to lawfully administer an oath pursuant to the Government Code, sec.52.025(b), or in the presence of a notary public having the authority to lawfully administer an oath pursuant to the Government Code, sec.406.016. The shorthand reporter's fee shall be paid by the Texas Department of Insurance. Any materials received from a witness shall be properly marked and noted by the shorthand reporter. A witness may make originals available for copying instead of relinquishing originals, provided that the originals remain available for comparison. (5) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 9, 1992. TRD-9209478 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: July 30, 1992 Proposal publication date: January 17, 1992 For further information, please call: (512) 463-6327 Chapter 3. Life, Accident, and Health Insurance and Annuities Subchapter T. Minimum Standards for Medicare Supplement Policies 28 TAC sec.3.3314 The State Board of Insurance of the Texas Department of Insurance adopts the repeal of sec.3.3314, concerning the standards for facilitating comparison among Medicare supplement insurance policies, without changes to the proposed text as published in the April 24, 1992, issue of the Texas Register (17 TexReg 2924). Repeal of sec.3.3314 is necessary because the standards set forth in sec.3. 3314 have been replaced by newer, more specific standards for comparison found in sec.3.3308. Provisions of sec.3.3308 address the maximum of 10 uniform benefit packages available under Medicare supplement legislation, and set forth the standards for uniform language and format for comparison between and among Medicare supplement benefit coverages. Notice of final adoption of the amendment to sec.3.3308 as part of a more comprehensive series of amendments and new sections to Subchapter T of this title (relating to Minimum Standards for Medicare Supplement Policies), was published in the March 31, 1992, issue of the Texas Register (17 TexReg 2238). Repeal of sec.3.3314 results in the deletion of provisions made obsolete by newer, more specific standards for comparison found in sec.3.3308. Provisions of sec.3.3308 address the maximum of 10 uniform benefit packages available under Medicare supplement legislation, and set forth the standards for uniform language and format for comparison between and among Medicare supplement benefit coverages. No comments were received regarding adoptin of the repeal. The repeal is adopted under the Insurance Code, Article 3.74 and Article 1. 04, and Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5. The Insurance Code, Article 3.74, sec.10, provides that the board adopt any rules, including, but not limited to, minimum standards for Medicare supplement policies, applicable to regulation of Medicare supplement coverage which are necessary for the state to obtain or retain certification as a state with an approved regulatory program under 42 United States Code, sec.1395ss. Article 1.04 provides the State Board of Insurance with the authority to determine policy and rules in accordance with the laws of this state for uniform application. Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5, authorize and require each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribe the procedures for the adoption of rules by a state administrative agency. The adopted repeal affects regulation of minimum standards for Medicare supplement policies pursuant to the Insurance Code, Article 3.74. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 9, 1992. TRD-9209477 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: July 30, 1992 Proposal publication date: April 24, 1992 For further information, please call: (512) 463-6327 Chapter 7. Corporate and Financial Regulation Subchapter A. Examination and Corporate Custodian and Tax 28 TAC sec.7.7 The State Board of Insurance of the Texas Department of Insurance adopts an amendment to sec.7.7, concerning subordinated indebtedness, surplus debentures, surplus notes, premium income notes, bonds, or debentures, and other contingent evidences of indebtedness, with changes to the proposed text as published in the February 25, 1992, issue of the Texas Register (17 TexReg 1514). Section 7.7 is concerned with subordinated indebtedness, surplus debentures, surplus notes, premium income notes, bonds, or debentures and other contingent evidences of indebtedness. These amendments are necessary to implement Article 1.39 enacted by passage of House Bill 62, 72nd Legislature, Second Called Session, 1991. Article 1.39 provides for the regulation of the issuance and repayment of subordinated indebtedness considering the financial condition of the insurer, and the assurance of consistency in accounting for subordinated indebtedness by insurers. This adoption includes several changes to the proposed text for the reasons explained in the following sentences. A change was made to subsection (a)(2) to more specifically establish the parameters of minimum surplus or "floor" and to provide to the commissioner discretionary authority in certain instances. The same change was made to subsection (c)(2) for clarification and consistency. To clarify subsection (b) (2), the word "proceeds" was deleted and the word "consideration" was substituted. New language was added to give to the commissioner discretionary authority in certain circumstances. Changes were made to subsection (c)(4) to clarify when payments can be made out of a sinking fund and by inserting the phrase "subject to the minimum surplus stated in the written agreement." A change was made to subsection (b)(5) to clarify that the payment of interest and repayment of principal under the written agreement are subordinated to policyholder and beneficiary claims. A change was made to subsection (c)(5) to replace the word "claims" with the phrase "payment of interest and repayment of principal" as the latter is more technically correct. The word "written" was also added to subsection (c)(5) for clarification. Changes were made to subsection (d)(2) to provide consistency with the Holding Company Regulatory Act (Texas Insurance Code, Article 21.49-1). The phrase "payment of interest" and the words "of principal" were added to subsection (d)(4) for clarification. The phrase "excess of the minimum surplus" and the words "or repayment" were added to subsection (d)(5) for clarification. The phrase "of another insurer" was added to subsection (e)(3) for clarification. Subsection (g) was added as suggested by several commenters and provides that the section is applicable to subordinated indebtedness issued on or after January 1, 1992. The amendments to sec.7.7 concerning subordinated indebtedness, surplus debentures, surplus notes, premium income notes, bonds or debentures, and other contingent evidences of indebtedness are necessary to implement Article 1.39 enacted by passage of House Bill 62, 72nd Legislature, Second Called Session, 1991. Article 1.39 provides for the regulation of the issuance and repayment of subordinated indebtedness by insurers, the adequacy and appropriateness of the terms of repayment of subordinated indebtedness considering the financial condition of the insurer, and the assurance of consistency in accounting for subordinated indebtedness by insurers. A commenter suggested that the last sentence of the definition of minimum surplus or "floor" in Subsection (a)(2), which states that "Such minimum surplus shall not cause a liability to be immediately posted," be eliminated because this provision is not in the Insurance Code, Article 1.39, and the commenter sees no rational justification for the rule to prohibit surplus debenture contributions simply because a portion of the contribution might exceed the minimum surplus or floor and become a liability. Another commenter raised a concern about the agency requiring a surplus cushion and believed that such a requirement would result in a substantial delay in the repayment of principal and interest and in lenders not financing acquisitions. A commenter suggested that the commissioner should have the discretion to use a different definition of minimum surplus or "floor" in certain circumstances to cure, what the commenter believed, was the sweeping applicability of subsection (a)(2) to all surplus debentures. The agency has modified the definition of minimum surplus or "floor" to reflect an amount that exceeds the sum of 10% of the face amount of the subordinated indebtedness plus, the greater of statutory minimum capital and surplus required by statute, rule, or regulation applicable to the issuing insurer, or the total capital and surplus of the insurer immediately before the issuance of the subordinated indebtedness. Language has been added giving the commissioner discretion with regard to the inclusion of an amount greater or less than 10% of the face amount of the subordinated indebtedness in determining the minimum surplus. This clarification of subsection (a)(2) has also been made to subsection (c)(2) for consistency. A commenter suggested that the first sentence of the definition of subordinated indebtedness in subsection (a)(3) be changed to read as follows: "Any contingent indebtedness issued by an insurer by which the recipient acquires a subordinated obligation of the insurer for repayment of principal and payment of interest pursuant to a written agreement providing for payment only out of that portion of an insurer's surplus that exceeds a minimum surplus stated in the agreement." The agency generally agrees with the commenter and has clarified the provision so that it is clear that it is the insurer which assumes a subordinated indebtedness. A commenter contended that "other contingent evidences of indebtedness" contained in subsection (a)(4) should be excluded from the definition of surplus notes as some forms of surplus notes do not increase surplus. The agency has deleted the reference to "other contingent evidences of indebtedness" from the definition of surplus notes. A commenter suggested that in subsection (b)(2) the consideration received by an insurer for the issuance of subordinated indebtedness should not be limited to cash, cash equivalent securities, or government obligations of readily determinable value. The agency generally disagrees with the commenter, but does, however, realize that, in certain instances, the receipt of other assets or the subordination of a current liability should be given consideration. The agency has added additional language giving the commissioner discretionary authority in certain instances. A commenter suggested that payments on a premium note, bond, or debenture contained in subsection (c)(4) should not be restricted to an established sinking fund. The agency generally agrees and the paragraph has been modified so that payments on a premium note, bond, or debenture must be made out of an established sinking fund if provided for in the written agreement. A commenter contended that the Insurance Code, Article 21.49-1, sec.4(d), relating to approval by the commissioner of transactions by an insurer with its affiliates governs the time limits set forth in subsection (d)(2). Therefore, the 60 days in the proposed section should be changed to 30 days, and the 90 days should be changed to 30 days unless the amount of the transaction will exceed 5.0% of the insurer's admitted assets or 25% of its surplus, in which case it would be 90 days under the Insurance Code, Article 21.49-1 sec.4(d). The agency has added clarifying language to subsection (d)(2) to distinguish between affiliates or officers, directors, and third parties. A commenter suggested that it would be appropriate to reflect as an admitted asset in subsection (e) (3) any portion of the subordinated indebtedness reflected as a liability on the balance sheet of the issuing insurer so that the balance sheet of both the issuer and the holding insurer would be consistent. Thus, the holder's balance sheet would show an asset equal to the liability shown on the issuer's balance sheet. The agency disagrees with the commenter as this would permit the holder of the debenture to claim as an asset funds that are not presently due or to which the holder does not have legal entitlement. This, in the agency's opinion, would be allowing the holder to overstate its legal assets. The agency has, however, clarified the language so that it is clear that an insurer holding a subordinated indebtedness of another insurer may report it as an admitted asset equal to the amount approved by the commissioner for payment by the issuer but not yet paid. Several commenters suggested that a section be added to this section to reflect that the section does not apply to any subordinated indebtedness issued prior to January 1, 1992. The agency agrees with the commenters and has added a provision addressing the effective date as subsection (g). Allstate County Mutual Insurance Company and Texas Life Insurance Company were generally in favor of the proposed section; however, both commenters requested that the section be clarified to indicate that the section only applies to subordinated indebtedness created on or after January 1, 1992. The Texas Legal Reserve Officials Association also suggested that this clarification be added; specifically objected to subsections (a)(2) and (c)(2) and proposed minor modifications to subsections (a)(3), (c)(5), (d)(2), (d)(4) and (5), and (e)(3). The Texas Association of Life Insurance Officials specifically objected to subsections (a)(4), (b)(2), and (c)(4). A representative with the law firm of Weil, Gotschal & Manges proposed minor modifications to subsections (a)(3) and (b)(2) and specifically objected to subsections (a)(2) and (e)(3). The amendment is proposed under the Insurance Code, Article 1.04, which authorizes the State Board of Insurance to determine rules in accordance with the laws of this state; the Insurance Code, Article 1.10, which authorizes the State Board of Insurance to see that all laws respecting insurance companies are faithfully executed; Insurance Code, Article 1.32, which provides for an early warning system for insurers in hazardous condition; the Insurance Code, Article 1.39, which makes subordinated indebtedness agreements, and payments and repayments thereon, subject to approval by the commissioner; and, Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5, which require and authorize each state administrative agency to adopt rules of practice setting forth the nature and requirements of available procedures, and prescribe the procedure for adoption of rules by state administrative agencies. sec.7.7. Subordinated Indebtedness, Surplus Debentures, Surplus Notes, Premium Income Notes, Bonds, or Debentures, and Other Contingent Evidences of Indebtedness. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Insurer-An insurer authorized to do business under the law of this state and includes life, health, and accident insurance companies, fire and marine companies, general casualty companies, title insurance companies, fraternal benefit societies, mutual life insurance companies, local mutual aid associations, statewide mutual assessment companies, mutual insurance companies other than life, farm mutual insurance companies, county mutual insurance companies, Lloyd's plans, reciprocal and interinsurance exchanges, group hospital service corporations, health maintenance organizations, stipulated premium insurance companies, and nonprofit legal services corporations. (2) Minimum surplus or floor-The amount of surplus specified in the written agreement evidencing the subordinated indebtedness which may not be used for payments or repayments of subordinated indebtedness and which amount must exceed the sum of the following: (A) 10% of the face amount of the subordinated indebtedness; plus (B) the greater of: (i) the statutory minimum capital and surplus required by statute, rule, or regulation applicable to the issuing insurer; or (ii) the total stated capital and surplus of the insurer immediately before the issuance of the subordinated indebtedness. The commissioner may approve an amount greater or less than 10% of the face amount of the subordinated indebtedness if the commissioner is satisfied such amount is appropriate, considering the financial condition of the insurer. (3) Subordinated indebtedness-Any contingent indebtedness issued by an insurer for which such insurer assumes a subordinated liability for repayment of principal and payment of interest pursuant to a written agreement providing for payment only out of that portion of an insurer's surplus that exceeds a minimum surplus stated in such agreement. Subordinated indebtedness includes advances made in accordance with the Insurance Code, Articles 11.16, 17.17, and 19.07, and surplus notes, as herein defined. (4) Surplus notes-Surplus notes, also known as "surplus debentures," "contribution certificates," "surplus capital notes," and "premium income notes, bonds, or debentures," however denominated, which are financing vehicles that increase the surplus of an insurer. (b) General provisions. (1) The issuance of subordinated indebtedness shall not be utilized to initially capitalize an insurer, other than a mutual life insurer, a county mutual, or a reciprocal or interinsurance exchange. (2) The consideration received by an insurer in return for the issuance of subordinated indebtedness shall be in the form of cash, cash equivalent securities, or government backed obligations of readily determinable value. However, in the instance of an acquisition of an insurer, the commissioner may give consideration to other assets having a readily determinable value acceptable to the commissioner. Additionally, in the instance of an issuer required by this agency to increase its surplus as regards policyholders, the subordination of a current liability owed by the issuer to the prospective holder of the subordinated indebtedness, may be considered in an amount acceptable to the commissioner. (3) When considering applications made pursuant to the Insurance Code, Article 1.39, and this section, the commissioner will consider other applicable provisions of the Insurance Code, including Articles 1.29 and 21. 49-1. (c) Written agreements. When issuing subordinated indebtedness, the insurer must execute a written agreement with the creditor, providing the following. (1) The creditor may be paid only out of the portion of the insurer's surplus that exceeds the minimum surplus stated in the agreement. (2) The minimum surplus or floor shall exceed the sum of the following. (A) 10% of the face amount of the subordinated indebtedness (provided, however, that the commissioner may approve an amount greater or less than 10% of the face amount of the subordinated indebtedness if the commissioner is satisfied such amount is appropriate, considering the financial condition of the insurer); plus (B) the greater of: (i) the statutory minimum capital and surplus required by statute, rule, or regulation applicable to the issuing insurer; or (ii) the total stated capital and surplus of the insurer immediately before the issuance of the subordinated indebtedness. (3) All payments of principal and interest shall be subject to the prior approval of the commissioner. (4) If the subordinated indebtedness is in the form of a premium note, bond, or debenture, which includes a provision for the payment or repayment only out of a sinking fund established by the insurer by setting aside a specified percentage of the insurance premium income collected by the insurer during a specified period, all payments must be made from the established sinking fund, subject to the minimum surplus stated in the written agreement, and such payment requires the prior approval of the commissioner. (5) In the event of liquidation, payment of interest and repayment of principal under the written agreement are subordinated to policyholder and beneficiary claims. (d) Filing requirements. (1) All subordinated indebtedness issued by an insurer is subject to the prior approval of the commissioner, regardless of amount. Such applications shall be filed with the Holding Company Activity, Mail Code 304-2A, Texas Department of Insurance, P.O. Box 149104, 333 Guadalupe, Austin, Texas 78714-9104. (2) Applications for approval of the payment of interest or repayment of principal are subject to the prior approval of the commissioner and shall be filed at least 30 days prior to the date of the proposed payment, or such shorter period as the commissioner may permit. Payment of interest or repayment of principal to an affiliate of an insurer may be made within the time periods specified in the Insurance Code, Article 21.49-1, sec.4(d)(1) or (2), provided the commissioner has not disapproved such payment within such periods. Payment of interest or the repayment of principal to an affiliate, officer, director, or third party not subject to the Insurance Code, Article 21.49-1, sec.4(d)(1) or (2) may be made 35 days after the filing of the application provided the commissioner has not disapproved such payment within such period. No such application shall be deemed filed until the date all material required and sufficient to constitute a full application has been provided. (3) The written application for approval of the issuance of subordinated indebtedness shall include at least the following: (A) the nature and purpose of the transaction; (B) the nature and amounts of any transfers of assets between the parties to the transaction; (C) the identities of all parties to the transaction; (D) whether any officers or directors of a party are pecuniarily interested in the transaction; (E) a copy of any agreement between the parties relating to the transaction; (F) evidence that the transaction will not adversely affect the interests of policyholders. (4) The written application for approval of the payment of interest or the repayment of principal of subordinated indebtedness shall include at least the following: (A) the nature and amounts of any payments or transfers of assets between the parties to the transaction; (B) the identities of all parties to the transaction; and (C) evidence that the repayment or payment is appropriate considering the financial condition of the insurer. (5) A current financial statement dated not earlier than 60 days before the application date must be filed with the application for approval of the payment of interest or repayment of principal which demonstrates the existence of sufficient surplus in excess of the minimum surplus, and a statement by the chief executive officer of the insurer that the insurer's current total surplus is in such amount that payment or repayment as of the payment date will be only from surplus in excess of minimum surplus and will not adversely affect the insurer's current financial condition. (6) Applications for approval of the issuance, payment of interest, or the repayment of principal, must meet the following standards. (A) The terms shall be fair and equitable. (B) The books, accounts, and records of each party shall be so maintained as to clearly and accurately disclose the precise nature and details of the transaction. (C) Minimum surplus and the insurer's surplus as regards policyholders following such payment of interest or repayment of principal shall be reasonable in relation to the insurer's outstanding liabilities and adequate to satisfy its financial needs. (e) Accounting requirements. (1) All financial statements published by any insurer or filed with the commissioner must show as a liability that portion of the insurer's surplus that exceeds the minimum surplus as defined in the written agreement to the extent of the unpaid principal balance thereon. (2) All agreements shall be clearly reported in an insurer's "Notes to Financial Statements" of the annual statement indicating that payment of interest and repayments of principal are subject to the prior approval of the commissioner. (3) An insurer holding a subordinated indebtedness of another insurer may report it as an admitted asset equal to the amount approved by the commissioner for payment by the issuer but not yet paid. (f) Applicability to foreign insurers. The provisions of this section shall apply to insurers domiciled in another state unless such other state regulates the issuance and payment or repayment of subordinated indebtedness under laws, rules, or bulletins that the commissioner finds are substantially similar in substance and effect to Texas law and rules. To pursue this exception, the insurer shall provide, upon request, to the commissioner evidence of similarity in the form of statutes, regulations, and interpretation of the standards utilized by the state of domicile. (g) The provisions of this section apply to subordinated indebtedness issued on or after January 1, 1992. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 1, 1988. TRD-9209561 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: August 3, 1992 Proposal publication date: February 25, 1992 For further information, please call: (512) 463-6327 TITLE 31. NATURAL RESOURCE AND CONSERVATION Part IX. Texas Water Commission Chapter 305. Consolidated Permits Subchapter D. Amendments, Renewals, Transfers, Corrections, Revocation, and Suspension of Permits 31 TAC sec.305.69 The Texas Water Commission (TWC) adopts an amendment to sec.305.69 concerning consolidated permits, with changes to the proposed text as published in the Texas Register on April 17, 1992 (17 TexReg 2698). The amendment is adopted in order to clarify existing rules and to conform to the federal hazardous waste regulations as published and adopted in the March 7, 1989, issue of the Federal Register (54 FedReg 9608), the February 21, 1991, issue of the Federal Register (56 FedReg 7239), the July 17, 1991, issue of the Federal Register (56 FedReg 32688), the August 27, 1991, issue of the Federal Register (56 FedReg 42504), and the September 5, 1991, issue of the Federal Register (56 FedReg 43874). The commission received comments on the proposed rules from Alternative Fuel Systems, Inc., Cement Manufacturers Association of Texas, Citizens Aware and United for a Safe Environment (CAUSE), City of New Braunfels, Dow Chemical Company, Hoechst Celanese Chemical Group, LaFarge Corporation, North Texas Cement Company, Olin Chemicals, Public Interest Counsel of the Texas Water Commission, Securing a Future Environment (SAFE), a State Senator, Sterling Chemical, Inc., Texas Chemical Council, Texas Industries, Inc. (TXI), and United States Environmental Protection Agency (EPA) Region VI. In addition, comments were received from citizens in public hearings conducted by the TWC in the Texas cities of: Austin, Midlothian, New Braunfels, and Texas City. One commenter remarked that, since the term hazardous waste management "unit" was proposed to be used under sec.305.69(g), then sec.305.2 (relating to Definitions) should contain such a definition. The commission agrees but will propose the addition of this definition in a subsequent rulemaking since the publication of these rules did not propose any change to sec.305.2. Some commenters pointed out some minor typographical errors in sec.305.69(h) Appendix I C.7.a, D.1.b., F.2.b., and Appendix L.7.a. These have been corrected. The amendment is adopted under the Texas Water Code, sec. sec.5.103, 5.105, and 26.011, which give the commission the authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The sections are also adopted under the Solid Waste Disposal Act, sec.3 and sec.4, which gives the commission the authority to regulate industrial solid wastes and hazardous municipal wastes and to adopt rules and promulgate rules consistent with the general intent and purposes of the Act. sec.305.69. Solid Waste Permit Modification at the Request of the Permittee. (a)-(f) (No change.) (g) Newly regulated wastes and units. (1) The permittee is authorized to continue to manage wastes listed or identified as hazardous under 40 CFR Part 261 or to continue to manage hazardous waste in units newly regulated as hazardous waste management units if: (A) the unit was in existence as a hazardous waste facility unit with respect to the newly listed or characteristic waste or newly regulated waste management unit on the effective date of the final rule listing or identifying the waste or regulating the unit; (B) the permittee submits a Class 1 modification request on or before the date on which the waste or unit becomes subject to the new requirements; (C) the permittee is in substantial compliance with the applicable standards of 40 CFR Part 265 and Part 266; (D) in the case of Classes 2 and 3 modifications, the permittee also submits a complete permit modification request within 180 days after the effective date of the final rule listing or identifying the waste or subjecting the unit to RCRA Subtitle C management standards; and (E) in the case of land disposal units, the permittee certifies that each such unit is in compliance with all applicable 40 CFR Part 265 ground-water monitoring and financial responsibility requirements on the date 12 months after the effective date of the final rule identifying or listing the waste as hazardous, or regulating the unit as a hazardous waste management unit. If the owner or operator fails to certify compliance with these requirements, the owner or operator shall lose authority to operate under this section. (2) New wastes or units added to a facility's permit under this subsection do not constitute expansions for the purpose of the 25 percent capacity expansion limit for Class 2 modifications. (h) Appendix I. The following appendix will be used for the purposes of this subchapter which relates to solid waste permit modification at the request of the permittee. insert pg 2 insert pg 4 insert pg 6 insert pg 8 insert pg 10 insert pg 12 insert pg 14 insert pg 16 insert pg 18 insert pg 20 insert pg 22 insert pg 24 [graphic] This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209414 Mary Ruth Holder Director, Legal Division Texas Water Commission Effective date: July 29, 1992 Proposal publication date: April 17, 1992 For further information, please call: (512) 463-8069 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter O. State Sales and Use Tax 34 TAC sec.3.312 The Comptroller of Public Accounts adopts an amendment to sec.3.312, concerning graphic arts or related occupations and miscellaneous activities, without changes to the proposed text as published in the May 12, 1992, issue of the Texas Register (17 TexReg 3451). The amendment in subsection (c) changes references from sec.3.292 concerning repair, remodeling, maintenance, and restoration of tangible personal property, where appropriate, to new sec.3.359 concerning motor vehicles and private aircraft. No comments were received regarding adoption of the amendment. The amendment is adopted 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. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209410 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: July 29, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 463-4028 Subchapter V. Franchise Tax 34 TAC sec.3.565 The Comptroller of Public Accounts adopts new sec.3.565, concerning survivors of mergers, without changes to the proposed text as published in the May 26, 1992, issue of the Texas Register (17 TexReg 3831). The new section replaces sec.3.412, concerning the same subject matter, which is being repealed in order that it can be adopted under the Texas Administrative Code, Title 34, Part I, Chapter 3, Subchapter V. This new section contains information concerning corporations which are the survivors of mergers. No comments were received regarding adoption of the new section. The new section is adopted 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. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209408 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: July 29, 1992 Proposal publication date: May 26, 1992 For further information, please call: (512) 463-4028 34 TAC sec.3.567 The Comptroller of Public Accounts adopts new sec.3.567, concerning additional tax on earned surplus, without changes to the proposed text as published in the May 26, 1992, issue of the Texas Register (17 TexReg 3832). The new section explains the additional tax imposed on corporations which will no longer have sufficient nexus with Texas to be subject to the tax on earned surplus. No comments were received regarding adoption of the new section. The new section is adopted 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. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209409 Martin Cherry Chief, General Law Section Comptroller of Public Accounts Effective date: July 29, 1992 Proposal publication date: May 26, 1992 For further information, please call: (512) 463-4028 Retirement System of Texas Chapter 25. Membership Credit Military Services 34 TAC sec.25.61, sec.25.66 The Teacher Retirement System of Texas (TRS) adopts amendment to sec.sec.25. 61, 25.66, 25.75, 25.87, 25.151 and new sec.sec.25.181-25.189, concerning military service credit veteran's out-of-state service credit, and development leave credit, without changes to the proposed text published in the May 12, 1992, issue of the Texas Register (17 TexReg 3452). The amended sections are adopted in order to implement recent statutory amendment permitting installment payment for special service credit. The amended sections will amend the sections governing military service credit, veteran's credit, out-of-state service credit, and developmental leave credit to permit payment for these types of credit by the installment payment method. The new sections will provide for and govern payment by the installment method. No comments were received regarding adoption of the amendments and new sections. The amendments are adopted under the Texas Government Code, sec.825.102, which authorized the TRS board of trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.40, which authorizes the TRA board of trustees to adopt rules to implement the installment method of payment for special service credit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209449 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: May 12, 1992 Proposal publication date: September 1, 1992 For further information, please call: (512) 370-0524 Veteran's Service Credit 34 TAC sec.25.75 The amendment is adopted under the Texas Government Code, sec.825.102, which authorizes the TRS board of trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.410, which authorizes the TRS board of trustees to adopt rules to implement the installment method of payment for special service credit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209450 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Purchase of Credit For Out-of-State Service 34 TAC sec.25.87 The amendment is adopted under the Texas Government Code, sec.825.102, which authorizes the TRS board of trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.410, which authorizes the TRS board of trustees to adopt rules to implement the installment method of payment for special service credit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209451 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Developmental Leave 34 TAC sec.25.151 The amendment is adopted under the Texas Government Code, sec.825.102, which authorizes the TRS board of trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.410, which authorizes the TRS board of trustees to adopt rules to implement the installment method of payment for special service credit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209452 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Installment Payments 34 TAC sec.sec.25.181-25.189 The new sections are adopted under the Texas Government Code, sec.825.102, which authorizes the TRS board of trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.410, which authorizes the TRS board of trustees to adopt rules to implement the installment method of payment for special service credit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209453 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Part III. Teacher Retirement System of Texas Chapter 29. Benefits Retirement The Teacher Retirement System of Texas (TRS) adopts amendments to sec.sec.29. 1, 29.2, 29.7, 29.8, 29.12, 29.21, 29.23, 29.24, 29.26, and 29.31, concerning retirement. Section 29.2 is adopted with changes to the proposed text as published in the May 12, 1992, issue of the Texas Register (17 TexReg 3452). Sections 29.1, 29.7, 29.8, 29.12, 29.21, 29.23, 29.24, 29.26, and 29.31 are adopted without changes and will not be republished. Section 29.21 is repealed. The amended sections are adopted in order to combine similar sections on disability and service retirement so as to eliminate repetition in the rules. The repeal of sec.29.21 eliminates a section made unnecessary by the combination of the rules. Changes were made to proposed sec.29.2 to modify the format of the subsection and add a subsection title for clarification. The amended sections also reflect statutory amendments made during the last legislative session. The amended sections eliminate from the rules an undesignated head for disability retirement and combine disability retirement sections with service retirement sections concerning eligibility, age and service requirements, minimum retirement benefits, retirement payment plans, and date of retirement and making application. The repeal of the section concerning the effective date for disability retirement eliminates a section made unnecessary by the combination of rules. The amended sections also provide for the same optional payment plans to be available to some disability retirees as are available to service retirees, as provided by recent statutory amendments. The amended sections also provide for the discontinuation of disability retirement benefits to retirees over 60 years of age under certain circumstances, in response to recent statutory amendments. Finally, they modify the conditions under which the death benefit options are available to the beneficiary of a disability retiree, as provided by recent statutory amendments. No comments were received regarding adoption of the sections. 34 TAC sec.sec.29.1, 29.2, 29.7, 29.8, 29.12, 29.23, 29.24, 29.26 The amendments are adopted under the Texas Government Code, sec.825.102, which authorizes the TRS Board of Trustees to adopt rules for the administration of the funds of the retirement system, and sec.sec.824.301-824.308, which govern eligibility for, and payment of, disability retirement benefits. sec.29.2. Age and Service Requirements for [Service] Retirements. Retirement benefits are payable according to the following schedule. See also sec.29.3 of this title (relating to Standard Annuity) for computation of standard annuity, sec.29.7 of this title (relating to Minimum Retirement Benefits) for minimum benefits, and sec.29.8(b) of this title (relating to Retirement Payment Plans) for optional reduced benefits. All retired members except those disability retirees whose benefits have ceased under the Government Code, sec.824.304(a) are covered by survivor benefits. The following is a list of length of service, age, and benefits. (1) Service retirement: (A) normal age retirement: (i) 30 years or more-55: the larger of a standard annuity or a minimum benefit; (ii) 20 years through 29 years-60: the larger of a standard annuity or a minimum benefit; (iii) five years through 19 years-65: the larger of a standard annuity or a minimum benefit; (B) early age retirement: (i) five years through 19 years-between 55 and 65: the larger of a standard annuity or a minimum benefit reduced from age 65; (ii) 20 years through 29 years-between 55 and 60: the larger of a standard annuity or a minimum benefit reduced from age 60; (iii) 30 years or more-any age below 55: the larger of a standard annuity or a minimum benefit reduced from age 55. (2) Disability retirement: (A) less than 10 years: $50 a month for the shorter of: (i) the duration of the disability; or (ii) the number of months of creditable service; (B) 10 years or more: the larger of a standard annuity or a minimum benefit. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209445 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Disability Retirement 34 TAC sec.29.21 The repeal is adopted under the Texas Government Code, sec.825.102, which authorizes the TRS Board of Trustees to adopt rules for the administration of the funds of the retirement system, and sec.sec.824.301-824.308, which govern eligibility for, and payment of, disability retirement benefits. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209446 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Death Before Retirement 34 TAC sec.29.31 The amended section is adopted under the Texas Government Code, sec.825. 102, which authorizes the TRS Board of Trustees to adopt rules for the administration of the funds of the retirement system, and sec.sec.824.301-824.308, which govern eligibility for, and payment of, disability retirement benefits. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209447 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 Plan Limitations 34 TAC sec.29.51 The Teacher Retirement System of Texas (TRS) adopts an amendment to sec.29. 51, concerning plan limitations on retirement benefits, without changes to the proposed text as published in the May 12, 1992, issue of the Texas Register (17 TexReg 3452). The amended section is adopted in order to clarify the scope and applicability of the section. The amended section will eliminate the word "service" from the title of the section to clarify that restrictions may apply to disability retirement benefits as well as service retirement benefits. No comments were received regarding adoption of the amendment. The amended section is adopted under the Texas Government Code, sec.825.102, which authorizes the TRS Board of Trustees to adopt rules for membership eligibility and the administration of the funds of the retirement system, and sec.825.506, which provides the Board with the authority to adopt rules to the extent necessary for the retirement system to be a qualified plan. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 8, 1992. TRD-9209448 Wayne Blevins Executive Secretary Teacher Retirement System of Texas Effective date: September 1, 1992 Proposal publication date: May 12, 1992 For further information, please call: (512) 370-0524 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 48. Community Care for Aged and Disabled Eligibility 40 TAC sec.48.2911, sec.48.2918 The Texas Department of Human Services (DHS) adopts amendments to sec.48. 2911 and sec.48.2918 concerning family care and eligibility for primary home care, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4160). The justification for the amendments is to increase the maximum number of hours per week a client can receive family care and primary home care services. For a Priority 1 client, the maximum number of hours will increase from 30 to 39. For others, the maximum number of hours will increase from 30 to 50 hours. The amendments will function by assisting individuals who need additional hours of service to remain in the community. No comments were received regarding adoption of the amendments. The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 32, which provides the department with the authority to administer public and medical assistance programs. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 15, 1992. TRD-9209696 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: August 5, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 450-3765 Texas Department of Insurance Exempt Filing Notification Pursuant to the Insurance Code, Chapter 5, Subchapter L (Editor's note: As required by the Insurance Code, Article 5.96 and Article 5.97, the Register publishes notices of actions taken by the State Board of Insurance pursuant to Chapter 5, Subchapter L, of the Code. Board action taken under these articles is not subject to the Administrative Procedure and Texas Register Act. These actions become effective 15 days after the date of publication or on a later specified date. The text of the material being adopted will not be published, but may be examined in the offices of the State Board of Insurance, 333 Guadalupe, Austin.) The State Board of Insurance of the Texas Department of Insurance adopted on July 9, 1992, a filing by the Fireman's Fund Insurance Company, Novato, California of revisions to the standard and uniform Premium Finance Company Errors and Omissions Policy. In accordance with the provisions of the Insurance Code, Article 5.97, a text of the filing has been filed in the office of the Chief Clerk of the Texas Department of Insurance. The filing has been available for public inspection for 15 days, and a public hearing has not been requested by any party. The policy revisions add policy wording required by the Insurance Code, Article 21.49-2D. There are no rate consequences to the adopted form revisions. This filing becomes effective on the 15th day after notice of this action is published in the Texas Register. This notice is filed pursuant to the Insurance Code, Article 5.97, which exempts board action on this filing from the requirements of the Administrative Procedure and Texas Register Act. (Reference Number 0692-32I). This notification is made pursuant to the Insurance Code, Article 5.97, which exempts it from the requirements of the Administrative Procedure and Texas Register Act. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on July 10, 1992. TRD-9209549 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: August 5, 1992 For further information, please call:(512) 463-6327