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 1. ADMINISTRATION Part I. Office of the Governor Chapter 5. Budget and Planning Office Subchapter B. State and Local Review of Federal and State Assistance Applications Introduction and General Provisions of Texas Review and Comment System 1 TAC sec.5.195 The Governor's Office adopts an amendment to sec.5.195, concerning Texas Review and Comment System (TRACS), with changes to the proposed text as published in the July 7, 1992, issue of the Texas Register (17 TexReg 4847). These adopted changes delete programs no longer in existence or no longer deemed necessary to be reviewed; add programs created since TRACS was last amended; and conform program numbers to current listings in the Catalog of Federal Domestic Assistance (CFDA). The changes are expected to make the review system more effective. Applications for financial assistance under Tables I and II must be submitted to the state single point of contact or to the regional review agencies, as appropriate, for review. Comments were received from the Texas Department of Transportation pointing out a number of changes in names and CFDA numbers in Tables I and II. These changes have been incorporated. The Texas Association of Regional Councils requested that a number of programs administered by the Texas Water Commission be added to Table II. These include all solid waste programs funded from municipal solid waste tipping fees (Fund 013), the Used Oil Recycling Program, and the Waste Tire Program. These programs were added without objection from the Water Commission. Capital Area Planning Council (CAPCO) commented that programs for which funds are set aside, such as substance abuse and services for the disadvantaged, should not be reviewed, as they are approved by the funding agencies whether they are reviewed or not. CAPCO also recommended that programs directly impacting areas, such as construction projects and economic and industrial development, should be reviewed. These principles were incorporated, to the extent possible. Middle Rio Grande Development Council recommended that all existing programs continue to require TRACS reviews. This suggestion was rejected as counter to the intent of the review system to exclude those programs and projects with little potential impact and those which receive little or no substantive comments over time. Houston-Galveston Area Council (H-GAC) recommended dropping education programs dealing with curriculum development, personnel training, and research. H-GAC also suggested exempting from review the Volunteers in Service to America Program (VISTA) volunteer projects and including programs funded under the Victims of Crime Act. These suggestions were incorporated to the extent that they do not conflict with the Texas Education Agency's desire to review certain education programs; crime victim assistance programs were added, as they are already being submitted for review at the direction of the governor's Criminal Justice Division. VISTA has been deleted from coverage under Table I. The Texas Education Agency recommended keeping the Follow Through Program (CFDA 84.014), the National Diffusion Network (CFDA 84.073), and the Improvement and Reform of Schools and Teachers Program and the Texas Comprehensive School Health Initiative under CFDA 84.232, Mid-Career Teacher Training. TEA asked that the Even Start Program (CFDA 84.213) and the Innovation in Education Program (CFDA 84.215) be added to the list of programs requiring review. These recommendations are all reflected in the rule as republished for adoption. The Texas Department of Housing and Community Development (TDHCA) requested that the non-entitlement Community Development Block Grant Program (CFDA 14. 228) continue to be exempted from TRACS review. This was agreed to, based on the current overlap between membership on the CDBG regional review committees (RRCs) and the regional council executive committees, which must formally adopt TRACS recommendations prior to transmittal to funding agencies. It was also felt that the involvement of regional council staff in supporting the RRCs should provide adequate opportunities for TRACS issues to be identified and resolved prior to project funding. On page 4868 of the proposed rule, the last sentence should have read "ALL STATE AGENCIES: ..." instead of "AGENCIES:...." This has been corrected in the republication. The amendment is adopted under Texas Civil Statutes, Article 4413 (32a), and the Local Government Code, Chapter 391. These laws authorize the Governor's Office to provide for the review of state and local applications for financial assistance and to establish policies and guidelines for review and comment. The Local Government Code, Chapter 391 requires applicants for state or federal assistance to submit their applications to the appropriate regional planning commissions for review and directs the governor to issue guidelines for carrying out such reviews. The Governor's Office proposes amendments to 1 TAC Section 5.195 of the Texas Review and Comment System (TRACS) rules. These proposed changes delete programs no longer in existence or no longer deemed necessary to review; add new programs for review, and conform program numbers to current listings in the Catalog of Federal Domestic Assistance. Applications for financial assistance under programs listed in Tables I and II must be submitted to the State Single Point of Contact or Regional Review Agencies, as appropriate, for review. The amendments are proposed under Texas Civil Statutes, Articles 4413(32a) and 1011m, which authorize the Governor's Office to provide for the review of state and local applications for grant and loan assistance and to establish policies and guidelines for review and comment. Article 1011m requires applicants for state or federal assistance to submit their applications for review to the appropriate regional planning commissions and directs the governor to issue guidelines for carrying out such reviews. sec.5.195. Program Coverage. (a)-(b) (No change.) (c) Federal programs included for review under TRACS pursuant to these laws, plus selected other activities, including all direct federal development, are shown in Table I. Copies of Table I may be obtained from the State Single Point of Contact, Governor's Budget and Planning Office, P.O. Box 12428, Austin, Texas 78711. As required by state law (Article 4413 32(a)), all state agencies must notify the governor's office when applying for federal funds. [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 September 28, 1992. TRD-9213470 David Talbot General Counsel Office of the Governor Effective date: October 27, 1992 Proposal publication date: July 3, 1992 For further information, please call: (512) 463-1778 TITLE 4. AGRICULTURE Part III. Texas Feed and Fertilizer Control Service Chapter 61. Feed Labeling 4 TAC sec.61.23 The Texas Feed and Fertilizer Control Service adopts an amendment to sec.61.23, concerning commercial feed rules, without changes to the proposed text as published in the August 21, 1992, issue of the Texas Register (17 TexReg 5717). Editorial correction is necessary to change the reference from sec.61.22(3) (A)(iv) to sec.61.22(3)(D). The section will function as before. The change is editorial. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Agriculture Code, Chapter 141, sec.141.004, which provides the Texas Feed and Fertilizer Control Service with the authority to adopt rules relating to the distribution of commercial feeds. 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 October 7, 1992. TRD-9213577 George W. Latimer, Jr. Texas State Chemist Texas Feed and Fertilizer Control Service Effective date: October 29, 1992 Proposal publication date: August 21, 1992 For further information, please call: (512) 845-1121 Chapter 61. Feed Penalties 4 TAC sec.61.61 The Texas Feed and Fertilizer Control Service adopts an amendment to sec.61.61, concerning commercial feed rules, without changes to the proposed text as published in the August 21, 1992, issue of the Texas Register (17 TexReg 5717). Editorial correction is necessary to change the reference from sec.61.22(f) (3)(A) to sec.61.22(4)(A). The section will function as before. Change is editorial only. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Agriculture Code, Chapter 141, sec.141.004, which provides the Texas Feed and Fertilizer Control Service with the authority to adopt rules relating to the distribution of commercial feed. 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 October 7, 1992. TRD-9213578 George W. Latimer, Jr. Texas State Chemist Texas Feed and Fertilizer Control Service Effective date: October 29, 1992 Proposal publication date: August 21, 1992 For further information, please call: (512) 845-1121 TITLE 16. ECONOMIC REGULATION Part II. Public Utility Commission of Texas Chapter 21. Practice and Procedure Miscellaneous 16 TAC sec.21.182 The Public Utility Commission of Texas adopts the repeal of sec.21.182, concerning Public Utility Commission assessment. The proposal to repeal the rule was published in the August 21, 1992, issue of the Texas Register (17 TexReg 5717). The rule being repealed provided a mechanism for adjusting utility rates to reflect changes in the rate of the assessment that the utilities pay to the State of Texas pursuant to the Texas Civil Statutes Article 1446c, sec.78. The section also required utilities to state the rate of the assessment on their bills. On July 13, 1992, the Attorney General issued an opinion finding invalid this Rule of Practice and Procedure. Comments were received from Southwestern Public Service Company, the Office of Public Utility Counsel, DeWitt County Electric Cooperative, Inc., El Paso Electric Company, Nueces Electric Cooperative, Inc., Deep East Texas Electric Cooperative, Inc., and Central Telephone Company of Texas. All of the comments supported the deletion of the rule. The repeal is adopted under PURA, sec.16(a) which provides the Public Utility Commission of Texas with the authority to make and enforce the rules reasonably required in the exercise of its powers and jurisdiction. 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 October 5, 1992. TRD-9213501 John W. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 27, 1992 Proposal publication date: August 21, 1992 For further information, please call: (512) 458-0100 Chapter 23. Substantive Rules General Rules 16 TAC sec.23.5 The Public Utility Commission of Texas adopts the repeal of sec.23.5, concerning Public Utility Commission assessment. The proposal to repeal the rule was published in the August 21, 1992, issue of the Texas Register (17 TexReg 5718). The rule being repealed provided a mechanism for adjusting utility rates to reflect changes in the rate of the assessment that the utilities pay to the State of Texas pursuant to the Texas Civil Statutes, Article 1446c, sec.78. The section also required utilities to state the rate of the assessment on their bills. On July 13, 1992, the Attorney General issued an opinion finding invalid a related rule of practice and procedure. The commission is repealing both rules. Comments were received from Southwestern Public Service Company, the Office of Public Utility Counsel, DeWitt County Electric Cooperative, Inc., El Paso Electric Company, Nueces Electric Cooperative, Inc., Deep East Electric Cooperative, Inc., and Central Telephone Company of Texas. All of the comments supported the deletion of the rule. The repeal is adopted under PURA, sec.16(a), which provides the Public Utility Commission of Texas with the authority to make and enforce the rules reasonably required in the exercise of its powers and jurisdiction. 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 October 5, 1992. TRD-9213502 John W. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 27, 1992 Proposal publication date: August 21, 1992 For further information, please call: (512) 458-0100 Certification 16 TAC sec.23.33 The Public Utility Commission of Texas adopts an amendment to sec.23.33 concerning telephone solicitation, with changes to the proposed text as published in the May 19, 1992, issue of the Texas Register (17 TexReg 3679). The purpose of the amendment is to require telephone solicitors to state the purpose of the call, the identity of the person and company or organization making the call, and a telephone number at which the person and company or organization making the call may be reached, except where the provision so such information is prohibited under the federal Fair Debt Collection Practices Act (15 United States Code, sec.1692, et seq). During the 30-day comment period specified in the May 19, 1992, issue of the Texas Register comments in support of the proposed amendment were received from the Office of Public Utility Counsel and MCI Telecommunications Corporation (MCI). Other comments were received from AT&T Communications of the Southwest, Inc. (AT&T). MCI and AT&T requested modifications to the proposed amendment. No comments in opposition to the proposed amendment were received. MCI and AT&T suggested that language be modified to require the telephone solicitor to state either the telephone number from which the call was made or another telephone number at which the person, company, or organization making the call may be reached. The suggestion was made because some originating telemarket offices operate on a strictly outbound basis, and can not receive incoming calls. As such, customers can not directly contact the organization responsible for the soliciting. The amendment was modified to meet the concerns of the commenters. Other modifications were made to conform the amendment more closely to the provisions of Texas Business and Commerce Code, sec.37.02 (Vernon Supplement 1992). The PUC is granted all necessary power and authority to enforce Texas Civil Statutes, Article 1446c, sec.119, which requires every telephone solicitor operating in Texas who makes consumer telephone calls subject to the Business and Commerce Code, sec.37.02, to implement in-house systems and procedures so that every effort is made not to call consumers who ask not to be called again. The amendment as adopted will give consumers direct access to the solicitors so that they may more easily make this request. It will also allow the PUC to obtain the necessary information to monitor the effectiveness of the requisite systems and procedures. The amendment is adopted under Texas Civil Statutes, Article 1446c, sec.16, which provides the Public Utility Commission of Texas with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction; and sec.119, which places certain requirements on telephone solicitors and grants the commission authority to enforce its provisions. sec.23.33. Telephone Solicitation. (a)-(c) (No change.) (d) Responsibilities of telephone solicitors. (1) Each telephone solicitor operating in this state who makes consumer telephone calls shall implement systems and procedures so that every effort is made not to call consumers who ask not to be called again. Upon request, a telephone solicitor shall provide a written description of such systems and procedures to the Public Utility Commission. (2) Every telephone solicitor must state the purpose of the call, the identity of the person and company or organization making the call, and a telephone number at which the person, company, or organization making the call may be reached, except where the provision of such information is prohibited under the federal Fair Debt Collection Practices Act (15 United States Code, sec.1692 et seq). 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 October 5, 1992. TRD-9213503 John M. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 27, 1992 Proposal publication date: May 19, 1992 For further information, please call: (512) 458-0100 Customer Service and Protection 16 TAC sec.23.57 The Public Utility Commission of Texas adopts an amendment to sec.23.57, concerning telecommunications privacy, with changes to the proposed text as published in the July 3, 1992, issue of the Texas Register (17 TexReg 4725). The amendment establishes a requirement that local exchange carriers (LECs) who provide caller identification (caller ID) services must offer free per-call and free per-line blocking options to all customers unless otherwise ordered by the commission. The public benefit anticipated as a result of enforcing the amendment will be to control the outflow of information about telecommunications customers by maintaining current expectations of privacy until the commission has had an opportunity to fully analyze caller identification services through hearings and public comment. The United States Senate is currently considering S. 652: "The Telephone Privacy Act of 1991" which would preempt the states from enacting a per-line blocking regulation different from that which is included in the bill. However the bill also contains language that would permit a different state per- line blocking requirement if such a requirement is in place prior to the date of enactment of the law. Therefore, this amendment to sec.23.57 is adopted as necessary in order to preserve the commission's options at a later date. The following submitted comments in response to the July 3, 1992 Texas Register publication: the American Civil Liberties Union of Texas (ACLU); the Texas Council on Family Violence; GTE Southwest Incorporated and Contel of Texas (GTE- SW); Consumers Union; United Telephone of Texas, Inc. (United); the Texas Gray Panthers; the Office of Public Utility Counsel (OPUC); the Texas Telephone Association (TTA); AT&T Communications of the Southwest, Inc. (AT&T); Southwestern Bell Telephone (SWBT); the Texas Medical Association (TMA); the State of Texas (the State); an individual from DeSoto, Texas; and an individual from Plano, Texas. GTE-SW and Contel filed joint comments. Reply comments were received from AT&T. The ACLU, Texas Council on Family Violence, OPUC, Consumers Union and the State of Texas supported the amendment as a means of avoiding federal pre-emption on the issue of per-line blocking. They agreed that if adopted, the amendment would enable the commission to maintain its authority to evaluate the various issues raised by the introduction of caller ID service and to determine what policy would best serve the citizens of Texas. OPUC expressed a common sentiment: "The states should retain the freedom to address the important and controversial issues raised by caller ID in ways that make sense in their jurisdictions." In contrast, AT&T, SWBT, and GTE-SW commented that the proposed amendment went beyond its stated objective and, if adopted, would have the practical effect of mandating free per-line blocking with caller ID service. AT&T commented that if adopted, the proposed rule would "affirmatively establish commission policy," thereby diverging from the commission's expressed intent to evaluate privacy concerns for new services on a case-by-case basis. AT&T urged the commission to withdraw the rule and to consider the policy decision with regard to blocking in the scope of Southwestern Bell's recently filed caller ID application. However, if the commission maintains that the rule is necessary to preserve its ability to consider per-line blocking options for subsequent caller ID filings, AT&T suggested revisions to the rule that it believed would eliminate its concern that the commission has already made a decision with respect to per-line blocking. AT&T recommended replacing the phrase "Unless otherwise ordered by the commission" in proposed subsection (g) (2) with: "When necessary to restore a lost degree of privacy" AT&T also suggested changing the "and" at the end of proposed subsection (g)(2)(A) to read "and/or" so that a carrier would not necessarily have to provide both per-call and per-line blocking. In its comments, SWBT also contended that the proposed amendment "goes beyond the objective of flexibility" and in the absence of evidence or a record regarding caller ID service, "any attempt to restrict the form of the service offering at this point would be premature." Furthermore, SWBT contended that the amendment was unduly burdensome. An LEC should be able to file an application to provide caller ID service "without the burden of establishing why the service does not provide free per-line and/or free per-call options to all customers." SWBT suggested a rewording of proposed subsection (g)(2) that it believes would better balance the interests of the calling party and the called party. SWBT's suggested changes to proposed subsection (g)(2) would eliminate the requirement that blocking options be provided at no charge and would allow per-line blocking to be provided to only certain categories of customers. SWBT also suggested that proposed subsection (g)(2) be reworded so that the commission "may" require an LEC to provide blocking options. GTE-SW commented that it believes it will be difficult for an LEC to qualify for a waiver from the blocking requirements. The proposed amendment permits waiver of the blocking requirements pursuant to subsections (b) and (c) of the current rule, which permit a utility to "show good cause" for not restoring privacy and/or charging a fee to restore privacy. GTE maintained that because sec.23.57 is designed to protect the privacy interests of the calling party, there is "little likelihood" that an LEC will be able to meet the good cause exception from the blocking requirements. Since the amendment appears to presume that blocking options are in the public interest, GTE-SW argued, this presumption will be very difficult to overcome. Furthermore, the per-line blocking requirement tips the balance unfairly in favor of the calling party, providing him or her with "a right to anonymity which does not exist in law or fact and destroys the called party's right to privacy." The commission does not agree that the amendment is overly restrictive, nor that it is inconsistent with the commission's intent to evaluate privacy concerns on a case-by-case basis. The rule provides for local exchange service customers to be able to "control the outflow of information about themselves." When a customer may experience a lost degree of privacy as result of a new service offering, the LEC must state how the lost degree of privacy can be restored, and what charge, if any, will apply. The LEC must also show good cause for any charge incurred or for not offering the customer a means by which the lost privacy can be restored. Caller ID is a service that affects the outflow of information about the calling party, and the per-call and per-line blocking options are a means by which the calling party can restore his/her "lost degree of privacy" if he/she chooses to do so. Thus, the requirement that an LEC provide blocking options with caller ID service is entirely consistent both with the rule's objective of allowing a local exchange customer to control the outflow of information about him/herself and with the rule's provisions for requiring an LEC to provide a means for restoring lost privacy at no charge, unless it can meet the "good cause" exception. Furthermore, the amendment does not preclude consideration of blocking requirements on a case-by-case basis, because it allows for the waiver of blocking requirements when an LEC can demonstrate a "good cause" for doing so. These "good cause" waiver requests will be evaluated on a case-by-case basis. The commission rejects the changes suggested by SWBT that would eliminate the requirements that the blocking options be provided free of charge and available to all customers. The commission also rejects the suggested language changes of AT&T, which would eliminate the requirement that both blocking options be offered. Furthermore, it does not appear that AT&T's suggested change to proposed subsection (g)(2) would significantly affect the ability of the LEC to obtain a waiver from the requirements of subsection g). While some parties felt that the amendment was too restrictive, others commented that the amendment did not go far enough. Texas Council on Family Violence, Consumers Union, the Texas Gray Panthers and TMA commented that while the proposed amendment was a step in the right direction, mandatory per-line blocking as the default would better preserve current privacy expectations. Per- line blocking as the default means that lines would automatically be blocked unless an end user elects to unblock his/her line. Consumers Union commented that per-line blocking as the default would enable end users to "maintain the status quo unless they choose otherwise." The commission acknowledges that for some, per-line blocking as the default may best preserve existing privacy expectations. The commission also recognizes that we are in a changing telecommunications environment. The commission has a responsibility to ensure that Texans enjoy the benefits of a developing telecommunications infrastructure. Because the purpose of this rulemaking is primarily the preservation of options in the face of pending statutory amendments, and because the issue of free and default options will be fully explored in any service or tariff application, the commission does not, at this time, resolve these issues. TMA and Consumers Union commented that there should be no opportunity for an LEC to waive the blocking requirement. Consumers Union contended that "there can be no good cause for not restoring privacy or for charging a fee for privacy when offering Caller ID." Furthermore, Consumers Union asserted that the prohibition of waivers would ensure the same privacy protections for customers throughout the state. TMA also objected to the opportunity for waivers because it "gives the commission the ability to, at the urging of a local exchange carrier, delete either or both blocking options." The commission disagrees with the suggestion that there should be no opportunity for a waiver of the blocking requirement. The rule addresses "good cause" in order to allow an LEC to provide explanation for not restoring a lost degree of privacy when introducing a new service. With caller ID service, the LEC should also be given the opportunity to request a waiver from the blocking requirements. However, when a waiver has been requested, the commission determines whether "good cause" has been shown, not the LEC. Many parties commented on the pros and cons of requiring free per-call and free per-line blocking options with caller ID service. While these comments are not directly related to the amendment since the amendment essentially preserves the commission's authority to determine an appropriate caller ID policy in the context of a caller ID service filing, these comments are relevant in that they reflect the wide range of opinions surrounding the blocking issue. This diversity only makes more apparent the need for the commission to retain its authority to weigh the various arguments made and to determine the blocking policy that best serves the public interest; a goal that this amendment will accomplish. These comments are summarized as follows. The ACLU, Texas Gray Panthers, Texas Council on Family Violence, OPUC, Consumers Union, TMA and the State expressed their support for a free per-call and free per-line blocking requirement. OPUC agreed that free per-line blocking "is the only way to completely maintain existing privacy expectations" because it allows customers to safeguard their privacy without taking the extra steps required by per-call blocking. Texas Gray Panthers observed that the dialing of extra digits necessary for per-call blocking is "a hardship for many elderly and mobility impaired individuals." Texas Council on Family Violence commented that per-line blocking is an "essential component of safety" to both domestic violence organizations and to battered women. TMA contended that caller ID without blocking requirements could "create conflicts" with the physician- patient relationship. Consumers Union commented that if free per line blocking is not offered at the outset, "in the future we may see phone companies marketing per line blocking, at a fee, to customers who are frustrated by per call blocking." Consumers Union and Texas Gray Panthers commented that free blocking is appropriate, since end users should not be required to pay a fee to restore privacy. The costs of blocking should be identified and recovered from the rates for caller ID service, not from customers of basic service. GTE-SW, United, SWBT and AT&T all expressed concern that a per-line blocking requirement would hamper the deployment of caller ID services. GTE-SW emphasized that widespread use of per-line blocking would deter deployment of caller ID by it and other LECs and "may entirely preclude the introduction of caller ID technology in Texas." United also commented that free per-line blocking can "diminish significantly" the value of caller ID. United commented that while it is essential that certain limited types of customers be able to obtain blocking options, free per-line blocking need not be available to all customers. AT&T commented that a per-line blocking requirement hampers "the effectiveness of caller ID overall by failing to limit its applicability to those calling circumstances where privacy is important to the calling party." Furthermore, SWBT commented that the requirements of the proposed subsection may limit the content of future caller ID applications filed. Similarly, AT&T commented that a widespread requirement that LECs provide free per-line blocking could discourage LECs from offering the service, and thus discourage development of compatible services in the future. United commented that per-line blocking is costly. According to United, in order to provision per-line blocking, LECs incur service order costs of installing per-line blocks, and in some cases, additional switch memory must be installed because, unlike per-call blocking (which is rarely used), per-line blocking can require the use of significant switch memory. United estimated that the cost per central office. just for the software need to provide per-line blocking would be approximately $8,000. These costs could cause LECs to reevaluate offering caller ID service in Texas. TTA commented that permitting a charge for per-line blocking will ensure that the customer will more fully understand what the service is and the impact of using per-line blocking. GTE-SW, TTA, and AT&T commented that per-line blocking could jeopardize the safety of subscribers when caller ID is used in place of E911 in a particular area or by non-911 emergency agencies. With per-line blocking, the person making an emergency call to a center using caller ID must remember to unblock the call first. Because some calls to an emergency service may inadvertently be blocked, according to TTA, "the value of these less expensive forms of caller identification is degraded to the extent per-line blocking is encouraged through a free offering." In addition, TTA contended that since the same codes are currently being used to block a call on a per-call basis, as well as to unblock an individual call on a line that has per-line blocking, the confusion resulting from this could potentially jeopardize a person in an emergency situation. While the commission recognizes that some non-911 emergency service agencies may subscribe to caller ID service in order to assist them in identifying incoming calls, the possibility that some of the incoming calls may be blocked is an issue that the agency will have to consider when choosing whether or not to order the caller ID service. Likewise, it is an issue that the end user may consider when deciding whether or not to subscribe to per-line blocking. However, the possibility that some calls to non-911 emergency centers may be blocked does not provide a compelling reason for restricting the commission's options in this rulemaking. Nor does TTA's argument that the availability of free per-line blocking diminishes the value of caller ID services to non-911 emergency centers justify such a restriction. It should be emphasized, however, that neither per-line or per-call blocking will affect the transmission of originating telephone numbers to 911. 911 services use automatic number identification (ANI), which cannot be blocked. However, to avoid the possibility of any ambiguity about the blocking of numbers to 911 services, the commission has added a new paragraph (now subsection (g)(1)) which specifically excludes 911 and enhanced 911 (E911) services from the provisions of subsection (g). SWBT, AT&T, and GTE-SWB expressed concern that proposed subsection (g) could be construed to include ANI. SWBT believed that the reference to "and/or other information" in proposed subsection (g)(1)(B), calling party identification, could be interpreted to include ANI and/or ALI (automatic location information) and recommended the insertion of the phrase "(except for ANI/ALI) in that subsection." AT&T concurred with SWBT on reply, emphasizing that "it is imperative that the transmission of ANI to IXCs (interexchange carriers) be unquestionably authorized under the rule." GTE-SW also expressed concern that in certain circumstances, such as in the provision of 800 and 900 services, ANI could fall within the proposed definition of caller ID service. GTE-SW suggested revising the proposed definition of caller ID service to explicitly exclude ANI. GTE-SW also recommended changes to the proposed definition of calling party identification and to the adopted definition of ANI, which it believed would eliminate any ambiguities. The commission did not intend for ANI to be subject to the requirements of subsection (g), nor does it agree that the amendment, as proposed, could be interpreted as applicable to ANI. However, in light of the concerns expressed, the commission has added subsection (g)(1) to eliminate the possibility that the provisions of subsection (g) could be construed to apply to ANI. GTE-SW commented that the proposed amendment discriminates against LECs by only addressing caller ID service provided by LECs. According to GTE, since IXCs and other telecommunications carriers have access to the technology used for caller ID service but will not be subject to the proposed rule's requirements, "the privacy interests of non-LEC customers will not be protected at all." While the commission recognizes GTE-SW's concern, the commission has limited jurisdiction over IXCs and other telecommunications carriers and thus cannot enforce blocking requirements for these carriers. However, to the extent the commission can protect the privacy concerns of local exchange customers, it has an obligation to do so. SWBT commented that proposed subsection (g)(1)(D) implies that a different code, other than the per-call blocking code, may be used by the calling party to disable the per-line blocking. SWBT commented that the technology necessary to dial two distinct codes, one to activate per-call blocking and a different code to disable per-line blocking, would not be available until mid-1995. Furthermore, since the ability of a calling party to disable per-line blocking is not necessary to the definition of per-line blocking, SWBT recommended the deletion of the phrase "unless the calling party acts affirmatively to release calling party identification" from the definition of per-line blocking in subsection (g)(1)(D). The commission does not agree with SWBT that the language in subsection (g)(1)(D) implies that a different code must be used to enable per-line blocking. Furthermore, whether or not the ability of a calling party to disable per-line blocking is technically part of the definition of per-line blocking, is not relevant for the purposes of this requirement. Per-call enabling will be considered to be part of the per-line blocking service as defined by proposed subsection (g)(1)(C) (now subsection (g)(2)(C)) and shall be subject to the requirements set forth in under subsection (g). When a free per- line blocking option is required under the provisions of this rule, it shall include the ability of the calling party to unblock on a per-call basis without charge. If a LEC chooses to contend that per-line blocking with per-call enabling is not technically feasible, it may so argue in its good cause showing under subsection (c) of this section. The State of Texas commented that dummy telephone numbers and names should be provided for law enforcement undercover operations because without such numbers, "Caller ID, even with per-line blocking, will endanger undercover investigators and/or compromise their operations." The state commented that sec.23.57 should be amended to require the provision of dummy numbers and names for law enforcement agencies. The rule does not in any way preclude the provision of dummy names and telephone numbers for law enforcement agencies. The commission believes that this issue would more appropriately be addressed in the context of a caller ID service filing and not in this amendment. The purpose of this amendment is not to establish a comprehensive policy on caller ID issues, but rather to prevent federal pre-emption on the issues of per-line and per-call blocking requirements. Comments made by the individual from DeSoto, the individual from Plano, as well as some of the comments from other parties were directed at caller ID services generally and were not relevant to this amendment. The amendment is adopted under Texas Civil Statutes, Article 1446c, sec.16, which provides the Public Utility Commission of Texas with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction. sec.23.57. Telecommunications Privacy. (a)-(f) (No change.) (g) Caller identification services. (1) Application. This subsection shall not be construed to apply to the delivery of ANI, as defined by subsection (a)(1) of this section, or to 911 or E911 services. (2) Definitions. The following words and terms, when used in this subsection, shall have the following meanings, unless the context clearly indicates otherwise. (A) Caller identification service (caller ID service) -A telecommunications service provided by a local exchange carrier that transmits calling party identification to a subscriber to the service. (B) Calling party identification-The calling telephone number, name, address, and/or other information that may be transmitted by a local exchange carrier to a called party. (C) Per-call blocking-A telecommunications service provided by a local exchange carrier that prevents the transmission of calling party identification to a called party on a call-by-call basis. (D) Per-line blocking-A telecommunications service provided by a local exchange carrier that prevents the transmission of calling party identification to a called party on every call, unless the calling party acts affirmatively to release calling party identification. (3) Per-call and per-line blocking options. Unless otherwise ordered by the commission pursuant to the provisions of subsections (b) and (c) of this section, local exchange carriers that provide caller ID service must: (A) provide all customers with a free per-call blocking option; and (B) provide all customers with a free per-line blocking option. 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 October 5, 1992. TRD-9213567 John M. Renfrow Secretary of the Commission Public Utility Commission of Texas Effective date: October 28, 1992 Proposal publication date: July 3, 1992 For further information, please call: (512) 458-0100 TITLE 19. EDUCATION Part I. Texas Higher Education Coordinating Board Chapter 5. Program Development Subchapter O. Offering of Small Classes by Public Senior Colleges and Universities 19 TAC sec.sec.5.301-5.304 The Texas Higher Education Coordinating Board adopts the repeal of sec.sec.5.301-5.304, concerning offering of small classes by public senior colleges and universities, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4155). The repeals will enable more efficient operation of public universities. The sections are being repealed and rewritten in response to Rider 19 in Article III of House Bill Number 1, 72nd Legislature. Semester credit hours generated in organized small classes would not be included when calculating the number of semester credit hours used for funding. No comments were received regarding adoption of the repeals. The repeals are adopted under Article III, Rider 19, House Bill 1, 72nd Legislature (1st called session), which provides the Coordinating Board with the authority to adopt rules regarding offering of small classes by public senior colleges and universities. 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 October 2, 1992. TRD-9213462 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 19 TAC sec.sec.5.301-5.303 The Texas Higher Education Coordinating Board adopts new sec.sec.5.301-5.303, concerning offering of small classes by public senior colleges and universities, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4155). The new sections will enable more efficient operation of public universities. The new sections are being proposed in response to Rider 19 in Article III of House Bill Number 1, 72nd Legislature. Semester credit hours generated in organized small classes would not be included when calculating the number of semester credit hours used for funding. No comments were received regarding adoption of the new sections. The new sections are adopted under Article III, Rider 19, House Bill 1, 72nd Legislature (1st called session), which provides the Coordinating Board with the authority to adopt rules regarding offering of small classes by public senior colleges and universities. 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 October 2, 1992. TRD-9213461 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 Chapter 13. Financial Planning Subchapter A. General Provisions 19 TAC sec.13.4 The Texas Higher Education Coordinating Board adopts the repeal of sec.13. 4, concerning general provisions, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4156). The section is being repealed because it pertains to grants that are no longer being offered by the Coordinating Board. State funds dedicated to the production of family physicians will not be entirely allocated to residency programs that produce family physicians within at most one year of their being funded. No comments were received regarding adoption of the repeal. The repeal is proposed under the Texas Education Code, sec.61.503, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules regarding Criteria for allocation of Fiscal Year 1978 funds appropriated for funding Family Practice Residency 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 October 2, 1992. TRD-9213463 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 Subchapter D. Procedures and Criteria for Funding of Family Practice Residency Programs 19 TAC sec.sec.13.61-13.73 The Texas Higher Education Coordinating Board adopts the repeal of sec.sec.13. 61-13.73, concerning financial planning, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4156). The rules are being repealed and rewritten to allow the Coordinating Board to make the most efficient and effective use of the funds appropriated for the Family Practice Residency Program. The amendments will also clarify the administration of related support programs for the Family Practice Residency Program. The rules will function to focus state funds on those family practice residency programs that are already functioning and producing family physicians, rather than on prospective programs that will take a few years to begin producing physicians. State funds dedicated to the production of family physicians will not be entirely allocated to residency programs that produce family physicians within at most one year of their being funded. No comments were received regarding adoption of the repeals. The repeals are adopted under the Texas Education Code, sec.61.503, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules regarding Procedures and Criteria for Funding of Family Practice Residency 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 October 2, 1992. TRD-9213465 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 19 TAC sec.sec.13.61-13.67 The Texas Higher Education Coordinating Board adopts new sec.sec.13.61-13.67, concerning financial planning, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4156). The new sections will allow the Coordinating Board to make the most efficient and effective use of the funds appropriated for the Family Practice Residency Program. The new sections will also clarify the administration of related support programs for the Family Practice Residency Program. The rules will function to focus state funds on those family practice residency programs that are already functioning and producing family physicians, rather than on prospective programs that will take a few years to begin producing physicians. State funds dedicated to the production of family physicians will not be entirely allocated to residency programs that produce family physicians within at most one year of their being funded. No comments were received regarding adoption of the new sections. The new sections are proposed under the Texas Education Code, sec.61.503, which provides the Texas Higher Education Coordinating Board with the authority to adopt rules regarding procedures and criteria for funding of family practice residency 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 October 2, 1992. TRD-9213464 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 Chapter 21. Student Services Subchapter C. Hinson-Hazlewood College Student Loan Program for all Loans which are Subject to the Provisions of the Guaranteed Student Loan Program, the College Access Loan Program, the Health Education Assistance Loan Program, and the Health Education Loan Program 19 TAC sec.21.64 The Texas Higher Education Coordinating Board adopts an amendment to sec.21.64, concerning student services, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4158). The amendment is needed in order to simplify the awarding of loan repayment deferments in the College Access Loan Program. The amendment will separate the operation of the loan repayment deferment procedures of the College Access Loan Program from the procedures used for awarding deferments in loan programs with guarantees provided by the United States Department of Education. Administration of the College Access Loan Program will be simplified. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Education Code, sec.52.54, which provides the Coordinating Board with the authority to adopt rules regarding the Hinson-Hazlewood College Student Loan Program (Repayment of Loans). 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 October 2, 1992. TRD-9213467 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 Subchapter CC. Tuition Credit Program 19 TAC sec.sec.21.950-21.959 The Texas Higher Education Coordinating Board adopts new sec.sec.21.950-21. 959, concerning the tuition credit program, without changes to the proposed text as published in the June 9, 1992, issue of the Texas Register (17 TexReg 4158). The new sections are needed for implementation of a new student financial assistance program provided for in House Bill 1, 72nd Legislature, First Called Session, Rider Number 23, III-9. The rules will provide operating guidelines for the new program. Eligible students will receive up to $1,000 of tuition credit for one year of college if graduating high school in three as opposed to four years. Correspondingly, the public school attended by the student will receive less funding due to the student's early graduation. No comments were received regarding adoption of the new sections. The new sections are adopted under Article III, Page III-9, House Bill 1, 72nd Legislature (1st called session), which provides the Coordinating Board with the authority to adopt rules regarding the Tuition Credit Program. 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 October 2, 1992. TRD-9213466 James McWhorter Assistant Commissioner for Administration Texas Higher Education Coordinating Board Effective date: October 27, 1992 Proposal publication date: June 9, 1992 For further information, please call: (512) 483-6160 TITLE 22. EXAMINING BOARDS Part XX. Texas Board of Private Investigators and Private Security Agencies Chapter 423. Rules of Procedure and Seal 22 TAC sec.423.1 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.423.1 concerning standards of conduct, without changes to the proposed text as published in the June 26, 1992, issue of the Texas Register (17 TexReg 4600). The board has determined that amendment of this section is necessary upon the advice of the Office of the Attorney General in order to conform to the requirements of Attorney General Opinion Number DM-68 dated December 11, 1991. The section will require a conviction of a felony instead of the previous indictment. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4413 (29bb), sec.11, which provide the Texas Board of Private Investigators and Private Security Agencies with the authority to promulgate all rules and regulations necessary in carrying out the provisions of this 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 October 5, 1992. TRD-9213448 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: October 26, 1992 Proposal publication date: June 26, 1992 For further information, please call: (512) 463-5545 TITLE 22. EXAMINING BOARDS Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct Advertising and Soliciting 22 TAC sec.501.48 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 48 concerning responses, without changes to the proposed text as published in the July 21, 1992, issue of the Texas Register (17 TexReg 5058). The amendment is necessary in order to facilitate the agency's investigations of professional misconduct by Certified Public Accountants. The amendment requires Certified Public Accountants to cooperate with agency investigations by providing the agency with requested documentation and/or workpapers. 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 written response to board communications. 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 October 6, 1992. TRD-9213547 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: October 28, 1992 Proposal publication date: July 21, 1992 For further information, please call: (512) 450-7066 Part XXIX. Texas Board of Professional Land Surveying Chapter 661. General Rules of Procedures and Practices Applications, Examinations, and Licensing 22 TAC sec.661.50 The Texas Board of Professional Land Surveying adopts new sec.661.50 concerning surveyor intern experience requirements, without changes to the proposed text as published in the August 18, 1992, issue of the Texas Register (17 TexReg 5629). This new section will clearly define experience requirements for surveying interns. The new section is adopted to define what a surveying intern must do to become a Registered Professional Land Surveyor. The mandatory experience requirements will give the surveyor intern a better learning background to draw upon as a practicing Registered Professional Land Surveyor, thus providing the public with a better surveying product. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 5282c, sec.9, which provide the 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. 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 October 5, 1992. TRD-9213487 Sandy Smith Executive Director Texas Board of Professional Land Surveying Effective date: January 1, 1993 Proposal publication date: August 18, 1992 For further information, please call: (512) 452-9427 TITLE 28. INSURANCE Part I. TEXAS DEPARTMENT OF INSURANCE Chapter 1. General Administration Subchapter E. Notice of Toll-Free Telephone Numbers and Procedures for Obtaining Information and Filing Complaints 28 TAC sec.1.601 The State Board of Insurance of the Texas Department of Insurance adopts an amendment to sec.1.601, concerning the notice of policyholder and complaint procedures and toll-free telephone number information and complaint procedures, with changes to the proposed text as published in the July 7, 1992, issue of the Texas Register (17 TexReg 4871). This amendment requires insurers claiming an exception to the provisions of the Insurance Code, Article 21.71, which requires insurers to install and maintain a toll-free telephone number, to maintain certain records for the purpose of verifying entitlement to such exception. The amendment is necessary to assure the uniform, timely, and effective implementation, administration, and enforcement of the Insurance Code, Article 21.71. Article 21.71 provides that each insurer in this state shall maintain a toll-free telephone number to provide information concerning policies issued by the insurer and to accept complaints from policyholders. Although Article 21.71(b) provides an exception for insurers whose gross initial premium receipts collected in this state are less than $2 million a year, the statute does not specify either the procedures for claiming such an exception, or the method by which verification of entitlement to such an exception is to be made. The Board has determined that the most effective and cost effective manner of administering the exception created in Article 21.71 is by establishing provisions for records maintenance providing the agency with the level of information necessary to verify entitlement to the exception by an insurer in a manner which results in greatest administrative efficiency and lowest cost of compliance. Four changes have been made to the amendment as proposed and published, for purposes of clarifying the recordkeeping requirements set out in the amendment and for the purpose of revising the effective date of the requirement to maintain records in the format provided in the amendment. First, the change to subsection (c)(5) provides that the effective date for compliance with the recordkeeping requirements as provided in paragraph (5) is January 1993, for calendar year 1992. Second, paragraph (5) is changed to clarify that "other supporting data" required in connection with the claiming of an exception is intended to mean any data, other than that explicitly required in paragraph (5), upon which the insurer relied in making the determination that it is entitled to the exception. Third, paragraph (5) is changed to clarify that fees which must be tracked and considered in determining eligibility for the exception are those fees, assessments, dues, or other consideration received in exchange for the insurance provided. Fourth, paragraph (5) is changed by the addition of two subparagraphs to address the recordkeeping requirements when an insurer is claiming the exception based upon less than $2 million in gross premium receipts other than initial premium receipts. Subparagraph (A) addresses instances where an insurer is claiming the exception based upon less than $2 million, as reported on its annual statement, in gross premium receipts, in gross first-year premium receipts attributable to combined in-state and out-of- state business, or in gross first-year premium receipts attributable to Texas business for a calendar year. Such gross premium receipts will always be equal to or larger than gross initial premium receipts for a given carrier. Subparagraph (A) also addresses the instance where an insurer or HMO reports on its annual statement the amount of gross initial premium receipts attributable to Texas business. Subparagraph (B) addresses instances in which some insurers will be permitted to demonstrate entitlement to the exception based on the tracking of information relating to gross first-year premium receipts for Texas business, in a manner similar to that than for gross initial premium receipts. The adopted amendment to subsection (c) provides the means by which verification of entitlement to the exception for maintaining the toll-free telephone number required by the Insurance Code, Article 21.71, is made, by requiring insurers to maintain certain records. Insurers who claim the exception based on receipt of gross initial premiums for a particular calendar year must, for each new policy written during the period for which the exception is being claimed, maintain records designed to provide information about such premium receipts as set out in paragraph (5). Insurers who claim the exception based on receipt of less than $2 million in gross premiums other than initial premiums must comply with the applicable provisions of either subsection (c)(5)(A) or (B). Written comments against the amendment as proposed and published were received from the Texas Legal Reserve Officials Association (TLROA) and from Lone Star Life Insurance Company. In addition, TLROA requested and was granted a public hearing on the proposed amendment. The public hearing on the proposed amendment was convened September 28, 1992, as Docket Number R-1924. Two commenters questioned the statutory authority of the board to adopt an amendment addressing records required to be maintained in order to claim the exception, on the basis of the absence of clear grant of authority in the statute creating the Insurance Code, Article 21.71, and on the basis that Article 1.04(b) is insufficient to grant such authority to the board. The Department responds that the record is clear with respect to the stated position of the board on the matter of the statutory authority granted to it relative to the administration and enforcement of Article 21.71, which creates both the requirement for insurers to maintain a toll-free information and complaint telephone number, as well as the exceptions to the installation and maintenance of such a number. The board has determined that the amendment setting out specific items of information to be maintained is essential to the uniform, orderly, and effective administration of the statute consistent with the legislative intent apparent from the specific provisions of Article 21.71. The department believes that the records maintenance provision is necessary to facilitate uniform, predictable, effective claims of exception to Article 21. 71, and verification of such claims. Two commenters complained that the amendment as proposed would be applied to claims for exception made during calendar year 1992, even though the amendment will not in all likelihood be effective until late in the third quarter or early in the fourth quarter of the calendar year. The commenters pointed out that all insurers entitled to file a claim for exception during calendar year 1992 are required to have filed such claim as of May 1, 1992, pursuant to the requirements of subsection (c)(3). They also asserted that the department has the capacity to challenge a particular company's claim for exception made during calendar year 1992 under Article 1.10 or Article 1.24, and that therefore the amendment should be changed to require such records maintenance only for exceptions made during calendar years 1993 and thereafter. The department responds that when the records maintenance amendment was originally drafted, early in 1992, it was anticipated that the amendment would be adopted to be effective much earlier in the calendar year than October 1992. For that reason, the proposal included a records maintenance requirement for claims for exception made during calendar year 1992. Since it is now clear that it will be some time in October 1992 at the earliest before the amendment is effective, the adoption provides that the records maintenance requirements will be administered beginning with claims for exception made during calendar year 1993. Two commenters objected to the inclusion of fees in the specific requirement about premium data which must be systematically maintained with respect to each new policy written during a policy year. The objection was basically that the terminology "including fees" exceeds the statutory provision and is inappropriate. For that reason, it was urged that the "fee," which might well not be a part of the premium risk for the policy, should not be included as a part of initial premium. The department responds that the wording of the provision in question was patterned to be consistent with the Insurance Code, Article 4.11, sec.2(c), which sets out the definition of "gross premiums" for life accident and health insurance companies for purposes of determining the premium tax to be paid by such companies. The definition in sec.2(c) includes in the definition of "gross premiums" the following: "the total gross amount of all premiums, membership fees, assessments, dues, and any other considerations for such insurance received during the taxable year...." Since this definition clearly indicates that such items as membership fees and dues, are to be included in the calculation and determination of "gross premiums," the department believes it is entirely appropriate that any fees paid in connection with amounts determined as necessary to bind a coverage should be included in the initial premium information. The department agrees, however, that the use of the word "fees" alone could be subject to misinterpretation. The final adoption, therefore, clarifies that the fees to which the provision in question makes reference are those fees which are collected as part of the consideration to write the policy and bind the coverage. Two commenters objected to the inclusion of the term "other supporting data" concerning information, other than items specifically listed in paragraph (5), which is subject to departmental availability and examination. The commenters expressed the opinion that the term "other supporting data" is one having inherent ambiguity. The commenters suggested, alternatively, that the portion of the provision relating to "other supporting data" either be made more specific, or be deleted. The department recognizes the need for a change to make it clear that the "other" data subject to availability to and examination by the department is any additional data upon which the company relied in making the determination that it was entitled to the exception. For that reason, the final adoption makes such a clarification, and in so doing specifically restricts the "other" data to that data which was in existence at the time of the determination by the company of its entitlement to the exception, and which presumably was easily accessible, since it was data the company used in its own evaluation of entitlement to the exception. Two commenters suggested that the records maintenance required in paragraph (5) should not be required of insurers claiming an exception if those insurers had collected total first-year premiums in Texas of less than $2 million, on the basis that if the total first-year premiums were less than $2 million, the total initial premiums for the same time period would have to be less than $2 million, since total initial premium is always equal to or smaller than total first-year premium. In addition, the commenters expressed the opinion that total first-year premium receipts attributable to Texas business is easily verifiable and demonstrable, without the additional recordkeeping proposed by the amendment. The department agrees in part, and disagrees in part, with the specific comments made with respect to verification of first-year premiums by utilizing annual statement reporting. However, the final adoption includes a change to the amendment as originally proposed, which is set out as subparagraph (A) and subparagraph (B) to the amendment as proposed and published. The first of the two additional subparagraphs provides for exceptions to maintenance of information about receipt of initial premiums, based on other premium receipt information which is reported on the annual statement, where such information otherwise demonstrates entitlement to the exception to installation and maintenance of a toll-free telephone number under the statute. The second of the two additional subparagraphs provides for maintenance of a system by which information pertaining to receipt of first-year, rather than initial, premiums must be maintained on the same basis as that provided for in the portion of paragraph (5) relating to initial premium. With respect to the change incorporated as subparagraph (A), if the exception to maintenance of a toll-free telephone number is made for a calendar year based on receipt of less than $2 million of any of the types of premiums specified in clauses (i)-(iv), the receipt of initial premium likewise is going to be less than $2 million. Since the types of premiums specified in clauses (i)-(iv) relate to annual statement form reporting requirements, they are easily verified. The department believes that administration of sec.1.601 as amended is enhanced as a result of the change, which addresses both effectiveness and cost effectiveness of the record maintenance and verification functions associated with any claim to the exception. Additional subparagraph (B) addresses a situation in which verification of entitlement to the exception based on first-year premium is more difficult. In instances where an insurer writes both Texas business and other- state business, but nonetheless it has gross first-year premiums of fewer than $2 million attributable to Texas, such a figure is not easily verifiable from examining annual statement filings. For this reason, subparagraph (B) is included in the final adoption to provide an alternative to tracking by initial premium receipts for companies which must have a system to track information about premium receipts on a calendar year basis, but which have fewer than $2 million in gross first-year premium receipts attributable to Texas business in a given calendar year. Two commenters objected to the portion of the Texas Register summary stating that there will be no cost to insurers as a result of compliance with the section, since no provision of the section requires an insurer to seek an exception to the statute. The commenters took issue with the statement that costs associated with records maintenance requirements arise as a result of pursuing a statutory exception and that they are therefore statutory in nature. The department responds by restating that the claim to exception is statutory in nature and voluntary on the part of a carrier. In addition, the department notes that the records maintenance requirements relate to very fundamental information, specifically: the policy number, the effective date of the policy, and the amount of initial premium received for the policy. The maintenance of such essential information appears to the department to be absolutely crucial to any carrier, in usable form, in the ordinary course of its business. For these reasons, the department believes that the recordkeeping provisions of the amendment should not result in additional costs to those who are required to comply with the amendment. The amendment is adopted under the Insurance Code, Articles 21.71 and 1.04, and Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5. The Insurance Code, Article 21.71(b), provides that the installation and maintenance of a toll-free information and complaint number is not required of insurers whose gross initial premiums collected in this state are less than $2 million. Article 1.04(b) authorizes the board to determine 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 adoption of rules by a state administrative agency. sec.1.601. Notice of Toll-Free Telephone Numbers and Information and Complaint Procedures. (a)-(b) (No change.) (c) Exceptions to notice requirements for insurer's toll-free number. (1)-(4) (No change.) (5) Records maintenance. Except as specifically provided in subparagraphs (A) and (B) of this paragraph, beginning with calendar year 1993, any insurer or health maintenance organization claiming an exception must maintain a system by which information pertaining to receipt of initial premiums is tracked on a calendar year basis. This information shall include for each new policy written during a calendar year the following: the policy number; the effective date of the policy; and the amount of initial premium received, including any membership fees, assessments, dues, and any other considerations for such insurance. Such information and any other data upon which the company relied in making the determination that it was entitled to the exception shall be made available to the department upon request and is subject to examination by the department. Failure by any insurer or HMO to maintain the information required in this paragraph or to provide such information to the department upon request constitutes grounds for disciplinary action which may result in the cancellation, revocation, or suspension of such insurer's or HMO's certificate of authority. (A) Any insurer or HMO which is authorized to write business in Texas and which claims an exception to the maintenance of a toll-free telephone number for a calendar year is not required to maintain information pertaining to initial premium receipts as set out in this paragraph in order to claim the exception if the exception is based on the criteria set out in any of clauses (i)-(iv) of this subparagraph, as follows: (i) such insurer or HMO claims the exception based on receipt of gross premiums of less than $2 million for the prior calendar year for business written in this state, as reported on its annual statement; (ii) such insurer or HMO claims the exception based on receipt of gross first- year premiums of less than $2 million for the prior calendar year for all business, as reported on its annual statement; (iii) such insurer or HMO writes business only in Texas and claims the exception based on receipt of gross first-year premiums of less than $2 million for the prior calendar year, as reported on its annual statement; or (iv) such insurer or HMO claims the exception based on receipt of gross initial first-year premiums of less than $2 million for business written in Texas, as reported on its annual statement. (B) Any insurer or HMO which is authorized to write business in Texas, but which does not meet the criteria of subparagraph (A) and which claims an exception based on receipt of gross first-year premiums of less than $2 million for business written in this state must maintain a system by which information pertaining to receipt of first-year premiums for Texas business is tracked on a calendar year basis. This information shall include for each new policy written during a calendar year the following: the policy number; effective date of the policy; and amount of the first-year premium received, including any membership fees, assessments, dues, and any other considerations for such insurance. (d)-(g) (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 October 7, 1992. TRD-9213541 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: October 28, 1992 Proposal publication date: July 7, 1992 For further information, please call: (512) 463-6327 Chapter 9. Title Insurance Subchapter A. Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas 28 TAC sec.9.1 The State Board of Insurance adopts an amendment to sec.9.1, concerning the adoption by reference of the Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas (the Basic Manual), with changes to some of the agenda items and without changes to some of the agenda items, as published in the June 5, 1992, issue of the Texas Register (17 TexReg 4059). Various subsections of the amendment to sec.9.1 will become effective on January 1, 1993. Those subsections are, Agenda Items 91-7, 91-8, 91-9, 91-10, 91-11, 91-16, 91-17, 91-18, 91-19, 91-20, 91-21, 91-22, 91-23, 91-44, 91-45, 91- 52, 91-53, 91-54, 91-55, 91-56 and 91-76. All other subsections of the amendment to sec.9.1 will become effective 20 days after filing of notice in the Texas Register. Those subsections are, 91-47, 91-49, 91-50, 91-51, 91-57, 91-58, 91- 60, 91-61, 91-62, 91-63, 91-64, 91-65, 91-66, 91-67, 91-68, 91-69, 91-70, 91-73, and 91-77. The amendment to sec.9.1 is necessary to reflect amendments which the board is adopting to the Basic Manual, which the section adopts by reference. The amendments to the Basic Manual are necessary to facilitate the administration of regulation of title insurance in this state by modifying currently existing rules and forms. The adopted amendments to the Basic Manual, as identified by agenda item number following, will adopt: Agenda Items 91-7-91-11, and 91-76 which adopt a Residential Owner Policy of Title Insurance-One-to-Four Family Residences, and related rules. 91-7 Adopts a Texas Residential Owner Policy of Title Insurance-One-to-Four Family Residences, to be designated as FORM T-1R: Residential Owner Policy of Title Insurance-One-To-Four Family Residences. 91-8 Adopts an amendment to Procedural Rule P-1.u. and adopts new Procedural Rule P-1 bb. to define terms and applicability of rules for the Owner Policy of Title Insurance and the Residential Owner Policy of Title Insurance-One-To-Four Family Residences. 91-9 Adopts new Procedural Rule P-38. Residential Owner Policy -One-To-Four Family Residences, regulating the issuance of the Residential Owner Policy of Title Insurance. 91-10 Adopts an additional Leasehold Endorsement form to be used with the Residential Owner Policy of Title Insurance-One-To-Four Family Residences, to be designated as the Residential Leasehold Endorsement. 91-11 Adopts an amendment to Procedural Rule P-9a(1) to authorize a Leasehold Endorsement for the Residential Owner Policy of Title Insurance-One-To-Four Family Residences. 91-76 Adopts a plain language Commitment for Title Insurance, to provide for issuance of various policies of Title Insurance; expand the tax exception to include taxes and assessments by any taxing authority; amend the standard exception language to be consistent with the Residential Owner Policy of Title Insurance -One-To-Four Family Residences; and, add an Information Sheet providing disclosures and toll-free number information. Agenda Items 91-16-91-23 adopt amendments to the tax exception in various forms and rules to include taxes and assessments by any taxing authority, as follows. 91-16 Amends the tax exception in the Owner Title Policy Commitment to the Texas State Highway Department to include taxes and assessments by any taxing authority. 91-17 Amends the tax exception in the Owner Title Policy Commitment for Eminent Domain Proceedings to include taxes and assessments by any taxing authority. 91-18 Amends Endorsement Instruction III for Assignment of Lien by amending the tax exception to include taxes and assessments by any taxing authority; and, by deleting the affirmative language of "None." 91-19 Amends Procedural Rule P-29 to include taxes and assessments by any taxing authority in the rule and in the amendment language. 91-20 Amends Rate Rule R-24 to include taxes and assessments by any taxing authority in the amendment language. 91-21 Amends Schedule B of the Owner Policy to provide standard exceptions consistent with the proposed revisions to the Commitment; to amend Schedule A by rephrasing the manner in which title ownership is stated; and, to expand the tax exception to include taxes and assessments by any taxing authority. 91-22 Amends Schedule B of the Mortgagee Policy to provide standard exceptions consistent with the proposed revisions to the Commitment; to amend Schedule A rephrasing the manner in which title ownership and encumbrance is stated; and, to expand the tax exception to include taxes and assessments by any taxing authority. 91-23 Amends the Mortgagee Title Policy Binder on Interim Construction Loan to relocate identifying data to Schedule A and rephrase the language of the obligation of the title insurer; and, to expand the tax exception to include taxes and assessment by any taxing authority. 91-44 Amends paragraph 5 of the Owner Policy, known as the "creditor's rights exclusion," by adding specific language limiting the exclusion to any claim based on fraudulent conveyance or transfer, equitable subordination, or preferential transfer. 91-45 Amends paragraph 8 of the Mortgagee Policy, known as the "creditor's rights exclusion," by adding specific language limiting the exclusion to any claim based on fraudulent conveyance or transfer, equitable subordination, or preferential transfer. 91-47 Adopts a new procedural rule to authorize express insurance language if an exception is made to encroachments or possible defects in title and the title company deems the risk insurable; and, in compliance with P-11, if an exception is made to certain liens and the title company deems the risk insurable. 91-49 Amends Procedural Rule P-37 to allow an exception to lack of right of access in the Texas Residential Owner Policy if the company is not in a position to insure such access. 91-50 Amends Procedural Rule P-8 by expressly providing insurance against loss if mechanic's liens are recorded prior to the date of the policy, but were not excepted by the title company; and, deleting the guarantee that no such liens have been filed. 91-51 Amends Procedural Rule P-36 to make deletion of the arbitration provision in the Owner, Mortgagee, and Texas Residential Owner policy forms mandatory if requested by the insured; to require notice to a proposed insured of the right to delete the arbitration provision at no charge; to require issuance of a Deletion of Arbitration form prior to closing; and, to amend the Conditions and Stipulations paragraph 14 of the Owner Policy and paragraph 13 of the Mortgagee Policy to provide that arbitration shall be at the request of either the insured or the title company unless the insured is an individual person. 91-52 Amends the Increased Value Endorsement by rewording and restructuring to simplify the form. 91-53 Amends Endorsement Instruction III to provide insurance against loss if an assigned lien is not a valid lien against the subject property; to delete affirmative language that the assigned lien is a valid lien and describing the type of lien; and, to allow deletion of the introductory phrases "and the following" and "and except" if no exceptions will be specified. 91-54 Amends Endorsement Instruction V, used with interim construction advances subsequent to issuance of a Mortgagee Title Policy, to insure against loss, if any, sustained by the insured if any lien is filed against the subject property; to delete language stating that no such liens have been filed; to insure against loss, if any, sustained by the insured if specific matters are not subordinate to the lien described in the policy; to delete language stating that such matters are subordinate; and, to allow deletion of paragraphs (a) 4 and 5 of the endorsement if they are not applicable. 91-55 Amends Endorsement Instruction VII, used with interim construction advances subsequent to issuance of a Mortgagee Title Policy Binder on Interim Construction Loan, to insure against loss, if any, sustained by the insured if certain matters are not subordinate to the lien described in the Binder; to delete language stating that such matters are subordinate; and, to allow deletion of paragraph 4 of the endorsement if not applicable. 91-56 Amends Endorsement Instruction VIII, used in connection with increased coverage subsequent to issuance of an Owner Policy, to insure against loss, if any, sustained by the insured if any mechanic's liens are filed against the insured property prior to the endorsement date except as specified in the policy or any prior endorsement; and, to delete language stating that no liens have been filed; and, to allow deletion of paragraph B(a) 4 of the endorsement, if not applicable. 91-57 Adopts a new Section VIII-Claims Handling Principles and Procedures, in the Basic Manual, establishing procedures for title companies, to handle claims made by first party claimants, which will be readily determinable by the companies, the insureds, and the Texas Department of Insurance. The procedures include claim acknowledgment deadlines, written communication requirements, claim reserve requirements, and a payment deadline upon final determination of liability; and, adopts new Procedural Rule P-40, establishing procedures to regulate the method of setting claim reserves. 91-58 Adopts a Proof of Loss Form (Form T-40), including English and Spanish information, to be used by an insured as a standard method of providing claim information to a title company, and to be used in conjunction with the proposed Claims Handling Principles and Procedures. 91-60 Amends the Minimum Escrow Accounting Procedures and Internal Controls, in Section V of the Basic Manual to allow only one licensed escrow officer to sign escrow checks if two signatures are required; and, to specify criteria for the written documentation on all interest-bearing escrow accounts. 91-61 Amends the Minimum Standards of Audit of Trust Funds required of Texas Title Insurance Agents and Title Attorneys in Section V of the Basic Manual to simplify the Specific Instructions for Exhibits E-1, E-2, and Exhibit F, Column F. 91-62 Amends Procedural Rule P-24 to provide that the rule does not affect division of premium between a title company and its subsidiary agent when the title company directly issues a policy of insurance pursuant to the Texas Insurance Code, Article 9.34; and, to define a subsidiary. 91-63 Amends Procedural Rule P-21, paragraph 2 to revise the ownership disclosure from 10% to 1.0% for each shareholder, owner, partner, or other person; add subparagraph (d) to require disclosure of anyone not a full-time employee of a title agent receiving any part of premium for services performed for said agent in connection with issuance of title insurance, and the amount of such premium received; and, to add subparagraph (e) defining "having, owning or controlling." 91-64 Amends Procedural Rule P-28 to reflect that the Advisory Council of Title Insurance Continuing Education will not be continued; to add new paragraph 5. requiring continuing education credits for relicensing, and renumbering the following paragraphs; and, updating references to the Texas Department of Insurance. 91-65 Amends Administrative Rule L-1, in Section VII of the Basic Manual to implement House Bill 2 amendments to licensing procedures for title insurance agents; to amend fee requirements; and, to update references to the Title Division and the Texas Department of Insurance. 91-66 Amends Administrative Rule L-2, in Section VII of the Basic Manual to implement House Bill 2 amendments to licensing procedures for title insurance escrow officers; to amend fee requirements; and, to update references to the Title Division and the Texas Department of Insurance. 91-67 Amends Administrative Rule L-3, in Section VII of the Basic Manual to implement House Bill 2 amendments to licensing procedures for direct operations; to amend fee requirements; and, to update references to the Title Division and the Texas Department of Insurance. 91-68 Amends the "Information RE: Abstract Plant" form, by simplifying the language and reformatting the requested information blocks. 91-69 Amends the addresses for Guaranty Assessment Recoupment Charge remittances pursuant to Form T-G2, and to permanently adopt Procedural Rule P- 30, of the Basic Manual. 91-70 Amends Rate Rule R-8 to increase each discount rate by 10% upon the premium for a Mortgagee Policy issued on a loan to fully take up, renew, extend, or satisfy a lien or liens already covered by a Mortgagee Policy. 91-73 Amends Procedural Rule P-18 to require delivery of a Commitment for Title Insurance after receipt of a bona fide order for an Owner Policy on Residential Real Property or an Owner Policy not to exceed $300,000; require a "best effort" for delivery to allow sufficient time for review prior to closing; and, amends the rule to define when liability and obligations under the Commitment would end. 91-77 Amends Procedural Rule P-1 by adding a requirement in definition "z" by adding the word "greater" to the period of time for a title search, and correcting the word "need" to "needed" in "z.5." Public comments on the proposal were submitted to the State Board of Insurance, and are summarized as follows. Comments on agenda items included as adopted amendments to the section were received from 14 sources during the comment period in connection with public hearings under Docket Numbers 1841 and 1863. With respect to Agenda Items 91-7-91-11 and 91-76, adopting a Texas Residential Owner Policy of Title Insurance-One-to-Four Family Residences, and related rules, comments were received from six sources. The comments were all in support of the adoption of a new residential policy form, and contained suggestions to correct grammatical or typographical errors or to properly designate the form number. Those making comments in favor of the residential policy form agenda items included the Greater Houston Land Title Association, the Office of Public Insurance Counsel, Title Resources Guaranty Company, Stewart Title Guaranty, the Texas Land Title Association, and the law firm of De Lange, Hudspeth and Pitman. With respect to Agenda Items 91-12-91-23 proposing amendments to the tax exception to include taxes and assessments by any taxing authority, comments were received from four sources. The comments were generally in support of the items, with two sources indicating that adoption of some agenda items in this group would negate the necessity of adopting others. Those making comments in favor of Agenda Items 91-16, 91-17, 91-18, 91-19, 91-20, 91-21, 91-22, and 91- 23, being the amendments to the tax exception language, included the Office of Public Insurance Counsel, Greater Houston Land Title Association, Title Resources Guaranty Company, and Stewart Title Guaranty Company. Those commenting that Agenda Item 91-12 is not necessary if Agenda Item 91-76 is adopted, and that Agenda Items 91-13, 91-14, and 91-15 were not necessary if Agenda Items 91- 21, 91-22, and 91-23 are adopted, were the Office of Public Insurance Counsel and Title Resources Guaranty Company. With respect to Agenda Items 91-39-91-43, proposing rules, forms, and rates for pre-foreclosure and post-foreclosure endorsement, comments were received from seven sources. One source supported the pre-foreclosure endorsement but opposed the post-foreclosure endorsement. Of the other sources one supported all items, two opposed all items, and three were neither for nor against, but suggested various amendments to the items including consistent tax exception and Creditors' Rights Exclusion language. One source recommended adoption of reporting codes for the new endorsement forms. Those making comments in opposition to all items were Title Insurance Company of Minnesota and Title Underwriters of Texas, Inc. The source in favor of all items was Stewart Title Guaranty Company. The source in favor of the pre-foreclosure endorsement but opposed to the post-foreclosure endorsement was the Greater Houston Land Title Association. Those sources neither for nor against the items were Title Resources Guaranty Company, Texas Land Title Association, and the law firm of Haynes and Boone. Comments were received from two sources, with respect to Agenda Items 91-44 and 91-45 proposing amendments to the Owner Policy and Mortgagee Policy, respectively, to add specific language limiting the "creditor's rights exclusion" to any claim based on fraudulent conveyance or transfer, equitable subordination, or preferential transfer. Both sources were in support of the items. With respect to Agenda Item 91-47 proposing a new procedural rule to authorize express insurance if an exception is made to encroachments, possible defects in title, or certain liens, and the title company deems the risk insurable, comments were received from four sources. One source opposed the affirmative coverage and two sources supported the express insurance language. One source was neither for nor against, but made a recommendation as to language. The source in opposition was Charter Title Company. The sources in support were Greater Houston Land Title Association and Stewart Title Guaranty Company. The source neither for nor against was Title Resources Guaranty Company. Two sources commented with respect to Agenda Item 91-49 which would amend Procedural Rule P-37 to allow an exception to a lack of right of access in the Texas Residential Owner Policy, if the company is not in a position to insure such access. Both sources were in support of the item, and were Title Resources Guaranty Company and Stewart Title Guaranty Company. Three sources commented on Agenda Item 91-50, proposing to amend Procedural Rule P-8 by expressly providing insurance against loss if mechanics' liens are recorded prior to the date of policy, but had not been excepted by the title company. The rule amendment would also delete the guarantee that no such liens have been filed. All sources were in support of the item, and were Greater Houston Land Title Association, Title Resources Guaranty Company, and Stewart Title Guaranty Company. Three sources commented with respect to Agenda Item 91-51 proposing to amend Procedural Rule P-36 to make deletion of the arbitration provision in policy forms mandatory if requested by the insured, to require notice of that right, to require issuance of a deletion form prior to closing, and to provide that arbitration shall be at the request of either the insured or the title company unless the insured is an individual person. Two sources were in support of the item and were Title Resources Guaranty Company and Stewart Title Guaranty Company. One source, the law firm of De Lange, Hudspeth and Pitman, opposed the item stating that arbitration is a quick and inexpensive forum for dispute resolution regarding coverage, and that it would be a serious mistake to remove individuals from the arbitration process. Comments were received from two sources with respect to Agenda Item 91-52 which proposes to amend the Increased Value Endorsement by rewording and restructuring to simplify the form; and, with respect to Agenda Item 91-53 proposing to amend Endorsement Instruction III to provide coverage if an assigned lien is not a valid lien; and to delete affirmative language regarding said lien. Both comments on these items were in favor of adoption and were from Title Resources Guaranty Company and Stewart Title Guaranty Company. With respect to Agenda Items 91-53, 91-54, 91-55, and 91-56 which propose various endorsement amendments, comments were received from three sources. Two sources were in favor of adopting all items, and were Title Resources Guaranty Company and Stewart Title Guaranty Company. One source, Greater Houston Land Title Association, was neither for nor against Agenda Item 91-53, and was in favor of adopting Agenda Items 91-54, 91-55, and 91-56. Three sources commented on one or more of Agenda Items 91-60, 91-61, 91-62, 91-63, 91- 64, 91-65, 91-67, and 91-69, which propose various staff amendments to administrative and procedural rules to implement new statutory requirements. All sources supported the adoption of these items, and were Title Resources Guaranty Company, Stewart Title Guaranty Company, and Greater Houston Land Title Association. Comments were received from seven sources with respect to Agenda Item 91-57 which would adopt Claims Handling Principles and Procedures; and, would adopt a new rule to regulate the method of setting claim reserves. There were two sources in favor of adoption of the item, with amendments, and four sources in opposition to the item. All sources commented on the requirement that payment for loss after liability has been finally fixed must occur within a set number of days. A 30-day period was recommended by three sources, and two sources believed it was not possible to finally fix a liability loss until a final court determination of a claim. One source recommended a 15-day period for payment of loss. Five of the sources also commented on the provision for setting claim reserves. All opposed the requirement that written records of any changes in an initial reserve must include the reasons for such change, and must be retained for four years. The sources indicated that often such changes were based on complex individual judgements and are often frequent. The sources stated that maintenance of such records with documentation of reasons would be a costly burden on the title companies. Two sources recommended further study of the Claims Handling Principles and Procedures. The sources in favor of adoption, with amendments, were Texas Land Title Association and Stewart Title Guaranty Company. The sources commenting to oppose this agenda item were Title Resources Guaranty Company, Title Insurance Company of Minnesota, Title Underwriters of Texas, Inc., and Lawyers Title Insurance Corporation. With respect to Agenda Item 91-58, comments were received from five sources. This item would adopt a Proof of Loss Form as a standard method of providing claim information. The comments of four sources were neither for nor against the item, but all contained recommendations for amendments or revisions of language. Two sources indicated that the form was ambiguous and insufficient to obtain information from which an accurate claim assessment may be made. Both sources indicated that the form requires only the information allowed by the policy, but the policy does not specify what information is allowed. One source was in favor of adopting the item with an amendment for clarification regarding lawsuits. The source in favor of the item was Stewart Title Guaranty Company. The other sources commenting on this item were the Office of Public Insurance Counsel, Lawyers Title Insurance Corporation, Title Resources Guaranty Company, and Title Insurance Company of Minnesota. Regarding Agenda Item 91-68 proposing to amend the Abstract Plant information form, comments were received from three sources, all in favor of adoption of the item. Two sources indicated a concern with the cost and time involved in providing underwriter examinations of abstract plants on the occurrence of every license renewal. The sources commenting were Stewart Title Guaranty Company, Alamo Title Insurance of Texas, and Title Resources Guaranty Company. Regarding Agenda Item 91-70 proposing to amend Rate Rule R-8, comments were received from three sources. One source, Greater Houston Land Title Association, opposed the item stating it was erroneous to assume that less work will be required to reinsure a previously insured lien. The other two sources, Title Resources Guaranty Company and Stewart Title Guaranty Company were in favor of adoption. Regarding Agenda Item 91-73, proposing to amend Procedural Rule P-18 to require delivery of a Commitment for Title Insurance in certain circumstances, comments were received from four sources. One source, Title Resources Guaranty Company, was neither for nor against the item, but recommended clarification of paragraph (c) of the rule. The other three sources were all in favor of adoption, with amendments to paragraph (c) of the rule. Those sources were, Texas Land Title Association, Office of Public Insurance Counsel, and Stewart Title Guaranty Company. With respect to Agenda Item 91-77, proposing to amend definition "z" of Procedural Rule P-1 by adding the word "greater" to the period of time for a title search, and making grammatical corrections, comments were received from three sources. Two sources were opposed to adding the word "greater" as incurring additional expense in a title search that would not be justified. One source recommended an amendment that would recognize prior title examination base files as an adequate method of meeting the requirements of the definition. The sources in opposition were, Texas Land Title Association and Title Resources Guaranty Company. The source in support, with an amendment, was Stewart Title Guaranty Company. The department agrees that adoption of certain items will remove the need to adopt others. Accordingly, Agenda Items 91-12, 91-13, 91-14, and 91-5 are not adopted since the language of 91-76, 91-21, 91-22, and 91-23 will supersede their need. The department believes that due to certain amendments made to Agenda Items 91- 39, 91-40, 91-41, 91-42, and 91-43, the resulting changes in language and scope are substantive in nature and will require republication for public comment. Accordingly, those items will be republished, as amended, for comment. The department has adopted some suggestions to amend Agenda Item 91-57, which establishes new Claims Handling Principles and Procedures, as new Section VIII of the Basic Manual. Paragraph I.F. is amended to add the word "written" to the definition of "Notice of Claim." Also, Paragraph III. D., which sets the time period for payment of loss after liability has been finally fixed was amended to provide for a 15-day period. The department believes that the maintenance of written records requirement in the standards for claim reserve setting and reviewing, established in new Procedural Rule P-40, and referenced in new Section VIII, Paragraph II. H., will provide necessary information which will permit more accurate analysis of the claim reserve maintenance by insurers. The department further believes that such information would be gathered by insurers in the normal course of business and the requirement to maintain such records for four years is not unduly burdensome. The department adopts the suggestion to clarify the language in Agenda Item 91-58, creating a Proof of Loss Form. Paragraph (6) b) of the form is amended to read, "Have you been served with a petition or other legal document in a lawsuit?" The department believes that it would be a costly and time consuming burden on underwriters if Agenda Item 91-68 requires an abstract plant examination by an underwriter on each renewal period. Accordingly, that item was amended to permit the use of an Abstract Plant Update form, to be completed by the title agent, on each license renewal application. The requirement of an underwriter examination of the abstract plant would be limited to the initial license application. Regarding comments received on Agenda Item 91-70, which amends Rate Rule R-8, the position of the department, based on testimony heard under Docket Numbers 1841 and 1863, is that Texas insurance consumers would benefit from an increase in the discount rate for subsequent Mortgagee Policies in the event a previously insured lien is refinanced. Purchasers of this insurance product would receive the benefit of as large a premium discount as possible under the rules. Any additional title search conducted by a title company in connection with a refinanced lien would only go back to the date of original financing, and would not be an examination of the entire title history. The title company would be fairly and adequately compensated, even with an increase in the discount rate. In response to various comments regarding the effective date of the adopted items, the department believes it would be more equitable to provide sufficient time for the printing, proofing, and dissemination of new policy or insuring forms, and for the education of personnel which would utilize such forms. Therefore, the following agenda items are adopted to be effective on January 1, 1993: Agenda Items 91-7, 91-8, 91-9, 91-10, 91-11, and 91-76 adopting a Residential Owner Policy of Title Insurance-One-to-Four Family Residences, related rules, and the plain-language Commitment for Title Insurance; 91-16, 91-17, 91-18, 91-19, 91-20, 91-21, 91-22, and 91-23 adopting amendments to the tax exception language in various forms to include taxes and assessments by any taxing authority, and other amendatory language; 91-44 and 91-45 amending the "creditors' rights exclusion" language in the Owner Policy and the Mortgagee Policy; 91-52 amending the Increased Value Endorsement; and, 91-53, 91-54, 91-55, and 91-56 which amend various Endorsement Instructions. The Department believes the remaining adopted items are of such necessity as to require prompt implementation, therefore the following agenda items are adopted to be effective 20 days after filing in the Texas Register: 91-47 Adopting new Procedural Rule P-39; 91-49 Amending Procedural Rule P-37; 91-50 Amending Procedural Rule P-8; 91-51 Amending Procedural Rule P-36; 91-57 Adopting new Section VIII-Claims Handling Principles and Procedures; 91-58 Adopting a Proof of Loss Form (Form T-40); 91-60 Amending the Minimum Escrow Accounting Procedures and Internal Controls; 91-61 Amending the Minimum Standards of Audit of Trust Funds; 91-62 Amending Procedural Rule P-24; 91-63 Amending Procedural Rule P-21.2; 91-64 Amending Procedural Rule P-28; 91-65, 91- 66 and 91-67 amending Administrative Rule L-1, L-2, and L-3, Section VII of the Basic Manual; 91-68 Amending the "Information RE: Abstract Plant" form; 91-69 Adopting Procedural Rule P-30, and amending related forms T-G2 and T-G3; 91-70 Amending Rate Rule R-8; 91-73 Amending Procedural Rule P-18; and, 91-77 Amending Procedural Rule P-1. The amendment is adopted under the Insurance Code, Articles 1.04, 9.07, 9. 21, and 9.30, and Texas Civil Statutes, Article 6252-13a, sec.4 and sec.5. The Insurance Code, Article 1.04, authorizes the State Board of Insurance to determine policy and rules. The Insurance Code, Article 9.07, authorizes and requires the board to promulgate or approve forms for policies of title insurance, to require title insurance companies and agents to submit information material for the board's consideration, and otherwise to provide for the regulation of the business of title insurance. The Insurance Code, Article 9.21, authorizes the board to promulgate and enforce rules and regulations prescribing underwriting standards and practices, and to promulgate and enforce all other rules and regulations necessary to accomplish the purposes of the Insurance Code, Chapter 9, concerning the regulation of title insurance. Texas Civil Statutes, Article 6252-13a, sec.4, authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures, and sec.5 prescribes the procedure for adoption of rules by a state administrative agency. sec.9.1. Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas. The State Board of Insurance adopts by reference the Basic Manual of Rules, Rates, and Forms for the Writing of Title Insurance in the State of Texas as amended effective October 30, 1992. The document is published by and is available from Hart Forms and Services, 11500 Metric Boulevard, Austin, Texas 78758, and is available from and on file at the Texas Department of Insurance, Title Insurance Section, MC 104-1C, 333 Guadalupe Street, Austin, Texas 78701-1998. 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 October 9, 1992. TRD-9213692 Linda K. von Quintus-Dorn Chief Clerk Texas Department of Insurance Effective date: October 30, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 463-6327 TITLE 31. NATURAL RESOURCES AND CONSERVATION Part III. Texas Air Control Board Chapter 114. Control of Air Pollution from Motor Vehicles Motor Vehicles 31 TAC sec.114.13 The Texas Air Control Board (TACB) adopts new sec.114.13, concerning oxygenated fuel, with changes to the proposed text as published in the June 5, 1992, issue of the Texas Register (17 TexReg 4066), to establish an oxygenated fuel program for El Paso County as required under the 1990 Federal Clean Air Act (FCAA) Amendments. Additionally, the TACB adopts revisions to the carbon monoxide (CO) State Implementation Plan (SIP) for El Paso to include an air quality analysis, an emissions inventory, new source review procedures, vehicle inspection/maintenance requirements, and the oxygenated fuel program. A public hearing was held in El Paso on July 2, 1992. A total of six commenters submitted testimony on the proposals during the comment period which ended on July 10, 1992. While there was no opposition to the concept of the rule, all of the commenters suggested changes. The following commenters provided testimony: Chevron U.S.A. Inc. (Chevron), Exxon Company, U.S.A. (Exxon), United States Environmental Protection Agency (EPA), El Paso City-County Health District (EPCCH), El Paso Refinery, L.P. (El Paso Refinery), and an individual. El Paso Refinery and EPCCH supported the six-month duration of the proposed control period of October 1-March 31. Chevron commented that the TACB should consider reducing the control period to four months as suggested in EPA guidance on the preparation of oxygenated fuel programs. This four-month period would not include the months of October and March. Mobile sources are by far the principal source of CO in El Paso and controlling their emissions must be the principal part of a successful control strategy. The TACB has monitored 14 exceedences of the CO standard in the months of October and March. EPA did not have this monitoring data and allowed the states discretion in determining the length of control periods for any nonattainment areas within their borders. The staff believes that this monitoring data is ample justification for the six-month control period as adopted. Using information from a recent report from the National Academy of Sciences (NAS), an individual stated that the use of ethanol as a fuel oxygenate may be detrimental to air quality. The commenter cited EPA information which indicates that the use of ethanol will lead to an increase in emissions of oxides of nitrogen (NO point=4.02p [sub]x) and contribute to ozone formation. The NAS report concluded, in part, that the control of NO [sub]x may be a more effective strategy than controlling volatile organic compounds (VOC), in that large amounts of VOC's are produced naturally. The TACB is aware of the NAS report but disagrees with the commenter that the potential for an increase in NO [sub]x emissions will aggravate an already serious ozone nonattainment situation. CO exceedences in El Paso occur in the months of October through March and the use of oxygenated fuel is confined to this period. Oxygenated fuel is not required during the summer ozone season. The problem of CO nonattainment in El Paso must also be addressed and the use of oxygenated fuels during winter months is a proven method of realizing substantial reductions in CO emissions without aggravating summer ozone exceedences. The same individual also commented on potential engine performance problems that could result from the use of an ethanol-gasoline mix, stating that some European auto manufacturers will void warranties if ethanol is used. The commenter questioned the need to apply additional CO control measures to automobiles. He commented that there are other sources of CO and that these sources may not be adequately controlled. The individual continued by stating that ethanol contains only 80% of the energy of gasoline and that any emissions reduction realized will be offset by the greater quantity of fuel that will be required to obtain the same amount of energy. The use of oxygenated fuel should have no effect on engine performance, other than a slight decrease in gasoline mileage. Neither the staffs of the TACB nor EPA are aware of any manufacturers that void a warranty based on the use of oxygenated fuel provided that the manufacturers' recommended blending limits are not exceeded. The blending limits in this adoption are within those recommended by domestic and foreign manufacturers. Emission inventories for El Paso show that 93% of CO emissions come from automobiles and other mobile sources. Any effective control strategy will need to address this predominant category of CO emissions. Ethanol does contain less energy per unit of volume when compared with gasoline; however, the ethanol/gasoline blend causes only a slight decrease in energy of about 2.0%. CO emissions can be reduced as much as 15% by using this blend and the staff believes the benefit of reduced CO emissions far outweighs the minor reduction in fuel economy. The commenter concluded his remarks by stating that air pollution controls applied only in El Paso will be ineffective as two-thirds of the population in the El Paso-Juarez airshed is in Ciudad Juarez, which is not subject to the same regulation. The TACB, EPA, and the Mexican environmental agency, SEDESOL, are working together to reach joint solutions to the pollution problems of El Paso and Ciudad Juarez. Much of the gasoline used in Ciudad Juarez is supplied from El Paso so the benefits of the oxygenated fuel program should be realized in both cities. Even though coordinated control strategies are being developed by both countries, the FCAA requires Texas to go forward with programs to obtain reductions within the state. El Paso Refinery commented that the minimum oxygen content, as adopted, is the same as the maximum federal limit of 2.7% of methyl tertiary butyl ether (MTBE), and it would be difficult to insure that each unit of gasoline contains exactly 2.7%. They suggested that the TACB consider wording similar to El Paso's city ordinance which establishes an oxygen content average. El Paso Refinery also stated that the TACB should move expeditiously to establish an oxygenate credit program. They stated that such a program will allow more efficient use of oxygenate supplies by allowing credit trading between ethanol blends, which are usually over-oxygenated, and MTBE blends that are limited to a hard oxygenate content number. The commenter concluded by stating that the TACB should petition EPA for relief if the exact oxygen content is set by federal guidance, citing a similar exercise of EPA discretion in Maricopa County, Arizona. The staff is developing procedures for an oxygenate credit program and solicits proposals from affected industries to help achieve an efficient program. The staff believes the adopted minimum oxygen content will help insure rule effectiveness until the credit program can be established. The proposed oxygen content is a regulatory minimum and fuel blends of a maximum of 3.5% oxygen content by weight are allowed under federal specifications. MTBE blends are allowed up to 15%, by volume, to meet oxygen content requirements. These upper blending limits are established to prevent a net increase in the emission of NO [sub]x. Chevron commented that small wholesale purchaser-consumers should be excused from the requirement to dispense gasoline of 2.7% oxygen content. Subsection (a) specifies that the oxygenated fuel requirements are confined to "motor vehicles." The definition of "motor vehicle" in TACB General Rules is confined to vehicles operated on streets or highways. The staff believes that the large majority of small wholesale-purchaser consumers use the fuel in off- road vehicles such as agricultural equipment and are exempt from the rule. However, any wholesale-purchaser regardless of size, supplying gasoline for on- road use will be required to distribute oxygenated gasoline during the specified control period. Exxon commented that the registration of refiners should not be required unless the refiner supplies a minimum amount of gasoline directly to a retail outlet. Exxon believes the focus for compliance of the Texas oxygenated fuels program should be directed at the terminal level. Exxon also suggested that information used in the registration of facilities should contain the TACB account number instead of all permit numbers. EPCCH suggested that the gasoline storage, refining, blending, terminal, and bulk plants be required to register with both the TACB and EPCCH. Refiners are a major part of the gasoline distribution network and share in the responsibility of the success of an oxygenated fuels program. The staff believes that refineries should be registered, particularly since this will be necessary under an oxygenate credit program, and has included language to accomplish this. The staff agrees that enforcement of the program will be directed primarily at terminal and blending facilities, but no modification to the rule language is necessary to implement this policy. The staff agrees that registration by the TACB account number would be more useful in an oxygenate credit program and appropriate wording has been included in the adopted rule. Account numbers will be issued for facilities not having them. The TACB and EPCCH will share inspection and enforcement responsibilities and the staff has added language requiring the joint registration of facilities. Chevron stated that the TACB should consider limiting registration of facilities to Control Area Responsible Parties (CAR) and Blender Control Area Responsible Parties (blender CAR) as defined in EPA guidance. They also stated that subsection (d) should clearly specify that the required testing records should be limited to tests for oxygen content. Exxon supported this comment and added that test results should be confined to the period of October 1-March 31. Chevron argued that testing should not be required of facilities downstream from refineries since blenders would calculate oxygen content from information supplied by the gasoline and oxygenate suppliers. EPA guidance on oxygenated fuel programs recommends registration of all parties in the gasoline distribution network, including CAR's and blender CAR's. The staff has retained rule language requiring full registration in order to more accurately track any oxygenate credit program. The staff agrees that test records required under this rule be should confined to those dealing with oxygen content and modified the rule language accordingly. The staff has also added language that test and documentation content be specified by category of facility. The testing specified in this rule is for oxygen content and will not be required during the uncontrolled period of the year. The staff believes that a method is necessary to validate the blending efficiency of gasoline with oxygenate and the rule language has been revised to allow the option of testing or the use of automated blending controls to assure proper blending. While testing will not be expressly required for automated blending operations, the staff believes good operating practices should include periodic tests to verify the accuracy of blending as blenders may be held responsible for downstream violations. EPA suggested that the use of the word "batch" in subsection (d) be defined as meaning any quantity of gasoline greater than one gallon. The staff agrees that clarifying the term "batch" is appropriate and has added the necessary language. Chevron and EPCCH stated that the words "properties," "composition," and "tests" are used interchangeably throughout the section and should be standardized with the specification that they refer to the oxygen and oxygenate content of gasoline. Chevron also stated that EPA guidance requires shipping documents to contain only an identification of the gasoline as oxygenated or non-oxygenated and the type of oxygenate used. Additional information would be required in the distribution network between a refinery or import facility and a covered area terminal. Chevron believes the TACB rule should follow this guidance. The staff has made the necessary changes to the rule language to clarify references to properties concerning oxygen and oxygenate content. EPA requirements concerning shipping and other documents are specific to each type of facility in the gasoline distribution network. The staff has added language in subsection (d) to reflect EPA documentation requirements. El Paso Refinery questioned the linking of the sampling methods in sec.114. 13(e) by the word "and." This indicates that all three methods listed will be required. They pointed out that the methods are linked by "or" in the SIP narrative. EPA suggested adding language that would clarify that only one of the sampling methods is necessary, and suggested adding EPA Oxygenate Flame Ionization Detector Test Method to the list of approved methods. Exxon recommended that the current American Society for Testing Materials Method D4815 be used to determine the oxygen content of gasoline. This would insure that the latest version of the test is used and not confined to the 1989 version, as was proposed. The rule is not intended to require all three test methods; therefore, the staff has changed the linking conjunction from "and" to "or". The staff also concurs with the suggestions of EPA and Exxon and has added the alternative test methods. Chevron commented that the pump labels required under subsection (f) should use language that would not require their removal during uncontrolled months. The commenter requested more flexibility in the print size and location of the label. EPCCH commented that the labels should be displayed only during the control period. EPA requires that labels on gasoline pumps dispensing oxygenated gasoline use the language as adopted in subsection (f) and 36-point bold print. There is some flexibility in the location of the label provided it is clearly legible to operators of the pump. The staff has modified the language in the proposal to allow this placement flexibility. Chevron commented that the TACB should add language to subsection (g) which clarifies the intent of regulating the sale of non-oxygenated fuel in the El Paso control area. EPA and Chevron suggested adding language that specifies the type of control area in which non-oxygenated fuel cannot be sold to consumers. EPCCH commented that documentation of non-oxygenated gasoline should accompany the product at all times. The area of applicability of the rule is stated in subsection (a). The intention or goals of the oxygenated fuel program are clearly stated in the SIP narrative which, the staff believes, is a more appropriate document for inclusion of these statements. In the interest of clarity, the staff has added language in subsection (g) that states the type of control area where the sale of oxygenated gasoline applies. The staff concurs that documentation of non- oxygenated fuel should accompany the product at all times to prevent the accidental distribution of the fuel to consumers and has added the necessary language to accomplish this change. In compliance with the Americans With Disabilities Act, this document may be requested in alternate formats by contacting Air Quality Planning Program staff at (512) 908-1457, (512) 908-1500 FAX or 1-800-RELAY-TX (TDD), or by writing or visiting at 12124 Park 35 Circle, Austin, Texas 78753. The new section is adopted under the Texas Clean Air Act (TCAA), Texas Health and Safety Code, sec.382.017 (Vernon 1990), which provides TACB with the authority to adopt rules consistent with the policy and purposes of the TCAA. sec.114.13. Oxygenated Fuels. (a) Beginning October 1, 1992, no person shall supply, sell, or dispense any gasoline for use as motor vehicle fuel in El Paso County during the period of October 1-March 31 of each year, unless the gasoline has a minimum oxygen content of 2.7% by weight, except as allowed under subsection (g) of this section. (b) No averaging, banking, or trading of oxygenate credits will be allowed until such time as a mechanism for the reporting and tracking of these credits is established by the Texas Air Control Board (TACB). (c) All gasoline storage, refining, and blending facilities; gasoline terminal and bulk plants; and gasoline transporters affected by this section shall be registered with the TACB and the El Paso City-County Health District. The owner or operator of each affected facility shall provide the following information to the TACB and shall update this information, as necessary, by September 1 of each year: (1) company name, mailing address, local street address, and telephone number; (2) name and title of the company's chief executive officer and a local contact; (3) type of facility; (4) TACB account numbers, if applicable; and (5) description of the affected operation. (d) All facilities affected by this section shall maintain complete and accurate records for at least two years and shall make such records available to representatives of TACB, the United States Environmental Protection Agency (EPA), or local air pollution agency having jurisdiction in the area upon request. The information in the records shall include, but shall not be limited to, the following: (1) for refiners/importers of oxygenated gasoline; (A) copies of all results of tests for oxygen content performed on batches of gasoline prior to transfer. For purposes of this rule, a batch of gasoline is considered any quantity greater than one gallon; (B) copies of all bills of lading or transfer documents for each batch; and (C) documents stating whether or not shipments of gasoline to any facility in a control area for use during a control period were oxygenated or non-oxygenated and stating oxygen content by weight of the gasoline, type of oxygenate used, and oxygenate content by volume; (2) for blenders, gasoline terminals, and bulk plants; (A) copies of all results of tests for oxygen content performed on batches of gasoline prior to transfer, or records of automated blending operations; (B) copies of all documents stating the quantity and oxygen content of the gasoline received and the type of oxygenate received by the facility; and (C) copies of all documents stating the quantity of gasoline shipped, whether gasoline shipments from the facility were oxygenated or non-oxygenated, and the type of oxygenate used; (3) for gasoline transporters; (A) copies of all documents stating the quantity of gasoline received by the transporter, whether the gasoline is oxygenated or non-oxygenated, and the type of oxygenate used; and (B) copies of all bills of lading or transfer documents for each batch; (4) for retailer and wholesale purchaser-consumer; (A) copies of all documents stating the quantity of gasoline received by the facility, whether the gasoline is oxygenated or non-oxygenated and the type of oxygenate used; and (B) copies of all bills of lading or transfer documents for each batch. (e) The oxygen content of gasoline at facilities affected by this section shall be determined by the following test methods: (1) gasoline sampling methodology described in 40 Code of Federal Regulation, Part 80, Appendix D; (2) American Society for Testing and Materials Method D4815 for the control periods beginning in 1992 and thereafter; (3) EPA Oxygenate Flame Ionization Detector Test Method; or (4) other test methods approved by EPA beginning in 1995 and thereafter. (f) Each gasoline pump at a retail outlet from which oxygenated gasoline is dispensed shall display, during the period of October 1-March 31, a legible and conspicuous label with the following statement: "The gasoline dispensed from this pump is oxygenated and will reduce carbon monoxide pollution from motor vehicles." This label shall be printed in 36-point bold type in a color contrasting the intended background and shall be placed so it is clearly legible from each side of the pump from which fuel can be dispensed. (g) The sale or distribution of non-oxygenated gasoline in a control area during the control period shall be allowed only under the following conditions: (1) such gasoline is segregated from oxygenated gasoline; (2) the documents which accompany such gasoline are clearly marked as "non- oxygenated gasoline, not for sale to ultimate consumers in a control area," and shall accompany the gasoline at all times; (3) the product is clearly labeled as "blendstock," "export," "storage," or a similar statement to prohibit improper distribution; and (4) the non-oxygenated gasoline is in fact not sold or dispensed to ultimate consumers during the control period in the control area. 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 October 8, 1992. TRD-9213645 Lane Hartsock Deputy Director, Air Quality Planning Texas Air Control Board Effective date: October 30, 1992 Proposal publication date: June 5, 1992 For further information, please call: (512) 908-1451 TITLE 37. PUBLIC SAFETY AND CORRECTIONS Part III. Texas Youth Commission Chapter 81. Administrative Provisions General 37 TAC sec.81.1 The Texas Youth Commission (TYC) adopts the repeal of sec.81.1, concerning complaints from the public, employees, and youth, without changes to the proposed text as published in the September 8, 1992, issue of the Texas Register (17 TexReg 6179). The new section will bring about a more efficient system of resolving complaints. The section is being repealed in order to adopt a new section which will provide a complaint system as required by law. No comments were received regarding adoption of the repeal. The repeal is adopted under the Americans with Disabilities Act of 1990 (ADA) (Public Law 101-336), which provides the TYC with the authority to provide a complaint system. 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 October 9, 1992. TRD-9213735 Ron Jackson Executive Director Texas Youth Commission Effective date: November 2, 1992 Proposal publication date: September 8, 1992 For further information, please call: (512) 483-5244 The Texas Youth Commission (TYC) adopts new sec.81.1 concerning complaints from the public, with changes to the proposed text as published in the September 8, 1992, issue of the Texas Register (17 TexReg 6180). The new section will bring about a more efficient system of resolving complaints. The change to the section is reflected only in the title. There are no changes in the text of the policy. The new section concerns complaints from the public. The section is being adopted to provide a complaint system as required by law. No comments were received regarding adoption of the new section. The new section is adopted under the Americans with Disabilities Act of 1990 (ADA), (Public Law 101-336), which provides the Texas Youth Commission with the authority to provide a complaint system. sec.81.1. Complaints from the Public. (a) Policy. Members of the public, employees, and youth are entitled to a timely and responsive resolution of a complaint. The Texas Youth Commission (TYC) complies with the Americans with Disabilities Act of 1990 (ADA) (Public Law 101-336). TYC will resolve complaints, including ADA complaints, relative to the operation of, and services provided by, TYC. Members of the public who wish to file a complaint, including one that alleges a violation of the ADA, may do so under the rules established by this policy. Complaints by TYC employees, including those which involve the ADA, are processed under the provisions of TYC Personnel Policy and Procedure Manual PRS.35.03, Employee Grievance Chapter. Complaints from youth, under TYC jurisdiction, including those alleging a violation of the ADA, are processed under General Operating Policy GOP.61.07, sec.89.7 of this title (relating to Youth Complaint Resolution System Terms and Rules). (b) Rules. (1) ADA compliance officer (ADACO). The executive director has appointed Mr. Gary Guenthner, or his successor, Director of Plant Operations and Development, P.O. Box 4260, 4900 North Lamar Boulevard, Austin, Texas 78756, (512) 483-5230, as the ADA compliance officer (ADACO) for TYC. (2) How to file an ADA complaint. Complaints may be filed either in writing or verbally. If the complaint is initially filed verbally, it must subsequently be reduced to writing and received by the ADACO not later than 15 calendar days after the ADACO was notified of the initial verbal filing. The complaint, in order to be timely filed, must be filed within 180 calendar days after the complainant became aware of, or should have become aware of, the alleged violation. Failure to timely file can result in the commission refusing to consider the complaint. (3) ADA complaint format. No particular format is prescribed for a complaint. However, concise and accurate information can be of immeasurable assistance in resolving the complaint. At a minimum the complaint should contain the following information: (A) name, address, and telephone number of person filing the complaint; (B) the nature of the complaint. A brief description of the circumstances surrounding the alleged violation to include location, names, and dates. (4) Were to file an ADA complaint. The complaint may be filed directly, either verbally or in writing, with the ADACO at the address in paragraph (1) of this subsection, or the complaint may be filed in writing with the superintendent of any TYC facility, or the director of any TYC regional office. That administrator will then immediately notify the ADACO and forward the written complaint to the ADACO within one working day from date of receipt of the complaint. (5) ADA complaint processing procedures. (A) ADACO and employee grievance administrator (EGA) responsibilities. Within five calendar days after the ADACO receives the written complaint the ADACO and the EGA will jointly identify the appropriate decision authority and establish a date the complaint is due receipt of the decision. As soon as possible after identification of the decision authority, the ADACO will notify the complainant of receipt of the complaint, the name of the TYC administrator appointed to resolve the complaint (decision authority), and the date a decision is due the complainant. (B) Decision authority's (DA) responsibilities. (i) Assignment. Immediately upon receipt of the complaint, the DA reviews it to ensure that he/she has the authority to act. If the DA does not have the authority to act, he/she will forward the complaint to the next level administrator who has the authority to act on the complaint. If the complaint is forwarded, the initial DA will immediately notify the ADACO and the EGA of the transfer. (ii) Time lines. The DA has 25 calendar days from date of receipt of the complaint to conduct an investigation, resolve the complaint, prepare a written decision, obtain a legal review of the decision, and notify the complainant in writing of the decision. If for good cause the DA requires additional time for investigation and resolution of the complaint, he/she will notify the ADACO, EGA, and the complainant of the reasons for the delay and provide a new estimated decision date. (iii) Investigation. The DA conducts the investigation an employee to conduct the investigation and provide the DA with non-binding recommendations. Prior to commencing the investigation, the person who will actually conduct the investigation (investigator) will review the complaint with the central office legal department and he/she will continue to periodically advise the legal department and the ADACO of the progress of the investigation. The investigator will permit the complainant and/or complainant's representative, and the investigator may, in his/her sole discretion, permit any other persons the investigator determines to have relevant information, to present matters on the complaint. There is no burden of proof of either the commission or the complainant. There are no rules of evidence applicable to the investigation. The DA is the sole judge of relevance, credibility of witnesses, and the weight to be afforded testimony and other relevant evidence. However, information determined by the DA to be factual should be supported by a preponderance of the evidence. (iv) Report of investigation. Upon completion of the investigation the DA will provide the complainant with a written decision on the complaint. If the decision is adverse to the complainant, the DA will include his/her reasons for the adverse decision. Prior to release of the written decision to the complainant, or any other person or entity, the DA will submit the proposed decision to the central office legal department for review. The legal department shall have five working days from receipt to review the proposed decision for legal sufficiency. If the legal department finds the decision to be for any reason legally insufficient, the decision will not be released to any one until such time as the deficiency has been corrected and the proposed decision has been found to be legally sufficient. (v) Decision distribution. After legal department approval, the DA will provide a copy of the decision to the complainant, the complainant's representative, if any, the ADACO, the EGA, and the director of the legal department. (6) Request for review of ADA complaint decision. (A) If the complainant is dissatisfied with the decision, he/she may, within 10 calendar days of the date of receipt of the decision, submit the written decision, and a written statement specifically outlining the reasons for disagreement, addressed to the executive director, Texas Youth Commission, at the address provided in paragraph (1) of this subsection, for review. (B) Upon receipt of the request for review, the executive director has 20 calendar days from date of receipt of the request for review to consider, resolve the issue, and notify the complainant in writing. Prior to releasing his/her decision, the executive director should, if the proposed decision is adverse to the complainant, submit the complaint record to the central office legal department for review and advice. If the executive director's decision is adverse to the complainant, the written notification need only state that the issue has been considered and that no valid reason has been found to warrant reversing the decision. (C) Distribution of the decision will be as established in paragraph (5) (B)(v) of this subsection. (D) The decision by the executive director finalizes the complaint process within TYC and exhausts the complainant's administrative remedies. (7) ADA complaint record repository. The ADACO is responsible for maintaining the files and records of all ADA complaints relative to TYC. Upon completion of processing the complaint, including any appeal, the original DA is responsible for ensuring that the original complaint, all correspondence, and any other relevant materials will be forwarded to the ADACO for filing. (8) How to file a complaint that does not involve an ADA violation. (A) Complaints must be filed in writing. In order to be timely filed, a complaint must be filed within 180 calendar days after the complainant became aware of, or should have become aware of, the circumstances the complainant believes constitutes a basis for complaint. Failure to timely file can result in the commission refusing to consider the complaint. (B) No particular format is prescribed for a complaint. However, concise and accurate information can be of immeasurable assistance in resolving the complaint. At a minimum the complaint should contain the following information: (i) name, address, and telephone number of persons filing the complaint; (ii) the nature of the complaint and a brief description of the circumstances surrounding the complaint to include location, names, and dates. (9) Where to file a non-ADA complaint. The complaint may be filed with the administrator of a TYC field program or with the administrative assistant to the executive director in TYC's central office at the address in paragraph (1) of this subsection. (10) Non-ADA complaint processing procedures. A record of each complaint is maintained by the administrative assistant to the executive director. (A) The administrative assistant is notified of all complaints received and assigns each complaint to the most appropriate administrator for response. Resolution of complaint is attempted at the program level. (B) The administrator assigned resolution of a complaint: (i) attempts to resolve the complaint in a timely and effective manner; (ii) reports the status of resolution to the complainant at least quarterly until and including final disposition; (iii) sends copies of communications with the complainant to the administrative assistant to the executive director. 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 October 9, 1992. TRD-9213734 Ron Jackson Executive Director Texas Youth Commission Effective date: November 2, 1992 Proposal publication date: September 8, 1992 For further information, please call: (512) 483-5244 Chapter 91. Discipline and Control Due Process Hearings Procedures 37 TAC sec.91.33 The Texas Youth Commission (TYC) adopts an amendment to sec.91.33, concerning Level II hearing procedure, without changes to the proposed text as published in the September 8, 1992, issue of the Texas Register (17 TexReg 6180). The section is being amended in order to bring about more efficient hearings procedure. The section concerns the Level II hearing procedure for youth committed to TYC. The amendment will allow youth to waive the 24-hour notice period before a hearing by agreeing, in writing, to an earlier hearing time. No comments were received regarding adoption of the amendment. The amendment is proposed under the Human Resources Code, sec.61.034, which provides the Texas Youth Commission with the authority to make rules appropriate to the proper accomplishment of its functions. 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 October 9, 1992. TRD-9213733 Ron Jackson Executive Director Texas Youth Commission Effective date: November 2, 1992 Proposal publication date: September 8, 1992 For further information, please call: (512) 483-5244 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 48. Community Care for Aged and Disabled Eligibility The Texas Department of Human Services (DHS) adopts the repeal of sec.48. 2919, and amendments to sec.sec.48.2931, 48.3903, and 48.5908, concerning community care for aged and disabled, without changes to the proposed text as published in the September 1, 1992, issue of the Texas Register (17 TexReg 6003). The justification for the proposal is to delete time-limited eligibility criteria from the rules. For simplicity and efficiency, DHS will provide sufficient funds to the adult protective services (APS) program so APS can purchase short-term services directly instead of referring short-term clients to CCAD programs. The proposal will function by providing more efficient provision of short-term services to APS clients, without involving caseworkers from two different programs. No comments were received regarding adoption of the sections. 40 TAC sec.48.2919 The repeal is adopted under the Human Resources Code, Title 2, Chapters 22 and 48, which provides the department with the authority to administer public assistance and protective services for the aged and disabled. 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 October 9, 1992. TRD-9213665 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: September 1, 1992 For further information, please call: (512) 450-3765 40 TAC sec.48.2931 The amendment is 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 October 9, 1992. TRD-9213668 Nancy Murphy Agency Liaison Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: September 1, 1992 For further information, please call: (512) 450-3765 Case Management 40 TAC sec.48.3903 The amendment is 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 October 9, 1992. TRD-9213666 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: September 1, 1992 For further information, please call: (512) 450-3765 Contracting for CCAD Services 40 TAC sec.48.5908 The amendment is 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 October 9, 1992. TRD-9213667 Nancy Murphy Agency Liaison, Policy and Document Support Texas Department of Human Services Effective date: November 15, 1992 Proposal publication date: September 1, 1992 For further information, please call: (512) 450-3765 Part X. Texas Employment Commission Chapter 301. Unemployment Insurance 40 TAC sec.301.9 The Texas Employment Commission adopts an amendment to sec.301.9 concerning payment of contributions and reimbursement, without changes to the proposed text as published in the August 28, 1992, issue of the Texas Register (17 TexReg 5949). The amendment will bring the Texas Employment Commission (TEC) into full compliance with state law and the regulations which have been promulgated by the Treasury. The amendment clarifies that all "payers of taxes," including agents, who paid over $500,000 in the prior fiscal year are required to make payments by electronic funds transfer (EFT). The amendment also excludes payers required to pay by EFT from the postmark rule, which states that a tax payment is timely if postmarked on the due date. Agents submitting a remittance for 20 or more accounts will be required to submit an allocation list on magnetic or electronic media, while those agents submitting for less than 20 accounts may do so on paper media. Four comments were received by TEC concerning this amendment. The comments were against the proposed amendment, and in general indicated that this would be difficult to administer, would discriminate against employers who chose to have their tax returns prepared by service providers, and would likely increase the fees payroll service agents charge as they would lose interest on the"float." Against. Automatic Data Processing; Advantage Payroll Services; Ceridian Employer Services; Systems Tax Service, Inc. The TEC disagrees with the commenters. Most, if not all, of the commenters, were under the impression that a separate EFT would be required for each account they reported. This is not the case, and only a single EFT will be expected from each agent for all accounts they report. There is no discriminatory impact on small employers as they have no reason to know or care about the means used by the agent to transmit the taxes to TEC. TEC acknowledges that the agents will lose interest income on the "float"; however the intent of the law requiring EFT was to capture that interest income for the state. The TEC believes that in addition to increasing interest income for the unemployment insurance trust fund by $80,000-$100,000 annually, it will reduce administrative costs by approximately $5,000.00 and eliminate the necessity for manual entry of approximately 18,500 paper checks and will provide a clearer audit trail for single remittances applied to multiple accounts. The amendment is adopted under Texas Civil Statutes, Article 5221b, which provide the Texas Employment Commission with the authority to adopt, amend, or rescind rules as it deems necessary for the effective administration of this 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 October 5, 1992. TRD-9213430 Ferris Duhon Legal Counsel Texas Employment Commission Effective date: October 26, 1992 Proposal publication date: August 28, 1992 For further information, please call: (512) 463-2291