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 7. BANKING AND SECURITIES Part VII. State Securities Board Chapter 109. Transactions Exempt from Registration 7 TAC sec.109.3 The State Securities Board adopts an amendment to sec.109.3, concerning sales to financial institutions and certain institutional investors under the Securities Act, sec.5.H, to expand the definition of "qualified institutional buyer" for purposes of the exemption, without changes to the proposed text as published in the February 9, 1993, issue of the Texas Register (18 TexReg 793). The amendment will continue to be uniform with the Securities and Exchange Commission in regard to what is included within the definition of qualified institutional buyer for purposes of the exemption. The amendment includes within the definition of qualified institutional buyer collective and master trusts for the investment of employee benefit plan funds as well as separate accounts of an insurance company. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 581, sec.28-1, which provide that the Board may make or adopt rules or regulations governing registration statements, applications, notices, and reports, and in the adoption of rules and regulations, may classify securities, persons, and matters within its jurisdiction, and prescribe different requirements for different classes. 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 May 3, 1993. TRD-9322405 Richard D. Latham Securities Commissioner State Securities Board Effective date: May 24, 1993 Proposal publication date: February 9, 1993 For further information, please call: (512) 474-2233 Chapter 124. Guidelines for Registration of Periodic Payment Plans 7 TAC sec.sec.124.1-124.6 The State Securities Board adopts new sec.sec.124.1-124.6, concerning administrative guidelines for registration of periodic payment plans, with one change to the proposed text as published in the February 9, 1993, issue of the Texas Register (18 TexReg 794). The change is contained in the title to which the word a "administrative" has been added to make it consistent with the titles of other securities registration guidelines chapters. The new sections foster uniformity with other states in applying requirements for registration of periodic payment plans for investing in mutual funds. The new sections reflect the guidelines recently adopted by the North American Securities Administrators Association, Inc. (NASAA). No comments were received regarding adoption of the new sections. The new sections are adopted under Texas Civil Statutes, Article 581, sec.28-1, which provide that the Board may make or adopt rules or regulations governing registration statements, applications, notices, and reports, and in the adoption of rules and regulations, may classify securities, persons, and matters within its jurisdiction, and prescribe different requirements for different classes. sec.124.1. Instruction. (a) Application. (1) These guidelines apply to the registration and qualification of periodic payment plans (sometimes referred to as "contractual plans"). (2) Applications not conforming to the standards contained in these guidelines shall be looked upon with disfavor. However, where good cause is shown, certain guidelines may be modified or waived by the Securities Commissioner. (b) Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Administrator-Referred to as "Securities Commissioner" throughout these guidelines. (2) Current account-Any account in a periodic payment plan: (A) which has not been liquidated and: (i) which is no more than six payments in arrears; or (ii) in which a payment has been made in the past six months; or (B) in which the total amount deducted from all payments for sales charges or commissions is 9.0% or less of the total amount of payments made. (3) Periodic payment plan-A plan which issues any certificate, investment contract, or other security providing for a series of periodic payments by the holder, and representing an undivided interest in certain specific securities or in a unit or fund of securities purchased wholly or partly with the proceeds of such payment. (4) Persistency rate-The percentage of the total number of accounts in a periodic payment plan which are current accounts. For purposes hereof, the computation of the persistency rate shall not include any account which has been canceled in accordance with the cancellation right contained in the Investment Company Act of 1940, sec.27(f), as amended. sec.124.2. Suitability Standards. (a) No periodic payment plan may be sold unless a principal of the selling dealer has determined that the plan is suitable for the purchasing investor. Such determination shall include, but not be limited to, consideration of the following factors: (1) the investor's age, marital status, and number of dependents; (2) the investor's major investment goals and the time frame for achieving those goals; (3) the investor's current and anticipated future financial status including income, and reasonably anticipated short and long term liabilities or other obligations; (4) the reasonable likelihood of the investor's continued income; (5) the investor's ability to address potentially burdensome financial situations (e.g., the death of a family member) through the use of insurance, savings, or other assets; and (6) the investor's understanding of the risks inherent in investing in securities and the proper use of savings instruments or accounts for shorter term needs. (b) The selling dealer shall retain for at least five years the documents disclosing the basis upon which the determination was reached as to each purchasing investor. sec.124.3. Limitation on Commissions. (a) In addition to the refund rights available to an investor in a periodic payment plan pursuant to the Investment Company Act of 1940, sec.27(d) and 27(f), as amended, in the event that an investor in a periodic payment plan shall withdraw from the plan within 28 months of the investor's initial payment, the investor shall receive the sum of: (1) the value of his or her account, and (2) the amount by which all sales charges, commissions, or other selling or redemption fees deducted from the investor's account exceed 15% of the gross payments made by the investor. (b) For purposes of subsection (a) of this section, each investor shall be provided a notice setting forth his or her cancellation rights. This notice, in the form provided in sec.124.4 of this title (relating to Disclosure), shall be sent not less than 30 days and not more than 60 days prior to the expiration of the investor's cancellation rights. Neither the sponsor nor its agent(s) shall advise the investor against exercising his or her right to cancel the plan without first determining that such advice is suitable for the particular investor. Such determination shall include, but not be limited to, consideration of the factors set forth in sec.124.2 of this title (relating to Suitability Standards), as well as of other factors indicating the likelihood that the investor will complete the plan. sec.124.4. Disclosure. Each investor in a periodic payment plan shall be provided with disclosure in the form which follows. This disclosure shall be executed by the investor and by the selling dealer. The investor shall be provided with an executed copy. The dealer shall retain an executed copy for a period of at least five years. IMPORTANT MESSAGE REGARDING YOUR (NAME OF PLAN) Dear Investor: You have the right within 28 months of the commencement of your plan to cancel your plan and receive a refund of all sales charges paid which are in excess of 15% of the total payments made. In determining whether or not to exercise your cancellation right, you should consider, among other things, the projected cost of your investment and your ability to make the scheduled payments over the life of your plan as they become due. If you wish to exercise your cancellation rights, you must send notice to that effect to: ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ by (date of expiration of cancellation rights). Very truly yours, (MESSAGE TO BE PUT ON ONE PAGE) IMPORTANT MESSAGE TO PURCHASER OF A PERIODIC PAYMENT PLAN Regarding your application for (___________________________name of plan) at (monthly investment amount/total number of years of program). Date (of application)_______________________. You are applying for an investment account which features a brokerage commission structure which concentrates the sales charge in the first 12 installments. In establishing such an account, you should most carefully consider your financial ability and personal intention to complete all of the scheduled (120 (ten years) or 180 (15 years)) payments. If you do not complete the full schedule of (120 or 180) payments, you will incur very high effective sales charges. These sales charges could cost you up to 50% of the amount you invested. You should be aware that there are many mutual funds which are available with brokerage commission structures that do not concentrate the sales charge in the early installments. at which you may withdraw from the plan and receive a full or partial refund of the sales charges: (1) within 45 days after receiving notice of your cancellation rights, you may cancel the plan and receive a full refund of all sales charges paid; or (2) within 28 months of the commencement of the plan, you may cancel the plan and receive a refund of all sales charges paid which are in excess of 15% of the total payments made. In evaluating your ability to invest regularly for a number of years, you should consider your income pattern, contingencies which may arise, and your willingness to invest in securities which fluctuate in value. If you have reason to doubt your ability and likelihood to complete this plan, you are urged to seek an alternative investment method. Purchaser's Statement I have received the above statement. [graphic] I have discussed the above statement with the applicant and believe that he or she understands it. [graphic] sec.124.5. Persistency Rate and Reports. (a) For all fiscal years beginning on or after January 1, 1993, the issuer of securities under a periodic payment plan shall file with the Securities Commissioner within 60 days of the end of the plan's fiscal year a report disclosing the plans persistency rate for all accounts opened in the jurisdiction no less than one year nor more than five years before the last day of the fiscal year. (b) An issuer who fails to maintain a persistency rate of 70% or higher within the jurisdiction shall furnish a report setting forth an explanation for such failure. Failure to furnish such a report or failure to provide an explanation satisfactory to the Securities Commissioner shall be grounds for the Securities Commissioner to deny, suspend, or revoke registration of the periodic payment plan. In making this determination, the Securities Commissioner may consider all relevant factors including but not limited to national persistency rates, market conditions, the number of investors in that jurisdiction, the period of time the plan has been selling in that jurisdiction, legislative and regulatory development, and any other unusual or unique circumstances. (c) The Securities Commissioner may deny the registration of a periodic payment plan based upon low persistency rates in one or more other jurisdictions. This provision shall not apply to the renewal of the registration of any plan currently registered in the jurisdiction. sec.124.6. Investment Objective. The stated investment objective of a periodic payment plan shall be a fundamental policy of the plan as defined in the Investment Company Act of 1940, sec.8(b), and shall be consistent with the goal of providing a long-term investment opportunity suitable for persons of relatively modest means. If a fund's investment objective is not currently a fundamental policy, it shall be made one at the next meeting of shareholders. 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 May 3, 1993. TRD-9322407 Richard D. Latham Securities Commissioner State Securities Board Effective date: May 24, 1993 Proposal publication date: February 9, 1993 For further information, please call: (512) 474-2233 Chapter 139. Exemptions by Rule or Order 7 TAC sec.139.4 The State Securities Board adopts new sec.139.4, concerning Mexican securities, without changes to the proposed text as published in the February 9, 1993, issue of the Texas Register (18 TexReg 799). The new section creates an exemption from the securities registration requirements of the Securities Act for certain Mexican securities. The new section creates an exemption under the Securities Act, sec.5.T, for securities either issued or guaranteed by the federal government of Mexico. The sole commenter was in favor of the rule proposal. Commenting in favor of the new section was the Association Mexicana de Casas de Bolsa, A.C.. The new section is adopted under Texas Civil Statutes, Article 581, sec.28-1, which provide that the Board may make or adopt rules or regulations governing registration statements, applications, notices, and reports, and in the adoption of rules and regulations, may classify securities, persons, and matters within its jurisdiction, and prescribe different requirements for different classes. 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 May 3, 1993. TRD-9322408 Richard D. Latham Securities Commissioner State Securities Board Effective date: May 24, 1993 Proposal publication date: February 9, 1993 For further information, please call: (512) 474-2233 TITLE 16. ECONOMIC REGULATIONS Part IV. Texas Department of Licensing and Regulation Chapter 80. Tow Trucks 16 TAC sec.80.20 The Texas Department of Licensing and Regulation adopts an amendment to sec.80.20 concerning registration requirements, with changes to the proposed text as published in the Texas Register (18 TexReg 1986). The amendment deletes the requirement for applicants to submit two photographs of the tow truck with the registration application. The word provided was added to the first sentence in subsection (e) for clarification. The registration waiting time will be reduced and operators will be able to file applications as soon as the vehicle identification number is known. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 6687-9b, which provide the Texas Department of Licensing and Regulation with the authority to promulgate and enforce a code of rules to assure compliance with the Act. sec.80.20. Registration Requirements. (a)-(d) (No change.) (e) A persons, corporation, partnership, or any other entity desiring to operate a tow truck shall file an appropriate written application with the department annually on a form provided by the department for that purpose. The written application form shall be accompanied by a certificate of insurance and the required fees. The application must be signed by the tow truck's owner or the owner's authorized agent. (f) The following information is required in the original application: (1)-(5) (No change.) (6) sales tax identification number, if applicable; and (7) a certification claiming exemption if an owner is claiming an exemption from cargo insurance coverage. 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 April 30, 1993. TRD-9322415 Jack W. Garison Executive Director Texas Department of Licensing and Regulation Effective date: May 24, 1993 Proposal publication date: March 30, 1993 For further information, please call: (512) 463-3127 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 19. Long-Term Care Nursing Facility Requirements for Licensure and Medicaid Certification Subchapter G. Resident Assessment 40 TAC sec.19.604 The Texas Department of Human Services (DHS) adopts an amendment to sec.19. 604, concerning Preadmission Screening and Annual Resident Review (PASARR), in its Long Term Care Nursing Facility Requirements for Licensure and Medicaid Certification, with changes to the proposed text as published in the February 12, 1993, issue of the Texas Register (18 TexReg 923). The justification for the amendment is to incorporate requirements of the Omnibus Budget Reconciliation Act of 1987 (OBRA '87) which provide for alternate placement of nursing facility residents with mental illness, mental retardation, or a related condition in a setting which is better suited for providing the specialized services they need. The amendment details the policies regarding alternate placement, the responsibilities of the nursing facility, and implications for the resident. The amendment will function by providing for more appropriate placement of nursing facility residents who need specialized services because of mental illness, mental retardation, or a related condition. During the 30-day public comment period, DHS received comments from the United Cerebral Palsy Association of Texas; Advocacy, Inc.; the State Committee of Examiners for Speech-Language Pathology and Audiology; and a medical doctor. A summary of the comments and DHS's responses follows: COMMENT: One commenter requested that the term "speech therapist" be changed to "speech-language pathologist" in subsection (e)(3)(C). RESPONSE: DHS concurs and is adopting the subsection with the requested change. COMMENT: One commenter recommended that more detailed language be included to more fully describe specialized services. RESPONSE: DHS believes that the definition of "specialized services" in subsection (a)(26) is sufficiently detailed. COMMENT: Two commenters objected to the term "responsible party" in the rule. RESPONSE: DHS uses the term throughout Chapter 19 to refer to an individual who may be involved in discussions concerning specialized services but does not make alternate placement decisions. These decisions may be made by a competent person or a legal representative. DHS is retaining the term as proposed. COMMENT: Two commenters recommended that interdisciplinary team (IDT) members, as stipulated in subsection (e)(3), be invited to participate with the consent of the resident or his legal representative. RESPONSE: DHS believes that on occasions when a professional or IDT member has pertinent information to give the membership at large, it would be a disservice to the resident to withhold the information. DHS is adopting the subsection without the recommended change. COMMENT: Two commenters recommended that case managers provide a monthly report in writing to the resident or legal representative. RESPONSE: DHS requires that the case manager provide a monthly written report to the nursing facility and that this report be placed in the clinical record. The clinical record is open to the resident and/or his legal representative. DHS believes that requiring another copy to be sent to the resident creates unnecessary extra paper, especially when not everyone will want a copy when the information is already available. The rule does not prohibit individual residents and their representatives from requesting and receiving a copy from the case manager; therefore, DHS is adopting the rule without adding the recommended change. COMMENT: Two commenters recommended that additional language be added under subsection (f)(5)(A) to clarify the responsibility of the mental health/mental retardation authorities when locating alternate placement is necessary. RESPONSE: DHS has passed this recommendation to TXMHMR staff for consideration as an appropriate addition to their PASARR procedures manual. COMMENT: Two commenters objected to the method DHS proposed for use in calculating the 30-month residence requirement. RESPONSE: DHS is currently developing an amendment to this methodology which will be proposed in the near future. COMMENT: Two commenters recommended that clarifying language be added to give residents who have a choice of residence the right to continue pursuing other alternate placements even if they have refused all alternates offered under subsection (f)(6)(C). RESPONSE: DHS agrees and has added the requested clarification to subsection (f)(6)(C). COMMENT: Two commenters recommended that subsection (f)(7)(A) be clarified to further explain the role of the mental health/mental retardation authority case manager. RESPONSE: The role of the case manager is under the auspices of TXMHMR; therefore, DHS has passed the recommendation to that agency for consideration as an addition to TXMHMR's PASARR rules (25 Texas Administrative Code sec.402, subchapter (E)) and PASARR procedures manual. COMMENT: Two commenters objected to the inclusion of "responsible party" in subsection (f)(7)(B). RESPONSE: DHS agrees and has deleted paragraph (B) altogether. COMMENT: Two commenters requested that the phrase "and is not granted a waiver" be added to subsection (f)(7)(C). RESPONSE: The requested language has been added to subparagraph (D), as a result of renumbering the subparagraphs under (7). COMMENT: One commenter requested that subsection (f)(7)(F) be changed to detail the MHMR case manager's responsibility to assist an individual in filing an appeal. RESPONSE: The role of the case manager is under the auspices of TXMHMR. DHS has passed the recommendation to that agency for consideration as an addition to TXMHMR's PASARR rules (25 Texas Administrative Code sec.402, subchapter (E). COMMENT: One commenter requested clarifying language to subsection (f)(7)(G) which would state that the alternate placement is appropriate as referenced in another section. RESPONSE: DHS believes the language would not be appropriate as an addition to this subsection and is adopting the language as proposed. 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 and under Texas Civil Statutes, Article 4413 (502), sec.16, which provides the Health and Human Services Commission with the authority to administer federal medical assistance funds. sec.19.604. Preadmission Screening and Annual Resident Review (PASARR). (a)-(d) (No change.) (e) Specialized Services. (1)-(2) (No change.) (3) An interdisciplinary team will be constituted by the case manager in order to develop a plan for specialized services. This team will identify those additional services required for specialized services that are not already being provided by the nursing facility and covered in the nursing facility daily vendor rate. The following persons must be invited to participate on the team: (A) the Director of Nurses or another appropriate nursing facility representative; (B) (No change.) (C) other professionals deemed appropriate, such as, but not limited to, an occupational therapist, physical therapist, or speech-language pathologist; (D) the individual and/or his guardian, legal representative, or responsible party; and (E) family members, if the individual or legal representative agrees. (4)-(12) (No change.) (f) Alternate Placement. (1) The Texas Department of Mental Health and Mental Retardation (TXMHMR) contracts with the local MHMR authority to procure alternate placement services for residents who are determined by TXMHMR to need specialized services and require alternate placement. (2) The local MHMR authority assigns a case manager for those residents who require alternate placement. (3) An interdisciplinary team as described in subsection (e)(3) of this section will be constituted. (4) The case manager must provide a monthly written report to the nursing facility regarding alternate placement activities as described in 25 Texas Administrative Code sec.402, subchapter (E). This report must be retained in the resident's nursing facility medical record. (5) For those residents who have been determined to be appropriately placed in a nursing facility and to need specialized services and who desire alternate placement, the following alternate placement activities occur. (A) The MHMR authority may locate alternate placement in consultation with the resident or his legal representatives. (B) The resident or his legal representative must approve the alternate placement. (C) If the resident or his legal representative refuse all alternate placement options, the resident may remain in the nursing facility and receive specialized services there until an acceptable option is found. (6) For those residents who have been determined to be inappropriately placed and to need specialized services and who have 30 continuous months of nursing facility residence, the following alternate placement activities occur. (A) The MHMR authority must locate alternate placement in consultation with the resident or his legal representatives. (B) The resident or his legal representative must approve the alternate placement. (C) Until the resident or his legal representative approve an alternate placement, the resident may remain in the nursing facility and receive specialized services there. (7) For those residents determined to be inappropriately placed in a nursing facility and to need specialized services but who do not have 30 months continuous residence, the following alternate placement activities occur. (A) The MHMR authority must present a specific placement alternative after notification. The resident or his legal representative must approve the alternate placement. If the resident or his legal representative does not approve the placement, the authority must present another. If the second placement is rejected, then a third placement is offered. The MHMR authority must present all three specific placement alternatives within six months after notification unless a waiver of the six months is granted by the TXMHMR PASARR Determination Program Office in accordance with 25 Texas Administrative Code sec.402.159(d)(3). (B) If the resident or his legal representative refuses all three alternate placement options and is not granted a waiver, then the TXMHMR PASARR Determination Program Office notifies the resident of the potential for discharge and loss of Medicaid benefits and the procedure for requesting a fair hearing. (C) The case manager must provide to the nursing facility with documentation of the basis for refusing the alternate placement options. (D) If the resident or his legal representative refuses all alternate placement options and is not granted a waiver, then the nursing facility must begin discharge planning procedures with the MHMR case manager and other interdisciplinary members unless a request for a fair hearing has been filed, as described in paragraph (7)(E) of this subsection. The nursing facility is responsible for discharging the resident, according to sec.19.302 of this title (relating to Transfer and Discharge). (E) Any resident or his legal representative not in agreement with the decision described in paragraph (7)(B) of this subsection may file a request with TXMHMR to receive a DHS fair hearing according to Chapter 79 of this title (relating to Legal Services). If the resident files a request for a fair hearing within 10 days of the notice, he may continue to reside in the nursing facility and receive specialized services pending the fair hearing results. (i) If the fair hearing results do not support the resident's or his legal representative's position: (I) the resident must accept the alternate placement offered, if it is still available, or the next alternate placement offered; or if refused; (II) the Medicaid eligibility worker is informed by TXMHMR that alternate placement is refused, and the 30-day discharge notice period begins. (ii) If the fair hearing results support the resident's or his legal representative's position, the resident may remain in the nursing facility and receive specialized services until the case manager locates an alternate placement. The resident or his legal representative may appeal alternate placement decisions until the resident or his legal representative agrees upon an alternate placement, or the fair hearing results support the location of an alternate placement. (g) Nursing facilities who admit or retain individuals that have not been screened by TXMHMR or who admit or retain individuals for whom nursing facility placement has been found to be inappropriate and who require specialized services will not be reimbursed for that individual as described in sec.19.1708 of this title (relating to Limitations on Provider Charges to Patients). (h) Nursing facilities must provide discharge planning services to all residents who are to be alternately placed as described in this section and provide residents those rights described in sec.19.302 of this title (relating to Transfer and Discharge). 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 May 4, 1993. TRD-9322437 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: June 15, 1993 Proposal publication date: February 12, 1993 For further information, please call: (512) 450-3765 Chapter 48. Community Care for Aged and Disabled Medicaid Waiver Program for Persons with Related Conditions 40 TAC sec.48.2103 The Texas Department of Human Services (DHS) adopts an amendment to sec.48. 2103 concerning client eligibility criteria, with changes to the proposed text as published in the March 5, 1993, issue of the Texas Register (18 TexReg 1401). The justification for the amendment is to revise the Community Living Assistance and Support Services (CLASS) program income and resource limit, and to specify that CLASS participants cannot receive CLASS and other Community Care for Aged and Disabled services at the same time. The amendment will function by providing more people with an opportunity to receive CLASS services. No comments were received regarding adoption of the amendment. DHS, however, has initiated minor changes to subsection (a)(4)(A) and (B). To provide a better explanation of Medicaid eligibility, DHS has added subparagraphs (A)(iv) and (B)(i)(IV). 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 and under Texas Civil Statutes, Article 4413 (502), sec.16, which provide the Health and Human Services Commission with the authority to administer federal medical assistance funds. sec.48.2103. Client Eligibility Criteria. (a) To be determined eligible by the Texas Department of Human Services (DHS) for waiver program services, an applicant must: (1)-(2) (No change.) (3) be under age 18 and reside with parents or spouses, and (A)-(D) (No change.) (E) receive waiver program services for persons with related conditions; or (4) be an individual who would be financially eligible for Medicaid if residing in a Medicaid-certified institution. For these individuals, the policies specified in subparagraphs (A) and (B) apply. (A) Spousal impoverishment provisions. (i) For waiver participants with spouses who live in the community, the income and resource eligibility requirements are determined according to the spousal impoverishment provisions in the Social Security Act, sec.1924, and as specified in the Medicaid State Plan and subsection (a) of this section. (ii) After the participant is determined to be eligible for Medicaid, DHS determines the amount of the participant's income applicable to payment. (iii) To determine the amount of the participant's income applicable to payment, DHS uses the same methodology as if the participant were residing in an institution, except that the personal needs allowance is equal to the institutional cap. (iv) DHS applies post-eligibility treatment of income rules to individuals eligible under a special income level, as specified in 42 Code of Federal Regulations sec.435. 726, for use only by states that do not use the 209(b) option. For individuals receiving home and community-based services who are subject to the post-eligibility treatment of income rules, the Medicaid payment to the provider for home and community-based services will be reduced by the amount that remains after deducting the appropriate amounts from the individual's income. The DHS Copayment Worksheet form is used to calculate the client copayment amount. (B) Calculation of participant copayment. (i) A participant who is financially eligible based on the special institutional income limit must share in the cost of waiver services. The method for determining the participant copayment is specified in this subparagraph and is documented on DHS's Medical Assistance Only Worksheet form. When calculating the copayment amount for a participant with income that exceeds the SSI federal benefit rate, DHS deducts the following: (I) the cost of the participant(s) maintenance needs, which must equal the special institutional income limit for eligibility under the Texas Medicaid program; (II) the cost of the maintenance needs of the participant's dependent children. This amount is equivalent to the Aid to Families with Dependent Children (AFDC) program basic monthly grant for children or for a spouse with children, using the recognizable needs amount in the AFDC Budgetary Allowance Chart; (III) the costs incurred for medical or remedial care that are necessary, but not covered by Medicare, Medicaid, or any other third party. This includes the cost of health insurance premiums, deductibles, and coinsurance; and (IV) the cost of the maintenance needs of the participant's spouse. This amount is equivalent to the amount of the SSI federal benefit rate, less the spouse's own income. (ii) The copayment amount is the participant's remaining income after all allowable expenses have been deducted. The copayment amount is applied only to the cost of home and community-based services which are funded through the Community Living Assistance and Support Services (CLASS) waiver program and specified on the participant's individual plan of care. The copayment amount must not exceed the cost of services actually delivered. (iii) Participants must pay the copayment amount to the provider contracted to deliver authorized waiver services. (b)-(d) (No change.) (e) Participants may be enrolled in only one waiver program at a time. Participants may not receive both CLASS waiver services and other DHS community care services at the same time. 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 May 4, 1993. TRD-9322438 Nancy Murphy Section Manager, Policy and Document Support Texas Department of Human Services Effective date: June 1, 1993 Proposal publication date: March 5, 1993 For further information, please call: (512) 450-3765