ADOPTED 
 RULES 
 
 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 V. General Services Commission 
  Chapter 111. Executive Administration Division 
  
  Historically Underutilized Business Certification Program 
 
  1 TAC sec.sec.111.11-111.19 
 
  The General Services Commission adopts the repeal of sec. sec.111.11-111.19, 
concerning the Historically Underutilized Business Certification Program, 
without changes to the proposed repeal as published in the March 14, 1995, issue 
of the Texas Register (20 TexReg 1805). 
 The sections are repealed to be replaced with new sec. sec.111.11 to 111.23. 
 The repealed sections are replaced by new sections 111.11 to 111.23 which 
reorganize and clarify the rules and allow for improved recordkeeping with the 
Disparity Study. 
 No comments were received regarding adoption of the repeals. 
 The repeals are adopted under the authority of Texas Civil Statutes, Article 
601b, which provide the General Services Commission with the authority to 
promulgate rules necessary to accomplish the purpose of the Article. 
 
  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 12, 1995. 
 TRD-9511711 
  David Ross Brown 
 Assistant General Counsel 
 General Services Commission 
    Effective date: October 4, 1995 
 Proposal publication date: March 14, 1995 
 For further information, please call: (512) 463-3960 
         
       
  1 TAC sec.sec.111.11-111.23 
 
  The General Services Commission adopts new sec.sec.111.11-111.23, concerning 
utilization of historically underutilized businesses ("HUBs"), based upon the 
results of the Texas Disparity Study. The Commission also repeals current 
sec.sec.111.11-111.19. Sections 111.12-111.16, 111.22, and 111.23 are adopted 
with changes to the proposed text as published in the March 14, 1995, issue of 
the Texas Register (20 TexReg 1805). Sections 111.17-111.21 are adopted without 
changes and will not be republished. 
 The new sections establish guidelines that may be used by governmental bodies 
in managing their contracting goals for historically underutilized businesses 
(HUBs). 
 In sec.111.11, Policy and Purpose, the first sentence has been revised to read 
as follows: "It is the policy of the commission to encourage the use of 
historically underutilized businesses by state agencies and to assist agencies 
to achieve these goals through race, ethnic, and gender neutral means." The 
change deletes language concerning the use of race and gender conscious remedial 
actions and clarifies the scope of the policy. 
 The definition of "Historically Underutilized Business." in sec.111.12, 
Definitions, has been amended to reorganize the subsections. The first sentence 
now reads: "A business outlined in subparagraph (C), (D), (E), (F), (G) and (H) 
in which the owner(s):". New subparagraph (A) was the second half of the 
sentence in former subparagraph (C). The first sentence in new subparagraph (B) 
was the second half of the sentence in former subparagraph (A) . New clauses 
(i)-(v) were part of former subparagraph (A). The definition of "American women" 
that appears in subparagraph (B)(iii) has been amended to add the words, "except 
those specified in clauses (i), (ii) (iv) and (v)." New subparagraph (C) now 
reads: "a corporation formed for the purpose of making a profit in which at 
least 51% of all classes of the shares of stock or other equitable securities 
are owned by one or more persons described by subparagraphs (A) and (B); or." 
New subparagraph (D) was formerly subparagraph (B) and has been modified to 
insert the words "and (B)" between the words "(A) " and "of this section," and 
to add the word "or" following the semicolon. New subparagraph (E) was formerly 
subparagraph (C) which was amended to replace the word "subparagraph" with the 
word "subparagraphs," to insert the word "and (B)" between the words "(A)" and 
"of this section," and to strike the words following the semicolon which have 
been moved to new subparagraph (A). New subparagraph (F) was formerly 
subparagraph (D) and new subparagraph (G) was formerly subparagraph (E). New 
subparagraph (H) is added and reads as follows: "a business other than described 
in subparagraphs (D), (F), and (G) of this section, which formed for the purpose 
of making a profit and is otherwise a legally recognized business organization 
under the laws of the State of Texas, provided that at least 51% of the assets 
and interest and 51% of any classes of stock and equitable securities are owned 
by one or more persons described by subparagraphs (A) and (B) of this section." 
The amendment reorganizes the text of the former rule, adds new subparagraph (H) 
in order to clarify the factors used in defining HUBs and excludes minorities 
from the description of "American women-owned businesses." These changes clarify 
the subsection and allow for improved recordkeeping consistent with the 
Disparity Study. Also in sec.111.12, the definition of "term contract" has been 
amended to add the words, "as defined in sec.113.2 of this title." The change 
reconciles this definition with agency practices. 
 In the first sentence of sec.111.13, subsection (a), the words, "increasing the 
level of HUB participation" have been replaced with the words, "encouraging the 
use of HUBs." A final sentence is added which reads: "Each agency may achieve 
the annual program goals by contracting directly with HUBs or indirectly through 
subcontracting opportunities." The amendments are made to clarify the subsection 
and to emphasize that contracting with a HUB at either the prime or 
subcontractor levels is permissive. 
 Section 111.13, subsection (b) is amended to read: "Each state agency shall 
make a good faith effort to assist HUBs in receiving a portion of the total 
contract value of all contracts that the agency expect to award in a fiscal year 
in accordance with the following percentages: (1) 11.9% for heavy construction 
other than building contracts; (2) 26.1% for all other building construction, 
including general contractors and operative builders contracts; (3) 57.2% for 
all special trade construction contracts; (4) 20% for professional services 
contracts; (5) 33% for all other services contracts; and (6) 12.6% for 
commodities contracts." The amendments substitute the term "good faith effort" 
for the term "best efforts" and delete the words "not less than" from the stated 
overall contracting goals for each category of contract, thus clearly denoting 
the stated percentages as goals rather than "set-asides". The category 
construction has been subdivided into three construction (sub) categories 
consistent with the relevant Standard Industrial Code(s) (SIC) reported in the 
Disparity Study. The numerical goal for each category or (sub) category has been 
amended to reflect total actual availability of HUBs as a percent of dollars as 
reported in Table 3.12 or Appendix H of the Disparity Study. The revisions also 
emphasize that the goals are applicable to the sum total of an agency's 
contracts on an annual basis. 
 Former sec.111.13, subsection (c), has been deleted and replaced with former 
subsections (d) and (e) as amended. The subsection as amended reads: " Each 
agency shall make a good faith effort to meet or exceed the goals outlined in 
sec.111.13(b). The percentage goals established in subsection (b) are overall 
annual program goals for each state agency applicable to the total annual dollar 
amount of an agency's contracts for each of the specific types of contracts. It 
may not be practicable to apply these goals to each contract. For each contract, 
state agencies may set higher or lower program goals than those outlined in 
subsection (b). Agencies may consider HUB availability, HUB utilization, 
geographical location of the project, the contractual scope of work or other 
relevant factors. By implementing the following procedures, an agency shall be 
presumed to have made a good faith effort: (1) prepare and distribute 
information on procurement procedures in a manner that encourages participation 
in state contracts by all businesses; (2) divide proposed requisitions into 
reasonable lots in keeping with industry standards and competitive bid 
requirements; (3) assess bond and insurance requirements and design such 
requirements to reasonably permit more than one business to perform the work; 
(4) specify reasonable, realistic delivery schedules consistent with an agency's 
actual requirements; (5) ensure that specifications, terms, and conditions 
reflect an agency's actual requirements, are clearly stated and do not impose 
unreasonable or unnecessary contract requirements; (6) provide contractors with 
referenced list of certified HUBs for subcontracting; (7) determine whether 
specific agency-wide goals are appropriate under the Disparity Study because 
some HUB groups have not been underutilized within applicable contracting 
categories and should not be included in the HUB goals for that category." These 
amendments delete references to former subsection (c) which identified specific 
racial and gender goals for each contract category, consolidate related 
provisions and clarify the subsection. Paragraph (7), in particular, clarifies 
the responsibilities of state agencies to review and revise agency-wide racial 
and gender goals for each contracting category to conform with the Disparity 
Study. 
 Former sec.111.13, subsection (f), now subsection (d), is amended to read: "A 
state agency may also demonstrate good faith under this section by including a 
supplemental letter with documentation as prescribed by the commission: (1) 
identifying the percentage of contracts awarded to women and/or minority-owned 
businesses that are not certified as HUBs; (2) demonstrating that a different 
goal from that identified in sec.111.13(b) was appropriate given the agency's 
mix of purchases; (3) demonstrating that a different goal was appropriate given 
the particular qualifications required by an agency for its contracts; or (4) 
demonstrating that a different goal was appropriate given that graduated HUBs 
cannot be counted toward the goal." The changes affirm state agency flexibility 
in satisfying the good faith standard. 
 Section 111.14, subsection (a) has been amended to add the following language 
as the first sentence: "Each agency's bid and contract documents for 
construction, professional services, other services and commodities exceeding 
$100,000 shall include HUB subcontracting good faith effort guidelines and goals 
as established in sec.111.13." The amendment establishes a $100,000 threshold 
for the application of the good faith effort guidelines specified in sec.111.14 
to subcontracts. The former second and now third sentence of subsection (a) has 
been revised to replace the words "in house" with the words, "with its employees 
as defined by the Internal Revenue Service. A new fourth sentence has been added 
which reads: "The HUB prime contractor may subcontract the remaining 75% of the 
contract with HUB or non-HUB subcontractors." The fifth and sixth sentences of 
subsection (a) as revised replace the words "in house" with the words "with its 
employees." The latter amendments clarify current restrictions on pass-through 
and brokering contracting arrangements so that a HUB may not assign more than 
75% of the contract work to non-employees and be credited as a prime contractor. 
The section also clarifies that a HUB prime has the option of subcontracting up 
to 75% of the contract work to HUB or non-HUB subcontractors. 
 In sec.111.14, subsection (b), the second sentence has been replaced with the 
following language: "The contractor shall submit a copy of the notice described 
in subsection (c)(2) below with its offer, and shall submit a statement within 
seven working days following its offer that specifies the expected percentage of 
work, if any, to be subcontracted." The change streamlines the language of the 
proposed rule, indicates a timeframe for contractor outreach efforts and 
clarifies that subcontracting is permissive. 
 In sec.111.14, the first sentence of subsection (c) and subsection (c), 
paragraphs (2) and (4) have been modified. The first sentence of subsection (c) 
now reads: "By implementing the following procedures, a contractor shall be 
presumed to have made a good faith effort:" In subsection (c), paragraph (1), 
the words "the smallest feasible parts" have been replaced with the words, 
"reasonable lots." The second sentence in paragraph (2) of subsection (c) has 
been amended to read: "The notice shall include a description of the 
subcontracting opportunities and identify the location to review contract 
specifications." The third sentence in paragraph (2) of subsection (c) has been 
amended to read: "The notice shall be provided to potential subcontractors prior 
to submission of the contractor's bid." In paragraph (3) of subsection (c), the 
words "in the area in which the work will be performed" have been added to the 
first sentence and the second and third sentences have been deleted. In 
paragraph (4) of subsection (c), the words "but not selected" have been inserted 
between the words "bid," and "the contractor" and the words "explain not hiring 
a HUB subcontractor" have been replaced with the words "document the selection 
process." In paragraph (5), the words "at the times (and) reporting" have been 
replaced with the word "report." The changes streamline and clarify the 
language. The change in paragraph (2) deletes the requirement that primes 
transmit a complete copy of all specifications as this could be unduly 
burdensome. 
 Revised sec.111.14, subsection (d) now reads: "If the commission's directory 
does not include at least five businesses, the contractor shall send the notice 
to HUBs on lists of minority and women-owned businesses maintained by other 
government agencies or organizations. If a contractor uses a source other than 
the commission's directory, the selected HUB subcontractor must become certified 
by the commission in accordance with the procedures set forth in sec.111.17 of 
this title." The new language encourages contractors to look outside of the 
commission's HUB directory when the directory does not include at least five HUB 
businesses within the applicable profession or trade, but also requires that any 
HUB contractor selected from outside the commission's directory become certified 
before the agency may receive good faith credit. 
 Section 111.14, subsection (e) contains the language of former subsection (d) 
as amended. Subsection (e) now reads: "An agency shall ensure that a contractor 
has complied with this sec.111.14 as a condition of awarding any contract." The 
modifications clarify that it is the responsibility of the state agency to 
confirm that a contractor has conducted the outreach efforts described in 
sec.111.14 before making a formal contract award. 
 Section 111.14, subsection (f) contains the language of former subsection (e) 
as amended. In the first sentence in subsection (f) as revised the word 
"minimum" has been deleted and the words, "after the award date of the contract" 
have been replaced with the words "following selection, but prior to the award 
of the contract." The second sentence of former subsection (e) has been deleted. 
Subsection (f) includes revisions to paragraphs (1), (2),(3),(4), (5), (6), and 
(7) of former subsection (e). Former paragraph (8) has been deleted and former 
paragraph (9) has become subsection (g). Former paragraphs (1) and (2) have been 
combined as revised paragraph (1). Paragraph (1) now reads: "Whether the 
contractor provided written notices to at least five qualified HUBs or the 
contractor advertised in general circulation, trade association, and/or 
minority/women focus media concerning subcontracting opportunities." Paragraph 
(2) contains the language of former paragraph (3) as amended. Specifically, the 
words, "a reasonable number of" were replaced with the words "at least five 
qualified HUBs" in paragraph (2) as amended. In paragraph (3), the language of 
former paragraph (4) has been inserted, the words "smallest feasible" have been 
replaced with the word "reasonable" and the words "in order to increase HUB 
participation" have been replaced with the words "in accordance with standard 
industry practices." Revised paragraph (4) contains the language of former 
paragraph (5), revised to add the words "or met with the rejected HUB to discuss 
the rejection" to the end of the first sentence and to delete the second 
sentence. Revised paragraph (5) contains the language of former paragraph (6) as 
amended and reads; "Whether the contractor provided qualified HUBs with adequate 
information about bonding, insurance, the plans, the specifications, scope of 
work and requirements of the contract. " Revised paragraph (6) contains the 
language of former paragraph (7) as amended and reads: "Whether the contractor 
negotiated in good faith with qualified HUBs, not rejecting qualified HUBs who 
are also the lowest responsive bidder." The revisions streamline and clarify 
contractor obligations with regard to subcontracting and remove provisions 
deemed unduly burdensome. 
 Revised sec.111.14, subsection (g) contains the amended language of former 
subsection (f), paragraph (9). Subsection (g) now reads: "Contractors are 
encouraged to use the services of available minority and women community 
organizations, contractor groups, local, state and federal business assistance 
offices, and other organizations that provide support services to HUBs." 
 Revised sec.111.14, subsection (h) contains the language of former subsection 
(f) as amended. In the second sentence of revised subsection (h), the words 
"include but not limited to the following:" have been replaced with the words, 
"state the reasons for the deficiency," and paragraphs (1) and (2) have been 
deleted. The revisions clarify the responsibilities of state agencies to notify 
contractors regarding the sufficiency of the contractor's asserted good faith 
effort(s). 
 Section 111.15, subsection (a) has been replaced with the following language: 
"Agencies are required to prepare a written plan for the use of HUBs in 
purchasing and in public works contracts in accordance with Texas Government 
Code, Chapter 2056 and Article 601b, sec.1.03(l)." The revisions clarify the 
responsibility of state agencies to prepare written plans for the use of HUBs in 
accordance with law. 
 In sec.111.16, subsection (c), the words "and suppliers" have been deleted from 
the first sentence. The words "and equipment" and have been added to the end of 
the second sentence. The words, "On a quarterly basis," have been added at the 
beginning of the third sentence. The words "or suppliers" have been deleted from 
the third sentence and in the fourth sentence, the words "or suppliers" have 
been deleted between the words "contractor" and "should". The changes conform 
the terminology used in this section with that used elsewhere in the title and 
clarify that contractors are subject to quarterly reporting requirements. 
 In sec.111.16, subsection (f), the text of subparagraphs (A)-(E) of paragraph 
(3) have been added to paragraph (2) and former paragraph (3) has been deleted. 
Paragraph (2) now reads: " the total number of HUBs receiving payments from each 
state agency and actually paid by each state agency to the following groups as 
defined in sec.111.12 of this title and certified by the commission: (A) Black 
Americans; (B) Hispanic Americans: (C) American Women; (D) Asian Pacific 
Americans and (E) Native Americans." The change clarifies the language in a 
manner consistent with sec.111.12. 
 In sec.111.22, subsection (a), the second sentence has been revised to read: 
"The commission shall update the directory semiannually and make the directory 
available to state agencies, local governments and the public on a cost recovery 
basis." The changes better reflect the groups to which the Commission makes the 
directory available. The third sentence in subsection (a) has been amended to 
substitute the words " in hard copy, on floppy diskette, or on magnetic tape" 
for the words "or in another format." The change specifies the alternative 
formats of the directory which the Commission shall make available. Subsection 
(b) of sec.111.22 has been deleted because the substance has been incorporated 
in subsection (a). 
 In sec.111.23, subsection (a), the first sentence has been revised to read: "A 
HUB shall be graduated from being used to fulfill HUB procurement utilization 
goals when it has maintained gross receipts or total employment levels for four 
consecutive years which exceed 75% of the following schedule which is extracted 
from the U.S. Small Business Administration's size standard for firms within 
similar primary four-digit Standard Industrial Classification codes, as stated 
in 13 Code of Federal Regulations, 121.601:" In addition, new paragraphs (1)-(8) 
were added to establish graduation ceilings for each contract category 
referenced in sec.111.12 and sec.111.13. New paragraphs (1)-(8) read: "(1) for 
heavy construction other than is building construction, $17, 0000,000; (2) for 
building construction, including general contractors and operative builders, 
$17,000,000; (3) for special trade construction, $7,000, 000; (4) for medical, 
financial and accounting services, $3,500,000; (5) for architectural/engineering 
and surveying services, $3,500,000; (6) for other services including legal 
services, $3,500,000; (7) for commodities wholesale, 100 full-time equivalent 
employees; (8) for commodities manufacturers, 500 full-time equivalent 
employees." 
 The new sections describe the basic components of the State's HUB contracting 
program consistent with the provisions of House Bill 2626, Acts, 73rd 
Legislature and Chapter, 1051, Article V, sec.101, and Chapter 684, sec.65(c), 
Acts, 73rd Legislature, Regular Session (1993) and the State of Texas Disparity 
Study. Proposed sec.111.11 states the commission's adopted policy; (2) 
sec.111.12 defines terms; (3) sec.111.13 establishes statewide remedial HUB 
utilization goals based upon the disparities identified in the study for 
potential availability of HUBs overall in each contract category and for 
separate HUB groups in each contract category; (4) sec.111.14 prescribes 
requirements for the application of the utilization goals to subcontracts; (5) 
sec.111.15 states agencies' strategic planing responsibilities; (6) sec.sec.111. 
17-111.22 restate the commission's current HUB certification program 
requirements, including audits, revocations, and protest procedures, and race, 
ethnic, and gender neutral assistance efforts for HUBs; (7) sec.111.23 provides 
a graduation requirement for HUBs which maintain certain levels of gross 
receipts or employment for two consecutive years. 
 Forty-four written comments were received from individuals, groups, 
associations, and governmental bodies in response to the proposed sections. Oral 
comments were received from 21 individuals, groups, associations, and 
governmental bodies during a public hearing held on April 24, 1995. The 
transcripts of that hearing are available upon request. The comments fell within 
ten general subject categories, as follows: 
 A. Definitions (sec.111.12)  A number of commenters questioned the use of the 
term "American Women" as falling outside the statute. Some commenters suggested 
that the definition of and criteria for women-owned businesses should include 
all women of any ethnicity. The alternative view is that the definition of women 
and women-owned businesses should exclude women or businesses that would also 
qualify for minority-based HUB status. Others noted an inconsistency in the 
definitions of women used in  sec.111.12 and sec.111.13. At least one commenter 
suggested that the definition of "term contract" be amended to correspond with 
the GSC's general usage. One commenter recommended that the definition of 
"professional services" be expanded to include the services available under 
Chapter 12, Health and Safety Code. 
 B. Proposed HUB Contracting and Procurement Goals ( sec.111.13 and sec.111. 14)  
Most of the comments concerned the proposed HUB contracting goals at the prime 
(111.13) and subcontracting (111.14) levels. A number of commenters described 
the proposed rules as promoting reverse discrimination, providing unwarranted 
preferential treatment, creating set asides or quota programs, or allowing 
businesses to be selected based on race, ethnicity, or gender regardless of the 
business' ability to provide a quality product or service at a competitive 
price. Some commenters urged that the creation of ethnic or gender-based 
contracting goals was not narrowly tailored to address a compelling state 
interest or to remedy discrimination. Others asserted that the HUB program was 
not "narrowly tailored" due to the failure to expressly state a sunset date. 
Some suggested that the established good faith effort goals should be based on 
actual availability rather than potential availability which was the standard 
proposed in the rules published on March 14, 1995. Others urged the adoption of 
goals based on potential availability and at least one commenter questioned 
whether potential availability had been underestimated. 
 A number of commenters questioned the appropriateness of the goals within 
certain of the four procurement categories used in the Disparity Study, arguing 
that the procurement categories were too broad or narrow, e.g. that certain 
object codes are improperly categorized or that geographical adjustments are 
necessary. Others questioned the appropriateness of continuing goals for certain 
minorities or women within those categories based on a perceived unavailability 
of qualified women or minorities for certain types of work, e.g. heavy 
construction. At least one commenter recommended that goals be discontinued for 
groups where an "overutilization" was documented in the Disparity Study, i.e, 
where the actual utilization rate exceeded 80% of the expected utilization rate 
(based on actual availability). 
 A number of commenters recommended technical amendments to sec.111.13 and 
sec.111.14 to remove one or more of the following phrases: "best efforts," "to 
award," and "shall be allocated," as each phrase reportedly suggested an illegal 
"set-aside." 
 C. Other Annual Procurement Utilization Goals Issues ( sec.111.13) A number of 
commenters were opposed to the adoption of former sec.111.13 (f), now 
sec.111.13(d), which would allow state agencies to demonstrate a good faith 
contracting effort by producing evidence of contracting with non-certified HUBs. 
At least one commenter opined that the section would remove the teeth from the 
certification program and invite abuse by businesses that cannot meet the 
criteria of being owned by ethnic or gender groups who own at least 51% of the 
business and demonstrate active participation or control. 
 D. Other Subcontracting Issues (sec.111.14) Some commenters stated that 
subcontracting opportunities may not be applicable to all awarded contracts, and 
contractors should only be required to meet overall HUB procurement goals. 
Others opined that requiring contractors to solicit five businesses in each of 
the possible race and gender categories would be an unfair burden or that 
compliance with the good faith subcontracting checklist would be too time 
consuming. The commission received one comment suggesting there should be no 
evaluation of good faith effort in negotiations between contractors and 
subcontractors and there should be no meetings to discuss rejections of 
subcontractors. This commenter was concerned that meetings held to discuss 
rejections of subcontractors may lead to price shopping abuses. Another 
commenter recommended that the expenditure of tax dollars on subcontracts, if 
not prime contracts, should grant preference only to Texas resident HUBs. 
 One commenter recommended that responsibility for publishing or transmitting 
notices of available subcontracting opportunities in a manner designed to reach 
qualified HUBs, should be shifted to state agencies under sec.111.14 or 
sec.111.15. In the alternative, contractors should have electronic access to the 
HUB directory so that they will have more current information. 
 commenters recommended technical amendments to subsections (c)(1) and (e)(1) to 
read: "Shall divide the contract work into the smallest feasible parts in 
accordance with standard construction practices." It was also recommended that 
subsection (c)(2) be amended to require "adequate information about the plans" 
rather than "shall include a copy of the specifications." 
 E. Comments on Agency Planning Responsibilities (sec.111.15)  One commenter 
recommended that proposed subsections (a) and (b) be deleted and replaced to 
read: " The provisions of this act (sic) shall not apply to any state agency 
that has a program approved by a branch of the federal government, or specific 
statutory authority to have a HUB or DBE program." 
 F. State Agency Reporting Requirements (sec.111.16) A number of commenters 
recommended that contractors and suppliers be required to report information 
related to HUB utilization no more frequently than quarterly, consistent with 
other reporting responsibilities. Another commenter recommended that a reporting 
matrix be developed that would allow for crediting of minority participation 
within a firm which is not minority or women-owned within the definition of the 
statute. According to the commenter, this arrangement would better track the 
utilization of state tax dollars. At least one commenter opined that subsection 
(c), which requires contractors to document all subcontract payments with copies 
of invoices, is excessive. 
 G. Certification Process (sec.111.17) A number of commenters recommended that 
subsection (b) be amended to exempt financial records and client lists from the 
documentation that must be provided to the commission for purposes of 
certification. The stated reason for the recommendation was to prevent required 
disclosure under the Open Records Act. One commenter recommended adding the 
following language to subsection (b): "If the articles of incorporation or a 
stock ownership agreement adequately serve to demonstrate that a business 
qualifies for HUB certification, then financial reports need not be submitted. 
The certifying agency may privately review financial records, but shall not make 
them part of the public record." 
 H. HUB Certification Directory (sec.111.22) Two commenters requested that 
contractors be given the ability to access the HUB Directory electronically. 
Another commenter noted that, under the proposed rules, HUB vendors who do not 
pay the fee to be listed on the central bid list (CMBL) will continue to be 
listed as certified, but information on the class and items for the commodities 
or services they provide will no longer appear as part of the computer file. 
According to the commenter, requiring HUBs to pay the CMBL fee operates to 
deprive state agencies of the best information on available HUBs. The commenter 
suggested that the rules or systems be modified to provide electronic access to 
available HUBs by class and item. 
 I. Graduation Requirements (sec.111.23) One commenter who supported the 
graduation requirement additionally recommended that sec.111.13 be amended to 
allow adjustments in HUB goals to reflect changes in actual availability brought 
about by graduation. Some commenters urged that professional organizations 
should establish the measures used to graduate businesses from the HUB program. 
It was also recommended that the proposed period for graduation from the state's 
program be extended from two to three years to correspond with the provisions of 
13 Code of Federal Regulations 121.60. 
 K. Additional Costs to Contractors and Agencies  (1) Costs to Contractors: 
Several commenters stated that the proposed rules will unduly delay the 
procurement process and will result in increased costs for contractors and the 
state. (2) Costs to Agencies: Some commenters suggested that the HUB 
subcontracting program will increase bid processing time and administrative 
staff for program tracking and compliance functions. Others commented that 
setting a $100,000 threshold would minimize direct and indirect costs. 
 For: The L.B.J. School of Public Affairs at the University of Texas, Texas 
Rehabilitation Commission, Minority Contractors Alliance of Texas, J. J. Nita 
Burgoon Company, Coastal Record Service, Inc., Micromal Computer Consulting, 
NAACP-Austin Branch, Carter Design Associates, Texas Coalition of Black 
Democrate/Texas, TAMAC, Austin Minority and Women Alliance, and African American 
Chambers of Commerce. 
 Against: Parkhill, Smith & Cooper Inc., Datum Engineering Incorporated, Texas 
Department of Criminal Justice, Texas Department of Transportation, Texas 
Department of Health, Texas Lottery Commission, Texas Society of Professional 
Engineering, the Associated General Contractors of America-Texas Building 
Branch, Consulting Engineers Council, Fulton Construction Corporation/Coastcon 
Corporation, Diamond Roofing & Construction, Gary Donaldson Architecture, Hunter 
Industries, Inc., BLGY, Dan Williams Company, J. L. Steel, Inc. AS 
Rehabilitation Commission, the University of Texas System, Texas Department of 
Agriculture, Texas Society of Architects, River City Materials Inc., Texas 
Department of Human Services, Texas Employment Commission, H.A. Lott, Inc. 
 A. Definitions (sec.111.12)  The Commission has amended the definitions of 
"American Women," "Historically Underutilized Businesses" and "Term Contract" in 
accordance with comments received. Section 111.12(A)(iii) is amended to read: 
"American Women-which includes women of any ethnicity except those specified in 
clauses (i), (ii), (iv), and (v)." A related change was made in sec.111.16, 
subsection (f) as previously described. 
 B. HUB Contracting and Procurement Goals (sec.111.13 and sec.111.14) The 
commission disagrees that the rules provide a quota system or otherwise 
guarantee business contracts based on ethnicity or gender. The proposed rules 
are designed to insure that the State of Texas makes a good faith effort to 
include HUBs in all contracting opportunities. At no time are the numerical 
goals represented as mandatory or a "set-aside." Instead, "good faith efforts" 
are described in sec.111.13 and sec.111.14 as an outreach process. 
 The commission agrees that HUB goals should be based upon actual availability 
of HUBs within the relevant industry and geographical area. The Legislature 
directed the commission to promulgate rules as necessary to implement the 
findings, conclusions and recommendations contained in the Disparity Study that 
was commissioned by the Comptroller of Public Accounts and developed by the 
National Economic Research Association (NERA) in consultation with the L.B.J. 
School of Public Affairs at the University of Texas. The Disparity Study, in 
turn, provides information that would permit the adoption of goals based on 
either actual or potential availability. Actual and potential HUB availability 
data is also reported in the Disparity Study as a percentage of vendors or as a 
percentage of contract dollars. Accordingly, the commission has revised 
sec.111.13, subsection (b) to establish three separate contracting goals for the 
construction industries and separate goals for professional services, other 
services and commodities. The goals are based on actual HUB availability as a 
percentage of contract dollars as reported in Table 3.12 and Appendix H of the 
Disparity Study. Section 111.13, subsection (c) as amended expressly allows 
state agencies to set higher or lower program goals than those outlined in 
subsection (b) based on HUB availability, geographical considerations, the 
contractual scope of work or other relevant factors. 
 The commission agrees with comments recommending that different or additional 
procurement categories should be established. Section 111.13 as revised, 
establishes three (sub)categories for construction contracts. i.e., heavy 
construction unrelated to building construction, building construction, and 
specialty trades consistent with the discreet SIC codes for each referenced in 
Appendix H of the Disparity Study. The (sub)categories for construction 
contracts showed wide variations in HUB availability so the goals for each 
subcategory have been amended accordingly. 
 The commission disagrees that utilization goals should be deleted for women 
within some or all of the construction contract categories and for Asians and 
Native Americans in the professional services contract category based upon the 
comments received and further consideration of the findings in the Disparity 
Study. The commission has, instead, established overall HUB goals and deleted 
former sec.111.13, subsection (c) which provided specific racial and gender-
based goals for each contractual category. In the commission's view, it would be 
unfair to remove women, Asians and Native Americans from contractual categories 
based on data that was collected primarily in 1987 and to a lesser extent, in 
1990. Thus, the goals provided within these rules may fairly be regarded as 
interim. 
 C. Other Annual Procurement Utilization Goals Issues ( sec.111.13) The 
commission has amended sec.111.13, subsection (f), now sec.111.13, subsection 
(d) , to address both the concerns of state agencies that contract in good faith 
with non-certified women and minority-owned businesses and the concerns of those 
who fear abuse by businesses that may not qualify for HUB certification. As 
amended, the section will allow state agencies to submit a supplemental letter 
and other documentation prescribed by the commission, as evidence of good faith 
efforts. Amendments also clearly indicate, however, that agencies may not use 
decertified and graduated HUBs to satisfy the good faith efforts standard. 
 D. Other Subcontracting Issues (sec.111.14) The commission agrees that 
requiring contractors to solicit five businesses in each of the possible 
categories could be burdensome and that subcontracting opportunities may not be 
applicable to all awarded contracts. The rules require solicitation from a total 
of five HUBs for contracting opportunities (one from each category or any 
combination). The commission also has amended sec.111.14(a) which allows for 
contractors to be evaluated for making a good faith effort in accordance with 
the goals set forth in sec.111.13(b). The commission disagrees with the request 
that negotiations between contractors and subcontractors be exempted from 
evaluation of good faith efforts and any requirement of explaining the 
subcontracting selection. State agencies should consider not only the different 
kinds of efforts the contractor has made, but also the quantity and intensity of 
those efforts. For the use of the checklist, good faith means not rejecting HUBs 
who qualify as the lowest, responsive bidder. 
 E. Comments on Agency Planning Responsibilities (sec.111.15)  The commission 
does not agree that agencies which are subject to federal DBE guidelines or 
alternative statutory HUB programs should be exempted from the application of 
the rules when engaged in contracting or procurements that are subject to 
Article 601b. Moreover, the intent of the Legislature as expressed in Chapter 
684, Acts 73rd Legislature, Regular Session, sec.65(c), (1993), was that the 
General Services Commission would promulgate rules necessary to implement the 
findings, conclusions and recommendations of the Disparity Study mandated by 
that Act. 
 F. State Agency Reporting Requirements (sec.111.16) The commission agrees that 
contractors and suppliers should be required to report information related to 
HUB utilization on a quarterly basis and has amended sec.111.16(c) accordingly. 
The commission disagrees that agencies should be credited with the award of a 
contract to a HUB prime or subcontractor based on a percentage of minorities or 
women who are employed by the contractor, but do not possess the requisite level 
of ownership and management. By statute, the HUB goals must be applied to women 
or minority-owned businesses only. 
 G. Certification Process (sec.111.17) The commission responds that its ability 
to withhold documentation that is collected and used to determine HUB 
certification eligibility is governed by provisions of the Open Records Act, 
Chapter 552, Government Code. It should also be noted that certain documents 
collected by the commission for certification reviews, such as tax returns, are 
confidential by law and thus, not subject to mandatory disclosure under the Open 
Records Act. 
 H. HUB Certification Directory (sec.111.22) The commission has amended  
sec.111.22, subsection (a), to better reflect the groups to which the commission 
makes the directory available and to substitute the words " in hard copy, on 
floppy diskette, or on magnetic tape" for the words "or in another format." The 
latter change specifies the alternative formats of the directory which are 
available. The commission's electronic database is currently available in hard 
copy, on diskette, on tape, or through the Department of Commerce Marketplace 
electronic bulletin board. In addition, the commission's automation team is in 
the process of creating and activating direct access to its information server. 
Agencies will also be required to include a list of HUBs with the bid 
information packet. The commission disagrees that the failure to waive the 
Centralized Master Bidders List fee for HUBs operates to deprive state agencies 
of information related to the services or commodities HUBs provide. The CMBL fee 
is a standard cost of doing business for and is uniformly applied to both HUB 
and non-HUB vendors. State agencies can also retrieve product descriptions for 
codes for commodities and services by using vendor names or vendor 
identification numbers. 
 I. Graduation Requirements (sec.111.23) The commission agrees that it may be 
unfair to graduate HUBs based on their financial performance during a two-year 
period, but disagrees that the period should be coextensive with federal rules 
governing the Texas Department of Transportation's minority contracting 
programs. The commission's certification and central Bid List are both two-year 
renewal cycles; A four-year period will allow completion of two HUB program 
cycles and be more cost efficient than the recommended three-year graduation 
period. The Commission has also adopted specific graduation ceilings for each of 
the contract categories referenced in sec.111.12 and sec.111.13. The new 
ceilings were culled from federal standards and reduced by 25% to ensure broader 
distribution of business among eligible HUBs. 
 K. Additional Costs to Contractors and Agencies  (1) To Contractors: At this 
time it is not possible to estimate the potential fiscal impact to contractors. 
The commission's experience shows no evidence of related price increases in 
construction, term contracts, open markets, or professional services (bids or 
proposals) since the implementation of the HUB program in Fiscal Year 1994. (2) 
To Agencies: At this time it is not possible to estimate the potential fiscal 
impact to all agencies resulting from the adoption of these rules. During Fiscal 
Year 1994 and Fiscal Year 1995, GSC experienced a $20,000 annual fiscal impact 
for administering the HUB program, but no new or additional fiscal impact for 
staffing is anticipated for the period Fiscal Years 1996-2000. GSC estimates 
that the graduation program will result in expenses for automation resources, 
equipment and other operating functions in the amount of $113,776 for Fiscal 
Years 1996-2000. The Commission has adopted the $100,000 subcontracting 
threshold as recommended by several state agencies to ameliorate the potential 
impact. 
 The new rules are adopted under the authority of Chapter 684, sec.65(c), Acts 
73rd Legislature, Regular Session (1993), which provides the General Services 
Commission with the authority to promulgate rules necessary to implement the 
findings. 
 
 
  sec.111.12. Definitions.  The following words and terms, when used in this 
subchapter, shall have the following meanings, unless the context clearly 
indicates otherwise. 
   
     Applicant-A corporation, sole-proprietorship, partnership, joint venture, 
or supplier that applies to the commission as an historically underutilized 
business. 
   
     Application-A written request for certification as an historically 
underutilized business in the required format submitted to the commission. 
   
     Commodities-Materials, supplies, or equipment. 
   
     Comptroller-Comptroller of Public Accounts. 
   
     Contractor-A supplier of commodities or services to a state agency under a 
purchase order contract or other contract. 
   
     Directory-The Texas Certified Historically Underutilized Business 
Directory. 
   
     Disparity Study -The State of Texas Disparity Study, performed by the 
National Economic Research Associates, Inc. ("NERA"). 
   
     Historically Underutilized Business-A business outlined in subparagraph 
(C), (D), (E), (F), (G) and (H) in which the owner(s): 
 
  (A) have a proportionate interest and demonstrate active participation in the 
control, operation, and management of the entities' affairs; and 
   
  (B) have been socially disadvantaged because of their identification as 
members of the following groups: 
 
  (i) Black Americans-which includes persons having origins in any of the Black 
racial groups of Africa; 
   
  (ii) Hispanic Americans-which includes persons of Mexican, Puerto Rican, 
Cuban, Central or South American, or other Spanish or Portuguese culture or 
origin, regardless of race; 
   
  (iii)  AmericanWomen-which includes all women of any ethnicity except those 
specified in clauses (i), (ii), (iv), and (v) of this subparagraph; 
   
  (iv) Asian Pacific Americans -which includes persons whose origins are from 
Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, 
Guam, the U.S. Trust Territories of the Pacific, the Northern Marianas, and 
Subcontinent Asian Americans which includes persons whose origins are from 
India, Pakistan, Bangladesh, Sri Lanka, Bhutan or Nepal; and 
   
  (v)  Native Americans-which includes persons who are American Indians, 
Eskimos, Aleuts, or Native Hawaiians; and 
     
  (C) a corporation formed for the purpose of making a profit in which at least 
51% of all classes of the shares of stock or other equitable securities are 
owned by one or more persons described by subparagraphs (A) and (B); or 
   
  (D) a sole proprietorship created for the purpose of making a profit that is 
100% owned, operated, and controlled by a person described by subparagraphs (A) 
and (B) of this section; or 
   
  (E) a partnership formed for the purpose of making a profit in which 51% of 
the assets and interest in the partnership is owned by one or more persons who 
are described by subparagraphs (A) and (B) of this section; or 
   
  (F) a joint venture in which each entity in the joint venture is an 
historically underutilized business under this subdivision; or 
   
  (G) a supplier contract between an historically underutilized business under 
this subdivision and a prime contractor under which the historically 
underutilized business is directly involved in the manufacture or distribution 
of the supplies or materials or otherwise warehouses and ships the supplies. 
   
  (H) a business other than described in subparagraphs (D), (F), and (G) of this 
section, which is formed for the purpose of making a profit and is otherwise a 
legally recognized business organization under the laws of the State of Texas, 
provided that at least 51% of the assets and interest and 51% of any classes of 
stock and equitable securities are owned by one or more persons described by 
subparagraphs (A) and (B) of this section. 
     
     NERA-National Economic Research Associates, Inc. 
   
     Non-Treasury Funds -Funds paid by a state agency that are not treasury 
funds. 
   
     Other services -all services other than construction and professional 
services, including consulting services subject to Texas Government Code, 
Chapter 2254, Subchapter B. 
   
     Person-U.S. citizen, born or naturalized. 
   
     Professional services -Services of accountants, architects, engineers, land 
surveyors, and physicians that must be purchased by state agencies under Texas 
Government Code, Chapter 2254, Subchapter A. 
   
     Subcontractor-A supplier of commodities or services to a contractor. 
   
     Subcontractor Funds -Payments made to certified historically underutilized 
businesses by a contractor or supplier under contract with the state. 
   
     Term Contract-A contract establishing a source or sources of supply for a 
specified period of time as defined in sec.113.2 of this title (relating to 
Annual Procurement Utilization Goals). 
   
     Treasury Funds -Funds maintained in the state treasury and paid through the 
comptroller's office for each state agency. 
   
     USAS-Uniform Statewide Accounting System for the State of Texas. 
 
   
  sec.111.13. Annual Procurement Utilization Goals. 
 
  (a) In accordance with the commission's policy of encouraging the use of HUBs 
in state procurement, and based upon the findings of the Disparity Study, each 
state agency shall make a good faith effort to utilize HUBs in contracts for 
construction, services, including professional and consulting services, and 
commodities purchases. Each agency may achieve the annual program goals by 
contracting directly with HUBs or indirectly through subcontracting 
opportunities. 
   
  (b) Each state agency shall make a good faith effort to assist HUBs in 
receiving a portion of the total contract value of all contracts that the agency 
expects to award in a fiscal year in accordance with the following percentages. 
 
  (1) 11.9% for heavy construction other than building contracts; 
   
  (2) 26.1% for all other building construction, including general contractors 
and operative builders contracts; 
   
  (3) 57.2% for all special trade construction contracts; 
   
  (4) 20% for professional services contracts; 
   
  (5) 33% for all other services contracts; and 
   
  (6) 12.6% for commodities contracts. 
     
  (c) Each agency shall make a good faith effort to meet or exceed the goals 
outlined in subsection (b) of this section. The percentage goals established in 
subsection (b) are overall annual program goals for each state agency applicable 
to the total annual dollar amount of an agency's contracts for each of the 
specific types of contracts. It may not be practicable to apply these goals to 
each contract. For each contract, state agencies may set higher or lower program 
goals than those outlined in this subsection. Agencies may consider HUB 
availability, HUB utilization, geographical location of the project, the 
contractual scope of work or other relevant factors. By implementing the 
following procedures, an agency shall be presumed to have made a good faith 
effort: 
 
  (1) prepare and distribute information on procurement procedures in a manner 
that encourages participation in state contracts by all businesses; 
   
  (2) divide proposed requisitions into reasonable lots in keeping with industry 
standards and competitive bid requirements; 
   
  (3) assess bond and insurance requirements and design such requirements to 
reasonably permit more than one business to perform the work; 
   
  (4) specify reasonable, realistic delivery schedules consistent with an 
agency's actual requirements; 
   
  (5) ensure that specifications, terms, and conditions reflect an agency's 
actual requirements, are clearly stated and do not impose unreasonable or 
unnecessary contract requirements; 
   
  (6) provide contractors with referenced list of certified HUBs for 
subcontracting; 
   
  (7) determine whether specific agency-wide goals are appropriate under the 
Disparity Study because some HUB groups have not been underutilized within 
applicable contracting categories and should not be included in the HUB goals 
for that category. 
     
  (d) A state agency may also demonstrate good faith under this section by 
including a supplemental letter with documentation as prescribed by the 
commission: 
 
  (1) identifying the percentage of contracts awarded to women and/or minority-
owned businesses that are not certified as HUBs; 
   
  (2) demonstrating that a different goal from that identified in subsection (b) 
of this section was appropriate given the agency's mix of purchases; 
   
  (3) demonstrating that a different goal was appropriate given the particular 
qualifications required by an agency for its contracts; or 
   
  (4) demonstrating that a different goal was appropriate given that graduated 
HUBs cannot be counted toward the goal. 
 
       
  sec.111.14. Subcontracts. 
 
  (a) Each agency's bid and contract documents for construction, professional 
services, other services, and commodities exceeding $100,000 shall include HUB 
subcontracting good faith effort guidelines and goals as established in 
sec.111.13. Therefore, a contractor shall be required to make a good faith 
effort to award necessary subcontracts to HUBs in accordance with the goals set 
forth in sec.111.13(b) of this title (relating to Annual Procurement Utilization 
Goals). When the contractor is a HUB, it must satisfy the good faith effort 
requirements by performing at least 25% of the contract work with its employees 
as defined by the Internal Revenue Service. The HUB prime contractor may 
subcontract the remaining 75% of the contract with HUB or non-HUB 
subcontractors. Any contractor that seeks to satisfy the good faith effort 
requirement in this manner shall report quarterly to the contracting agency, in 
the form required by the agency, the volume of work performed under the contract 
and the portion of the work that was performed with its employees. If a HUB 
contractor performs less than 25% of the cumulative total contract with its 
employees, then for the next quarter, the contractor shall report its 
subcontractors as required by a non-HUB contractor. 
   
  (b) A state agency shall require a potential contractor to state whether it is 
a Texas certified HUB and whether one or more subcontractors will be used to 
perform the contract. The contractor shall submit a copy of the notice described 
in subsection (c)(2) below with its offer, and shall submit a statement within 
seven working days following its offer that specifies the expected percentage of 
work, if any, to be subcontracted. 
   
  (c) By implementing the following procedures, a contractor shall be presumed 
to have made a good faith effort: 
 
  (1) To the extent consistent with prudent industry practice, divide the 
contract work into reasonable lots. 
   
  (2) Notify HUBs of the work that the contractor intends to subcontract. The 
notice shall be in writing. The notice shall include a description of the 
subcontracting opportunities and identify the location to review contract 
specifications. The notice shall be provided to potential subcontractors prior 
to submission of the contractor's bid. 
   
  (3)  The contractor shall send the notice described in paragraph (2) of this 
subsection to at least five businesses in the current commission directory of 
certified HUBs that perform the type of work required in the area in which the 
work will be performed. 
   
  (4) If a non-HUB subcontractor is selected through means other than 
competitive bidding, or a HUB bid is the lowest price responsive bidder to a 
competitive bid, but not selected, the contractor will be required to document 
the selection process. 
   
  (5) The contractor shall maintain business records documenting its compliance 
with this sec.111.14 and shall make a compliance report to the contracting 
agency and report in the format required by the agency's contract documents, 
provided that reporting shall be required at least once for each calendar 
quarter during the term of the contract. 
   
  (6) If the contract is a state lease contract, the contractor or lessor shall 
comply with the requirements of this section from and after the occupancy date 
provided in the lease, or such other time as may be specified in the invitation 
for bid for the lease contract. 
     
  (d) If the commission's directory does not include at least five businesses, 
the contractor shall send the notice to HUBs on lists of minority and women-
owned businesses maintained by other government agencies or organizations. If a 
contractor uses a source other than the commission's directory, the selected HUB 
subcontractor must become certified by the commission in accordance with the 
procedures set forth in sec.111.17 of this title. 
   
  (e) An agency shall ensure that a contractor has complied with this section as 
a condition of awarding any contract. 
   
  (f) In making a determination that a good faith effort has been made, a state 
agency shall require the contractor to complete a checklist, and submit 
supporting documentation explaining in what ways the contractor has made a good 
faith effort according to each requirement, within 14 days following selection 
but prior to award of the contract. The checklist shall include at least the 
following: 
 
  (1) Whether the contractor provided written notices to at least five qualified 
HUBs or the contractor advertised in general circulation, trade association, 
and/or minority/women focus media concerning subcontracting opportunities. 
   
  (2) Whether the contractor provided written notice to at least five qualified 
HUBs allowing sufficient time for HUBs to participate effectively. 
   
  (3) Whether the contractor divided the contract work into the reasonable 
portions in accordance with standard industry practices. 
   
  (4) Whether the contractor documented reasons for rejection or met with the 
rejected HUB to discuss the rejection. 
   
  (5) Whether the contractor provided qualified HUBs with adequate information 
about bonding, insurance, the plans, the specifications, scope of work and 
requirements of the contract. 
   
  (6) Whether the contractor negotiated in good faith with qualified HUBs, not 
rejecting qualified HUBs who are also the lowest responsive bidder. 
     
  (g) Contractors are encouraged to use the services of available minority and 
women; community organizations contractor groups; local, state, and federal 
business assistance offices, and other organizations that provide support 
services to HUBs. 
   
  (h) State agencies shall review the checklist and attached documentation 
submitted by the contractor and issue a written notice of acceptance or 
deficiency of a good faith effort within 14 days of the agency's receipt. The 
notice of deficiency shall state the reasons for deficiency. 
 
     
  sec.111.15. Agency Planning Responsibilities. 
 
  (a) Agencies are required to prepare a written plan for the use of HUBs in 
purchasing, and in public works contracts in accordance with Texas Government 
Code, Chapter 2056 and Article 601b, sec.1.03(l). 
   
  (b) An agency may adopt the requirements of sec. sec.111.11-111.14 of this 
title (relating to Executive Administration Division) as part of its required 
strategic plan. 
 
     
  sec.111.16. State Agency Reporting Requirements. 
 
  (a) The comptroller will report to the commission not later than March 15 of 
each year regarding the previous six-month period, and on September 15 of each 
year regarding the preceding fiscal year, the payments made for the purchase of 
goods, services and public works awarded and actually paid from treasury funds 
by each state agency. Subject to the capabilities of the comptroller's USAS 
system, the comptroller shall identify state agencies' purchases from state term 
contracts which are paid from treasury funds so that those purchases awarded and 
actually paid under term contracts may be included in the commission's report of 
its own purchases. 
   
  (b) State agencies will report to the commission, not later than March 15 of 
each year regarding the previous six-month period and on September 15 of each 
year regarding the preceding fiscal year, the payments made for the purchase of 
goods and services awarded and actually paid from non-treasury funds by the 
state agency. The report shall include information requested by the commission 
and shall be in a form prescribed by the commission. State agencies' purchases 
from state term contracts which are paid from non-treasury funds must be 
identified on the report as such so that they may be reflected on the 
commission's report of its own purchases. 
   
  (c) State agencies will continuously maintain, and compile monthly, 
information relating to the agency's use, and the use by each operating division 
of the agency, of historically underutilized businesses, including information 
regarding subcontractors. This information shall include, but is not limited to 
the information required in subsections (a) and (b) of this section. On a 
quarterly basis, state agencies shall require a contractor to whom a state 
agency has awarded a contract to report to the agency the identity and the 
amount paid to each historically underutilized business to whom the contractor 
has awarded a subcontract for the purchase of supplies, materials, and 
equipment. Contractors should document progress payments made to subcontractors, 
professionals consultants or suppliers certified as historically underutilized 
businesses by submitting invoices to the paying state agency. 
   
  (d) State agencies will report to the commission, not later than March 15 of 
each year regarding the previous six-month period and on September 15 of each 
year regarding the preceding fiscal year, the total dollar amount of 
historically underutilized business subcontracting participation in all of the 
agencies' contracts for the purchase of goods, services and public works 
payments. State agencies must include subcontracting participation paid from 
Treasury and Non-Treasury funds. 
   
  (e) State agencies that participate in a group purchasing program under 
sec.3.01(a)(5) of the Act shall include a separate report to the commission, not 
later than March 15 of each year regarding the previous six-month period and 
September 15 of each year regarding the preceding fiscal year, of purchases that 
are made through the group purchasing program and shall report the dollar amount 
of each purchase that is allocated to the reporting agency. 
   
  (f) The commission shall prepare a consolidated report based on a compilation 
and analysis of the reports submitted by each state agency and information 
provided by the comptroller in the format specified by the commission. These 
reports of historically underutilized business purchasing and contracts shall 
form a record of each agency's purchases in which the agency selected the 
vendor. If the vendor was selected by the commission as part of its state term 
contract program, the purchase will be reflected on the commission's report of 
its own purchases. The commission report will contain the following information: 
 
  (1) the total dollar amount of payments made by each state agency; 
   
  (2) the total number of HUBs receiving payments from each state agency and 
actually paid by each state agency to the following groups as defined in 
sec.111.12 of this title (relating to Definitions) and certified by the 
commission; 
 
  (A) Black Americans; 
   
  (B) Hispanic Americans; 
   
  (C) American Women; 
   
  (D)  Asian Pacific Americans; and 
   
  (E) Native Americans. 
       
  (g) On April 15 of each year, the commission shall submit the consolidated 
report regarding the previous six-month period to the joint committee, 
referenced in House Bill 2626, sec.3, charged with monitoring the implementation 
of the historically underutilized business goals. The commission shall submit a 
consolidated report on October 15 of each year regarding the preceding fiscal 
year to the presiding officer of each house of the legislature, the members of 
the legislature and the joint select committee. 
 
     
  sec.111.22. Texas Historically Underutilized Business Certification Directory. 
The commission shall compile in the most cost-efficient format a directory of 
businesses certified as historically underutilized businesses. The commission 
shall update the directory semiannually and provide a copy to state agencies, 
local governments and the public on a cost recovery basis. The commission shall 
provide access to the directory either electronically or in hard copy, on floppy 
diskette, or on magnetic tape, depending on the needs of the each state agency. 
The commission and state agencies shall use the directory to solicit bids from 
certified HUBs for state purchasing and public works contracts. 
 
   
  sec.111.23. Graduation Procedures. 
 
  (a) A HUB shall be graduated from being used to fulfill HUB procurement 
utilization goals when it has maintained gross receipts or total employment 
levels for four consecutive years which exceed 75% of the following schedule 
which is extracted from the U.S. Small Business Administration's size standard 
for firms within similar primary four-digit Standard Industrial Classification 
codes as stated in 13 Code of Federal Regulations 121.601: 
 
  (1) for heavy construction other than is building construction, $17,0000,000; 
   
  (2)  for building construction, including general contractors and operative 
builders, $17,000,000; 
   
  (3) for special trade construction, $7,000,000; 
   
  (4) for medical, financial and accounting services, $3,500,000; 
   
  (5) for architectural/engineering and surveying services, $3,500,000; 
   
  (6) for other services including legal services, $3,500,000; 
   
  (7)  for commodities wholesale, 100 full-time equivalent employees; 
   
  (8)  for commodities manufacturers 500 full-time equivalent employees. 
     
  (b) Firms which have achieved the size standards identified in subsection (a) 
of this section will be assumed to have reached a competitive status in 
overcoming the effects of discrimination. The commission shall review as part of 
the certification or recertification process the financial revenue or relevant 
data of firms to determine whether the size standards identified in subsection 
(a) have been met. 
   
  (c) Businesses that have graduated from the HUB program in accordance with 
this section or have been decertified in accordance with sec.sec.111.17-111. 22 
of this title (relating to Executive Administration Division) may not be 
included in meeting agency goals. 
 
  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 12, 1995. 
 TRD-9511712 
  David Ross Brown 
 Assistant General Counsel 
 General Services Commission 
    Effective date: October 4, 1995 
 Proposal publication date: March 14, 1995 
 For further information, please call: (512) 463-3960 
         
                   
  TITLE 4. AGRICULTURE 
 Part I. Texas Department of Agriculture 
  Chapter 5. Quarantines 
  
  Pink Bollworm Quarantine 
 
  4 TAC sec.sec.5.171-5.179 
 
  The Texas Department of Agriculture (the department) adopts the repeal of 
sec.sec.5.171-5.179, concerning pink bollworm quarantine, without changes to the 
proposed text as published in the August 11, 1995, issue of the Texas Register 
(20 TexReg 6061). 
 The repeals are adopted in order to allow the department to make the 
regulations consistent with House Bill 3003 passed in the 74th Legislative 
Session (now codified at Texas Agriculture Code (the Code), Chapter 6 (Vernon 
Supplement 1995)). 
 The department is submitting separately adopted new sections in order to 
substitute those for these sections. 
 No comments were received regarding the adoption of the repeals. 
 The repeals are adopted under the Texas Agriculture Code, sec.74.006, which 
provides the Texas Department of Agriculture with the authority to adopt rules 
as necessary for the efficient enforcement and control and administration of the 
Cotton Pest Law. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511642 
  Dolores Alvarado Hibbs 
 Chief Administrative Law Judge 
 Texas Department of Agriculture 
    Effective date: October 2, 1995 
 Proposal publication date: August 11, 1995 
 For further information, please call: (512) 463-7583 
         
           Chapter 6. Boll Weevil Control 
  
  4 TAC sec.sec.6.1-6.6 
 
  The Texas Department of Agriculture (the department) adopts the repeal of 
sec.sec.6.1-6.6, concerning boll weevil control, without changes to the proposed 
text as published in the August 11, 1995, issue of the Texas Register  (20 
TexReg 6061). 
 The repeals are adopted in order to allow the department to make the 
regulations consistent with House Bill 3003 passed in the 74th Legislative 
Session (now codified at Texas Agriculture Code (the Code), Chapter 6 (Vernon 
Supp. 1995). 
 The department is submitting separately adopted new sections in order to 
substitute those for these sections. 
 No comments were received regarding adoption of the repeals. 
 The repeals are adopted under the Texas Agriculture Code, sec.74.006, which 
provides the Texas Department of Agriculture with the authority to adopt rules 
as necessary for the efficient enforcement and control and administration of the 
Cotton Pest Law. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511641 
  Dolores Alvarado Hibbs 
 Chief Administrative Law Judge 
 Texas Department of Agriculture 
    Effective date: October 2, 1995 
 Proposal publication date: August 11, 1995 
 For further information, please call: (512) 463-7583 
         
         Chapter 6. Cotton Pest Control 
  
  4 TAC sec.sec.6.1-6.10 
 
  The Texas Department of Agriculture (the department) adopts new sec.sec.6.1-6. 
10, concerning cotton pest control. Section 6.9 is adopted with changes to the 
proposed text as published in the August 11, 1995, issue of the Texas Register 
(20 TexReg 6062). Sections 6.1-6.8 and 6.10 are adopted without changes and will 
not be republished. 
 These new sections are being adopted in accordance with statutory changes made 
by the 74th Legislature, Regular Session, 1995 in accordance with House Bill 
3003. Section 6.9 is adopted with changes to subsection (b), paragraph (4) by 
adding new subparagraph (E) which allows for extensions for cotton stalk 
destruction when other extenuating circumstances are determined by the 
department. 
 The department is adopting new sec.sec.6.1-6.10 to combine the current pink 
bollworm and boll weevil regulations into one consolidated rule which assists in 
controlling and minimizing the spread of cotton pests. 
 No comments were received regarding adoption of the new sections. 
 The new sections are adopted under the Texas Agriculture Code, sec.74.006, 
which provides the Texas Department of Agriculture with the authority to adopt 
rules as necessary for the efficient enforcement and administration of the 
Cotton Pest Law. The new sections concerning quarantines are proposed under the 
Texas Agriculture Code, sec.74.010, which permits the regulation of cotton pests 
and quarantines; and the Texas Agriculture Code Chapter 71, Subchapter A, which 
authorizes inspections, quarantines, and control and eradication zones for 
dangerous insect pests. 
 
 
  sec.6.9. Authorized Planting and Stalk Destruction Dates. 
 
  (a) All cotton plants in any of the pest management zones set forth in sec.6.7 
of this title (relating to Pest Management Zones) shall be planted within and 
mechanically destroyed by the authorized planting and stalk destruction dates 
indicated for each zone. Destruction shall be accomplished by the methods 
described as follows. 
 
  (1) Zone 1. 
 
  (A) Planting dates: February 1-April 20. 
   
  (B) Cotton destruction date: on or before September 1. Destruction shall be 
accomplished by shredding and plowing out the plants to prohibit the presence of 
any cotton plants. 
     
  (2) Zone 2. 
 
  (A) Area (1). 
 
  (i) Planting dates: February 1-April 15. 
   
  (ii) Cotton destruction date: on or before September 10. 
   
  (iii) Destruction shall be accomplished by shredding and plowing out the 
plants to prohibit the presence of any cotton plants. 
     
  (B) Area (2). 
 
  (i) Planting dates: February 1-April 15. 
   
  (ii) Cotton destruction date: on or before September 25. 
   
  (iii) Destruction shall be accomplished by shredding and plowing out the 
plants to prohibit the presence of any cotton plants. 
     
  (C) Area (3). 
 
  (i) Planting dates: March 1-May 1. 
   
  (ii) Cotton destruction date: on or before October 1; 
   
  (iii) Destruction shall be accomplished by shredding and plowing out the 
plants to prohibit the presence of any cotton plants. 
       
  (3) Zone 3. 
 
  (A) Area (1). 
 
  (i) Planting dates: March 5-May 15. 
   
  (ii) Cotton destruction date: on or before October 1. 
   
  (iii) Destruction shall be accomplished by shredding and plowing out the 
plants to prohibit the presence of any cotton plants. 
     
  (B) Area (2). 
 
  (i) Planting dates: March 5-May 15; 
   
  (ii) Cotton destruction date: on or before October 15. 
   
  (iii) Destruction shall be accomplished by shredding and plowing out the 
plants to prohibit the presence of any cotton plants. 
       
  (4) Zone 4. 
 
  (A) Planting dates: March 5-May 10. 
   
  (B) Cotton destruction date: on or before October 10. Destruction shall be 
accomplished by shredding and plowing out the plants to prohibit the presence of 
any cotton plants. 
     
  (5) Zone 5. 
 
  (A) Planting dates: March 10-May 20. 
   
  (B) Cotton destruction date: on or before October 20. Destruction shall be 
accomplished by shredding and/or plowing out the plants to prevent further 
growth of any cotton plants. 
     
  (6) Zone 6. 
 
  (A) Planting dates: March 10-May 20. 
   
  (B) Cotton destruction date: on or before October 31. Destruction shall be 
accomplished by shredding and/or plowing out the plants to prevent further 
growth of any cotton plants. 
     
  (7) Zone 7. 
 
  (A) Planting dates: March 20-May 31. 
   
  (B) Cotton destruction date: on or before November 30. Destruction shall be 
accomplished by shredding and/or plowing out the plants to prevent further 
growth of any cotton plants. 
     
  (8) Zone 8. Cotton destruction date: on or before February 1. 
 
  (A) Destruction shall be accomplished by shredding and plowing out the plants 
to prohibit the presence of any cotton plants. 
   
  (B) Plowing shall be performed with an implement which dislodges the root and 
leaves the soil in a ridged and roughened condition. 
     
  (9) Zone 9. 
 
  (A) Planting dates: March 15-May 31. 
   
  (B) Cotton destruction date: on or before February 1. Destruction shall be 
accomplished by shredding and plowing out the plants to prohibit the presence of 
any cotton plants. 
       
  (b) The department may, on written request by a farm owner and/or operator, 
grant an extension of the cotton planting or destruction dates. The department 
may also, on written request by a farm owner and/or operator, authorize an 
alternative to the method of mechanical destruction of cotton prescribed by 
these rules. Requests for extensions or changes in the method of the destruction 
of cotton stalks, regrowth cotton or volunteer cotton may be granted for the 
reasons listed in paragraph (4) of this subsection. 
 
  (1) A written request must include the Consolidated Farm Service Agency (CFSA) 
Farm/Tract Number, the reason for the request, the amount of acreage subject to 
the request, and the amount of time needed to complete planting or destruction. 
   
  (2) All requests for extensions on initially un-destroyed or un-planted cotton 
or for approval of an alternative method of cotton destruction must be 
postmarked on or prior to the last planting date or cotton destruction date, 
whichever is applicable. An extension may be requested after the last planting 
date if sufficient information is provided by the owner or operator documenting 
that the crop was initially planted prior to the planting deadline and re-
planting is necessary, or after the cotton destruction date if the stalks were 
previously destroyed prior to the deadline. Extensions may be granted based on 
the criteria in paragraph (4) of this subsection. 
   
  (3) Failure to submit an extension request when required constitutes a 
violation and shall subject the farm owner and/or operator to administrative 
penalties as allowed by the Texas Agriculture Code, Chapter 74, and the Texas 
Agriculture Code, sec.12.020. 
   
  (4) Extension requests will be considered for approval only if compliance with 
subsection (a) of this section is delayed for one or more of the following 
reasons: 
 
  (A) research; 
   
  (B) weather conditions; 
   
  (C) illness; 
   
  (D) mechanical failure; or 
   
  (E) other good cause. 
       
  (c) Where there is conflict between the planting and cotton destruction dates 
set for counties in the pest management zones established under this chapter, 
and the planting and stalk destruction dates set for those same counties under 
other federal, state or county regulations, the dates set under this chapter 
shall take precedence, unless otherwise specified. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511640 
  Dolores Alvarado Hibbs 
 Chief Administrative Law Judge 
 Texas Department of Agriculture 
    Effective date: October 2, 1995 
 Proposal publication date: August 11, 1995 
 For further information, please call: (512) 463-7583 
         
               Part II. Texas Animal Health Commission 
  Chapter 41. Fever Ticks 
  
  4 TAC sec.41.1 
 
  The Texas Animal Health Commission adopts an amendment to sec.41.1, concerning 
tick eradication, without changes to the proposed text as published in the July 
25, 1995, issue of the Texas Register (20 TexReg 5458). 
 The amendment is necessary to allow the Executive Director to authorize 
research programs and field studies vary from standard tick quarantine 
requirements. 
 One comment in favor of the regulation was received from Heart-Bar Deer Farms. 
The Texas Animal Health Commission agrees with this comment that regulation will 
facilitate field studies that may advance eradication of the fever tick. 
 The amendment is adopted under the Texas Agriculture Code, Texas Civil 
Statutes, Chapter 161, which provides the Commission with the authority to adopt 
rules to eradicate ticks. 
 The amendment implements the Agriculture Code, sec.167.003 and sec.167.029, 
which authorizes the Commission to adopt necessary rules to eradicate ticks and 
to provide conditions for the handling and movement of livestock. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511612 
  Terry Beals, DVM 
 Executive Director 
 Texas Animal Health Commission 
    Effective date: October 15, 1995 
 Proposal publication date: July 25, 1995 
 For further information, please call: (512) 719-0714 
         
         Chapter 43. Tuberculosis 
  
  Subchapter A. Cattle 
 
  4 TAC sec.43.1 
 
  The Texas Animal Health Commission adopts an amendment to sec.43.1, concerning 
the movement of cattle exposed to tuberculosis, without changes to the proposed 
text as published in the July 28, 1995, issue of the Texas Register  (20 TexReg 
5561). 
 The amendment is necessary to allow cattle exposed to tuberculosis to move to 
designated pens if tested negative to tuberculosis within 60 days prior to 
entry. 
 No comments were received regarding adoption of the amendment. 
 The amendment is proposed under the Texas Agriculture Code, Texas Civil 
Statutes, Chapter 162, which provides the Commission with the authority to enter 
into a cooperative program to eradicate tuberculosis. 
 The amendment implements the Agriculture Code, sec.sec.162.002, 162.003, 161. 
041, and 161.061, which provides the Commission with the authority to establish 
rules relating to tuberculosis, establish testing requirements, protect 
livestock from tuberculosis, and establish quarantines. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511610 
  Terry Beals, DVM 
 Executive Director 
 Texas Animal Health Commission 
    Effective date: October 15, 1995 
 Proposal publication date: July 28, 1995 
 For further information, please call: (512) 719-0714 
         
           Chapter 47. Requirements and Standards for Approved Personnel 
  
  4 TAC sec.47.1 
 
  The Texas Animal Health Commission adopts an amendment to sec.47.1, concerning 
changing the vaccination age of female cattle from 120 and 365 days to four and 
ten months, without changes to the proposed text as published in the July 25, 
1995, issue of the Texas Register (20 TexReg 5459). 
 The amendment is necessary to lower the maximum age for official calfhood 
vaccination. 
 No comments were received regarding adoption of the amendment. 
 The amendment is adopted under the Texas Agriculture Code, Texas Civil 
Statutes, Chapter 163, which provides the Commission with the authority to 
promulgatge rules to eradicate brucellosis. 
 The amendment implements the Agriculture Code, sec.163.064, which provides the 
Commission with the authority to regulate and require vaccination. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511611 
  Terry Beals, DVM 
 Executive Director 
 Texas Animal Health Commission 
    Effective date: October 15, 1995 
 Proposal publication date: July 25, 1995 
 For further information, please call: (512) 719-0714 
         
         Chapter 55. Swine 
  
  4 TAC sec.55.4 
 
  The Texas Animal Health Commission adopts an amendment to sec.55.4, concerning 
livestock markets handling swine, without changes to the proposed text as 
published in the July 25, 1995, issue of the Texas Register (20 TexReg 5460). 
 The amendment is necessary to increase disease surveillance for swine by 
testing and identification. 
 One comment was received regarding adoption of the amendment. The Texas Pork 
Producers opposed the exemption from post-sale testing for swine with disease-
free status or a negative test within 30 days prior to sale. The Commission 
deferred consideration of eliminating the exemption rather than postponing 
adoption of the livestock testing program. 
 The amendment is adopted under the Texas Agriculture Code, Texas Civil 
Statutes, sec.165.022, which provides the Commission with the authority to 
promulgate rules for eradication of swine diseases. 
 The amendment implements the Agriculture Code, sec.165.021 and sec.165.022, 
which provide the Commission with the authority to act to eradicate swine 
diseases. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511614 
  Terry Beals, DVM 
 Executive Director 
 Texas Animal Health Commission 
    Effective date: October 15, 1995 
 Proposal publication date: July 25, 1995 
 For further information, please call: (512) 719-0714 
         
             
  TITLE 7. BANKING AND SECURITIES 
 Part II. Banking Department of Texas 
  Chapter 29. Sale of Checks Act 
  
  7 TAC sec.29.1 
 
  The Banking Commissioner of Texas (the commissioner) adopts new sec.29.1, 
concerning permissible investments for licensees under the Sale of Checks Act, 
Texas Civil Statutes, Article 489d (the Act), without changes to the proposed 
text as published in the July 28, 1995, issue of the Texas Register  (20 TexReg 
5575). 
 The Act, sec.9, provides that licensees with a net worth of not less than $5 
million must maintain permissible investments equal to the aggregate face amount 
of all of their outstanding checks sold in the United States. Under the Act, 
sec.9A, the commissioner has the authority to approve investments other than 
those specified in the Act as "permissible investments" for purposes of the Act, 
sec.9 and sec.9A. The commissioner also is empowered to adopt and enforce 
reasonable rules to implement sec.9A. The section as adopted expands the list of 
investments that would qualify as permissible investments under sec.9A. 
 No comments were received regarding adoption of the new section. 
 The new section is adopted under Texas Civil Statutes, Article 489d, sec.9A, 
which authorize the commissioner to approve investments other than those 
specified in that section as permissible investments for purposes of the Act and 
to adopt and enforce reasonable rules to implement that section. 
 
  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 11, 1995. 
 TRD-9511630 
  Everette D. Jobe 
 General Counsel 
 Banking Department of Texas 
    Effective date: October 2, 1995 
 Proposal publication date: July 28, 1995 
 For further information, please call: (512) 475-1300 
         
             
  TITLE 13. CULTURAL RESOURCES 
 Part I. Texas State Library and Archives Commission 
  Chapter 7. Local Records 
  
  Standards and Procedures for Management of Electronic Records 
 
  13 TAC sec.sec.7.71-7.78 
 
  The Texas State Library and Archives Commission adopts amendments to 
sec.sec.7.71-7.78, concerning standards and procedures for the management of 
electronic records of local governments. Section 7.75 is adopted with changes to 
the proposed text as published in the May 30, 1995, issue of the Texas Register 
(20 TexReg 3946). Sections 7.71-7.74 and 7.76-7.78 are adopted without changes 
and will not be republished. 
 Amendments are being adopted to provide electronic recordkeeping requirements 
that are more clearly stated and that update the rules with newly published 
national standards. Subsection (c) of sec.7.75 is amended based on comments 
received from a government records management official that the requirements for 
records stored on rewritable media should apply to all electronic records within 
the scope of the rules to support the integrity and authenticity of the records. 
 Adoption of the amendments makes the rules for electronic records easier to use 
by removing definitions for records of varying retention periods, as these 
distinctions serve no purpose in the context of the requirements of these 
sections; by setting out in full, rather than by reference, requirements 
concerning temperature and humidity requirements for the storage of optical 
disks and the expungement of information from a certain type of optical disk; 
and by removing references to state agencies in order to make these sections 
language specific to local governments. The opportunity for local governments to 
appropriately use digital imaging systems is enhanced by adding a standard for 
the scanning of microforms that has become available since the rules were 
originally adopted. 
 The commission received one comment regarding adoption of a change to sec.7. 
75, which was incorporated into the rules. This comment was received from Laura 
McGee, Records Management Officer, City of Dallas. 
 The amendments are adopted under the Local Government Code, sec.205.003(a), 
which provides the Texas State Library and Archives Commission with the 
authority to adopt rules establishing standards and procedures for the 
electronic storage of local government records. The amendments were approved by 
the Local Government Records Committee, as required by the Government Code, 
sec.441.165, at an open meeting held in Austin on June 20, 1995. 
 The Local Government Code, sec.205.003, is affected by the amendments. 
 
 
  sec.7.75. Security of Electronic Records. 
 
  (a) Local governments must implement and maintain an electronic records 
security program for office and storage areas that: 
 
  (1)-(5) (No change.) 
     
  (b) (No change.) 
   
  (c) For records stored on rewritable electronic media, the system must ensure 
that read/write privileges are controlled and that an audit trail of rewrites is 
maintained. 
 
  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 11, 1995. 
 TRD-9511620 
  Raymond Hitt 
 Assistant State Librarian 
 Texas State Library and Archives Commission 
    Effective date: October 2, 1995 
 Proposal publication date: May 30, 1995 
 For further information, please call: (512) 463-5460 
         
                   
  TITLE 22. EXAMINING BOARDS 
 Part IV. Texas Cosmetology Commission 
  Chapter 89. General Rules and Regulations 
  
  22 TAC sec.sec.89.4, 89.6, 89.11, 89.14, 89.20, 89.34, 89.41, 89. 53, 89.54, 
89.56, 89.72, 89.75, 89.76 
 
  The Texas Cosmetology Commission adopts amendments and new section to 
sec.89.4, concerning cosmetology instructor on duty; sec.89.6, concerning new 
location or change in floor plan of school; sec.89.11, concerning daily 
attendance register;  sec.89.14, concerning concurrent enrollments and make-up 
hours; sec.89.20, concerning length of courses; sec.89.34, concerning applicants 
for licensure through reciprocity; sec.89.41, concerning change of location of a 
salon or independent contractor; sec.89.53, concerning minimum requirements for 
both private and public cosmetology schools; sec.89.54, concerning independent 
contractor/booth rental license; sec.89.72, concerning curriculum; sec.89.75, 
concerning field trips; and sec.89.76, concerning minimum requirements for 
cosmetology school separate facility; and new sec.89.56, concerning 
administrative processing fees. Sections 89.20, 89.34, 89.41, 89.53, 89.54, and 
89.72 are adopted with changes to the proposed text as published in the August 
8, 1995, issue of the Texas Register (20 TexReg 5984). Changes are the result of 
public comments received in open meeting September 9, 1995. Amended 
sec.sec.89.4, 89.6, 89.11, 89.14, 89.75, and 89.76; and new 89.56 are adopted 
without changes and will not be republished. 
 The amendments and new section are adopted to comply with Senate Bill 1502 and 
House Bill 1, 74th Texas Legislature, Regular Session. 
 The amended and new sections will bring the Texas Cosmetology Commission into 
compliance with Senate Bill 1502 and House Bill 1, 74th Legislature, Regular 
Session. 
 No comments were received regarding the adoption of the amendments and new 
section. 
 The amendments and new section are adopted under Texas Civil Statutes, Article 
8451a, sec.4(a), which provide the Texas Cosmetology Commission with the 
authority to "issue rules consistent with this Act after a public hearing", to 
protect the public's health and welfare. 
 
 
  sec.89.20. Length of Courses. 
 
  (a)-(h) (No change.) 
   
  (i) Manicurist: The manicuring course shall be for 600 hours in an approved 
school. 
   
  (j)-(k) (No change.) 
   
  (l) Recommendations for approving validation of hours: 
 
  (1)-(7) (No change.) 
   
  (8) The guidelines recommended above will be pro-rated based upon the number 
of hours required for the speciality license or instructor license. Required 
course hours for licensure are based on current hour requirements at the time of 
reinstatement. 
 
       
  sec.89.34. Applicants for Licensure through Reciprocity. 
 
  (a) Any person who seeks licensure in the State of Texas through reciprocity 
from any other state shall: 
 
  (1)-(3) (No change.) 
   
  (4) the applicant must present the same number of hours as required by the 
State of Texas for the applied license; 
   
  (5) In addition, the state from which the applicant holds a current license or 
certificate must grant reciprocity for Texas license or certificate holders. 
     
  (b) Any person who seeks licensure in the State of Texas through reciprocity 
from another nation shall: 
 
  (1)-(3) (No change.) 
   
  (4) the applicant must present the same number of hours as required by the 
State of Texas for the applied license; and 
   
  (5) (No change.) 
   
  (6) In addition, the state from which the applicant holds a current license or 
certificate must grant reciprocity for Texas license or certificate holders. 
     
  (c) (No change.) 
 
     
  sec.89.41. Change of Location of a Salon or School. A salon or school may move 
and continue to operate with the current license, but must be inspected and 
approved under the current requirements in the new location. The salon or school 
must notify the commission office in writing of the change of address as soon as 
the change of address becomes available. 
 
   
  sec.89.53. Minimum Requirements for Both Private and Public Cosmetology 
Schools. 
 
  (a) The following are the requirements for a private cosmetology school as 
authorized by the Texas Cosmetology Commission: 
 
  (1) A building to house a cosmetology school must be fireproof and of 
permanent type of construction, and contain a minimum of 3,500 square feet of 
floor space, with separate restrooms for male and female students. The building 
must be divided into two separate areas: one for classroom instruction and one 
clinic work area. 
   
  (2)-(15) (No change.) 
     
  (b) (No change.) 
 
     
  sec.89.54. Independent Contractor/Booth Rental License. 
 
  (a)-(d) (No change.) 
   
  (e) The original and renewal booth rental license fee shall be $50 and shall 
be valid for two years from date of issue. If a booth rental license is 
delinquent for less than 30 days, the delinquency fee shall be $10, over 30 days 
the delinquency fee shall be $25. 
   
  (f) Independent Contractors practicing cosmetology in more than one location 
must exhibit an original booth rental license at each location. 
   
  (g) Independent Contractors must post in a location visible at all times the 
following information. It must be posted on the outside of the booth or the door 
where it can be read by visitors or prospective clients: 
 
  (1) Operators name. 
   
  (2) Operators license number. 
   
  (3) Hours of business. 
     
  (h) The lessor to an independent contractor must maintain a list of all 
renters that includes: 
 
  (1) Name of renter. 
   
  (2) Cosmetology license number of the renter. 
   
  (3) Hours of business of the renter. 
     
  (i) The lessor must supply the inspector with a list of renters upon request. 
Failure to provide the list can result in a violation of such significance to 
require a hearing. 
 
     
  sec.89.72. Curriculum.  The curriculum listed has been established by the 
Texas Cosmetology Commission and must be followed by all cosmetology schools. 
The curriculum shall be posted in a conspicuous place in the school. A current 
syllabus and lesson plans for each course shall be maintained by the school and 
be available for inspection. 
 
  (1) Operator curriculum. 
 
  (A)-(C) (No change.) 
   
  (D) Manicure curriculum: 
 
  (i)-(iv) (No change.) 
   
  (v) procedures, 320 hours; 
 
  (I)-(IX) (No change.) 
   
  (X) application of nail extensions; 
 
  (-a-)-(-d-) (No change.) 
   
  (-e-) Odorless product 
       
  (vi) arms and hands; 
 
  (I) (No change.) 
   
  (II) muscles-ten hours: 
 
  (-a-)-(-b-) (No change.) 
     
  (III) (No change.) 
   
  (IV) skin-ten hours; 
 
  (-a-)-(-e-) (No change.) 
     
  (V) nails-50 hours; 
 
  (-a-)-(-d-) (No change.) 
       
  (vii) bactoriology, sanitation and safety measures-100 hours; 
 
  (I)-(IV) (No change.) 
     
  (viii) professional practices -80 hours; 
 
  (I)-(II) (No change.) 
     
  (ix) total, 600 hours. 
   
  (x) Theory is construed to mean any topic of instruction (See listed in this 
subparagraph) in the classroom or practical area. 
     
  (E)-(I) (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 September 11, 1995. 
 TRD-9511638 
  Dick G. Strader 
 Executive Director 
 Texas Cosmetology Commission 
    Effective date: October 2, 1995 
 Proposal publication date: August 8, 1995 
 For further information, please call: (512) 454-4674 
         
             
  22 TAC sec.89.5, sec.89.73 
 
  The Texas Cosmetology Commission adopts the repeal of sec.89.5, concerning 
specialty instructor on duty; and sec.89.73, concerning fashion photography 
salon requirements, without changes to the proposed text as published in the 
August 4, 1995, issue of the Texas Register (20 TexReg 5850). 
 The repeals are adopted to comply with Senate Bill 1502, 74th Texas 
Legislature, Regular Session. 
 Rule 89.5 defined the requirements for speciality instructors on duty in 
schools of cosmetology. Rule 89.73 defined the requirements for fashion 
photography salons. 
 No comments were received regarding adoption of the repeals. 
 The repeals are adopted under Texas Civil Statutes, Article 8451a, sec.4(a), 
which provide the Texas Cosmetology Commission with the authority to "issue 
rules consistent with this Act after a public hearing", to protect the public's 
health and welfare. 
 
  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 11, 1995. 
 TRD-9511639 
  Dick G. Strader 
 Executive Director 
 Texas Cosmetology Commission 
    Effective date: October 2, 1995 
 Proposal publication date: August 4, 1995 
 For further information, please call: (512) 454-4674 
         
           Part XI. Board of Nurse Examiners 
  Chapter 211. Bylaws 
  
  22 TAC sec.211.7 
 
  The Board of Nurse Examiners adopts an amendment to sec.211.7, concerning 
Committees of the Board, without changes to the proposed text as published in 
the July 28, 1995, issue of the Texas Register (20 TexReg 5578). 
 In accordance with the Health and Safety Code, sec.142.016, the Board of Nurse 
Examiners and the Texas Department of Health (TDH) entered into a memoranda of 
understanding (MOU) and is adopting rules to address the relationship in regard 
to the MOU. 
 The amendment will comply with the legislative directive and clarify that 
jurisdiction granted to each agency follows the statutory delegation of 
authority from the legislature. 
 There were no comments received regarding adoption of the amendment. 
 The amendment is adopted under the Nursing Practice Act, (Texas Civil Statutes, 
Article 4514), sec.1, which provides the Board of Nurse Examiners with the 
authority and power to make and enforce all rules and regulations necessary for 
the performance of its duties and conducting of proceedings before it. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511634 
  Kathy Thomas, MN, RN, CPNP 
 Interim Executive Director 
 Board of Nurse Examiners 
    Effective date: October 2, 1995 
 Proposal publication date: July 28, 1995 
 For further information, please call: (512) 835-8675 
         
         Chapter 217. Licensure and Practice 
  
  22 TAC sec.217.3 
 
  The Board of Nurse Examiners adopts an amendment to sec.217.3, concerning 
Temporary Permit, without changes to the proposed text as published in the July 
28, 1995, issue of the Texas Register (20 TexReg 5587). 
 The Computer Adaptive Test (CAT), implemented in 1994, offers daily testing of 
candidates, rather than twice a year as previously done with the paper and 
pencil exam. As candidates complete all requirements for graduation and testing, 
they are deemed eligible for the examination. Currently, the temporary permit is 
only valid for 60 days or until the results of the exam are received. This has 
caused numerous problems with for the candidates and their employers. Extending 
the length of time for the temporary permit will benefit the candidates, 
employers and office staff. 
 The amendment will provide additional time for application and results process 
ing and license mailing to occur, will increase the time in which graduates can 
test and will inform educators, employers and graduate nurses of the period the 
permit is valid. 
 There were no comments received regarding adoption of the amendment. 
 The amendment is adopted under the Nursing Practice Act, (Texas Civil 
Statutes), Article 4514, sec.1, which provides the Board of Nurse Examiners with 
the authority and power to make and enforce all rules and regulations necessary 
for the performance of its duties and conducting of proceedings before it. 
 
  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 authority. 
 Issued in Austin, Texas, on September 11, 1995. 
 TRD-9511635 
  Kathy Thomas, MN, RN, CPNP 
 Interim Executive Director 
 Board of Nurse Examiners 
    Effective date: October 2, 1995 
 Proposal publication date: July 28, 1995 
 For further information, please call: (512) 835-8675 
         
             
  TITLE 25. HEALTH SERVICES 
 Part VII. Texas Medical Disclosure Panel 
  Chapter 601. Informed Consent 
 Texas Medical Disclosure Panel (panel) adopts the repeal of existing 
sec.sec.601.1-601.4 and adopts new sec.sec.601.1-601.6 concerning informed 
consent. Section 601.2 and sec.601.3 are adopted with changes to the proposed 
text as published in the April 7, 1995, edition of the Texas Register  (20 
TexReg 2593). Section 601.1 and sec. sec.601.4-601.6 and the repealed sections 
are adopted without changes to the proposed text and therefore will not be 
published. 
 the new sections cover the purpose of the chapter; the panel's procedures 
requiring full disclosure (list A) and procedures requiring no disclosure (list 
B); the panel's disclosure and consent form; the panel's radiation therapy 
disclosure and consent form; and the history of the rules of the panel. 
 repeal of sec.sec.601.1-601.4 allow for the adoption of the new sections in 
Texas Register format. New sec.601.1 relates generally to the panel and sets out 
the purpose of the sections which are to implement the requirements of the 
Medical Liability and Insurance Improvement Act of Texas, Texas Civil Statutes, 
Article 4590i, Subchapter F relating to informed consent. This section also 
makes reference to list A in the new sec.601.2 and list B in the new sec.601.3. 
 601.2 and sec.601.3 have been put into proper Texas Register format so that the 
full text of the rules, including list A and list B, will be published in future 
volumes of the Texas Administrative Code. At this time the actual list A and 
list B are adopted by reference and are not published in the code. There are no 
changes to the procedures listed or to the risks and hazards assigned to the 
listed procedures. The only purpose of the new sections is to place the existing 
procedures and risks and hazards into Texas Register format. 
 some places it was necessary to add additional language stating that no other 
procedures or risks are assigned at this time. This language was added in order 
to create the proper outline form of having two items, such as subparagraphs (A) 
and (B) in each list. This change is found in new sec.601.2(a) (1)(B), (2)(B), 
(3)(B), (c)(2), (e)(2), (h)(2), and (q)(2). In sec.601.3 this change is found in 
subsections (b)(2) and (h)(2). In addition, since the disclosure and consent 
form has been moved to new  sec.601.4, the reference to the form has been 
changed in new  sec.601.2 (a)(1)(A), (2)(A), and (3)(A). In addition, 
punctuation or capitalization has been corrected in ten places in new  sec.601.2 
and in one place in new sec.601.3. In new sec.601.3, subsection (n) under 
radiology has been changed to use lower case letters instead of capital letters 
in paragraphs (11), (16), (18), (20), (23), (24)-(27), and (31) and in paragraph 
(11) "gastrointestinal" is spelled out. 
 new sec.601.4 the disclosure and consent form is being adopted so that it will 
be published in the Texas Administrative Code. There have been no changes to the 
language of the disclosure and consent form. This is still the same form 
originally adopted by the panel in 1982. New sec.601.5 adopts the radiation 
therapy disclosure and consent form which was originally adopted by the panel in 
1990. There have been no changes to the form. 
 sec.601.6 lists the history of the rules adopted by the panel. The history is 
listed in order to assist individuals in identifying the rules in effect on a 
certain date. This history was previously included in existing sec.601.1. 
 Texas Department of Health (department) accepted comments on the proposal for a 
30-day period beginning April 7, 1995. The department received the following 
comments from department staff to correct errors in terminology. No other 
comments were received. 
 One commenter suggested changing the word "uncontrolled" in  sec.601. 
2(g)(5)(A) relating to removing fibroids, (7)(A) relating to removal of the 
nerves to the uterus (presacral neurectomy), (8)(A) relating to removal of the 
cervix, and (10)(A) relating to abdominal suspension of the bladder (retropubic 
urethropexy), to "uncontrollable" in order to maintain consistency with  
sec.601.2(g)(1)(A), (2)(A), and (6)(A), and because the term "uncontrollable" 
better describes the condition. 
 The department agrees and has changed the term "uncontrolled" in subparagraphs 
(5)(A), (7)(A), (8)(A) and (10)(A) to "uncontrollable." The term "uncontrolled" 
was used in the panel's existing rules at sec.sec.601.1.7.5.1, 601.1.7.7.1, 
601.1.7.8.1, and 601.1.7.10.1 which are being repealed and replaced. 
 One commenter asked if the words "shinny" and "contratrue" in 
sec.601.2(r)(8)(B)(i) relating to skin should be "shiny" and "contracture." 
 Response: The department agrees and has made the change. The words were 
misspelled in the panel's existing rules at sec.sec.601.1.18.8.2.1 which are 
being repealed and replaced. 
 One commenter asked if the term "stereotaxic" should be "stereotactic" in 
sec.601.3(m)(7) relating to nervous system. 
 The department agrees and has made the change. The word was misspelled in the 
panel's existing rules at sec.601.2.13.7. 
 One commenter asked if the term "dachrocystography" should be 
"dacryocystography" in sec.601.3(n)(15) relating to radiology. 
 The department agrees and has made the change. The term was misspelled in the 
panel's existing rules at sec.601.2.14.15 which is being repealed and replaced. 
 One commenter asked if the term "cystolitholopaxy" should be "cystolitholapaxy" 
in sec.601.3(p)(4) relating to urinary system. 
 The department agrees and has made the change. The term was misspelled in the 
panel's existing rules at sec.601.2.16.4 which is being repealed and replaced. 
  
  Medical Treatments and Surgical Procedure Established by the Texas Medical 
Disclosure Panel 
 
  25 TAC sec.sec.601.1-601.4 
 
  The repeals are adopted under the Medical Liability and Insurance Improvement 
Act of Texas, Texas Civil Statutues, Article 4590i, sec.6.04 which authorizes 
the Texas Medical Disclosure Panel to prepare lists of medical treatments and 
surgical procedures that do and do not require disclosure by physicians and 
health care providers of the possible risks and hazards and to prepare the form 
for the treatments and procedures which do require disclosure. 
 
  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 11, 1995. 
 TRD-9511685 
  John Yatsu, M.D. 
 Chairman 
 Texas Medical Disclosure Panel 
    Effective date: October 3, 1995 
 Proposal publication date: April 7, 1995 
 For further information, please call: (512) 458-7236 
         
       
  25 TAC sec.sec.601.1-601.6 
 
  The new sections are adopted under the Medical Liability and Insurance 
Improvement Act of Texas, Texas Civil Statutes, Article 4590i, sec.6.04, which 
authorizes the Texas Medical Disclosure Panel to prepare lists of medical 
treatments and surgical procedures that do and do not require disclosure by 
physicians and health care providers of the possible risks and hazards and to 
prepare the form for the treatments and procedures which do require disclosure. 
 
 
  sec.601.2. Procedures Requiring Full Disclosure-List A. 
 
  (a)  Anesthesia. 
 
  (1) Epidural. 
 
  (A) Risks are enumerated in the form in sec.601.4 of this title (relating to 
Disclosure and Consent Form). 
   
  (B) No other risks are assigned at this time. 
     
  (2) General. 
 
  (A) Risks are enumerated in the form in sec.601.4 of this title. 
   
  (B) No other risks are assigned at this time. 
     
  (3) Spinal. 
 
  (A) Risks are enumerated in the form in sec.601.4 of this title. 
   
  (B) No other risks are assigned at this time. 
       
  (b)  Cardiovascular system. No procedures are assigned at this time. 
   
  (c)  Digestive system treatments and procedures. 
 
  (1) Cholecystectomy with or without common bile duct exploration. 
 
  (A) Pancreatitis. 
   
  (B) Injury to the tube between the liver and the bowel. 
   
  (C)  Retained stones in the tube between the liver and the bowel. 
   
  (D)  Narrowing or obstruction of the tube between the liver and the bowel. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
     
  (2)  Other procedures. No other procedures are assigned at this time. 
     
  (d)  Ear treatments and procedures. 
 
  (1) Stapedectomy. 
 
  (A)  Diminished or bad taste. 
   
  (B) Total or partial loss of hearing in the operated ear. 
   
  (C) Brief or long-standing dizziness. 
   
  (D)  Eardrum hole requiring more surgery. 
   
  (E) Ringing in the ear. 
     
  (2) Reconstruction of auricle of ear for congenital deformity or trauma. 
 
  (A) Less satisfactory appearance compared to possible alternative artificial 
ear. 
   
  (B) Exposure of implanted material. 
     
  (3) Tympanoplasty with mastoidectomy. 
 
  (A) Facial nerve paralysis. 
   
  (B) Altered or loss of taste. 
   
  (C) Recurrence of original disease process. 
   
  (D) Total loss of hearing in operated ear. 
   
  (E) Dizziness. 
   
  (F) Ringing in the ear. 
       
  (e) Endocrine system treatments and procedures. 
 
  (1) Thyroidectomy. 
 
  (A)  Injury to nerves resulting in hoarseness or impairment of speech. 
   
  (B)  Injury to parathyroid glands resulting in low blood calcium levels that 
require extensive medication to avoid serious degenerative conditions, such as 
cataracts, brittle bones, muscle weakness and muscle irritability. 
   
  (C)  Lifelong requirement of thyroid medication. 
     
  (2) Other procedures. No other procedures are assigned at this time. 
     
  (f) Eye treatments and procedures. 
 
  (1) Eye muscle surgery. 
 
  (A) Additional treatment and/or surgery. 
   
  (B) Double vision. 
   
  (C) Partial or total loss of vision. 
     
  (2) Surgery for cataract with or without implantation of intraocular lens. 
 
  (A) Complications requiring additional treatment and/or surgery. 
   
  (B) Need for glasses or contact lenses. 
   
  (C)  Complications requiring the removal of implanted lens. 
   
  (D)  Partial or total loss of vision. 
     
  (3) Retinal or vitreous surgery. 
 
  (A) Complications requiring additional treatment and/or surgery. 
   
  (B) Recurrence or spread of disease. 
   
  (C) Partial or total loss of vision. 
     
  (4) Reconstructive and/or plastic surgical procedures of the eye and eye 
region, such as blepharoplasty, tumor, fracture, lacrimal surgery, foreign body, 
abscess, or trauma. 
 
  (A) Worsening or unsatisfactory appearance. 
   
  (B) Creation of additional problems. 
 
  (i) Poor healing or skin loss. 
   
  (ii) Nerve damage. 
   
  (iii) Painful or unattractive scarring. 
   
  (iv)  Impairment of regional organs, such as eye or lip function. 
     
  (C)  Recurrence of the original condition. 
     
  (5) Photocoagulation and/or cryotherapy. 
 
  (A) Complications requiring additional treatment and/or surgery. 
   
  (B) Pain. 
   
  (C) Partial or total loss of vision. 
     
  (6) Corneal surgery, such as corneal transplant, refractive surgery and 
pterygium. 
 
  (A) Complications requiring additional treatment and/or surgery. 
   
  (B) Possible pain. 
   
  (C) Need for glasses or contact lenses. 
   
  (D) Partial or total loss of vision. 
     
  (7)  Glaucoma surgery by any method. 
 
  (A) Complications requiring additional treatment and/or surgery. 
   
  (B) Worsening of the glaucoma. 
   
  (C) Pain. 
   
  (D) Partial or total loss of vision. 
     
  (8)  Removal of the eye or its contents (enucleation or evisceration). 
 
  (A)  Complications requiring additional treatment and/or surgery. 
   
  (B)  Worsening or unsatisfactory appearance. 
   
  (C) Recurrence or spread of disease. 
     
  (9) Surgery for penetrating ocular injury, including intraocular foreign body. 
 
  (A) Complications requiring additional treatment and/or surgery, including 
removal of the eye. 
   
  (B) Chronic pain. 
   
  (C) Partial or total loss of vision. 
       
  (g) Female genital system treatments and procedures. 
 
  (1) Abdominal hysterectomy (total). 
 
  (A) Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C) Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
     
  (2) Vaginal hysterectomy. 
 
  (A)  Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C)  Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
   
  (F) Completion of operation by abdominal incision. 
     
  (3) All fallopian tube and ovarian surgery with or without hysterectomy, 
including removal and lysis of adhesions. 
 
  (A) Injury to the bowel and/or bladder. 
   
  (B) Sterility. 
   
  (C) Failure to obtain fertility (if applicable). 
   
  (D) Failure to obtain sterility (if applicable). 
   
  (E) Loss of ovarian functions or hormone production from ovary(ies). 
     
  (4) Abdominal endoscopy (peritoneoscopy, laparoscopy). 
 
  (A)  Puncture of the bowel or blood vessel. 
   
  (B) Abdominal injection and complications of infection. 
   
  (C) Abdominal incision and operation to correct injury. 
     
  (5) Removing fibroids (uterine myomectomy). 
 
  (A) Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C) Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
     
  (6) Uterine suspension. 
 
  (A) Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C) Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
     
  (7)  Removal of the nerves to the uterus (presacral neurectomy). 
 
  (A)  Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C)  Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
   
  (F) Hemorrhage, complications of hemorrhage, with additional operation. 
     
  (8) Removal of the cervix. 
 
  (A) Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C) Sterility. 
   
  (D)  Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E)  Injury to the bowel and/or intestinal obstruction. 
   
  (F) Completion of operation by abdominal incision. 
     
  (9) Repair of vaginal hernia (anterior and/or posterior colporrhaphy and/or 
enterocele repair). 
 
  (A)  Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C)  Sterility. 
   
  (D) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (E) Injury to the bowel and/or intestinal obstruction. 
     
  (10) Abdominal suspension of the bladder (retropubic urethropexy). 
 
  (A) Uncontrollable leakage of urine. 
   
  (B) Injury to bladder. 
   
  (C) Injury to the tube (ureter) between the kidney and the bladder. 
   
  (D) Injury to the bowel and/or intestinal obstruction. 
     
  (11)  Conization of cervix. 
 
  (A) Hemorrhage with possible hysterectomy to control. 
   
  (B) Sterility. 
   
  (C) Injury to bladder. 
   
  (D)  Injury to rectum. 
   
  (E) Failure of procedure to remove all of cervical abnormality. 
     
  (12) Dilation and curettage of uterus (diagnostic). 
 
  (A) Hemorrhage with possible hysterectomy. 
   
  (B)  Perforation of the uterus. 
   
  (C) Sterility. 
   
  (D) Injury to bowel and/or bladder. 
   
  (E) Abdominal incision and operation to correct injury. 
     
  (13) Dilation and curettage of uterus (obstetrical). 
 
  (A)  Hemorrhage with possible hysterectomy to control. 
   
  (B) Perforation of the uterus. 
   
  (C) Sterility. 
   
  (D) Injury to the bowel and/or bladder. 
   
  (E) Abdominal incision and operation to correct injury. 
   
  (F) Failure to remove all products of conception. 
       
  (h) Hematic and lymphatic system. 
 
  (1) Transfusion of blood and blood components. 
 
  (A) Fever. 
   
  (B) Transfusion reaction which may include kidney failure or anemia. 
   
  (C) Heart failure. 
   
  (D) Hepatitis. 
   
  (E) A.I.D.S. (acquired immune deficiency syndrome). 
   
  (F) Other infections. 
     
  (2) Other procedures. No other procedures are assigned at this time. 
     
  (i) Integumentary system treatments and procedures. 
 
  (1) Radical or modified radical mastectomy. (Simple mastectomy excluded). 
 
  (A) Limitation of movement of shoulder and arm. 
   
  (B)  Swelling of the arm. 
   
  (C) Loss of the skin of the chest requiring skin graft. 
   
  (D) Recurrence of malignancy, if present. 
   
  (E)  Decreased sensation or numbness of the inner aspect of the arm and chest 
wall. 
     
  (2) Reconstruction and/or plastic surgical operations of the face and neck. 
 
  (A) Worsening or unsatisfactory appearance. 
   
  (B)  Creation of several additional problems. 
 
  (i) Poor healing or skin loss. 
   
  (ii) Nerve damage. 
   
  (iii) Painful or unattractive scarring. 
   
  (iv) Impairment of regional organs, such as eye or lip function. 
     
  (C) Recurrence of the original condition. 
       
  (j) Male genital system. 
 
  (1) Orchidopexy (reposition of testis(es)). 
 
  (A) Removal of testicle. 
   
  (B) Atrophy (shriveling) of the testicle with loss of function. 
     
  (2) Orchiectomy (removal of the testis(es)). 
 
  (A) Decreased sexual desire. 
   
  (B)  Difficulties with penile erection. 
     
  (3) Vasectomy. 
 
  (A)  Loss of testicle. 
   
  (B) Failure to produce permanent sterility. 
       
  (k) Maternity and related cases. 
 
  (1) Delivery (vaginal). 
 
  (A) Injury to bladder and/or rectum, including a hole (fistula) between 
bladder and vagina and/or rectum and vagina. 
   
  (B) Hemorrhage possibly requiring blood administration and/or hysterectomy 
and/or artery ligation to control. 
   
  (C) Sterility. 
   
  (D) Brain damage, injury or even death occurring to the fetus before or during 
labor and/or vaginal delivery whether or not the cause is known. 
     
  (2) Delivery (cesarean section). 
 
  (A) Injury to bowel and/or bladder. 
   
  (B) Sterility. 
   
  (C) Injury to tube (ureter) between kidney and bladder. 
   
  (D)  Brain damage, injury or even death occurring to the fetus before or 
during labor and/or cesarean delivery whether or not the cause is known. 
   
  (E)  Uterine disease or injury requiring hysterectomy. 
       
  (l)  Musculoskeletal system treatments and procedures. 
 
  (1)  Arthroplasty of all joints with mechanical device. 
 
  (A) Impaired function such as shortening or deformity of an arm or leg, limp 
or foot drop. 
   
  (B) Blood vessel or nerve injury. 
   
  (C) Pain or discomfort. 
   
  (D) Fat escaping from bone with possible damage to a vital organ. 
   
  (E) Failure of bone to heal. 
   
  (F) Bone infection. 
   
  (G)  Removal or replacement of any implanted device or material. 
     
  (2)  Mechanical internal prosthetic device. 
 
  (A) Impaired function such as shortening or deformity of an arm or leg, limp 
or foot drop. 
   
  (B)  Blood vessel or nerve injury. 
   
  (C) Pain or discomfort. 
   
  (D)  Fat escaping from bone with possible damage to a vital organ. 
   
  (E)  Failure of bone to heal. 
   
  (F) Bone infection. 
   
  (G) Removal or replacement of any implanted device or material. 
     
  (3) Open reduction with internal fixation. 
 
  (A) Impaired function such as shortening or deformity of an arm or leg, limp 
or foot drop. 
   
  (B)  Blood vessel or nerve injury. 
   
  (C) Pain or discomfort. 
   
  (D)  Fat escaping from bone with possible damage to a vital organ. 
   
  (E)  Failure of bone to heal. 
   
  (F) Bone infection. 
   
  (G) Removal or replacement of any implanted device or material. 
     
  (4) Osteotomy. 
 
  (A) Impaired function such as shortening or deformity of an arm or leg, limp 
or foot drop. 
   
  (B) Blood vessel or nerve injury. 
   
  (C)  Pain or discomfort. 
   
  (D) Fat escaping from bone with possible damage to a vital organ. 
   
  (E) Failure of bone to heal. 
   
  (F)  Bone infection. 
   
  (G) Removal or replacement of any implanted device or material. 
     
  (5) Ligamentous reconstruction of joints. 
 
  (A) Failure of reconstruction to work. 
   
  (B) Continued loosening of the joint. 
   
  (C) Degenerative arthritis. 
   
  (D)  Continued pain. 
   
  (E) Increased stiffening. 
   
  (F) Blood vessel or nerve injury. 
   
  (G) Cosmetic and/or functional deformity. 
     
  (6) Children's orthopedics (bone, joint, ligament or muscle). 
 
  (A)  Growth deformity. 
   
  (B) Additional surgery. 
       
  (m) Nervous system treatments and procedures. 
 
  (1) Craniotomy (craniectomy) for excision of brain tissue, tumor, vascular 
malformation and cerebral revascularization. 
 
  (A) Additional loss of brain function including memory. 
   
  (B) Recurrence or continuation of the condition that required this operation. 
   
  (C) Stroke. 
   
  (D) Blindness, deafness, inability to smell, double vision, coordination loss, 
seizures, pain, numbness and paralysis. 
     
  (2) Craniotomy (craniectomy) for cranial nerve operation including neurectomy, 
avulsion, rhizotomy or neurolysis. 
 
  (A)  Numbness, impaired muscle function or paralysis. 
   
  (B) Recurrence or continuation of the condition that required this operation. 
   
  (C)  Seizures. 
     
  (3) Spine operation, including laminectomy, decompression, fusion, internal 
fixation or procedures for nerve root or spinal cord compression; diagnosis; 
pain; deformity; mechanical instability; injury; removal of tumor, abscess or 
hematoma (excluding coccygeal operations). 
 
  (A) Pain, numbness or clumsiness. 
   
  (B) Impaired muscle function. 
   
  (C) Incontinence or impotence. 
   
  (D) Unstable spine. 
   
  (E) Recurrence or continuation of the condition that required the operation. 
   
  (F) Injury to major blood vessels. 
     
  (4) Peripheral nerve operation; nerve grafts, decompression, transposition or 
tumor removal; neurorrhaphy, neurectomy or neurolysis. 
 
  (A) Numbness. 
   
  (B)  Impaired muscle function. 
   
  (C) Recurrence or persistence of the condition that required the operation. 
   
  (D) Continued, increased or different pain. 
     
  (5) Correction of cranial deformity. 
 
  (A)  Loss of brain function. 
   
  (B) Seizures. 
   
  (C) Recurrence or continuation of the condition that required this operation. 
     
  (6)  Transphenoidal hypophysectomy or other pituitary gland operation. 
 
  (A)  Spinal fluid leak. 
   
  (B) Necessity for hormone replacement. 
   
  (C) Recurrence or continuation of the condition that required this operation. 
   
  (D) Nasal septal deformity or perforation. 
     
  (7)  Cerebral spinal fluid shunting procedure or revision. 
 
  (A) Shunt obstruction or infection. 
   
  (B) Seizure disorder. 
   
  (C)  Recurrence or continuation of brain dysfunction. 
       
  (n) Radiology. 
 
  (1) Angiography, aortography, arteriography (arterial injection of contrast 
media-diagnostic). 
 
  (A) Injury to artery. 
   
  (B) Damage to parts of the body supplied by the artery with resulting loss of 
function or amputation. 
   
  (C) Swelling, pain, tenderness or bleeding at the site of the blood vessel 
perforation. 
   
  (D) Aggravation of the condition that necessitated the procedure. 
   
  (E) Allergic sensitivity reaction to injected contrast media. 
     
  (2) Myelography. 
 
  (A) Chronic pain. 
   
  (B) Transient headache, nausea, vomiting. 
   
  (C) Numbness. 
   
  (D) Impaired muscle function. 
     
  (3) Angiography with occlusion techniques-therapeutic. 
 
  (A) Injury to artery. 
   
  (B) Loss or injury to body parts. 
   
  (C) Swelling, pain, tenderness or bleeding at the site of the blood vessel 
perforation. 
   
  (D) Aggravation of the condition that necessitated the procedure. 
   
  (E) Allergic sensitivity reaction to injected contrast media. 
     
  (4) Angioplasty (intravas