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 16. ECONOMIC REGULATION Part II. Public Utility Commission of Texas Chapter 23. Substantive Rules Rates 16 TAC sec.23.23 The Public Utility Commission of Texas adopts an amendment to sec.23.23, with changes to the proposed text as published in the October 10, 1995 issue of the Texas Register (20 TexReg 8265-8296). This rulemaking project was initiated this summer, following enactment of House Bill 2128, the 1995 Texas Legislature's comprehensive telecommunications legislation. At its September 27, 1995 Open Meeting, the Commission voted to publish proposed rule changes in this rulemaking project, Number 14372, the review of the Commission's substantive rules for applicability to new telecommunications categories under the Public Utility Regulatory Act of 1995 (PURA '95 or the Act). Following an informal workshop on October 23, 1995, parties filed comments on the proposals with the Commission. A public hearing on these proposals was also held at the Commission on November 10, 1995. Adopted amendments to other substantive rules opened in Project Number 14372 were published in the January 2, 1996 issue of the Texas Register. Adopted amendments to sec.23.23 were not published in that edition because of a minor formatting problem in one subparagraph. The amendments are occasioned by the recent telecommunications legislation, as well as a need to update certain definitions in the sections. The changes made in response to legislation include recognition of new certification categories, such as certificates of operating authority and service provider certificates of operating authority, for providers of telecommunications services, and clarifications as to the areas where the Commission's jurisdiction is restricted to dominant certificated telecommunications utilities. The following parties submitted written comments following publication of our proposed rule changes in this project: Southwestern Bell Telephone Company (SWB); Texas Exchange Carrier Association (TECA); Texas Telephone Association (TTA); Texas Statewide Telephone Cooperative, Inc. (TSTCI); MCI Telecommunications Corporation (MCI); AT&T Communications of the Southwest, Inc. (AT&T); Office of Public Utility Counsel (OPUC); and Consumers Union (CU). In addition, at the November 10, 1995 Public Hearing, certain parties offered oral comments, which are summarized below to the extent they differ from their written comments. This rulemaking project was initiated to revise the Commission's telecommunications-related substantive rules in accordance with changes made in House Bill 2128, incorporated into the Public Utility Regulatory Act of 1995 (PURA '95). With minor exceptions, the intent of this project was not to change the content of the affected rules except as necessary to conform to the new legislation and this agency's reorganization (prompted in part by the new legislation). The one major policy decision we had to make was to which telecommunications utilities our rules should apply. Most notably, House Bill 2128 provided for local-exchange competition by authorizing the entry of companies holding either a certificate of operating authority (COA) or a service provider certificate of operating authority (SPCOA). In the absence of specific legislative direction otherwise, however, the Commission proposed to limit the application of existing substantive rules to dominant carriers or to the slightly narrower (conceptually) category of "dominant certificated telecommunications utilities" (DCTUs). Initially, both terms exactly coincide with "incumbent LECs," which are companies holding a certificate of convenience and necessity (CCN) on September 1, 1995. Many commenters disapprove of the Commission's proposed use of the term "DCTUs," either generally or as applied to specific substantive rules. SWB, TTA, CU, and OPUC express dissatisfaction with any use of the term; AT&T, in a late- filed clarification to its comments, states a preference for replacing "DCTUs" with "incumbent local exchange companies" (incumbent LECs) wherever the former is used in our proposed revisions. TTA and CU share this preference, but they, along with SWB and TSTCI, also believe that the application to DCTUs only of a number of rules, particularly those dealing with service quality and customer relations, is inappropriate. They argue for applying such rules to both incumbent LECs and new local-service providers. MCI is the only commenter that expressly supports the Commission's proposed use of the "DCTU" term; it believes that such use represents an appropriate matching of regulation to monopoly power. Despite the objections noted previously, the Commission considers using the "DCTU" term to be appropriate for many rules. It is slightly narrower than "dominant carrier" (to which we apply a number of rules), in that it would exclude any uncertificated telecommunications utility, such as a competitive- access provider, that is declared by the Commission to be a dominant carrier; such exclusion is desirable when a rule solely concerns local exchange telephone service. It is broader than "incumbent LECs," in that it would include any company receiving a CCN after September 1, 1995, as well as any holder of a COA or an SPCOA found to be a dominant carrier. Such inclusion is appropriate when market dominance is a key criterion for applying a rule. With regard to our decision to apply most of these rules to dominant carriers or DCTUs, we offer the following rationale. First, there is some question as to the Commission's authority to extend these rules to nondominant COA/SPCOA holders, in light of the limiting language of PURA '95 sec.3.051(s)(1) . On the other hand, sec.3.3531(e) and sec.3.2532(b) require consideration of a COA/SPCOA applicant's "ability to meet the Commission's quality of service requirements," and sec.3.258(a) requires all holders of a CCN or COA to "render continuous and adequate service" to their customers. Hence we have initiated a new project, Number 14960, in order to receive further comment on what if any service-quality rules and/or other consumer safeguards can and should be applied to nondominant certificated telecommunications utilities. In the meantime, consumers will have the assurance that the Commission's existing customer- protection rules still apply to dominant local-service providers; for competitive reasons, new entrants also will have at least some incentive to provide service in accordance with these rules. We have also tried to lessen any confusion associated with our use of the "DCTU" term by adding to our "DCTU" definition, in Substantive Rule 23.3, a sentence stating that, unless clearly indicated otherwise, the rules applicable to a DCTU apply to only those services for which the utility is dominant. (We also added a similar sentence to the "dominant carrier" definition. Both new definitions were published in the January 2, 1996 issue of the Texas Register.) To the extent not done so previously, we summarize and respond to parties' comments below. We discuss more general remarks first, then those dealing specifically with sec.23.23. SWB, which offered the most voluminous comments not limited to specific rules, appears to have three primary (and related) concerns about the proposed rule revisions. First, it believes the revisions largely fail to address the regulatory changes attendant to a LEC's election under Subtitle H of PURA '95. Second, it considers the widespread substitution of the term "DCTU" for "LEC" to be both inadequate and likely to generate confusion and interpretation problems. Third, depending in part on the interpretation of "dominant carrier" with respect to a COA holder's carriage of "1+" intraLATA toll calls, it believes the application of the Commission's service-quality standards and other consumer safeguards to DCTUs will improperly skew the competitive arena and disadvantage customers of new local-service providers. As for the first concern, SWB claims that "The new legislation states clearly that there must be significant overhaul of the Commission's regulations to recognize the changes in regulatory oversight for the [Subtitle-H-]electing companies," for "the old rules do not apply" to such LECs. (SWB cites the language in PURA '95 sec.3.352(c) that says, "An electing company's telecommunications services shall be regulated under this subtitle regardless of whether that company is a 'dominant carrier'...") However, "With painfully few exceptions, ...the proposed amendments make no distinction as to whether the requirements apply" to a Subtitle-H-electing LEC or to a LEC that remains under rate-of- return regulation. SWB asserts that "Incentive regulation requires a more comprehensive consideration" of which rules should be applied to electing LECs. At the Public Hearing, MCI and CU stated their disagreement with SWB's belief in the wholesale non-applicability of many existing substantive rules to electing LECs. The Commission also disagrees with SWB on this issue. PURA '95 sec.3.353(d) (1) specifies various provisions of the Act beyond Subtitle H, as well as "all Commission procedures and rules not inconsistent with this subtitle," that will govern the regulation of an electing company's basic network services. Thus we agree with CU that the language in sec.3.352(c) relates to rate regulation. In this connection we have reviewed the rules and are modifying certain ones, such as sec.23.21(b), to eliminate conflicts between the rules and PURA '95. Like TTA, CU, and OPUC, SWB fears that the "DCTU" term may lead to confusion. SWB notes that neither "DCTU," nor "certificated," nor "certificated telecommunications utility" is defined in PURA '95; it believes the important differences among holders of a CCN, a COA, and an SPCOA "will lead to conflict" in applying the "DCTU" term. As an example of the interpretation problems it expects to stem from the "DCTU" application, SWB cites the definition in PURA '95 sec.3.002(2)(C) of a dominant carrier with respect to "1+" intraLATA toll service. SWB infers that a COA holder might be considered dominant for such service if it elects to carry its own 1+ traffic, even though an incumbent LEC normally would also offer 1+ intraLATA toll service in the same area. Using this interpretation, SWB concludes that such a COA holder may be discouraged from carrying its own 1+ traffic, because of the threat of having to abide by all of the DCTU requirements in the substantive rules. The Commission believes such an interpretation of sec.3.002(2)(C) to be unwarranted. We subscribe to SWB's alternative interpretation, under which neither the COA holder nor the incumbent LEC would be considered dominant with respect to intraLATA toll in that area. But in this event, SWB argues, "the Commission is raising serious inequities for both the incumbent LECs who continue to be regulated by the Commission and the customers who elect to purchase their services from the new entrants to the marketplace." The incumbent LECs face regulatory burdens not faced by their competitors, while those "consumers who want to have reasonable assurances of quality services and regulatory oversight will continue to buy from the incumbent LECs," a situation not conducive to free and open competition. As noted earlier, several other parties share this view, and advocate wider application of some rules to cover new competitors. Again, we decline to so apply the existing rules, but will consider these issues in Project Number 14960. In SWB's view, replacing "LEC" with "DCTU" amounts to applying PURA '95 in a legally incorrect way, for (it asserts) the Commission's authority over (CCN- holding) LECs under the old PURA was not the same as its present authority over any holder of a CCN, COA, or SPCOA that is dominant under PURA '95. Thus the general use of the "DCTU" term assigns regulatory burdens on "newly created entities" (apparently including electing companies) not authorized by the Legislature. As examples, SWB cites sec.sec.23.17, 23.54, and 23.69 as containing requirements that had to be met by the LECs under the old PURA. SWB believes fair competition calls specifically for fewer restrictions to be placed on LECs electing Subtitle-H regulation. Doing so, it contends, would allow consumers to dictate the levels of service and protections that will ultimately be provided. Should the Commission determine it must exercise its authority to protect consumers, it could do so as long a dominant carrier remains in the market. The upshot of SWB's general recommendations is that the Commission should reject the proposed rule changes to the extent they apply the "DCTU" term, and order further revisions to determine the applicability of specific rules to such statutorily defined entities as dominant carriers, LECs, incumbent LECs, telecommunications utilities, and, in particular, LECs electing incentive regulation. As will be seen later, the Commission agrees in a few cases to SWB's recommendations concerning the application of a rule to DCTUs and the need to exempt electing companies from a rule's provisions. As indicated earlier, however, we decline to make the sweeping changes SWB recommends. CU expresses concern that applying the "DCTU" term will invite incumbent LECs, especially those electing Subtitle-H regulation, to claim non-dominance for certain services and/or markets. Similarly, OPUC fears that using the term will lead to "unnecessary...gamesmanship." The Commission doubts that such fears will be realized. This concern should apply equally to the use of "dominant carrier," which already appears in a number of rules. Moreover, PURA '95 sec.3.002(2)(B) clearly specifies all incumbent LECs to be dominant as to local exchange telephone service. In addition, as indicated earlier, these substantive rules do not affect an electing LEC's rate regulation. Finally, incumbent LECs have competitive reasons to continue abiding by rules safeguarding consumers. TTA, which suggests using "incumbent LEC" instead of "DCTU," says the Commission could adapt its oversight to such a LEC's new status if it is found nondominant in some market(s); it also questions whether a new local-service provider could ever be declared a dominant carrier in light of "the PURA 95 requirement that a provider must have provided local exchange service prior to September 1, 1995." The Commission refers to its earlier responses on the DCTU definition and application, and observes that TTA's last point seems to result from misreading the "dominant carrier" definition in PURA '95 sec.3.002(2). Noting the volume of the proposed rule changes, AT&T suggests that the Commission staff incorporate appropriate recommended changes of commenters into a new draft for further review and comment by parties before submitting the draft for consideration and adoption. AT&T believes this approach would provide the added benefit of allowing staff to consider further the net benefits of applying substantive rules to new competitors. The Commission rejects this general approach, but again refers to new Project Number 14960, on nondominant certificated telecommunications utilities. TSTCI states its concern that this project is "somewhat premature" because a number of outstanding policy issues remain to be resolved in other rulemakings; it disagrees with the staff's characterization of this project as something of a "clean-up" proceeding. The Commission disagrees with TSTCI's judgment that this project is premature. We believe that this project can be concluded before other specific policy questions are resolved; some projects will not be completed until 1997 or later. As noted earlier, CU recommends replacing "DCTU" with "incumbent LEC," which the Legislature typically used in House Bill 2128. CU suggests the additional possibility of redefining "DCTU" to refer only to a COA holder or SPCOA holder found dominant under PURA '95 sec.3.2572(d), then using the term where appropriate in the substantive rules. The Commission considers such a redefinition to be unnecessary, because such a redefinition would make no substantive change to the entities covered. CU contends strongly that the Commission must impose consumer protections and service-quality standards on new local-service providers. Citing the same provisions in PURA '95 sec.3.2531(e) and sec.3.2532(b) that TTA did, CU says it would make no sense to ignore a new competitor's continued compliance with the standards mentioned in the Act. Moreover, it argues, doing so would be contrary to the policy intent of House Bill 2128 to promote fair competition, which requires that new competitors bear certain public-interest responsibilities. CU offers as examples of such consumer safeguards those contained in sec.sec.23.6, 23.41-23.46, 23.58, and 23.61. Its overall conclusion, though, is that except where specifically prohibited by PURA '95, all substantive rules should apply to incumbent LECs (including electing LECs), COA holders, and SPCOA holders. The Commission again refers to its earlier remarks on these matters; they will be considered afresh in Project Number 14960. Comments and Commission responses specifically regarding sec.23.23 follow. AT&T says that the term "local exchange carriers" in sec.23.23(d)(5)(F)(ix) (V) (dealing with the switched-transport rates of LECs not subject to sec.23.91) should be replaced with "incumbent LECs" so that COA holders are not read to be subject to the rate regulation of the Commission. The Commission agrees to substitute "DCTUs," rather than "incumbent LECs," for "local exchange carriers." (As noted earlier, AT&T actually recommended "DCTUs" in its original comments.) SWB cites sec.23.23(d) to support its contention that not all incumbent LECs should face the same requirements just because they are dominant carriers. SWB maintains that certain of this rule's requirements are incompatible with provisions of Subtitle H of PURA '95. It cites one specific example: the local- transport-rate restructuring mandates in the rule versus the access-rate provisions of Subtitle H. SWB says the restructuring would involve increases in access rates for some customers and decreases for others. But sec.3.353(b) forbids electing companies from raising Basket-I-service rates, including switched-access rates, and sec.3.352(d) prohibits the Commission from ordering these companies to reduce such rates. The Commission reaches a different conclusion. We believe that the specific language in sec.3.451(b) takes precedence over the general prohibition in sec.3. 352(d) on the Commission's reducing switched-access rates for electing companies. PURA '95 sec.3.451(b) says that "Section 3.352(d) of this Act does not prevent the Commission from enforcing this subtitle." "This subtitle" refers to Subtitle J, Competitive Safeguards, including sec.3.452, Unbundling. In the words of sec.3.452(a), "An incumbent local exchange company shall, at a minimum, unbundle its network to the extent ordered by the Federal Communications Commission." The local-transport-rate restructuring mandated in sec.23.23(d) is in accordance with the directive of sec.3.452(a); as such it is designed to be revenue-neutral. The Commission therefore believes that the restructuring required in sec.23.23(d) is consistent with PURA '95: it complies with sec.3.451(b) while minimizing conflict with sec.3.352(d). The amendment is adopted under the Public Utility Regulatory Act of 1995, sec.1.101, which provides the Public Utility Commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, including rules of practice and procedure. Cross Index to Statutes: Public Utility Regulatory Act of 1995, 74th Legislature Regular Session 1995. sec.23.23. Rate Design. (a)-(b) (No change.) (d) Telephone. (1) General. Dominant certificated telecommunications utility (DCTU) rates for intrastate access services shall be established in accordance with the provisions of this subsection. Nothing in this subsection precludes a DCTU from offering new, experimental, promotional, or competitive services in accordance with other provisions of this part authorizing such offerings. (2) Definitions. The following words and terms, when used within this subsection, shall have the following meanings, unless the context clearly indicates otherwise. (A) Access customer-Any user of services which are obtained from a DCTU access service tariff. (B) Access services-DCTU services which provide connections for or are related to the origination or termination of intrastate telecommunications services that are generally, but not limited to, interexchange services. (C) Dedicated signalling transport-Transmission of out-of-band signalling information between an access customer's common channel signalling network and a DCTU's signalling transport point on facilities dedicated to the use of a single customer. (D) Direct-trunked transport-Transmission of traffic between the serving wire center and another DCTU office, without intermediate switching, which is charged on a flat-rate basis. (E) Equal access-DCTU access which is provided to access customers on a tariffed basis, which is equal in type, quality and price to Feature Group C, and for which the rates are unbundled. From an end user's perspective, equal access is characterized by the availability of 1-plus dialing with the end user's interexchange carrier of choice on interLATA calls. (F)-(G) (No change.) (H) Interexchange Carrier (IXC)-A carrier other than a DCTU providing any means of transporting intrastate telecommunications messages between local exchanges, but not solely within local exchanges, in the State of Texas. An entity is not an IXC solely because of: (i)-(iv) (No change.) (I) Intrastate-Refers to communications which both originate and terminate within Texas state boundaries. A DCTU access billing arrangement for services to access customers when local transport is jointly provided by more than one DCTU. (K) Percent Interstate Usage (PIU)-An access customer-specific ratio or ratios determined by dividing interstate access minutes by total access minutes. The specific ratio shall be determined by the DCTU unless the DCTU's network is incapable of determining the jurisdiction of the access minutes. A PIU establishes the jurisdiction of switched access usage for determining rates charged to switched access customers and affects the allocation of switched access revenue and costs by DCTUs between the interstate and intrastate jurisdictions. (L) Residual charge-The per-minute charge designed to account for historical contribution to joint and common costs made by switched transport services. (M) Serving wire center (SWC)-The DCTU-designated central office which serves the access customer's point of demarcation. (N) Special access-A transmission path connecting customer-designated premises to each other either directly or through a hub or hubs where bridging, multiplexing or network reconfiguration service functions are performed and includes all exchange access not requiring switching performed by the DCTU's end office switches. (O) Switched access-Access service that is provided by DCTUs to access customers and that requires the use of DCTU network switching or common line facilities generally, but not necessarily, for the origination or termination of interexchange calls. Switched access includes all forms of transport provided by the DCTU over which switched access traffic is delivered. (P) Switched access demand-Switched access minutes of use, or other appropriate measure where not billed on a minute of use basis, for each switched access rate element, normalized for out of period billings. For the purposes of this section, switched access demand shall include minutes of use billed for the local switching rate element. (Q) Switched access minutes or access minutes of use -The measured or assumed duration of time that DCTU network facilities are used by access customers. Access minutes are measured for the purpose of calculating access charges applicable to access customers. (R) Tandem-switched transport-Transmission of traffic between the serving wire center and another DCTU office that is switched at a tandem switch and charged on a usage basis. (3) Switched access rates of incumbent local exchange companies. Notwithstanding paragraphs (4) and (5) of this subsection, an incumbent local exchange company may file with the commission tariffs for switched access service that have been approved by the Federal Communications Commission, provided that the tariffs include all rate elements in the company's interstate access tariff other than end user charges. If on review the filed tariffs contain the same rates, terms, and conditions, excluding any end user charges, as approved by the Federal Communications Commission, the commission shall order the rates to be the intrastate switched access rates, terms, and conditions for the incumbent local exchange company within 60 days of filing. (4) Access services. Each DCTU's tariff must include the recurring and nonrecurring charges for all access services offered by the DCTU. A DCTU is not required to include in its access tariff any access service that its network is technologically incapable of providing. A DCTU must include in its access tariff any access service which is provided on a special assembly basis if the service is provided to more than three customers or if the service is provided at more than three locations. DCTUs are prohibited from charging intrastate end user common line charges, intrastate subscriber line charges, or similar intrastate end user charges. (5) Access rates. The structure and rates for all DCTUs' intrastate switched access services shall be established in accordance with the following requirements. (A) Terminating CCL. Each DCTU's terminating CCL rate shall not exceed $.08 per premium terminating rated access minute of use. (B) Premium rates. The requirements of this subparagraph apply to Southwestern Bell Telephone Company effective December 14, 1994 unless otherwise ordered by the commission. Premium access rates shall apply only to those switched access minutes that: (i) terminate via Feature Group B; (ii) originate or terminate via Feature Group C; (iii) originate from an equal access end office via any switched access feature group; (iv) terminate to an equal access end office via any switched access feature group; or (v) originate from a non-equal access end office and are routed over Feature Group D tandem connections. (C) Local switching. The rate differential between the LS1 and LS2 local switching rate elements shall be phased into one premium local switching rate element. The requirements of this subparagraph apply to Southwestern Bell Telephone Company effective December 14, 1994 unless otherwise ordered by the commission. (D) Local transport rate structure and pricing. Local transport rates shall not contain unreasonable distance sensitivity. Each DCTU shall comply with clauses (i)-(ix) of this subparagraph, unless indicated otherwise. (i) Transport Services. Each DCTU that is subject to this subparagraph shall offer transport services that consist of the following elements: entrance facilities, direct-trunked transport, tandem-switched transport, dedicated signalling transport, and a residual charge. (ii) Entrance Facilities. (I) All access customers that use the DCTU's facilities between the customer- designated point of demarcation and the SWC shall be assessed a flat- rated entrance facilities charge based upon the service level ordered. Dominant certificated telecommunications utilities shall offer entrance facilities at voicegrade, DS1 and DS3 service levels. (II) Rates for entrance facilities shall be set no lower than 105% of the long run incremental cost (LRIC) for each service level stated in subclause (I) of this clause. (III) The DCTU may charge distance-sensitive rates for entrance facilities as enumerated in clause (viii) of this subparagraph. Mileage shall be measured as airline mileage between the point of demarcation and the SWC. (iii) Direct-Trunked Transport. (I) All access customers that use the DCTU's direct-trunked transport facilities shall be assessed a flat-rated direct-trunked transport charge based upon the service level ordered. Dominant certificated telecommunications utilities shall offer direct trunked transport at voice grade, DS1 and DS3 service levels. (II) Rates for direct-trunked transport facilities shall be set no lower than 105% of the long run incremental cost (LRIC) for each service level in subclause (I) of this clause. Additionally, these rates shall be set consistent with the requirement in clause (vii) of this subparagraph. (III) The DCTU may charge distance sensitive rates for direct-trunked transport, as enumerated in clause (viii) of this subparagraph. Mileage shall be measured as airline mileage between the SWC and end office or between customer- designated points. (IV) Centralized equal access providers are not required to provide direct- trunked transport services. DCTUs that do not have measurement and billing capabilities at their end offices are not required to provide direct-trunked transport services at those end offices. (iv) Tandem-Switched Transport. (I) All access customers that use the DCTU's tandem-switched transport facilities shall be assessed the following rates: (-a-) a per access minute tandem switching charge; and (-b-) a per access minute tandem-switched transmission charge. (II) The rates for tandem-switched transport facilities shall be set no lower than 105% of the long run incremental cost (LRIC). Additionally, these rates shall be set consistent with the requirements in clause (vii) of this subparagraph. (III) The DCTU may charge distance-sensitive rates for tandem-switched transmission elements, as enumerated in clause (viii) of this subparagraph. Mileage shall be measured as airline mileage between the SWC and the end office, unless the customer has ordered tandem-switched transport between the tandem office and the end office, in which case mileage shall be measured as airline mileage between the tandem office and the end office. (v) Dedicated Signalling Transport: Dedicated signalling transport shall be provided in accordance with the following requirements. Any DCTU that currently provides dedicated signalling transport shall file tariff revisions to comply with the requirements of this clause in accordance with the schedule contained in subclause (III) of clause (ix) of this subsection. (I) Dedicated signalling transport shall consist of two subelements, a signalling link charge and a signalling transfer point (STP) port termination charge. (II) A flat-rated signalling link charge per unit of capacity shall be assessed upon all access customers that use facilities between the access customer's common channel signalling network and the DCTU's signalling transfer point or equivalent facilities. If the DCTU charges distance-sensitive rates for the signalling link, mileage shall be measured as airline mileage between the access customer's common channel signalling network and the DCTU's signalling transfer point. (III) A flat-rated STP port termination charge per port shall be assessed upon all access customers that use dedicated signalling transport. (IV) Rates for dedicated signalling transport facilities shall be set no lower than 105% of the long run incremental cost (LRIC). (vi) Residual Charge. (I) The DCTU shall assess only one residual charge for each local switching access minute of use sold to those customers interconnecting with the DCTU's switched access network by ordering from the DCTU's access tariff. (II) The initial residual charge contained in the initial tariff amendments filed pursuant to clause (ix)(III) of this subparagraph shall be computed as set forth in items (-a-)-(-c-) of this subclause: (-a-) The rates developed pursuant to this subparagraph for entrance facilities, tandem-switched transport, direct-trunked transport, and dedicated signalling transport services shall be multiplied by 1994 demand to calculate an estimated revenue. (-b-) The estimated revenue shall be subtracted from the intrastate local switched transport service revenues for 1994 to calculate a residual amount. (-c-) The residual amount shall be divided by the total intrastate local switching access minutes for 1994 to calculate the residual charge. (vii) Transport Rate Differences. The rate differences between tandem-switched transport, DS1 direct-trunked transport and DS3 direct-trunked transport, shall be reasonable. The difference between the rate and 105% of the LRIC for DS1 direct-trunked transport shall not exceed 150% of the difference between the rate and 105% of the LRIC for DS3 direct-trunked transport, on an equivalent unit of capacity basis. The difference between the rate and 105% of the LRIC for DS0 direct-trunked transport shall not exceed 150% of the difference between the rate and 105% of the LRIC for DS3 direct-trunked transport, on an equivalent unit of capacity basis. The difference between the rate and 105% of the LRIC for tandem-switched transport shall not exceed 150% of the difference between the rate and 105% of the LRIC for DS3 direct-trunked transport, on an equivalent unit of capacity basis. To determine the rate and LRIC relationships between the transport options, the tandem switch LRIC must be included in the LRIC for the tandem-switched transport option. (viii) Distance Sensitive Rates. If the DCTU employs distance-sensitive rates for entrance facilities, direct-trunked transport and/or tandem-switched transmission elements, they shall be assessed in the following manner: (I) a distance-sensitive component shall be charged for the use of the transmission facilities, including intermediate transmission circuit equipment between the end points of the transmission link; and (II) a nondistance-sensitive component shall be charged for the use of the circuit equipment at the ends of the transmission link. (ix) Tariff Provisions. (I) Nonrecurring charges shall be waived for a period of 180 days from the effective date of the initial tariff filings made pursuant to this subparagraph, when an access customer reconfigures its trunks between tandem-switched transport and direct-trunked transport or orders the disconnection of overprovisioned trunks for those circuits that carry intrastate traffic. (II) Tariff revisions shall be filed to remove any resale or sharing restrictions for switched transport services. (III) Initial tariff amendments to implement the provisions of this subparagraph shall be filed according to the following schedule: (-a-) DCTUs with 1 million or more access lines shall file no later than 120 days from the effective date of this subparagraph; (-b-) DCTUs with 50,000 or more access lines but fewer than 1 million access lines may file no earlier than 180 days from the effective date of this subparagraph; (-c-) DCTUs with fewer than 50,000 access lines may file no earlier than 240 days from the effective date of this subparagraph. (IV) Initial tariff amendments filed in compliance with this subsection shall be filed pursuant to sec.23.26 of this title (relating to New and Experimental Services). Tariff revisions filed pursuant to this subparagraph shall not be combined in a single application with any other tariff revision. Initial tariff amendments shall not be permitted to become effective before expanded interconnection for switched transport services becomes available from the DCTU for those DCTUs subject to substantive rule sec.23.92 of this title (relating to Expanded Interconnection). (V) DCTUs not subject to substantive rule sec.23.91 of this title (relating to Long Run Incremental Cost Methodology for DCTU Services) may propose charges that are the same as the charges in effect for the carrier's interstate provision of the same service or adopt the switched transport rates of another DCTU that are developed pursuant to the requirements of this section. (VI) Within 120 days after the completion of LRIC cost studies required by substantive rule sec.23.91 of this title (relating to Long Run Incremental Cost Methodology for DCTU Services), any DCTU subject to that rule shall file tariff amendments in order to revise its local transport rates in conformity with this section based upon the new LRIC cost studies. (E) Lower rates. Nothing in this paragraph prevents a DCTU from charging a lower rate for any rate element than the amount specified herein; however, no DCTU shall charge any rate for switched access that is not contained in its switched access tariff. (F) Rounding. The rates for all access services shall be assessed using conventional rounding of fractional units of applicable billing units, i.e. a fraction equal to or greater than .5 of one unit will be rounded up to the next higher whole unit, while fractions less than .5 of one unit will be rounded down to the next lower whole unit, except that local transport mileage may be rounded up to the next whole mile. (6) Administrative provisions. (A) Percent Interstate Usage (PIU). The intrastate access service tariff of all DCTUs must contain, at a minimum, the requirements stated in clauses (i)- (iii) of this subparagraph. (i) Jurisdictional determination capability. If the DCTU possesses the network capability to determine the jurisdiction of an access service, a monthly PIU, based upon the actual jurisdictional determination of access services used by the access customer, must be calculated by the DCTU and applied to the monthly bill for each access customer. (ii) No jurisdictional determination capability. If a DCTU's network facilities are incapable of making a determination of the jurisdiction of an access service, such DCTU shall establish guidelines in its access tariff that permit an access customer to self-report. PIUs may be self-reported by access customers to DCTUs if all of the requirements of subclauses (I)-(VI) of this clause are met. (I) A DCTU must request and receive written representation from the self- reporting access customer that the access customer possesses a network technology or has established other reasonable methods which it can accurately determine the jurisdiction of each access service used by the access customer. (II) The DCTU must request and receive a written representation from the access customer that the access customer calculates self-reported PIUs based upon the actual jurisdiction of each access service used by the access customer. (III) The DCTU must request and receive from the access customer, at a minimum, an annual report supporting the self-reported PIUs. (IV) The DCTU's intrastate access tariff must establish a monitoring procedure for the annual monitoring of all self-reported PIUs and an auditing procedure for timely auditing of questionable self-reported PIUs. (V) The DCTU's intrastate access service tariff must contain an adjustment procedure for the correction of up to 12 months of access service bills which were based upon an erroneous PIU as determined through a PIU audit. (VI) The DCTU's intrastate access tariff must specify that the DCTU is responsible for verifying the accuracy of the PIU report and the access customer is responsible for the accuracy of self-reported PIUs. (iii) Default PIU. If the DCTU's network facilities are incapable of determining Call jurisdiction and the access customer fails to exercise its self-reporting option under clause (ii) of this subparagraph, the DCTU must provide written notice to the access customer by certified mail that, if the customer fails to exercise one of its options within 30 days of receipt of such notice, a PIU will be established at 50%. Nothing in this paragraph prohibits the DCTU from auditing such access customer. If such an audit is conducted, the results of such audit will be used to determine that access customer's PIU. (B) Meet point billing. The provisions in this subparagraph pertain to access services which are required to be meet point billed. (i) Tariffs. DCTUs must file administrative tariff amendments to reflect compliance with the most current "Multiple Exchange Carrier Access Billing (MECAB)" and "Multiple Exchange Carrier Ordering and Design (MECOD)" guidelines within 60 days after acceptance of these guidelines or acceptance of revisions to these guidelines by the Federal Communications Commission. If the Federal Communications Commission accepts the "Small Exchange Company Access Billing (SECAB)" guidelines pertaining to meet exchange companies, as defined in sec.23.94 of this title (relating to Small Local Exchange Carrier Regulatory Flexibility), may file tariff amendments within 60 days after acceptance by the Federal Communications Commission to reflect compliance with MECAB through the implementation of SECAB. (ii) Compensation. For any a DCTU is authorized to receive compensation for its portion of the jointly-provided access service. If a DCTU receives compensation above the amount associated with the provision of its portion of a jointly-provided access service, the DCTU must immediately file a proposed tariff amendment with the commission to recover only its portion of the jointly- provided service and, within 30 days after approval of the required tariff amendment, must refund the surplus amount received with interest to each affected customer. Additionally, DCTUs are prohibited from filing tariff amendments that result in a jointly-provided access service billed amount which exceeds charges for 100% of the jointly-provided service. (C) Equal access. Beginning January 1, 1993, DCTUs must file with the commission, on January 1 of each odd-numbered year, a report which describes the DCTU's ten-year forecasted plan and schedule for implementation of equal access technology in Texas. Reports filed on and after January 1, 1995, must include a description of all changes to the information provided in the prior biennial report, along with detailed explanations for such changes. However, when a DCTU implements equal access in 100% of the areas for which the DCTU is certificated to provide local exchange service, the DCTU shall file a final equal access report with the commission. In such report, the DCTU will affirm that the DCTU will notify the commission if it no longer provides equal access to 100% of its certificated area and will resume reporting in compliance with the provisions of this subparagraph. (e) Electric. Rates shall not be unreasonably preferential, prejudicial, or discriminatory, but shall be sufficient, equitable, and consistent in application to each class of customers, taking into consideration the need to conserve energy and resources. 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 January 3, 1996. TRD-9600018 Paula Mueller Secretary of the Commission Public Utility Commission of Texas Effective date: January 24, 1996 Proposal publication date: October 10, 1995 For further information, please call: (512) 458-0100 Customer Service and Protection 16 TAC sec.23.43 The Public Utility Commission of Texas adopts amendments to the following substantive rules with no changes to the proposed text as published in the September 19, 1995 issue of the Texas Register (20 TexReg 7439): sec.23. 12, concerning financial records and reports; sec.23.21, concerning cost of service; sec.23.26, concerning new and experimental services; sec.23.28, concerning promotional rates for LEC services; and sec.23.43, concerning applicant and customer deposits. The amendments are required to comply with the Public Utility Regulatory Act of 1995 (PURA '95) sec.3.213(j) which directs the commission to examine its policies, reporting requirements, and procedural and substantive rules as they relate to rural and small incumbent local exchange companies and cooperatives and to eliminate or revise those policies and rules that place unnecessary burdens and expenses on those companies. The Commission does not adopt the proposed changes to sec.23.11, concerning general reports. Substantive Rules sec.sec.23.11, 23.12, 23.21, 23.26 and 23.28 were inadvertently published for adoption on January 2, 1996 at Texas Register (21 TexReg 51) under the preamble for the Commission's general rulemaking project number P-14372. Section 23.43, however, was not included in that publication and is therefore included with the complete preamble for this rulemaking. Following the initial review of commission substantive rules and a workshop held on July 13, 1995, the Commission proposed that some of the changes needed for Small Local Exchange Carriers (SLECs) should be made for all dominant certificated telecommunications utilities and/or all other utilities. A SLEC is defined in proposed sec.23.94 as "any incumbent certificated telecommunications utility as of September 1, 1995, that has fewer that 31,000 access lines in service in this state, including the access lines of all affiliated incumbent local exchange companies within the state, or a telephone cooperative organized pursuant to Texas Civil Statutes, Article 1528c." Some of the amendments pertain to all utilities regulated by the commission and are included in this rulemaking as a matter of administrative efficiency. The change to sec.23.12(e), concerning financial records and reports, will allow a SLEC to file annual revision sheets containing all changes made to its Cost Allocation Manual. The change to sec.23.21, concerning cost of service, will add a Subsection (e) entitled "Policies for SLECs." One policy states that a SLEC's future construction plans and operational changes may be considered in evaluating the overall reasonableness of the SLEC's current rates. A second policy states that the Commission may not initiate an inquiry under PURA '95 sec.3.210 into the overall reasonableness of the current rates of a SLEC more frequently than every three years from the date of a Commission order setting reasonable rates under PURA '95 sec.3.210 or sec.3.211. The change to sec.23.26, concerning new and experimental services, will add a Subsection (m), entitled "Provisions for SLECs." This provision will allow, a SLEC to adopt for its new and experimental services the rates for the same or substantially similar services offered by a larger incumbent local exchange company ("LEC"). The change to sec.23.28, concerning promotional rates for LEC services will add a Subsection (p), entitled "Provisions for SLECs." This provision will allow a SLEC to adopt as its promotional rates for its services the rates for the same or substantially similar services offered by a larger incumbent LEC. The change to sec.23.43, concerning applicant and customer deposits, will allow a utility to provide the "Your Rights as a Customer" publication, as contemplated by Substantive Rule sec.23.41(a)(5), at the time a deposit is required rather than as a separate publication. A utility may provide the "Your Rights as a Customer" publication only if it contains the information regarding customer deposits as required by commission substantive rule sec.23.43. The change to sec.23.11(g), concerning general reports, would have eliminated the requirement that SLECs file an annual report regarding payments, compensation, and other expenditures. Pursuant to Government Code sec.2002.029, a public hearing on the amendments was held at the Commission's offices at 10:00 a.m. on November 9, 1995. Fort Bend Telephone Company ("FBTC"), Border to Border Communications ("BBC"), Texas Statewide Telephone Cooperative, Inc. ("TSTCI"), and Consumers Union were represented at the hearing. Testimony taken at the public hearing was largely reflective of the written comments and is included in the Commission's summary of those comments. The commission received written comments on the amendments from Texas Utilities Electric Company ("TUEC"), the Office of Public Utility Counsel ("OPC"), El Paso Electric Company ("EPEC"), the Texas Telephone Association ("TTA"), Public Citizen, Inc., Consumers Union, and TSTCI. Many comments were made regarding suggested changes to subsections of the rules that were not opened and not noticed by this rulemaking. To the extent particular issues were presented regarding these closed subsections the comments will not be summarized herein. It is important to note that the Commission is currently conducting a number of rulemakings in which many of these ancillary issues will be considered and addressed. TSTCI stated concerns regarding SLEC filings under sec.23.12(e)(4)(B), which requires estimates of any monetary costs or savings associated with any annual revisions to its CAM. TSTCI commented that no methodology for calculating the numbers was presented, nor was there any real need for such a filing as any substantial costs or savings would be reflected in the annual revision sheet itself. Consumers Union noted that requiring a SLEC to file only an annual revision sheet to its CAM would increase the workload of the staffs of both the PUC and the OPC and that such increased costs to the state should be noted in the preamble to the rule. The Commission does not support TSTCI's proposal to eliminate sec.23.12(e)(4) (B). The requirements of this subsection provide the staff with important information regarding the costs and benefits relating to changes to the CAM; specifically, monitoring of such changes is necessary to ensure that the costs of the changes are not inappropriately shifted to ratepayers. Monitoring the changes becomes increasingly important in an era when telephone companies are increasing business in non-regulated activities while continuously re-evaluating their organizational structure. As to the concerns expressed by the Consumers Union, the Commission is acting under the guidance of the legislature to reduce the regulatory burden on the SLECs where appropriate and in so doing, the Commission has determined that shifting the review of the SLECs' CAMs to annual revision sheets is not unduly burdensome or costly and does not outweigh the benefits accrued to the SLEC. OPC and Consumers Union commented that the provisions of sec.23.21(e)(1) which allow the Commission to consider future construction plans and operational changes in evaluating the overall reasonableness of a SLEC's current rates results in a "future test year" and forces the ratepayers into "buying a pig in the poke." Further, they argued, consideration of such future costs is problematic if there are no safeguards in place to ensure that the plans are actually carried out. sec.23.21(e)(1) states that a SLEC's future construction plans and operational changes "may," not "shall," be considered in evaluating the overall reasonableness of the SLEC's current rates. Before approving any such future plans presented under this provision of the rules, the Commission expects to consider the SLEC's request in the context of the entire case, including what measures it will incorporate to ensure that such plans will be carried out as presented. Comments were received from OPC and Consumers Union regarding sec.23.21(e)(2) which prohibits the Commission from initiating an inquiry under the Act, sec.3. 210, into the overall reasonableness of the current rates of a SLEC more frequently than every three years from the date of a commission order setting reasonable rates under the Act, sec.3.210 or sec.3.211. Both parties stated a concern regarding unduly limiting the Commission's regulatory oversight. Further, both parties expressed concern over apparent conflicts with other portions of PURA. For example, OPC cites PURA sec.3.213(e)(1) which requires the Commission to review changes in rates if it receives complaints filed by 5. 0% or 1,500 ratepayers. OPC claims that prohibiting the Commission from reviewing the overall reasonableness of rates for three years contradicts the expressed desire of the legislature to allow for the ratepayers to challenge the rates. The legislature adopted sec.3.213(e)(1) which requires the Commission to review changes in rates if it receives complaints filed by 5.0% or 1,500 ratepayers at the same time it adopted PURA sec.3.213(j)(1) which states: "Notwithstanding any other provisions of this Act, the commission shall consider and may adopt policies that include the following: . . . (C) policies that provide for evaluation of the overall reasonableness of current rates no more frequently than once every three years . . ." The Commission believes that the obvious intention of sec.3.213(j) is to allow for the Commission to consider alternative policies for regulating SLECs-policies which are alternatives to those set out generally in the statute. In this regard, the Commission does not find the amendment to be in conflict with other provisions of the law and makes no changes to the rule based on these comments. Consumers Union and OPC also expressed concern regarding the SLECs' ability to adopt the rates of a large LEC utilizing the provision of sec.23.26(m) and sec.23.28(p) when considered in conjunction with the flexibility standards of Substantive Rule sec.23.94. Specifically, the concern is in regard to the potential for cross-subsidization of services approved under those sections given that the rates are deemed to be just and reasonable and do not require additional cost support from the SLEC. The concerns of the commenters are exacerbated by the three year moratorium on overall rate reviews imposed by sec.23.21(e)(2) stating that the Commission's hands would be tied with respect to keeping check on issues of cross-subsidization. A further concern with the provisions of sec.23.26(m) and sec.23.28(p) is that the operations of the larger LEC may not be sufficiently similar to the SLEC's operations to merit a mirroring of rates for a particular service. Additionally, the rates of the LEC may vary by geographical area served etc. sec.23.26(m) and sec.23.28(p) allow for a SLEC to adopt the rates of a larger LEC and have its rates and terms deemed to be not unreasonable, plus be granted a waiver of the incremental cost standard ONLY IF the presiding examiner determines that the SLEC is seeking to adopt rates for the same or substantially similar services as offered by the larger LEC. This option to mirror does not preclude the examiner from obtaining all the information he or she finds necessary to make the determination that the services are substantially similar in all respects. The Commission fully expects that the presiding examiner will take into consideration such issues as the geographic similarities and the relevant economies of scope and scale pertinent to the services in question. Therefore, the Commission finds that any adoption of mirrored rates will be made in full recognition of the various aspects used to determine that the services are, in toto, the same or substantially similar services. Comments concerning sec.23.43 amendments were supportive across the board with EPEC making one suggestion regarding clarification of text in a subsection of the rule that was not opened and not noticed, and therefore cannot be addressed. The Commission had asked for specific comments on the proposed changes to sec.23.11, concerning general reports. TUEC noted that the Commission asked "whether there is a public interest in mere disclosure" of the information reported to the Commission under sec.23.11(g) this rulemaking. TUEC commented in support of the elimination of the reporting requirements of sec.23.11(g) for SLECs, and further stated that the Commission could repeal the subsection in its entirety with "no loss of meaningful regulatory oversight." TUEC and TSTCI stated that all necessary information is available to the Commission in the context of a rate case and in earnings monitoring reports, and therefore is accessible to the public and the press. OPC, Consumers Union, and Public Citizen commented that the SLECs should not be exempted from the requirements of sec.23.11(g) because exactly the same information is not available in the exact same form in a rate filing package or in the earnings monitoring report and that the public has a right to access to detailed information of the sort reported in such filings. Consumers Union stated that consumers and the media use the information to track the rationale behind the utilities various business decisions: "The public has a right to know how well managed their institutions are. Doing away with reporting requirements would not be in the best interests of the news media or the public it serves." The Commission is persuaded by arguments that the exact same information contained in sec.23.11(g) is not available in the manner currently provided under this subsection in any other report and that therefore exempting SLECs from the requirements of sec.23.11(g) may not be in the public interest at this time. However, the Commission will monitor the number of requests made by the public for this information and may revisit the issue at a later date. The Commission withdraws the proposed amendment to sec.23.11. The amendment is adopted under PURA '95, sec.1.101, which provides the Public Utility Commission of Texas with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction, and PURA '95 sec.3.213(j), which directs the commission to examine its policies, reporting requirements, and procedural and substantive rules as they relate to rural and small incumbent local exchange companies and cooperatives to eliminate or revise those policies and rules that place unnecessary burdens and expenses those companies. The following statute is affected by this rule: the Public Utility Regulatory Act of 1995, sec.sec.1.101 and 3.213. sec.23.43. Applicant and Customer Deposit. (a) Definition. Unless the context clearly indicates otherwise, in this section the term "utility," insofar as it relates to telephone utilities, shall refer to dominant certificated telecommunications utilities. (b) Establishment of credit for permanent residential applicants. (1) Each utility may require a residential applicant for service to satisfactorily establish credit, but such establishment of credit shall not relieve the customer from complying with rules for prompt payment of bills. Credit history shall be applied equally for a reasonable period of time to a spouse or former spouse who shared the service. Credit history maintained by one must be applied equally to the other without modification and without additional qualifications not required of the other. (2) For purposes of this section, applicant is to be defined as a person who applied for service for the first time or reapplies at a new or existing location after discontinuance of service. Customer is defined as someone who is currently receiving service. (3) Subject to these rules, a residential applicant shall not be required to pay a deposit: (A) if the residential applicant has been a customer of any utility for the same kind of service within the last two years and is not delinquent in payment of any such utility service account, and during the last 12 consecutive months of service did not have more than one occasion in which a bill for such utility service was paid after becoming delinquent and never had service disconnected for nonpayment; applicants are encouraged to obtain a letter of credit history from their previous utility, and utilities are encouraged to provide such information with final bills. (B) if the residential applicant demonstrates a satisfactory credit rating by appropriate means, including, but not limited to, the production of generally acceptable credit cards, letters of credit reference, the names of credit references which may be quickly and inexpensively contacted by the utility, or ownership of substantial equity; or (C) if the residential applicant furnishes in writing a satisfactory guarantee to secure payment of bills for the service required; (i) unless otherwise agreed to by the guarantor, the guarantee shall be for the amount of deposit the utility would normally seek on the applicant's account. The amount of guarantee shall be clearly indicated on any documents or letters of guarantee signed by the guarantor; (ii) when the customer has paid bills for service for 12 consecutive residential billings without having service disconnected for nonpayment of bills and without having more than two occasions in which a bill was delinquent, and when the customer is not delinquent in the payment of current bills, the utility shall void and return any documents or letters of guarantee placed with the utility to the guarantor. (4) An initial deposit may not be required from residential customers unless the customer has more than one occasion during the last 12 consecutive months of service in which a bill for utility service was paid after becoming delinquent or if the customer's service was disconnected for nonpayment. A deposit required pursuant to this section shall not exceed an amount equivalent to one-sixth of annual billings including the carriage charges of interexchange carriers only where a local exchange carrier's tariffs provide for billing for the interexchange carrier. Such deposit may be required to be made within ten days after issuance of written termination notice and requested deposit. In lieu of initial deposit, the customer may elect to pay the current bill by the due date of the bill, provided the customer has not exercised this option in the previous 12 months. The customer may furnish in writing a satisfactory guarantee to secure payment of bills in lieu of cash deposit. In the event the appropriate federal authority prohibits inclusion of interstate charges for an interexchange carrier in the determination of the deposit amount, or prohibits payment of interexchange carriage charges as a condition for local exchange service or reason for disconnection of local exchange service, intrastate carriage charges of an interexchange carrier shall not be included in the determination of the deposit amount. (5) At the time a deposit is required, every electric and telephone utility shall provide applicants for, and customers of, commercial, industrial, or residential service written information about deposits. This information shall contain: (A) the circumstances under which a utility may require a deposit or an additional deposit; (B) how a deposit is calculated; (C) the amount of interest paid on a deposit and how this interest is calculated; and (D) the time frame and requirement for return of the deposit to the customer. (c) Commercial and industrial service. In the case of commercial or industrial service, if the credit of an applicant for service has not been established satisfactorily to the utility, the applicant may be required to make a deposit. (d) Amount of deposit and interest for permanent residential, commercial, and industrial service and exemption from deposit. (1) The required deposit shall not exceed an amount equivalent to one-sixth of the estimated annual billing. For local exchange telephone carriers the estimated annual billings shall include, in addition to the charges of the local exchange carrier, the carriage charges of interexchange carriers only where the local exchange carrier's tariff provides for billing for the interexchange carrier. In the event the appropriate federal authority prohibits inclusion of interstate charges in the determination of the deposit amount, or prohibits payment of interexchange carriage charges as a condition for local exchange service or as a reason for disconnection of local exchange service, intrastate carriage charges of an interexchange carrier shall not be included in the determination of the deposit amount. (A) During the first 12 months of service, an additional deposit may be requested prior to the issuance of a bill; (i) To require such deposit, the customer's actual usage must be three times estimated usage (or three times average usage of most recent three bills), and the customer's current usage must exceed $150, and the customer's current usage must exceed 150% of the security held; (ii) The request for such additional deposit must be issued in writing and must indicate that the customer may elect to pay the current usage in lieu of the additional deposit; (iii) The utility may disconnect service if the additional deposit or the current usage payment is not made within 10 days of request provided a written disconnect notice has been issued to the customer. Such disconnect notice may be issued concurrently with the written request for the additional deposit or current usage payment. (B) If actual billings of a commercial customer are at least twice the amount of the estimated billings, and a suspension notice has been issued on a bill within the previous 12-month period, a new deposit may be required to be made within 15 days after issuance of written notice of termination and requested additional deposit. If actual billings of a residential customer are at least twice the amount of the estimated billings after two billing periods, and a suspension notice has been issued on a bill within the previous 12-month period, a new deposit may be required to be made within 15 days after issuance of written notice of termination and requested additional deposit. In lieu of additional deposit, the customer may elect to pay the current bill by the due date of the bill, provided the customer has not exercised this option in the previous 12 months. (2) All applicants for permanent residential service who are 65 years of age or older will be considered as having established credit if such applicant does not have an outstanding account balance within the utility or another utility for the same utility service which accrued within the last two years. No cash deposit shall be required of such applicant under these conditions. (3) Each utility which requires deposits to be made by its customers shall pay a minimum interest on such deposits at an annual rate at least equal to 6.0% compounded annually. If a refund of deposit is made within 30 days of receipt of deposit, no interest payment is required. If the utility retains the deposit more than 30 days, payment of interest shall be made retroactive to the date of deposit. (A) Payment of the interest to the customer shall be annually if requested by the customer, or at the time the deposit is returned or credited to the customer's account. (B) The deposit shall cease to draw interest on the date it is returned or credited to the customer's account. (4) Determining amount of deposit. In determining the amount of any deposit permitted by these rules, no revenue from estimated telephone directory advertising may be used. (5) In determining the amount of any deposit permitted by this section, charges for calls placed from combat or war zones, as designated by the federal government, by American military personnel that are billed to a telephone number in Texas may not be used. (6) An electric utility shall not charge an additional deposit for residential electric utility service if the customer, a spouse, or the head of the household is serving military duty in a combat or war zone, as designated by the Federal government, or is a member of the reserve component who is serving military duty that is directly related to such hostilities, or if the customer is a party to a deferred payment plan with the utility under sec.23. 46(m)(2) of this title (relating to Discontinuance of Service). (e) Deposits for temporary or seasonal service and for weekend residences. The utility may require a deposit sufficient to reasonably protect it against the assumed risk for temporary or seasonal service, provided such policy is applied in a uniform and nondiscriminatory manner. The utility may require a deposit for weekend residences sufficient to reasonably protect it against the assumed risk, provided such policy is applied in a uniform and nondiscriminatory manner. These deposits shall be returned according to guidelines set out in subsection (h) of this section. (f) Complaint by applicant or customer. Each utility shall direct its personnel engaged in initial contact with an applicant or customer for service, seeking to establish or reestablish credit under the provisions of these sections, to inform the customer, if dissatisfaction is expressed with the utility's decision, of the customer's right to file a complaint with the commission thereon. (g) Re-establishment of credit. Every applicant who previously has been a customer of the utility and whose service has been discontinued for nonpayment of bills or meter tampering or bypassing of meter shall be required, before service is rendered, to pay all amounts due the utility or execute a deferred payment agreement, if offered, and reestablished credit as provided in subsection (a) of this section. The burden shall be on the utility to prove the amount of utility service received but not paid for and the reasonableness of any charges for such unpaid service, as well as all other elements of any bill required to be paid as a condition of service restoration. (h) Records of deposits. (1) The utility shall keep records to show: (A) the name and address of each depositor; (B) the amount and date of the deposit; and (C) each transaction concerning the deposit. (2) The utility shall issue a receipt of deposit to each applicant from whom a deposit is received and shall provide means whereby a depositor may establish claim if the receipt is lost. (3) A record of each unclaimed deposit must be maintained for at least four years, during which time the utility shall make a reasonable effort to return the deposit. (i) Refund of deposit. (1) If service is not connected, or after disconnection of service, the utility shall promptly and automatically refund the customer's deposit plus accrued interest or the balance, if any, in excess of the unpaid bills for service furnished. A transfer of service from one premise to another within the service area of the utility shall not be deemed a disconnection within the meaning of these sections, and no additional deposit may be demanded unless permitted by these sections. (2) When the customer has paid bills for service for 12 consecutive residential billings or for 24 consecutive commercial or industrial billings without having service disconnected for nonpayment of bill and without having more than two occasions in which a bill was delinquent, and when the customer is not delinquent in the payment of the current bills, the utility shall promptly and automatically refund the deposit plus accrued interest to the customer in the form of cash or credit to a customer's bill, or void the guarantee. If the customer does not meet these refund criteria, the deposit and interest may be retained in accordance with subsection (c) of this section. (j) Upon sale or transfer of utility or company. Upon the sale or transfer of any utility or operating units thereof, the seller shall file with the commission, under oath, in addition to other information, a list showing the names and addresses of all customers served by such utility or unit who have to their credit a deposit, the date such deposit was made, the amount thereof, and the unpaid interest thereon. 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 January 3, 1996. TRD-9600017 Paula Mueller Secretary of the Commission Public Utility Commission of Texas Effective date: January 24, 1996 Proposal publication date: September 19, 1995 For further information, please call: (512) 458-0100 TITLE 22. EXAMINING BOARDS Part XVIII. Texas State Board of Podiatric Medical Examiners Chapter 378. Continuing Education 22 TAC sec.sec.378.2-378.4 The Texas State Board of Podiatric Medical Examiners adopts amendments to sec.sec.378.2-378.4, concerning Continuing Education, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10247). The sections are being amended to change dates to agree with the statute and to explain the method of approval for hours. The amendments will help clarify methods of approval. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Civil Statutes, Articles sec.4568(j) and sec.4590(e), which provide the Texas State Board of Podiatric Medical Examiners with the authority to adopt all reasonable or necessary rules, regulations, and by-laws not inconsistent with the law regulating the practice of podiatric medicine, the laws of this state, or of the United States; to govern its proceedings and activities, the regulation of the practice of podiatric medicine, and the enforcement of the law regulating the practice of podiatric medicine. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 5, 1996. TRD-9600151 Janie Alonzo Staff Services Officer I Texas State Board of Podiatric Medical Examiners Effective date: January 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 305-7000 Part XX. Texas Board of Private Investigators and Private Security Agencies Chapter 423. Rules of Procedure and Seal Code of Professional Responsibility and Conduct 22 TAC sec.423.4 The Texas Board of Private Investigators and Private Security Agencies adopts new sec.423.4, concerning Continuing Education Course for Private Investigators, with changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9372). The Board has determined that this amendment is necessary in order to comply with the provisions of House Bill 713 of the 74th Texas Legislature. Minor changes have been made to correct grammar and to clarify the number of instructional hours which must be accrued and taught. The word "class" has also been changed throughout the text to "course" for the sake of consistency. This section defines the number of hours and types of continuing education programs to be completed by all private investigators in the State of Texas. Comments were basically favorable to the rule. An individual instructor offered written comment regarding some changes in grammar; he made no other comment either for or against the rule. The new section is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies wit the authority "to promulgate all rules and regulations necessary in carrying out the provisions of the Act. " sec.423.4. Continuing Education Courses for Private Investigators. (a) Beginning February 1, 1996, a person who is registered as a private investigator and/or a manager of an investigations company shall successfully complete a minimum of 12 clock hours of Board approved continuing education credits within the two-year period for which his private investigator's registration pocket card is issued. Proof of the required continuing education must be received by the Board at the time of renewal of the private investigator's registration. (1) The instructor of a continuing education course shall provide a certificate of completion to each person successfully completing the course within seven days after the date the course was taught. (2) The certificate of completion shall contain: (A) the name and social security number of the person attending the course; (B) the title and topic of the course; (C) the number of hours of instruction provided; (D) the signature of the instructor; and (E) the words" has successfully completed a continuing education course for private investigators". (3) Copies of certificates of completion for the continuing education course for private investigators shall be submitted to the Board by a private investigator and/or a manager at the time of their renewal. (b) To receive Board approval, a continuing education course shall contain instruction relating to one or more of the following: (1) Investigative procedures and practices; (2) Business practices; (3) Legal aspects of private investigation; and/or (4) Ethical aspects of private investigation. (c) To receive Board approval, a continuing education course shall contain at least one clock hour of instruction. (d) The Executive Director shall approve courses for continuing education that she determines meets the qualifications of these rules and the Act. Such courses may be provided for and taught by any organization or person that, in the Executive Director's discretion, has the education, knowledge and experience to provide such information, including informal courses by manufacturers of products normally used in the course of investigations company business; informal courses by investigation affiliated associations; or other qualified entity. A person wishing to conduct a continuing education course must provide the Executive Director a description of the contents of the curriculum and the qualifications of any instructor. The Executive Director shall inform the person wishing to conduct the course of her approval or disapproval within 15 working days of receiving the request. The Executive Director may delegate this responsibility to other employees of the Board. (e) A private investigator or manager who is approved by the Board to instruct a continuing education course may count the hours instructed toward his own continuing education credits. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600062 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-5545 Chapter 423. Rules of Procedure and Seal Hearings, Grievances, and Appeal Procedures 22 TAC sec.423.11, sec.423.12 The Texas Board of Private Investigators and Private Security Agencies adopts amendments to sec.423.11 and sec.423.12, concerning Grievance and Appeal Procedures and Definitions, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8557). The Board has determined that this amendment is necessary because Article 6252, which contained the Administrative Procedure and Texas Register Act, was repealed and was reestablished as of the Texas Government Code, Chapters 2001 and 2002. The amendments change the citations to the Texas Government Code, Chapters 2001 and 2002. No comments were received regarding adoption of the amendments. The amendments are adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600063 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 Chapter 423. Rules of Procedure and Seal Code of Professional Responsibility and Conduct Hearings, Grievances, and Appeal Procedures 22 TAC sec.423.22 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.423.22, concerning Form and Content of Pleadings, without changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9127). The Board has determined that this amendment is necessary to comply with changes in federal statute. The amendment specifies that letter size paper be used for pleadings instead of legal size paper. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413 (29bb), sec.11(a)(3), which provide the Texas Board of Private Investigator and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600064 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 463-5545 22 TAC sec.423.46 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.423.46, concerning Depositions, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8558). The Board has determined that this amendment is necessary because Article 6252, which contained the Administrative Procedure and Texas Register Act, was repealed and was reestablished as the Texas Government Code, Chapters 2001 and 2002. The amendment changes the citations to the Texas Government Code, Chapters 2001 and 2002. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act." This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600065 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 22 TAC sec.423.47 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.423.47, concerning Subpoenas, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8558). The Board has determined that this amendment is necessary because Article 6252, which contained the Administrative Procedure and Texas Register Act, was repealed and was reestablished as the Texas Government Code, Chapters 2001 and 2002 . This amendment changes the citations to the Texas Government Code, Chapters 2001 and 2002. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600066 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 22 TAC sec.423.60 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.423.60, concerning Grievance and Appeal Procedures and Definitions, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8558). The Board has determined that this amendment is necessary because Article 6252, which contained the Administrative Procedure and Texas Register Act, was repealed and was reestablished as the Texas Government Code, Chapters 2001 and 2002. This amendment changes the citations to the Texas Government Code, Chapters 2001 and 2002. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600067 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 Chapter 428. Guard Dog Company 22 TAC sec.sec.428.3-428.10 The Texas Board of Private Investigators and Private Security Agencies adopts new sec.sec.428.3-428.10, concerning Personal Protection Authorization, with changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9373). The Board has determined that these new sections are necessary in order to comply with the provisions of House Bill 713 of the 74th Texas Legislature. Minor changes have been made to correct format and grammar. Language has also been changed to clarify possible violations and the date when the training certificate must be submitted to the Board. These sections clearly defines the Level Four training course which is required for obtaining a Personal Protection Authorization. Comments were basically favorable to the new rules. An individual instructor offered written comment regarding some changes in grammar; he made no other comment either for or against the rule. The Associated Security Services and Investigators of the State of Texas (A.S.S.I. S.T.) asked that some of the language be clarified regarding violations and the submission date for training certificates. They also voiced comments regarding the lapel pin requirement and the requirement that specifies the Minnesota Multiphasic Personality Inventory Test. The new rules are adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " sec.428.3. Board Approved Personal Protection Officer Instructor/Level Four Training/Approved Commissioned Security Officer Training Schools. (a) The personal protection officer course may be offered by Board approved commissioned security officer training schools and taught by Board approved Personal Protection Officer Instructors who are employed by the approved school. Personal Protection Officer Training Instructors must be approved to instruct the Level Four training. To receive Board approval, a school or instructor must submit an application to the Board on a form provided by the Board. Any person applying for approval as an instructor shall submit proof of qualification as required by the Board. Proof of qualification as an instructor shall include, but not be limited to, the following: (1) an instructor's certificate issued by the Texas Commission on Law Enforcement Officer Standards and Education (TCLEOSE) along with proof that the individual has instructed nonlethal self-defense or nonlethal defense of a third party for three or more years. Evidence may include: (A) affidavit from employer; (B) a copy of curriculum taught; (2) an instructors certificate issued by federal, state or political subdivision law enforcement academy along with proof that the individual has instructed nonlethal self-defense or nonlethal defense of a third party for 3 or more years. Evidence may include: (A) affidavit from employer; (B) a copy of curriculum taught; (3) an instructor's certificate issued by the Texas Education Agency (TEA) along with proof that the individual has instructed nonlethal self- defense or nonlethal defense of a third party for three or more years. Evidence may include: (A) affidavit from employer; (B) a copy of curriculum taught; (4) an instructor's certificate relating to law enforcement, private security or industrial security issued by a junior college, college or university along with proof that the individual has instructed nonlethal self-defense or nonlethal defense of a third party, for three or more years. Evidence may include: (A) affidavit from employer; (B) a copy of curriculum taught; or (5) evidence of attending and successfully completing a Board approved training course for Personal Protection Officer Instructors. (b) A letter of approval from the Board shall be issued to each approved instructor and shall be valid for a period of one year. The instructor's approval may be renewed for a period of one year upon application to the Board and payment of the renewal fee. (c) A letter of approval for a personal protection officer instructor shall be considered a license with respect to suspension, revocation or denial. (d) Notice shall be given in writing to the Board within 14 days after a change in the address of the approved instructor. sec.428.4. Level Four Training (Personal Protection Officer Training Course). (a) The Personal Protection Officer Training Course shall consist of a minimum of 15 classroom hours and shall be offered by Board approved training schools and taught by Board approved personal protection training instructors. All training shall be conducted with Board approved instructor present during all instruction. All students of a Personal Protection Officer Training Course shall be tested with an examination prepared by and obtained from the Board. Board official Personal Protection Officer Training Video Tapes shall be obtained from the Board and used as the curriculum. LEVEL FOUR TRAINING COURSE (1) Introduction-.5 hr. (A) Credentials-Establishing credibility for purpose of student confidence; (B) Options in personal protection; and (C) Increased security consciousness. (2) Rules to employ in personal protection circumstances -1. hr. (A) Distance is insurance-maintain the defensive cocoon; (B) Reversing the flow of fear and intimidation; (C) Maximizing the use of the element of surprise; (D) Do not assume help will arrive; and (E) Never turn your back on danger. (3) The Force Continuum: An academic study-1. hr. (A) Command presence; (B) Verbal tactics; (C) Empty hand control (soft); (D) Empty hand control (hard); (E) Intermediate; (F) Deadly force; (G) Totality of circumstances affecting the use of force; and (H) Evaluation and Testing. (4) UnArmed Defensive Tactics-10 hrs. (A) Empty hand control (hard)/linear attack response techniques; (B) Empty hand control (soft)/Control measures, detainment technique, and takedowns; (C) Practical simulations; and (D) Evaluation and Testing. (5) Oleoresin Capsicum/Aerosol Projector Training -2.5 hrs. THIS SECTION MUST HAVE A CERTIFIED OLEORESIN CAPSICUM (O.C.) INSTRUCTOR TO OBTAIN CERTIFICATION IN O.C. USE. (A) Historical overview; (B) Position on force continuum; (C) Familiarization with chemical agent, content, and dispensing unit; (D) Effects of Oleoresin Capsicum; (E) Subject/Officer decontamination; (F) Deployment; (G) Practical exercises; and (H) Evaluation and Testing 15 hours total. (b) Personal Protection Officer training video tapes will be prepared by Board staff and selected experts in the field of nonlethal self-defense and nonlethal self-defense of a third party. sec.428.5. Personal Protection Officer Training Video Tapes, Examination, and Grade. (a) The Boards official Personal Protection Officer Training Video Tapes shall be used by all Board approved schools and instructors as their curriculum and shall be obtained from the Board. (b) All students of a Personal Protection Officer Training Course shall be tested with an examination prepared by and obtained from the Board. (c) The passing grade of the Personal Protection Officer Training Course shall be a minimum of 70% correct answers on academic studies and must meet the minimum standards as set forth by the approved instructor on practical simulations. sec.428.6. Certificate of Completion. (a) The certificate of completion shall contain the: (1) name and approval number of the school; (2) name and signature of the school director; (3) name, signature and approval number of the personal protection training instructor; (4) date of completion; (5) full name and social security number of the student; and (6) complete address of the location where the training was conducted. (b) The certificate of completion shall contain the words "has successfully completed the 15-hour Personal Protection Officer Level Four Training Course approved by the Texas Board of Private Investigators and Private Security Agencies". (c) Certificates of completion shall be issued by a Board approved training school. sec.428.7. Attendance, Progress and Completion Records Required. A Board approved school shall: (1) issue an original Certificate of Completion to each qualifying student, within seven days after the student qualifies; (2) maintain adequate records to show attendance and progress of grades of students and maintain on file a copy of each certificate issued to students at the Board approved training school; and (3) Make records available to Board Investigators for inspection during reasonable business hours. sec.428.8. Requirements for Issuance of a Personal Protection Authorization. (a) An applicant for Personal Protection Authorization shall: (1) submit a written application for a personal protection authorization on a form prescribed by the Board; (2) be at lease 21 years of age; (3) provide proof that the applicant is currently employed by a Investigations Company or a Guard Company. Proof may be in the form of an original sworn affidavit or letter from the employer, reflecting the company name, license number, phone number and address, signed by the licensed manager; (4) have a valid Security Officer Commission Card issued prior to applying for a personal protection authorization; (5) submit proof that the applicant has requalified with his handgun within 90 days preceding the date the application for a personal protection authorization is received by the Board; (6) submit proof that the applicant has successfully completed the Personal Protection Officer Course taught by a Board approved Personal Protection Officer Instructor; and (7) submit proof of completion of the Minnesota Multiphasic Personality Inventory test. Proof of completion of the Minnesota Multiphasic Personality Inventory test shall be in the form of the Board approved Declaration of Psychological and Emotional Health and shall be signed by a licensed psychologist. (A) The Declaration of Psychological and Emotional Health form submitted shall be the original signed by a licensed psychologist. (B) A Declaration of Psychological and Emotional Health form shall be submitted upon renewing a Personal Protection Authorization, or after any break in employment. (8) Shall meet all qualifications established by the Act and by the rules of the board. (b) Personal Protection Officer Pocket Cards are not transferable and shall be issued to the licensed company by whom the personal protection officer is employed. sec.428.9. Requirements of Personal Protection Officer Employer. Personal Protection Officer employers shall: (1) obtain Personal Protection Officer Lapel Pins from the Board and shall issue the same to their Personal Protection Officer; (2) purchase from the Board approved Personal Protection Officer lapel pins annually as the lapel pins will expire on August 31 of each year; (3) issued the Personal Protection Officer authorization pocket card issued by the Board to the Personal Protection Officer when received from the Board and affix a color photograph to the pocket card; (4) maintain on file for Board inspection, contracts for Personal Protection Officer's; and (5) maintain on file for Board inspection current records on all persons issued a personal protection authorization. The records shall contain: (A) current residence of personal protection officer; and (B) current duty assignment, location of assignment and the person(s) the officer is protecting from bodily harm along with the hours, date(s) and duties. sec.428.10. Violations of the Act by Personal Protection Officers. The following shall be considered a violation of the Act if a personal protection officer: (1) does not perform personal protection officer duties for the employer as indicated in the Board records; (2) performs personal protection officer duties for any person(s) other than the employer as indicated in the Board records; (3) does not affix his signature, right index fingerprint and color photograph to the personal protection officer pocket card issued by the Board; (4) does not timely surrender his personal protection officer pocket card upon written notice served by the Board or his employer; (5) fails to timely surrender his personal protection officer pocket card upon any arrest, charge, indictment or conviction of any felony or crime involving moral turpitude; (6) while in the course and scope of his employment fails to wear a Board approved lapel pin on his outermost garment, or wears a Board approved lapel pin that is not valid; (7) while in the course and scope of his employment as a personal protection officer, provides or engages in any other service regulated by the Act or Board Rules other than providing personal protection from bodily harm to one or more individuals; (8) fails to conceal his firearm on his person or carries his firearm in a manner that alarms another; (9) fails to surrender his personal protection officer pocket card to his employer upon termination of employment; (10) fails to carry on his person, the security officer commission and personal protection authorization issued to him while performing the officer's duties as a personal protection officer; (11) fails to present the commission and authorization card on request; or (12) violates any portion of the Act or Board Rules. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600068 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-5545 Chapter 429. Application and Examination 22 TAC sec.429.5 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.429.5, concerning Fingerprint Cards, with changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8559). The Board has determined that this amendment is necessary because Article 6252, which contained the Administrative Procedure and Texas Register Act, was repealed and was reestablished as the Texas Government Code, Chapters 2001 and 2002. A change was made to eliminate wording that specified that two fingerprint cards would be submitted so that if one was not classifiable, the second one might be classifiable. The amendment changes the citations to the Texas Government Code, Chapters 2001 and 2002. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3) which provide the Texas Board of Private Investigator and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " sec.429.5. Fingerprint Cards. (a) Except as provided for in sec.451.4 of this title (relating to Fingerprints), all fingerprint cards required by the Act shall be fingerprint cards approved by and obtained from the Board. Two fingerprint cards shall be submitted for each applicant. All blank spaces shall be completed and the cards shall be signed by the applicant and the person taking the prints. (b) Applicants who have fingerprints rejected because of ridge characteristics (not those who are improperly printed) may appeal to the Board through the Texas Government Code, Chapter 2001 by filing a written request for a hearing with the Executive Director. The applicant should bring to the hearing items that may include a birth or marriage certificate, service discharge, a letter from the District Clerk stating the applicant has not been convicted of a felony or a crime involving moral turpitude within the past seven years, and a letter from the sheriff and chief of police of the county and city of the applicant's residence. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600069 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 Chapter 435. Training Programs 22 TAC sec.sec.435.1, 435.9, 435.15 The Texas Board of Private Investigators and Private Security Agencies adopts amendments to sec.sec.435.1, 435.9, and 435.15, concerning Training, with changes to the proposed text as published the November 14, 1995, issue of the Texas Register (20 TexReg 9375). The Board has determined that these amendments are necessary in order to ensure that all private security and private investigation registrants are properly trained. Minor changes have been made to correct grammar and to clarify who would be qualified to provide the training. These sections clearly defines the Level One, Two and Three training courses which are required for various members of the private security and private investigation industry. Comments were basically favorable to the amendments. An individual instructor offered written comment regarding some changes in grammar; he made no other comment either for or against the amendments. The Associated Security Services and Investigators of the State of Texas (A.S.S.I. S.T.) asked that some clarifications be made in the language regarding who would be qualified to provide the training; A.S.S.I.S.T. made no other comment either for or against the amendments. The amendments are promulgated under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " sec.435.1. Application for a Training Course Approval. (a) An application for training school approval shall be on a form prescribed by the Board to show proof that the applicant: (1) has developed an adequate training course or is using the Board's Training Manual as its curriculum; (2) has adequate space, qualified instructors, and proper instructional material; and (3) (No change.) (b) (No change.) sec.435.9. Training Course. (a) In accordance with the Act, sec.20 and sec.32, the following training shall be required of employees: (The required number of training hours shall be actual training and shall not include examination or question and answer sessions which time shall be over and above the required training time. Level One and Level Two may be taught by the manager, the manager's designee or a Board approved school and Board approved instructor. Level Three shall be taught by a Board approved training school and Board approved instructor.) (1) Level One-All registrants, and commissioned guards including noncommissioned security officers, private investigators, branch office managers, licensed managers, alarm systems monitors, dog trainers and security consultants and excluding alarm installers, alarm salespersons, owner, officers, partners, and shareholders. A Certificate of Completion of Level One training shall be submitted to the Board along with the application to register the individual within 14 days after they commence employment. At least one copy of the Level One Training Course Video, the written materials packet and the test packet shall be obtained by June 15, 1996 from the Board by each company that has been issued a category "A", "B" OR "C" license, letter of authority, school approval or instructor approval and shall include: (A) Introduction to Act and Board Rules-two hours; (B) Field Note Taking-1/2 hour; (C) Report Writing (Phase I)-1/2 hour; (D) Introduction to Leadership and Professional Demeanor -one hour; (E) Individual Company Policy (Not on Video, Provided by Company-one hour; and (F) Question and Answers and Examination to Follow. (2) Level Two-Unarmed and Armed Guards Only. A Certificate of Completion shall be submitted to the Board within 90 days after they commence employment. At least one copy of the Level Two Training Course Video, the written materials packet and the test packet shall be obtained from the Board by each company that has been issued a category "A", "B" OR "C" license, letter of authority, school approval or instructor approval and shall include: (A) Powers and Authority of Security Officers (Phase I)-two hours; (B) Patrol Tactics, Observation Techniques-1-1/2 hours; (C) Recognizing Emergency Situations (Including Emergency Reporting)-one hour; (D) Report Writing (Phase II)-1-1/2 hours; and (E) Question and Answers and Examination to Follow. (3) Level Three-Armed Guards Only. (A) Powers and Authority of Security Officer (Phase II) Including Legal Limitations on the Use of Firearms-eight hours; (B) Handling Emergency Situations-eight hours; (C) Firearms Training (Includes Range Firing and Procedures and Firearm Safety and Maintenance)-nine hours; (D) Using Handcuffs and Other Weapons-two hours; (E) Uniform Regulations-one hour; (F) Public Relations-one hour; and (G) Questions and Answers and Examination to Follow. (b) The Board's official Level One and Level Two Training Videotape and test packet shall be obtained from the Board and used by all companies that have been issued a category "A", "B" OR "C" license, letter of authority, school approval or instructor approval as their curriculum for Level One and Level Two Training. Videos may be used to enhance course presentation for Level Three training but cannot be the only teaching methods used. (c) The Training manual will be prepared by Board staff and other qualified individuals selected by the Director. sec.435.15. Security Officer Training Manual, Examination, and Grade. (a) The Board's official training manual shall be used by all Board-approved training schools. (b) All students of a training school basic program shall be tested with an examination prepared by and obtained from the Board. (c) The passing grade of all examinations shall be a minimum of 70% correct answers. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600070 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-5545 22 TAC sec.435.16 The Texas Board of Private Investigators and Private Security Agencies adopts new sec.435.16, concerning Firearm Requalification, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8559). The Board has determined that this new section is necessary in order to ensure that all armed security officers are trained properly. This section clearly defines the firearm course which is required for armed security officers at the time of requalification. No comments were received regarding adoption of the new rule. The new rule is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600071 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 Chapter 445. Employee Records 22 TAC sec.445.1 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.445.1, concerning Employee Records, without changes to the proposed text as published in the October 20, 1995, issue of the Texas Register (20 TexReg 8559). The Board has determined that the amendment is necessary in order comply with House Bill 713 of the 74th Texas Legislature. The section clearly defines the requirements for the content of all employee files. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600072 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: October 20, 1995 For further information, please call: (512) 463-5545 Chapter 451. Registration of Employees or Private Investigators 22 TAC sec.451.4 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.451.4, concerning Fingerprints, with changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9128). The Board has determined that this amendment is necessary in order comply with House Bill 713 of the 74th Texas Legislature. Minor changes have been made to clarify who must be fingerprinted and have a criminal history background check. The amendment requires that all employees who are required to be registered must be fingerprinted prior to beginning employment in order that a criminal history background check may be done on every registered employee in the industry. Comments were basically favorable to the rule. An individual instructor offered written comment asking the language be changed for clarification purposes; he made no other comment either for or against the rule. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigator and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " sec.451.4. Fingerprints. (a) Unless an employee who is required to be registered, commissioned or licensed under the provisions of this Act has been expired for a period of time less than six months, new fingerprint cards are required when making application. (b) Fingerprints required by the Act or Board Rules shall be obtained prior to an individual beginning employment. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600073 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 463-5545 22 TAC sec.451.5 The Texas Board of Private Investigators and Private Security Agencies adopts the repeal of sec.451.5, concerning Color Photographs, without changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9128). The Board has determined that the repeal is necessary in order comply with House Bill 713 of the 74th Texas Legislature. It repeals the requirement that photographs of each applicant be submitted to the Board. No comments were received regarding adoption of the repeal. The repeal is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigator and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act." This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600076 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 463-5545 Chapter 452. Criminal History Background Checks 22 TAC sec.452.1 The Texas Board of Private Investigators and Private Security Agencies adopts new sec.452.1, concerning Criminal History Background Checks, with changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9377). The Board has determined that this amendment is necessary to comply with the provisions of House Bill 713 of the 74th Texas Legislature. A change was made to require a F.B.I. criminal history background check upon renewal if the individual has not previously done so. This change was made in accordance with recommendations from the Office of the State Auditor. This section is proposed to require all applicants to submit fingerprints and the required fees so that the Board may conduct a criminal history background check through both the Department of Public Safety and the Federal Bureau of Investigation. Unfavorable comments were received from members of the industry regarding the requirement that noncommissioned security officers have their fingerprints classified by the F.B.I. They stressed that such a requirement would be an economic burden on the licensed population. The Associated Security Services and Investigators of the State of Texas (A. S.S.I.S.T.) made comments against this rule. The new section is promulgated under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigators and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " sec.452.1. Criminal History Background Checks. Except as provided for in sec.451.4 of this title (relating to Fingerprints), all applicants for any license, permit or approval issued by the Board shall submit two sets of classifiable fingerprints on fingerprint cards obtained from the Board along with any required fees to the Board for the purpose of a criminal history check. (1) One set of classifiable fingerprints shall be submitted by the Board to the Texas Department of Public Safety. (2) One set of classifiable fingerprints shall be submitted to the Federal Bureau of Investigations. (3) Upon renewal of any license, permit or approval issued by the Board, each individual who has not previously submitted an F.B.I. fingerprint card and fee shall do so prior to the license, permit or approval being renewed. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600074 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-5545 Chapter 455. Fees 22 TAC sec.455.1 The Texas Board of Private Investigators and Private Security Agencies adopts an amendment to sec.455.1, concerning Fees, without changes to the proposed text as published in the November 14, 1995, issue of the Texas Register (20 TexReg 9377). The Board has determined that this amendment is necessary in order comply with House Bill 713 of the 74th Texas Legislature. This amendment details the fee for Personal Protection Authorization and details the different fees for resubmission of fingerprints to the Texas Department of Public Safety and to the Federal Bureau of Investigation. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Texas Civil Statutes, Article 4413(29bb), sec.11(a)(3), which provide the Texas Board of Private Investigator and Private Security Agencies with the authority "to promulgate all rules and regulations necessary in carrying out the provision of this Act. " This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600075 Clema D. Sanders Executive Director Texas Board of Private Investigators and Private Security Agencies Effective date: January 25, 1996 Proposal publication date: November 14, 1995 For further information, please call: (512) 463-5545 TITLE 25. HEALTH SERVICES Part II. Texas Department of Mental Health and Mental Retardation Chapter 401. System Administration Subchapter B. Interagency Agreements 25 TAC sec.401.58 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.401.58, governing uniform assessment tool for assessing decision-making capacity of Chapter 401, Subchapter B, concerning interagency agreements, without changes to the proposed text as published in the October 3, 1995, issue of the Texas Register (20 TexReg 8064). The new section adopts by reference rules of the Texas Department of Human Services (TDHS) at 40 TAC sec.72.501 (relating to Memorandum of Understanding Concerning the Capacity Assessment of Persons Who are Elderly and Persons with Mental Retardation and/or Developmental Disabilities) which are adopted elsewhere in this issue of the Texas Register . Changes have been made to the text of the TDHS rule and the assessment tool which are discussed in the TDHS adoption preamble. The TDHS rule constitutes a memorandum of understanding (MOU) with TDMHMR as required by the Texas Health and Safety Code, sec.533.044, as amended by House Bill 869 of the 74th Legislature. The statute specifies that the MOU must require the use of a uniform assessment tool to assess whether a person who is receiving services in a facility operated or regulated by TDHS or TDMHMR and is elderly, has mental retardation, or has a developmental disability needs a guardian of the person or estate, or both, or other decision-making assistance provided by law. The MOU specifies the assessment tool to be utilized, the facilities that must use the assessment tool, the circumstances under which facilities must use the assessment tool, pilot testing of the assessment tool, and an annual review of the MOU. No public hearing was scheduled or requested. Written comments were received from Advocacy, Inc., Austin; and the guardian of a state school resident. The comments were reviewed by TDMHMR and TDHS program staff along with comments received by TDHS from the public. Only the comments received by TDMHMR are addressed here. One commenter requested that "developmental disabilities" be defined in both the MOU and the assessment tool as excluding individuals diagnosed or labeled as having a mental illness unless they also have mental retardation, a developmental disability other than mental illness, or are elderly. The department and TDHS agreed and have modifed language in the MOU and the assessment tool accordingly. A commenter requested that a family member or a significant other be permitted to request the initiation of a capacity assessment of an individual. The department and TDHS agreed and have modifed language in the MOU and assessment tool to reflect that persons other than the members of the interdisciplinary team may initiate the assessment process when the individual is believed to lack capacity. A commenter asked that the phrase "language other than English" be included in the background instructions of the assessment tool which call for the assessor to indicate the individual's primary form of communication. The department and TDHS declined to include the suggested language because the instructions already require the assesser to indicate which language is the individual's primary language. A commenter stated elements of the assessment tool are not meaningful for an individual living in an institution, and suggested that if there is no way to objectively score the person's level of functioning, at a minimun, the assessor should feel free to indicate that this could not be determined. The department and TDHS agree and have added language to the general instructions. A commenter questioned how her son, who resides in a state school and has the behavior level of an infant can be expected to give his "perspective" of his relationship with each person who provides information for the assessment. The department responds that because the commenter is the legal guardian for her son, the assessment tool would never be used. The assessment is conducted only for those persons who do not have a guardian and who are believed to need a guardian or other assistance with decision-making. The new section is adopted under the Texas Health and Safety Code, sec.532. 015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority, and with sec.533.044, which requires the MOU to be adopted by rule. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 8, 1996. TRD-9600190 Ann Utley Chair, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: February 1, 1996 Proposal publication date: October 3, 1995 For further information, please call: (512) 206-4516 TITLE 34. PUBLIC FINANCE Part I. Comptroller of Public Accounts Chapter 3. Tax Administration Subchapter CC. Waste Tire Recycling Fee 34 TAC sec.3.721 The Comptroller of Public Accounts adopts an amendment to sec.3.721, concerning the collection and reporting requirements, with changes to the proposed text as published in the October 17, 1995, issue of the Texas Register (20 TexReg 8417). The change occurs in subsection (g)(8) and was made for the purpose of clarity. Agricultural tires are not exempt from the waste tire recycling fee. The 74th Legislature amended the Health and Safety Code, sec.361 to impose the waste tire recycling fee on the sale of certain used and new large tires, including agricultural tires. This amendment prescribes which tires are subject to the fee and who must collect and remit the fee to the comptroller. No comments were received regarding adoption of the amendment. The amendment is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The amendment implements Texas Health and Safety Code, sec.361.471 and sec.361.472. sec.3.721. Collection and Reporting Requirements. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Dealer-A wholesaler, retailer, or any other person who sells or offers to sell new or good used tires. (2) Good used tire-A tire, not including a recapped or retreaded tire, suitable for continued use for its original intended purpose. (3) Tire-A new or good used tire that has a rim diameter equal to or greater than 12 inches but less than 17.5 inches, a new tire with a rim diameter equal to or greater than 17.5 inches, or a new motorcycle tire, regardless of the rim diameter. (4) Sale for resale-A sale of a tire to a purchaser for the purpose of reselling the tire in the normal course of business in the form or condition in which it is acquired (i.e., as a separate item), or as original equipment in the manufacture of new vehicles. A sale of a replacement tire that is attached to or becomes an integral part of a vehicle, trailer, or other equipment that is being sold, rented, or leased is not a sale for resale. The waste tire recycling fee is due on the sale prior to the replacement tire becoming a part of this equipment. (b) Collection and remittance of the fee. (1) Every dealer must collect the fee on each sale of a new or good used tire, unless specifically exempted by this section. (2) The fee is not due on the sale of a vehicle, trailer, or other equipment that has a tire as an integral part of it. (3) The amount of the fee due must be separately stated on the invoice, bill, or contract to the customer, and shall be identified as the Texas waste tire recycling fee. (4) A dealer may not advertise, make public, indicate, or imply that the dealer will absorb, assume, or refund any portion of the fee. (c) Report forms. The waste tire recycling fee is to be reported on the Texas battery sales fee/waste tire recycling fee report form as prescribed by the comptroller. The fact that the dealer does not receive the form or does not receive the correct form from the comptroller for the filing of the return does not relieve the dealer of the responsibility of filing a return and paying the required fee. (d) Reporting period. (1) Monthly filing. The waste tire recycling fee is due and payable on or before the 20th day of the month following the end of each calendar month. Every dealer also required to report the battery sales fee must file at the same time the waste tire recycling fee is filed. Returns must be filed on a monthly basis unless a dealer qualifies as a quarterly filer under paragraph (2) of this subsection. (2) Quarterly filing. A dealer who owes an average, as computed for the year, of less than $50 for a calendar month or less than $150 for a calendar quarter is required to file a return and pay the fee on or before the 20th day of the month following the end of the calendar quarter. The battery sales fee liability is not included in determining the requirement for quarterly filing; however, a dealer required to file the battery sales fee return on a monthly basis must file the waste tire recycling fee return at the same time. The comptroller will notify a dealer when the report and payment may be submitted quarterly. (e) Payment of the fee. (1) On or before the 20th day of the month following each reporting period, every person subject to the fee shall file a consolidated return for all businesses operating under the same fee payer number and remit the total fee due. (2) The returns must be signed by the person required to file the return or by the person's duly authorized agent, but need not be verified by oath. (f) Records required. (1) Invoices or other records must be kept for at least four years after the date on which the invoices or records are prepared. (2) The comptroller or an authorized representative has the right to examine any records or equipment of any person liable for the fee in order to verify the accuracy of any return made or to determine the fee liability in the event no return is filed. (g) Exemptions. (1) Sales for resale are not subject to the fee. (2) The sale of a tire that under the sales contract is shipped to a point outside Texas is not subject to the fee imposed by this rule if the shipment is made by the seller by means of: (A) the facilities of the seller; (B) delivery by the seller to a carrier for shipment to a consignee at a point outside this state; or (C) delivery by the seller to a forwarding agent for shipment to a location in another state of the United States or its territories or possessions. (3) Exports beyond the territorial limits of the United States are not subject to the fee. Proof of export may be shown only by: (A) a copy of a bill of lading issued by a licensed and certificated carrier showing the seller as consignor, the buyer or purchaser as consignee, and a delivery point outside the territorial limits of the United States; (B) documentation provided by a licensed United States customs broker certifying that delivery was made to a point outside the territorial limits of the United States; (C) formal entry documents from the country of destination showing that the tire was imported into a country other than the United States. For the country of Mexico, the formal entry document would be the pedimento de importaciones document with a computerized, certified number issued by Mexican customs officials; or (D) a copy of the original airway, ocean, or railroad bill of lading issued by a licensed and certificated carrier which describes the items being exported and a copy of the freight forwarder's receipt if the freight forwarder takes possession of the property in Texas. (4) There is no exemption provided for any organization or governmental agency, except as provided in paragraph (5) of this subsection. (5) The United States, its instrumentalities and agencies are exempted from the waste tire recycling fee. (6) Bicycle tires are not subject to the fee. (7) Solid industrial tires are not subject to the fee. (8) Off-road tires with a rim diameter of 17.5 inches or greater intended for use on heavy machinery such as loaders, dozers, graders, or mining equipment are not subject to the fee. All other tires with a rim diameter of 17.5 inches or greater, including agricultural tires, are subject to the fee. (9) A recapped or retreaded tire is not subject to the fee. (h) Replacements covered by a warranty or service contract. (1) The replacement of a tire under a manufacturer's warranty, without an additional charge to the purchaser, is not the sale of a tire to the purchaser. This replacement, therefore, is not subject to the fee. If there is a charge to the customer for the replacement (such as a pro rata warranty adjustment), then the customer must pay the waste tire recycling fee. (2) The replacement of a tire under an extended warranty or a service contract, for which the customer pays an extra charge, is or is not subject to the fee depending on the terms of the contract. (A) If the replacement is free of charge to the customer, the dealer is responsible for paying the fee. (B) If there is a charge to the customer for the replacement, the customer must pay the fee. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600106 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: January 25, 1996 Proposal publication date: October 17, 1995 For further information, please call: (512) 463-3725 Subchapter II. Telecommunications Infrastructure Fund Assessment 34 TAC sec.3.1101 The Comptroller of Public Accounts adopts new sec.3.1101, concerning due date for assessment report and payment, without changes to the proposed text as published in the November 21, 1995, issue of the Texas Register (20 TexReg 9673). The new section is being proposed pursuant to House Bill 2128, 74th Legislature, 1995, which imposes an assessment on telecommunication utilities and commercial mobile service providers. The purpose of the assessment is to finance the Telecommunications Infrastructure Fund. The following comment was received regarding adoption of the new section. Century Cellunet wrote in support of delaying the first TIF assessment due date until March 31, 1996, to allow recoupment. The comptroller responded that the initial report had already been extended to January 31, 1996. On balance, the comptroller does not feel that further delay would further the efficient collection of this assessment from all segments of the industry. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The new section implements Texas Civil Statutes, Article 1446c, sec.3.606. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 8, 1996. TRD-9600177 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: January 29, 1996 Proposal publication date: November 21, 1995 For further information, please call: (512) 463-4028 34 TAC sec.3.1102 The Comptroller of Public Accounts adopts new sec.3.1102, concerning telecommunications receipts and assessment determination, with changes to the proposed text as published in the November 21, 1995, issue of the Texas Register (20 TexReg 9673). The new section is being proposed pursuant to House Bill 2128, 74th Legislature, 1995, which imposes an assessment on telecommunication utilities and commercial mobile service providers. The purpose of the assessment is to finance the Telecommunications Infrastructure Fund (TIF). The changes consist of adding a provision to subsection (a)(3), excluding revenue from private carrier paging services until August 10, 1996. This was done pursuant to information received from the Federal Communications Commission. Subsections (a)(9) and (b)(6) added an exclusion for revenue from private pay telephones. This was done pursuant to information from the Public Utility Commission explaining their interpretation of the Public Utility Regulatory Act of 1995, sec.3.002(9). Subsection (b)(2) deleted examples of enhanced services in response to a comment that pointed out that these examples were not universally applicable. The comptroller chose to delete them to minimize potential confusion. The following comments were received regarding adoption of the new section. Paging Companies for a Fair Assessment (PCFA) asked the comptroller to reduce the assessment by one sixth because there will be only ten months, September 1995-June 1996, to assess $75 million from commercial mobile service providers. The comptroller does not have the authority to reduce the assessment. However, according to subsection (e) of this section, any overage or underage balance remaining at the end of a fiscal year will be forwarded to the following year's annual assessment. PCFA urges that commercial mobile service providers not be assessed for any portion of the 1995-1996 fiscal year before the comptroller's announcement of the assessment rate because these companies have been unable to collect the assessment from their customers. The comptroller, based on the legislation, responded that the TIF assessment is levied on telecommunications companies and not their customers. PCFA says its members have met with state senators and representatives and have been advised to "pass it through" to their customers. PCFA says the apparent intent of the TIF assessment was for commercial mobile service providers to serve as collection agents for public education funds. PCFA says it is unfair that the rules do not address the method by which they are to collect the amounts from their customers. The comptroller responded that the TIF assessment is levied on telecommunications companies and not their customers. The Public Utility Regulatory Act of 1995 is silent on the issue of passing through the assessment. PCFA writes that it assumes that the comptroller's intention is for each year of the TIF assessment to stand on its own. Under this scenario, the comptroller would make refunds if he collected in excess of $75 million from commercial mobile service providers in any fiscal year. The comptroller responded that he intends to adjust the rate near the end of each year, with a view toward coming as close to the target as possible. We expect this will minimize any over or under collection, but according to subsection (e) of this section, any overage or underage balance remaining at the end of a fiscal year will be forwarded to the following year's annual assessment. PCFA comments that the definitions seem to reflect that the proposed rules were drafted with primary consideration of landline telephone service and gives as an example subsection (b)(2) of this section. This subsection includes "enhanced services" in the assessment base but lists as examples only enhanced services provided by telephone utilities. The comptroller responded that the examples listed were taken from 34 TAC sec.3.344, concerning Telecommunications Services, and were in response to questions asked when that section was originally drafted. The examples have been removed. Century Cellunet and PCFA disagree with the inclusion of revenue derived from equipment within the TIF assessment base (subsection (b)(7) of this section). The comptroller responded that Tax Code, sec.151.007(a)(2), in defining "sales price" disallows deduction of the cost of the materials used. The Public Utility Regulatory Act of 1995, sec.3.606(j) and (k), tie the TIF assessment directly to the taxable telecommunications receipts reported by each affected company. Accordingly, revenue from telecommunications equipment rented to customers as part of a telecommunications service that is subject to the sales tax is also subject to the TIF assessment. The comptroller's office has had a long-standing sales tax policy of taxing equipment provided with telecommunications services as part of the service itself. Since the TIF is linked to receipts which are subject to sales tax, these receipts are subject to the TIF assessment. Subsection (b)(7) of this section removes any competitive advantage created by the TIF for sellers of telecommunications equipment by allowing revenue from equipment sold and separately invoiced from telecommunications services to be excluded from the TIF assessment base. MobileMedia Communications, Inc. urges that revenue from paging services provided by companies that are licensed by the Federal Communications Commission in the private carrier paging service and specialized mobile radio carriers be subject to the TIF assessment from the outset rather than treated as non-TIF assessable until August 10, 1996. PCFA states that the Texas legislature adopted the commercial mobile service definition contained in the 1993 Omnibus Budget Act, not the grandfathering provision. Some of these licenses currently list the regulatory status as commercial mobile radio service. The comptroller responded that the Public Utility Regulatory Act of 1995, sec.3.606(a)(9), defines commercial mobile service provider as a provider of commercial mobile service under the Communications Act of 1934, sec.153(n) and sec.332(d), (47 United States Code, sec.sec.151 et seq), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993. The Omnibus Budget Reconciliation Act of 1993, sec.6002(c)(2)(B), states that "any private land mobile service provided by any person before such date of enactment, and any paging service utilizing frequencies allocated as of January 1, 1993, for private land mobile services, shall, except for purposes of sec.332(c)(6) of such Act, be treated as a private mobile service until three years after such date of enactment." (See also 47 Code of Federal Regulations, sec.20.9(c)). The Federal Communications Commission has written on the licensing issue saying, "All private carrier paging licensees are grandfathered until that date (August 10, 1996), and therefore regulated as private mobile radio service (PMRS) providers. For administrative reasons, certain licenses issued to grandfathered PMRS providers may list the regulatory status as commercial mobile radio service (CMRS). These licensees are however grandfathered consistent with the Act." 47 United States Code, sec.332(d)(3), defines private mobile service as "any mobile service (as defined in 47 United States Code, sec.153(n)) that is not a commercial mobile service or the functional equivalent of a commercial mobile service as specified by regulation of the commission." These are distinguishable from providers of "commercial mobile service" as defined in 47 United States Code, sec.332(d)(1), revenue from whose services are subject to the Telecommunications Infrastructure Fund assessment. Accordingly, we will consider paging revenue from private carrier paging and specialized mobile radio licensees not to be subject to the TIF assessment until August 10, 1996. Nextel Communications, Inc., wrote in support of excluding revenue from specialized mobile radio (SMR) companies until August 10, 1996. Nextel also stated, "Because the Communication Act's definition of 'commercial mobile service' encompasses only interconnected services, the 'commercial mobile service' definition in House Bill 2128, 74th Legislature, 1995, will not apply to Fleet Call of Texas non-interconnected PMRS SMR services before or after August 10, 1996." The comptroller responded that Fleet Call of Texas met the definition of a commercial mobile service provider by making interconnected service available to the public for profit. However, since it is classified by the Federal Communications Commission as a specialized mobile radio service provider, its revenue would not be subject to the TIF assessment until August 10, 1996. At that time, it will be considered a commercial mobile service provider and its revenue from both interconnected and non-interconnected mobile service will be subject to the TIF assessment since it will at that time be "making interconnected service available" to the public for profit, within the terms of 47 United States Code, sec.332(d). The Public Utility Commission responded to a question from the comptroller that "the Commission has considered providers of private pay telephone services not to be telecommunications utilities under the Public Utility Regulatory Act of 1995, sec.3.002(9), exclusion for subscribers to customer-owned pay telephone service. These private pay telephone providers are in fact the subscribers to the customer-owned pay telephone service offered by the local exchange company (LEC). Therefore, even though private pay telephone providers are reselling telecommunications services, they are doing so as subscribers to the LEC service that excludes them from the definition of telecommunications utility." Accordingly, revenue from private pay telephones is not subject to the TIF assessment. Century Cellunet wrote requesting that the exemption in Tax Code, sec.151. 323, be applied to commercial mobile services that are (i) not originated from or (ii) not billed to a telephone number or billing or service address within Texas. Century requests that subsection (b)(5) of this section be amended to read, "(5) paging and mobile telephone services which are both originated from and billed to a telephone number or billing or service address within Texas." The comptroller responded that the TIF assessment is based on taxable telecommunications receipts reported by the provider under the Tax Code, Chapter 151. The language in Tax Code, sec.151.323, does not support such an amendment. Century Cellunet wrote that revenue derived from its customers to reimburse itself for payment of the TIF assessment should not be included in the sales tax base. Century believes that this was not the intention of the legislature. Century requests that the comptroller include a provision in the rule acknowledging that separately stated charges to a customer, where a telecommunications provider is reimbursing itself for the TIF assessment, are not subject to tax as telecommunications services. The comptroller responded that the TIF assessment is not on the customers but on the providers. As an assessment on the seller, the comptroller's office considers it to be a cost of doing business for the seller. Tax Code, sec.151.007(a)(2), includes in the definition of sales price, "the total amount for which a taxable item is sold.. .without a deduction for the cost of ... (2) the materials used, labor or service employed, interest, losses, or other expenses." Accordingly, sales tax is properly due on expenses in connection with the sale of a telecommunications service on which the TIF assessment is due. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The new section implements Texas Civil Statutes, Article 1446c, sec.3.606. sec.3.1102. Telecommunications Receipts and Assessment Determination. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Basic local exchange telephone service-The provision by a telephone company of each access line and each dial tone to a fixed location for sending and receiving telecommunications in the telephone company's local exchange network. Services will be considered to be basic whether the customer has access to a private line or a party line or whether the customer has limited or unlimited access. It does not include long-distance telecommunications service. (2) Commercial mobile service- (A) Any mobile service that is provided for profit and makes interconnected service available: (i) to the public; or (ii) to such classes of eligible users as to be effectively available to a substantial portion of the public, as specified by regulation by the Federal Communications Commission (FCC); (B) Mobile service means radio communication service carried on between mobile stations or receivers and land stations, and by mobile stations communicating among themselves, and includes: (i) both one-way and two-way radio communication services; (ii) a mobile service which provides a regularly interacting group of base, mobile, portable, and associated control and relay stations (whether licensed on an individual, cooperative, or multiple basis) for private one-way or two-way land mobile radio communications by eligible users over designated areas of operation; and (iii) any service for which a license is required in a Personal Communications Service as authorized by the FCC. (C) The full text defining Commercial Mobile Service can be found in the Communications Act of 1934, sec.153(n) and sec.322(d) (47 United States Code, sec.sec.151, et seq). (3) Commercial mobile service provider-Any person (sole owner, partnership, corporation or other organization) who is a provider of commercial mobile service. The term includes persons who resell mobile service to end users. Specialized mobile radio service companies and providers of private carrier paging services will not be considered commercial mobile service providers until August 10, 1996, pursuant to 47 Code of Federal Regulations, sec.20.9(c). (4) Long-distance telecommunication-A service which both originates from and is billed to a telephone number or billing or service address within Texas. (5) Private line-A telephone circuit dedicated for use between specific locations. (6) Sales tax-Tax due under the Tax Code, Chapter 151. (7) Telecommunications receipts-Any receipt derived from telecommunications services on which the retailer is required to collect Texas sales tax. (8) Telecommunications services-The electronic or electrical transmission, conveyance, routing, or reception of sounds, signals, data, or information utilizing wires, cable, radio waves, microwaves, satellites, fiber optics or any other method now in existence or that may be devised including, but not limited to, long-distance telephone service. The storage of data or other information for subsequent retrieval or the processing, or reception and processing, of data or information intended to change its form or content are not included in telecommunications services. Providers of telecommunications services should refer to sec.3.344 of this title (relating to Telecommunications Services). (9) Telecommunications utility-Any person, corporation, river authority, cooperative corporation, or any combination thereof now or hereafter owning or operating for compensation in this state equipment or facilities for the conveyance, transmission, or reception of communications over a telephone system as a dominant carrier. Interexchange telecommunications carriers (including resellers of interexchange telecommunications services), specialized communications common carriers, other resellers of communications, other communications carriers who convey, transmit, or receive communications in whole or in part over a telephone system, providers of operator services, and separated affiliate and electronic publishing joint ventures are also telecommunications utilities. The full text defining a telecommunications utility can be found in the Public Utility Regulatory Act of 1995, Title III, sec.3.002(9). The term includes resellers of telecommunications services other than through private pay telephones and includes individuals selling telecommunications services by means of debit cards. (b) Assessment base. Sales for resale and sales to persons exempted from paying sales tax under the Tax Code, Chapter 151, are excluded from the assessment base. Commercial mobile service providers and telecommunications utilities, including persons who are resellers in either of those categories, shall pay the assessment on charges for any of the following: (1) basic local exchange service; (2) enhanced services; (3) auxiliary services (call waiting, call forwarding, etc.); (4) long-distance telecommunications services which are both originated from and billed to a telephone number or billing or service address within Texas; therefore, if a call originates in Texas and is billed to a Texas service address, the charge is taxable even if the invoice, statement, or other demand for payment is sent to an address in another state; (5) paging, mobile telephone, and other commercial mobile service, including roaming charges; (6) a taxable service paid for by the insertion of coins or tokens into a coin-operated telephone other than a private pay telephone; (7) equipment provided to a customer as part of a telecommunications service including separately stated charges for installation, maintenance, and repair. Equipment sold to customers and invoiced separately from telecommunications services is excluded. Separately stated charges for maintenance or repair of customer-owned equipment are excluded; (8) installation of telecommunications services (service connection fee) ; and (9) private line services, including charges for related equipment. Taxable receipts include the channel termination charge imposed at each channel termination point within this state, the total channel mileage charges imposed between channel termination points or relay points within this state, and an apportionment of the interoffice channel mileage charge that crosses the state border. An apportionment on the basis of the ratio of the miles between the last channel termination point in Texas and the state border to the total miles between that channel termination point and the next channel termination point in the route will be accepted. Other methods may be used if first approved in writing by the comptroller. (c) Assessment determination. The annual assessment will be determined in the following manner. (1) Telecommunications utility. The $75 million annual assessment for each fiscal year divided by the taxable telecommunications receipts reported by all utilities from July 1 through June 30 immediately preceding the beginning of each report period will result in an assessment rate applicable to all utilities for the following four quarters. Because the rate is based on historical data, the comptroller may adjust the rate to reflect actual taxable telecommunications receipts. The assessment rate times the taxable telecommunications receipts reported by each utility will result in the amount owed by that utility. (2) Commercial mobile service provider. The $75 million annual assessment for each fiscal year divided by the taxable telecommunications receipts reported by all providers from July 1 through June 30 immediately preceding the beginning of each report period will result in an assessment rate applicable to all providers for the following four quarters. Because the rate is based on historical data, the comptroller may adjust the rate to reflect actual taxable telecommunications receipts. The assessment rate times the taxable telecommunications receipts reported by each provider will result in the amount owed by that provider. (3) Both funds applicable. Persons acting as both telecommunications utilities and commercial mobile service providers must report attributable data and pay assessments to each fund. (d) Rate adjustment. Before the issuance of the third or fourth quarter assessment reports, the comptroller may adjust the assessment rate by accounting for current reports filed and any amended reports filed or audits concluded in the previous quarters. (e) Balance. Any overage or underage balance remaining at the end of a fiscal year will be forwarded to the following year's annual assessment. The following year's annual assessment will be adjusted to account for the previous years balance, if any. (f) Application. This section applies to the Telecommunications Infrastructure Fund Assessment only. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 8, 1996. TRD-9600178 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: January 29, 1996 Proposal publication date: November 21, 1995 For further information, please call: (512) 463-4028 34 TAC sec.3.1103 The Comptroller of Public Accounts adopts new sec.3.1103, concerning auditing, records, assessments, without changes to the proposed text as published in the November 21, 1995, issue of the Texas Register (20 TexReg 9675). This new section is being proposed pursuant to House Bill 2128, 74th Legislature, 1995, which imposes an assessment on telecommunication utilities and commercial mobile service providers. The purpose of the assessment is to finance the Telecommunications Infrastructure Fund. No comments were received regarding adoption of the new section. The new section is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The new section implements Texas Civil Statutes, Article 1446c, sec.3.606. sec.3.1103. Auditing, Records, Assessments. (a) Taxpayer accounts may be audited by authorized representatives of the Comptroller of Public Accounts at any time during regular business hours of the taxpayer. (b) The audit will be performed by examining any records, books, or other information which are maintained by the taxpayer. If the records are inadequate to accurately reflect the taxable telecommunications receipts, the auditor will base the audit report on the best information available. (c) The Comptroller of Public Accounts may assess any unpaid tax assessment within four years after the date the assessment was due and payable. (d) All taxpayers subject to the tax assessment imposed by Texas Civil Statutes, Article 1446c, sec.3.606, must keep adequate records in order to accurately determine the amount of tax due and payable for a period of at least four years, and make the records available to the comptroller or his designated representative upon request. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 8, 1996. TRD-9600179 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: January 29, 1996 Proposal publication date: November 21, 1995 For further information, please call: (512) 463-4028 TITLE 40. SOCIAL SERVICES AND ASSISTANCE Part I. Texas Department of Human Services Chapter 11. Food Distribution and Processing Food Distribution Program 40 TAC sec.sec.11.103, 11.107, 11.121 The Texas Department of Human Services (DHS) adopts amendments to sec.sec.11. 103, 11.107, and 11.121, without changes to the proposed text as published in the November 24, 1995, issue of the Texas Register (20 TexReg 9837). The justification for the amendments is to provide a technical correction and clarifications regarding the Food Distribution Program. The amendments will function by ensuring that policy is correct and clear. No comments were received regarding adoption of the amendments. The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 33, which provides the department with the authority to administer public and nutritional assistance programs. The amendments implement the Human Resources Code sec. sec.22.001-22.024 and sec.sec.33.001-33.024. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600103 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: February 1, 1996 Proposal publication date: November 24, 1995 For further information, please call: (512) 438-3765 Chapter 48. Community Care for Aged and Disabled In-Home and Family Support Program 40 TAC sec.48.2704 The Texas Department of Human Services (DHS) adopts an amendment to sec.48. 2704, without changes to the proposed text as published in the November 7, 1995, issue of the Texas Register (20 TexReg 9262). The justification for the amendment is to enable staff to request a physician's statement if other records alone cannot clearly establish disability. The amendment will function by ensuring the correct determination of disability so program eligibility determination can be made. No comments were received regarding adoption of the amendment. The amendment is adopted under the Human Resources Code, Title 2, Chapters 22 and 35, which provides the department with the authority to administer public assistance and support services for persons with disabilities programs. The amendment implements the Human Resources Code, sec. sec.22.001-22.024 and sec.sec.35.001-35.012. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 4, 1996. TRD-9600104 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: February 1, 1996 Proposal publication date: November 7, 1995 For further information, please call: (512) 438-3765 Chapter 72. Memoranda of Understanding with Other State Agencies Memorandum of Understanding Concerning the Capacity Assessment of Persons Who Are Elderly and Persons with Mental Retardation and/or Developmental Disabilities 40 TAC sec.72.501 The Texas Department of Human Services (DHS) adopts new sec.72.501, with changes to the proposed text as published in the August 25, 1995, issue of the Texas Register (20 TexReg 6591). Justification of the new section is to comply with the provisions of the Health and Safety Code, sec.533.044, requiring DHS and the Texas Department of Mental Health and Mental Retardation (TDMHMR) to adopt a Memorandum of Understanding (MOU) that requires the use of a uniform assessment tool to assess whether an elderly person, a person with mental retardation, or a person with a developmental disability who is receiving services in a facility operated or regulated by DHS or TDMHMR needs a guardian of the person or estate, or both, or other decision-making assistance provided by law. The MOU specifies the assessment tool to be utilized, the facilities that must use the assessment tool, the circumstances under which facilities must use the assessment tool, pilot testing of the assessment tool, and an annual review of the MOU. The new section will function by making available a mechanism to identify consumers who require assistance, guardianship or other means, in making decisions about self-care and financial management. DHS received comments on the proposed MOU and the assessment tool from Advocacy, Inc., and a member of the DHS Aged and Disabled Advisory Committee during the public comment period in the Texas Register, from August 25, 1995, to September 25, 1995. DHS reviewed these comments with TDMHMR. The comments and responses follow. Comment: The definition of developmental disabilities (DDs) in the MOU and the assessment tool should exclude individuals diagnosed or labeled as having a mental illness (MI) unless the individual also has mental retardation, a DD other than MI or is elderly. Response: The department agrees and has revised the DDs definition in the MOU and assessment tool. The definition of DD was revised to exclude persons diagnosed with only MI before age 22. The Health and Safety Code, sec.533.044, requiring DHS and TDMHMR to develop the MOU and assessment tool, does not identify persons with a diagnosis of only MI as part of the population to whom a capacity assessment may be administered. Comment: Include a family member or a significant other as a person who may request the administration of the capacity assessment to a loved one. Response: The department agrees and has expanded the circumstances under which a capacity assessment will be administered to include all reports of suspected incapacity. Comment: Add "language other than English" when requesting information in the assessment tool on the primary form of communication used by the person being assessed. Response: The "primary form of communication" refers to the means of communication (oral, written, gestural) rather than the language, so the text was not added. However, the explanation with the assessment item on primary language now includes examples of a primary language. Comment: Absent from the assessment tool are instructions directing an assessor to indicate when an individual's capacity for an activity cannot be determined as the result of residence in an institutional setting. An assessor cannot assess an individual's capacity level pertaining to activities that are normally provided for the individual or are not permissible in institutional settings. Response: The department agrees. Instructions were added to several sections of the capacity assessment directing the assessor to comment on the absence of opportunity to observe an assessee's performance of an activity or skill and to comment when there are problems with an assessee having the opportunity to perform a skill. Comment: Share information on the training components for the pilot study of the capacity assessment along with the results from the pilot study. Response: The department will share information on the pilot training components and results. Comment: Add language to the instructions for the assessment tool directing an assessor to document the assessee's perception of the assessment process and to document the assessee's ease or difficulty in responding to assessment questions. Response: In response to this comment, instructions were added to the capacity assessment tool to document the assessee's perceptions of individuals, such as family, friend, or facility staff, who contribute information about the assessee's capacity for self-care and financial management. However, the department believes the existing comment sections and general summary section in the assessment tool allow for documentation of the assessee's perception of and ease or difficulty with the assessment process. The new section is adopted under the Health and Safety Code, sec.533.044, which provides the department with the authority to adopt by rule a joint MOU requiring the use of a uniform assessment tool to assess the decision-making capacity of certain individuals; and under the Human Resources Code, Title 2, Chapter 22, which authorizes the department to administer public assistance programs. The new section implements the Health and Safety Code, sec.533.044, and the Human Resources Code, sec.sec.22.001-22.024. sec.72.501. Uniform Assessment Tool for Assessing Decision-Making Capacity. (a) Introduction and legal authority. The Texas Department of Mental Health and Mental Retardation (TDMHMR) and Texas Department of Human Services (TDHS)(the agencies) by rule adopt a joint memorandum of understanding (MOU) as required by the Texas Health and Safety Code, sec.533. 044 which requires the use of a uniform assessment tool to assess whether an elderly person, a person with mental retardation, a person with a developmental disability, or a person who is suspected of being a person with mental retardation or a developmental disability and who is receiving services in a facility regulated or operated by TDMHMR or TDHS needs a guardian of the person or estate, or both. This agreement is entered into pursuant to the provisions of the Human Resources Code sec.22.002(f), and is therefore not subject to the provisions of the Interagency Cooperation Act, Chapter 771, Texas Government Code. (b) Facilities. The agencies prescribe these as the facilities which must use the assessment under the pilot described in subsection (e) of this section; (1) TDMHMR: residential services facilities (community-based residential services at community centers, state schools, state centers, and intermediate care facilities for the mentally retarded (ICFs-MR)); (2) TDHS: nursing facilities. (c) Circumstances. The capacity assessment tool will be administered to an elderly person, a person with mental retardation, a person with developmental disability, which was not diagnosed as a result of the development of mental illness before age 22, or a person who is suspected of being a person with mental retardation or a developmental disability when incapacity is suspected by: (1) a representative of an interdisciplinary care plan team in nursing facilities; and (2) an interdisciplinary team (IDT) in residential services facilities; (d) Focus of capacity assessment. The assessment tool will be used to assess the capacity of an identified person's ability to make decisions concerning the person's own welfare and financial affairs, including the person's: (1) need for a guardianship and the type of guardianship that is appropriate for the person; (2) ability to care for the person's own physical health or to manage the person's own financial affairs; (3) ability to provide food, clothing, or shelter for himself or herself; (4) decision-making ability; and (5) ability to communicate a decision. (e) Administration. The agencies will pilot use of the uniform assessment tool as follows: (1) Duration. The agencies will pilot test the use of the uniform assessment tool between September 1, 1995 and August 31, 1996. (2) Location. The agencies will pilot test the uniform assessment tool at the following locations: (A) TDMHMR will implement in at least three facilities of varied sizes and staffing patterns; and (B) TDHS will implement in at least one county. (3) Staff. The following facility staff will administer the uniform assessment tool: (A) TDMHMR: the IDT will designate professional staff or team members at residential services facilities; and (B) TDHS: the social worker at a nursing facility. (4) Evaluation. During the pilot test, the agencies will evaluate the use of the uniform assessment tool and will make decisions regarding the continuation and expansion of use of the uniform assessment tool. (f) Annual Review. No later than the last month of each state fiscal year, TDMHMR and TDHS shall review and modify the MOU as necessary. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 5, 1996. TRD-9600167 Nancy Murphy Section Manager, Media and Policy Services Texas Department of Human Services Effective date: February 1, 1996 Proposal publication date: August 25, 1995 For further information, please call: (512) 438-3765