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 VI. Texas Motor Vehicle Commission Chapter 105. Advertising 16 TAC sec.sec.105.2, 105.4, 105.5, 105.8, 105.10, 105.17, 105.24, 105.26 The Motor Vehicle Board of the Texas Department of Transportation adopts amendments to sec.105.2 concerning general advertising prohibitions, sec.105.4 concerning definitions, sec.105.5 concerning availability of vehicles, sec.105.8 concerning advertising layout, sec.105.10 concerning dealer price advertising, sec.105.17 concerning free offers, sec.105.24 concerning savings claims, and sec.105.26 concerning lease payment disclosures, without changes to the proposed text as published in the December 8, 1995, issue of the Texas Register (20 TexReg 10333). The amendment to sec.105.2 extends the prohibition against false, deceptive, unfair or misleading advertising to any person advertising a new or used vehicle. The amendment to sec.105.5 adds the requirement that a specific used vehicle must be in the possession of the dealer if it is to be advertised for sale. The amendments to sec.sec.105.4, 105.8, and 105.17 expand advertising rules to include leased motor vehicles as well as those for sale. The amendment to sec.105.10 extends the requirements for dealer price advertising to used vehicles. The amendment to sec.105.24 clarifies that a discount may not be advertised on a used vehicle. The amendment to sec.105.26 clarifies radio broadcast advertisement requirements for lease disclosures. The effect of the amendment to sec.105.2 will be to make uniform the general advertising prohibitions for all persons advertising motor vehicles. The effect of the amendment to sec.105.5 will be to reduce the potential for bait and switch advertising by requiring an advertised vehicle and its assigned title to be in the possession of the dealer at the time the advertisement is placed. The effect of the amendments to sec.sec.105.4, 105.8, and 105.17 will be to extend the advertising requirements of new and used vehicle sales to leased vehicles, thus ensuring uniformity in application. The effect of the amendments to sec.105.10 and sec.105.24 clarifies the application of the rules to used motor vehicles. The effect of the amendment to sec.105.26 will be to better protect the public by clarifying that a radio advertisement is for a leased vehicle. Written comments on the proposed amendment to sec.105.24 were received from the Texas Independent Automobile Dealers Association. A public hearing for the purpose of receiving comment was held on January 18, 1996. No comments were received from the public. The amendments are adopted under the Texas Motor Vehicle Commission Code, sec.3.06, which provides the board with authority to adopt rules necessary and convenient to effectuate the provisions of the act and to govern practice and procedure before the agency. 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 February 1, 1996. TRD-9601524 Brett Bray Director, Motor Vehicle Division Texas Motor Vehicle Commission Effective date: February 26, 1996 Proposal publication date: December 8, 1995 For further information, please call: (512) 505-5100 Chapter 111. General Distinguishing Numbers 16 TAC sec.111.10 The Texas Motor Vehicle Board adopts an amendment to sec.111.10, concerning motor vehicle dealer operating hours, sign and telephone number requirements, and number of dealers who may be licensed at one location, with changes to the proposed text as published in the December 8, 1995, issue of the Texas Register (20 TexReg 10334). The amendment is necessary to facilitate enforcement of all rules and improve dealer availability to the public by defining normal working hours and limiting the number of dealers licensed in one location. The effect of the amendment to sec.111.10(1)(A) and (G) is to define normal working hours for retail and wholesale automobile dealers thus allowing the public to contact the dealers and to facilitate contact for enforcement purposes. The effect of the amendment to sec.111.10(1)(B) and (F) will be to limit the number of dealers who may be licensed in one structure, thus facilitating contact by the public with specific dealers and facilitating contact for enforcement purposes. The effect of the amendment to sec.111.10(1)(E) and (F)(ii) will be to clarify that each motor vehicle dealer must have a separate telephone number with a fixed land-based telephone company facilitating contact by the public and facilitating contact for enforcement purposes. Written comments on the proposed amendment were received from the National Vehicle Leasing Association, the Texas Independent Automobile Dealers Association, A H Distributors, Team Advantage, Inc., Larry G. Mills, M&M Auto, Terry's Wholesale Cars, Winter Motor Co., Gerald Farmer's Auto Sales, Jerry William's Autos, Larry Grulich Auto Sales, Roy's Auto Sales, Gary's Auto Sales, T's Auto Sales, Village Leasing, Inc., Slim Jim's, VIP Motors, Attorney Angela Chinn Woodbury, and the Midwest Odometer and Title Fraud Enforcement Association. A public hearing for the purpose of receiving comments was held on January 18, 1996. Comments in favor of the proposed amendment was received from Ed Clark on behalf of the Texas Independent Automobile Dealers Association, Bubba Bashaw on behalf of the Central Texas Independent Dealers Association, Robert Eppes on behalf of the National Highway Traffic Safety Administration, Carol Kent, Assistant Director-Enforcement, Tyna Rodriguez, Motor Vehicle Division investigator and Patrick Psencik, Motor Vehicle Division investigator. Comments opposing the proposed amendments or parts thereof were received from David Nichols of American Auto Dealers Network, Inc. , Paul Teas of Auto Dealer Network Corp., Ollie W. Williamson of Team Advantage, Inc., Larry Mills, Larry Certain of Prime Pre-Owned Vehicles, Nicholas Lambiase of A H Distributors, and Attorney Bruce Allegar. The Board considered comments that the definition of normal working hours was too restrictive on part-time dealers, and on those who spend extensive time at auctions or otherwise need to be away from their business locations. Staff reported the lack of defined business hours seriously hampered contact with dealers. The board agreed with staff and other comments that the proposed requirement was not restrictive and promoted responsible contact between dealers and the public. The alternative to a normal business hours for wholesale dealers, who do not deal with the public, was generally supported by all those commenting and determined by the Board to be sufficient for contact for enforcement purposes. The limit on the number of dealers who may be located in one structure as proposed in sec.111.10(B) and (F) was opposed by those who felt co-locating a number of dealers allowed the new dealers to learn from more experienced dealers at their location, and cut costs, thus allowing small businessmen to survive. Representatives of dealerships currently operating at multi-dealer locations opposed the proposed amendment, citing the potential for putting large numbers of small dealers out of business due to increased overhead costs. Proponents of the proposed amendment included Robert Eppes, Special Investigator with the National Highway Traffic Safety Administration who noted that many multi-dealer sites masked for criminal activity. The staff presented photographs of three multi-dealer sites which were under investigation. Motor Vehicle Division investigators described the difficulties involved in contacting and auditing dealers at these and other multi-dealer sites. The Board determined that there was little evidence to support the business need for large numbers of dealers to co-locate. Further, the availability of dealers to the public and enforcement of all rules would be facilitated by limiting the number of dealers at one location. There were no comments on the new requirement that dealers must have a separate sign and separate telephone listing with a land-based telephone company. The Board determined these to be legitimate requirements to facilitate contact with dealers by the public and enforcement personnel. The Board reduced the required number of days dealers must be open to four days per week to allow time for participation in auto auctions, but otherwise approved the language of the amendment as supported by staff and three dealer associations. The amendment is adopted under the Texas Motor Vehicle Commission Code, sec.3.06, which provides the Board with authority to adopt rules necessary and convenient to effectuate the provisions of the act and to govern practice and procedure before the agency. sec.111.10. Established and Permanent Place of Business. All dealers must meet the following requirements at each location where vehicles are sold or offered for sale. (1) Office requirements. (A) A dealer's office facility must be open to the public during normal working hours. Normal working hours are defined as at least four days per week for a continuous period of time not less than four hours per day between the hours of 8:00 a.m. and 8:00 p.m. The dealer's business hours for each day of the week must be posted at the main entrance of the dealer's office, and the owner or a bona fide employee of the dealer must be at the dealer's location during the posted business hours for the purpose of buying, selling, exchanging, or leasing vehicles. In the event the owner or a bona fide employee is not available to conduct business during the dealer's posted business hours, a separate sign must be posted indicating the date and time such owner or a bona fide employee will resume dealer operations. In addition, such dealership must notify the division in writing of any subsequent change in the dealer's standard business hours. (B) With the exception of dealers holding only a wholesale license, no more than four dealers may be located in a business or residential structure. The structure must be of sufficient size to accommodate the usual office furniture and equipment, such as a desk, file cabinet, chairs, etc. As a minimum, the office must be equipped with a desk and chairs from which the dealer transacts his business and be equipped with a working telephone instrument listed in the name under which the dealer does business. If a dealer's office is located in a residential structure, the office must be completely separated from and have no direct access into the residential quarters and be in compliance with all applicable local zoning ordinances and deed restrictions. Such an office shall not be used as a part of the living quarters and must be readily accessible to the public without having to pass into or through any part of the living quarters. (C) Portable-type office structures may qualify, provided they meet the minimum requirements as set forth herein. (D) If a dealer conducts business in conjunction with another business owned by the same person, the same telephone instrument may be used for both businesses. However, if the name of the dealer differs from that of the other business, a separate telephone listing and a separate sign for the dealer is required. (E) A dealer may conduct business in conjunction with another business not owned by the same person, however, the same telephone number may not be used by both businesses; the dealer shall have a separate sign, a separate desk, a separate working telephone instrument, and a separate telephone number and listing in the name of the dealer. The dealer must either own the property or have a separate lease agreement from the owner meeting the requirements of paragraph (4) of this section. (F) More than one, but no more than eight dealers who hold only a wholesale license may occupy the same business structure and conduct their respective dealer operations under different names, as long as no retail dealers are located in the same structure; provided, however, each wholesale dealer must, in addition to having a qualifying dealer's sign conspicuously displayed on the premises, have: (i) a separate desk from which that dealer transacts business; (ii) a separate working telephone instrument, number, and listing in the dealer's name with a fixed, land-based telephone company, and, (iii) a separate lease agreement meeting the requirements of paragraph (4) of this section. (G) Dealers who hold only a wholesale license will not be required to be present during normal working hours if they keep on file with the Motor Vehicle Division, notice of a designated period of time in which the dealer and the dealer's records will be available for inspection by the Motor Vehicle Division at the dealer's licensed location. The period of time will be no less than two consecutive hours, between the hours of 8:00 a.m. and 5:00 p.m., on any one day of the week, except Saturday or Sunday. (2)-(4) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on February 1, 1996. TRD-9601523 Brett Bray Director, Motor Vehicle Division Texas Motor Vehicle Commission Effective date: March 31, 1996 Proposal publication date: December 8, 1995 For further information, please call: (512) 505-5100 Part VIII. Texas Racing Commission Chapter 303. General Provisions Subchapter A. Organization of the Commission 16 TAC sec.303.3 The Texas Racing Commission adopts an amendment to sec.303.3, concerning the commission's offices, without changes to the proposed text as published in the December 19, 1995, issue of the Texas Register (20 TexReg 10873). The amendment is adopted to ensure the public and the commission's licensees have accurate information regarding the commission's location. The amendment changes the physical address, phone number, and fax number of the commission's main office in Austin to reflect an office relocation in January 1996. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3. 02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act. 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 31, 1996. TRD-9601410 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: February 22, 1996 Proposal publication date: December 19, 1995 For further information, please call: (512) 833-6699 Subchapter D. Texas Bred Incentive Programs Programs for Horses 16 TAC sec.303.95 The Texas Racing Commission adopts an amendment to sec.303.95, concerning races for accredited Texas-bred horses, without changes to the proposed text as published in the December 19, 1995, issue of the Texas Register (20 TexReg 10874). The amendment is adopted to ensure the commission's rules are consistent with state law. The amendment clarifies the requirements of a racetrack regarding the conducting of races for accredited Texas-bred horses and deletes language that, due to an expiration date, is no longer applicable. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3. 02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; sec.6.08, which authorizes the commission to adopt rules to administer Texas-bred incentive programs; and sec.9.03, which establishes the requirements for racetracks to conduct accredited Texas-bred races. 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 31, 1996. TRD-9601411 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: February 22, 1996 Proposal publication date: December 19, 1995 For further information, please call: (512) 833-6699 Chapter 321. Pari-mutuel Wagering Subchapter B. Distribution of Pari-mutuel Pools 16 TAC sec.321.111 The Texas Racing Commission adopts an amendment to sec.321.111, concerning the twin trifecta pool, without changes to the proposed text as published in the November 7, 1995, issue of the Texas Register (20 TexReg 9242) and in the November 14, 1995, issue of the Texas Register (20 TexReg 9361). The amendment is adopted to ensure that pari-mutuel wagering will be of the highest caliber and will be conducted with the utmost integrity. The amendment clarifies the procedures relating to the dissemination of information about the pool and for paying the pool if a race animal is prevented from starting. No comments were received regarding adoption of the amendment. The amendment is adopted under the Texas Civil Statutes, Article 179e, sec.3. 02, which authorize the commission to adopt rules for conducting racing with wagering and for administering the Texas Racing Act; sec.6.06, which authorizes the commission to adopt rules relating to all aspects of the operation of pari- mutuel racetracks; and sec.11.01, which authorizes the commission to adopt rules regulating pari-mutuel wagering. 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 31, 1996. TRD-9601412 Paula Cochran Carter General Counsel Texas Racing Commission Effective date: February 22, 1996 Proposal publication date: November 7 and November 14, 1995 For further information, please call: (512) 833-6699 TITLE 22. EXAMINING BOARD Part XIV. Texas Optometry Board Chapter 280. Therapeutic Optometry 22 TAC sec.280.5 The Texas Optometry Board adopts an amendment to sec.280.5, relating to therapeutic optometry, with changes to the proposed text as published in the December 15, 1995, issue of the Texas Register (20 TexReg 10736). Amended sec.280.5 is adopted to clarify the use of cocaine eye drops for diagnostic purposes by therapeutic optometrists. As amended the section clearly denotes that cocaine eye drops may be possessed and administered but not prescribed. As adopted sec.280.5 differs from the published text in that the word "Administration" is substituted for the word "Agency" in the title "United States Drug Enforcement Administration". Additionally, the phrase "possessed and administered" is substituted for the word "dispensed" in (j)(4) to clarify the fact that therapeutic optometrists may not prescribe or dispense cocaine eye drops. Comments were received from the Texas Department of Public Safety (DPS), the Texas State Board of Pharmacy (TSBP), the Texas Ophthalmological Association (TOA), and the Texas Medical Association (TMA). The DPS commented that it has no problems with the amendment as proposed. The TSBP commented that the correct name for the DEA is the Drug Enforcement Administration rather than Agency. The TSBP also commented against the use of the word "dispensed" in the proposed amendment because its use could lead to misunderstandings. The Board agrees with these comments. The amendment as adopted contains the language recommended by the TSBP. The TOA and TMA commented against the amendment. Their first comment was that the amendment violates an agreement reached between the TOA, the TMA, the Texas Optometric Association, and the Texas Association of Optometrists during the 72nd Legislature. The Board is unable to agree or disagree with this comment. The Board was not a party to any political negotiations during the 72nd Legislature. The TOA and TMA also commented that the Texas Optometry Act limits a therapeutic optometrist to diagnosing and treating visual defects, abnormal conditions, and diseases of the eye and adnexa. According to the commenter, cocaine eye drops are used to assist in the diagnosis of Horner's Syndrome, a neurological disease. Horner's Syndrome is not a condition or disease of the eye. The Board disagrees with this comment for the following reasons: Horner's Syndrome is a systemic disease for which therapeutic optometrists receive training to diagnose in optometry college. The ocular symptoms and signs of Horner's Syndrome include miosis, ptosis, and peri-ocular and/or facial anhydrosis. If a patient presents with these symptoms, the therapeutic optometrist is responsible for diagnosing the condition so that the appropriate referral may be made. Therapeutic optometrists are often challenged to diagnose conditions they do not treat. For example, pituitary tumors cause bitemporal hemianopsia, loss of side vision. Therapeutic optometrists perform a visual field test to diagnose this condition for the purpose of making a proper referral. Cocaine eye drops have uses other than for the diagnosis of Horner's Syndrome. These drops may be used as a corneal anesthetic to assist in the manipulation of tissue for superficial foreign body removal. The choice of the proper corneal anesthetic is a matter of professional judgment for the therapeutic optometrist. Finally, the Texas Optometry Act, Texas Civil Statutes, Article 4552, sec.1.03(g) holds therapeutic optometrists to the same standard of professional care and judgment as ophthalmologists practicing under the Medical Practice Act. If optometrists are held to same standard of professional care as ophthalmologists, it logically follows that they should have the same diagnostic tools as ophthalmologists for the purpose of treating those conditions and diseases of the eye as are within therapeutic optometrists' authorized scope of practice and for making proper referrals of patients whose conditions and diseases are beyond the scope of therapeutic optometric authority. The amendment is adopted under the provisions of the Texas Optometry Act, Texas Civil Statutes, Article 4552, sec.1.03 and sec.2.14, which provides the Texas Optometry Board with the authority to promulgate rules. The Board interprets sec.1.03 as authorizing therapeutic optometrists to utilize cocaine eye drops for diagnostic purposes. The Board interprets sec.2. 14 as authorizing it to adopt substantive and procedural rules for the regulation of the profession of optometry. sec.280.5. Prescription and Diagnostic Drugs for Therapeutic Optometry. (a)-(i) (No change.) (j) A therapeutic optometrist may possess and administer cocaine eye drops for diagnostic purposes. The cocaine eye drops must be no greater than 10 percent solution in prepackaged liquid form. (1) A therapeutic optometrist must observe all requirements of the Texas Controlled Substances Act, the Health and Safety Code, Chapter 481, and all requirements of the Texas Department of Public Safety (DPS) Drug Rules in making application and maintaining renewal of a United States Drug Enforcement Agency (DEA) registration number for possession of the cocaine eye drops, a Schedule II controlled substance. (2) A therapeutic optometrist must obtain a registration number from the DPS for the principal office of practice. Application may be made for a separate registration for the practice of optometry at a satellite office but all requirements of this rule shall apply in all locations. (3) The therapeutic optometrist must use the required DEA form for the purchase of the cocaine eye drops and shall maintain a complete and accurate record of purchases (to include samples received from pharmaceutical manufacturer representatives) and dispensing of controlled substances. The maximum amount to be purchased and maintained in an office of practice shall be no more than two vials, one opened and one in inventory. (4) The recordkeeping listed in this section shall be subject to inspection at all times by the Texas Department of Public Safety, the U.S. Drug Enforcement Administration, and the Texas Optometry Board and any officer or employee of the governmental agencies shall have the right to inspect and copy records, reports, and other documents, and inspect security controls, inventory and premises where such cocaine eye drops are possessed or administered. (5) Minimum security controls shall be established to include but not be limited to: (A) establishing adequate security to prevent unauthorized access and diversion of the controlled substance, (B) during the course of business activities, not allowing any individual access to the storage area for controlled substances except those authorized by the therapeutic optometrist, (C) storing the controlled substance in a securely locked, substantially constructed cabinet or security cabinet which shall meet the requirements under the DPS Drug Rules, (D) not employ in any manner an individual that would have access to controlled substances who has had a federal or state application for controlled substances denied or revoked, or have been convicted of a felony offense under any state or federal law relating to controlled substances or been convicted of any other felony, or have been a licensee of a health regulatory agency whose license has been revoked, canceled, or suspended. (6) Failure of the therapeutic optometrist to maintain strict security and proper accountability of controlled substance shall be deemed to be a violation of the Texas Optometry Act, sec.4.04. 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 February 1, 1996. TRD-9601460 Lois Ewald Executive Director Texas Optometry Board Effective date: February 22, 1996 Proposal publication date: December 15, 1995 For further information, please call: (512) 305-8500 Part XXII. Texas State Board of Public Accountancy Chapter 501. Professional Conduct Professional Standards 22 TAC sec.501.25 The Texas State Board of Public Accountancy adopts an amendment to sec.501. 25, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10248). The amendment allows a licensee's certificate to be revoked for at least 12 months upon the licensee's third suspension for failing to satisfy the board's continuing professional education requirements. The amendment will function by imposing a minimum one-year revocation of certificate on licensees who repeatedly fail to complete continuing professional education requirements. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and sec.15A, which requires licensees to complete continuing professional education. 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 18, 1996. TRD-9601494 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 Other Responsibilities and Practices 22 TAC sec.501.37 The Texas State Board of Public Accountancy adopts new sec.501.37, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10248). The new section allows a Certificate to be revoked for at least 12 months upon the Certificate holder's third occasion of practicing without a license or through an unregistered entity. The section will function by requiring licensees to timely obtain the appropriate licenses or registrations or face severe penalties for repeated failures. No comments were received regarding adoption of the new section. The new section is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; sec.8, which prohibits the practice of accountancy without a license; and sec.10, which requires individuals and practice units to register with the Board. 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 18, 1996. TRD-9601495 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 Chapter 505. The Board 22 TAC sec.505.10 The Texas State Board of Public Accountancy adopts an amendment to sec.505. 10, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10248). The amendment increases the number of Board members on committees to at least two. The amendment will function by ensuring every Board committee has at least two Board members. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 18, 1996. TRD-9601496 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 Chapter 519. Practice and Procedure 22 TAC sec.519.5 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 5, with changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10249). The changes are the replacement of the word "working" with the word "calendar" before the word "day" in subsections (b) and (c). The amendment corrects a citation to the Administrative Procedure Act, requires a request for a public hearing on a proposed rule to be filed with the Board at least ten calendar days before the rulemaking meeting, and requires persons wishing to testify at a rulemaking meeting to provide written copies of their testimony at least five calendar days before the rulemaking meeting. The amendment will function by enhancing scheduling of Board meeting agendas and will allow Board members more time in which to consider witnesses' comments. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; and Government Code, sec.2001.029, which requires state agencies to hold public hearings in rulemaking proceeding if properly requested. sec.519.5. Rulemaking Proceedings. (a) Service of a proposed section or amendment of any existing section shall be governed by the Administrative Procedure Act, sec.2001.023 and sec.2001. 024. (b) A request for a public hearing to receive comments on a proposed rulemaking must be received in the offices of the board no later than 5:00 p.m. of the tenth calendar day prior to the board meeting scheduled to consider the adoption of the proposed rule. (c) A person wishing to testify at a public hearing to receive comments on a proposed rulemaking or revision must file a written copy of his or her testimony in the offices of the board by no later than 5:00 p.m. of the fifth calendar day prior to the public hearing unless the board announces a different filing date. 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 18, 1996. TRD-9601497 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 22 TAC sec.519.26 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 26, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10249). The amendment describes the options available to the board when it considers agreed consent orders and allows removal of the prohibition against using as evidence information discovered or disclosed in an informal conference. The amendment will function by clarifying the two options available to the Board when it considers agreed consent orders, and removing unnecessary restrictions on the use of information obtained during an informal conference. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law; Government Code, sec.2001.054, which requires that licensees be afforded an opportunity to show their compliance with the law; and Government Code, sec.2001.056, which allows for the informal disposition of contested cases. 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 18, 1996. TRD-9601498 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 22 TAC sec.519.27 The Texas State Board of Public Accountancy adopts an amendment to sec.519. 27, without changes to the proposed text as published in the December 5, 1995, issue of the Texas Register (20 TexReg 10250). The amendment allows the Board to improve scheduling of its meeting agenda. The amendment will function by requiring timely filing of requests which affect the Board's meeting agenda and scheduling. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 41a-1, sec.6, which provide the Texas State Board of Public Accountancy with the authority to make such rules as may be necessary or advisable to carry in effect the purposes of the law. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on January 18, 1996. TRD-9601499 William Treacy Executive Director Texas State Board of Public Accountancy Effective date: February 26, 1996 Proposal publication date: December 5, 1995 For further information, please call: (512) 505-5566 TITLE 25. HEALTH SERVICES Part I. Texas Department of Health Chapter 91. Cancer Prostate Cancer Advisory Committee 25 TAC sec.91.21 The Texas Department of Health (department) adopts new sec.91.21, concerning the creation of the prostate cancer advisory committee, with changes to the proposed text as published in the October 31, 1995, issue of the Texas Register (20 TexReg 8959). The prostate cancer advisory committee will provide advice on the strategies for educating the public on the health benefits of the early detection, prevention and treatment of prostate cancer. The creation of the committee is required by Health and Safety Code, sec.91.003. The new section is required by Texas Civil Statutes, Article 6252-33 relating to state agency advisory committees. The department deleted proposed subsection (p) relating to an effective date of January 1, 1996, and corrected a minor clerical error in proposed subsection (f)(2). The following comments were received during the comment period. Comment: A commentator suggested that the committee members should be individuals who are current contributors to this field and practitioners in their respective areas of expertise. The commentator also suggested that the committee composition include urologists, epidemiologists, individuals who have clinical testing and cancer screening expertise (pathologist and/or clinical chemist), public health and education. Response: Department staff agree in part with this comment. However, in addition to the clinical specialties identified above, staff believe it is important to include prostate cancer survivors or caregivers of individuals with prostate cancer as consumer representatives of this committee. Comment: A commentator stated that the regulations governing the structure of the new committee are appropriate and recommends appointment of the committee as soon as possible. Response: Staff concur with comment. These comments were submitted by individuals representing MD Anderson Cancer Center, Houston, Texas and Baylor College of Medicine, Houston, Texas. The commenters were generally in favor of the rules as proposed. The new section is adopted under Texas Health and Safety Code, sec.91.003, which requires the creation of the prostate advisory committee; Article 6252-33, sec.5, which sets standards for the evaluation of advisory committees by the agencies for which they function; under Health and Safety Code, sec.12. 001, which provides the board with authority to adopt rules for the performance of every duty imposed by law upon the board, the department, and the commissioner of health; and Health and Safety Code, sec.11.016, which allows the board to establish advisory committees. sec.91.21. The Prostate Cancer Advisory Committee. (a) The committee. An advisory committee shall be appointed under and governed by this section. (1) The name of the advisory committee shall be the Prostate Cancer Advisory Committee (committee). (2) The committee is required to be established by the Texas Board of Health (board) by Health and Safety Code sec.91.003. (b) Applicable law. The committee is subject to Texas Civil Statutes, Article 6252-33 relating to state agency advisory committees. (c) Purpose. The purpose of the committee is to provide advice to the board on strategies for educating the public on the health benefits of the early detection, prevention, and treatment of prostate cancer. (d) Tasks. (1) The committee shall advise the board concerning rules relating to educating the public on the health benefits of the early detection, prevention, and treatment of prostate cancer. (2) The committee shall carry out any other tasks given to the committee by the board. (e) Review and duration. By September 1, 2002, the board will initiate and complete a review of the committee to determine whether the committee should be continued, consolidated with another committee, or abolished. If the committee is not continued or consolidated, the committee shall be abolished on that date. (f) Composition. The committee shall be composed of eleven members appointed by the board. The composition of the committee shall include: (1) four consumer representatives; and (2) seven other representatives. (g) Terms of office. The term of office of each member shall be six years. (1) Members shall be appointed for staggered terms so that the terms of a substantial equivalent number of members will expire on December 31st of each even-numbered year. (2) If a vacancy occurs, a person shall be appointed to serve the unexpired portion of that term. (h) Officers. The advisory committee shall elect a presiding officer and an assistant presiding officer at its first meeting after August 31st of each year. (1) Each officer shall serve until the next regular election of officers. (2) The presiding officer shall preside at all committee meetings at which he or she is in attendance, call meetings in accordance with this section, appoint subcommittees of the committee as necessary, and cause proper reports to be made to the board. The presiding officer may serve as an ex-officio member of any subcommittee of the advisory committee. (3) The assistant presiding officer shall perform the duties of the presiding officer in case of the absence or disability of the presiding officer. In case the office of presiding officer becomes vacant, the assistant presiding officer will serve until a successor is elected to complete the unexpired portion of the term of the office of presiding officer. (4) A vacancy which occurs in the offices of presiding officer or assistant presiding officer may be filled at the next committee meeting. (5) A member shall serve no more than two consecutive terms as presiding officer and/or assistant presiding officer. (6) The committee may reference its officers by other terms, such as chairperson and vice-chairperson. (i) Meetings. The committee shall meet only as necessary to conduct committee business. (1) A meeting may be called by agreement of department staff and either the presiding officer or at least three members of the committee. (2) Meeting arrangements shall be made by department staff. Department staff shall contact committee members to determine availability for a meeting date and place. (3) Each meeting of the committee shall be announced and conducted in accordance with the Open Meetings Act, Texas Government Code, Chapter 551. (4) Each member of the committee shall be informed of a committee meeting at least five working days before the meeting. (5) A simple majority of the members of the committee shall constitute a quorum for the purpose of transacting official business. (6) The committee is authorized to transact official business only when in a legally constituted meeting with quorum present. (7) The agenda for each committee meeting shall include an item entitled public comment under which any person will be allowed to address the committee on matters relating to committee business. The presiding officer may establish procedures for public comment, including a time limit on each comment. (j) Attendance. Members shall attend committee meetings as scheduled. Members shall attend meetings of subcommittees to which the member is assigned. (1) A member shall notify the presiding officer or appropriate department staff if he or she is unable to attend a scheduled meeting. (2) It is grounds for removal from the committee if a member cannot discharge the member's duties for a substantial part of the term for which the member is appointed because of illness or disability, is absent from more than half of the committee and subcommittee meetings during a calendar year, or is absent from at least three consecutive committee meetings. (3) The validity of an action of the committee is not affected by the fact that it is taken when a ground for removal of a member exists. (4) The attendance records of the members shall be reported to the board. The report shall include attendance at committee and subcommittee meetings. (k) Staff. Staff support for the committee shall be provided by the department. (l) Procedures. Roberts Rules of Order, Newly Revised , shall be the basis of parliamentary decisions except where otherwise provided by law or rule. (1) Any action taken by the committee must be approved by a majority vote of the members present once quorum is established. (2) Each member shall have one vote. (3) A member may not authorize another individual to represent the member by proxy. (4) The committee shall make decisions in the discharge of its duties without discrimination based on any person's race, creed, gender, religion, national origin, age, physical condition, or economic status. (5) Minutes of each committee meeting shall be taken by department staff. (A) A draft of the minutes approved by the presiding officer shall be provided to the board and each member of the committee within 30 days of each meeting. (B) After approval by the committee, the minutes shall be signed by the presiding officer. (m) Subcommittees. The committee may establish subcommittees as necessary to assist the advisory committee in carrying out its duties. (1) The presiding officer shall appoint members of the committee to serve on subcommittees and to act as subcommittee chairpersons. The presiding officer may also appoint nonmembers of the committee to serve on subcommittee. (2) Subcommittees shall meet when called by the subcommittee chairperson or when so directed by the committee. (3) A subcommittee chairperson shall make regular reports to the committee at each committee meeting or in interim written reports as needed. The reports shall include an executive summary or minutes of each subcommittee meeting. (n) Statement by members. The board, the department, and the committee shall not be bound in anyway by any statement or action on the part of any committee member except when a statement or action is in pursuit of specific instructions from the board, department, or committee. (o) Reports to board. The committee shall file an annual written report with the board. (1) The report shall list the meeting dates of the committee and any subcommittees, the attendance records of its members, a brief description of actions taken by the committee, a description of how the committee has accomplished the tasks given to the committee by the board, the status of any rules which were recommended by the committee to the board, anticipated activities of the committee for the next year, and any amendments to this section requested by the committee. (2) The report shall identify the costs related to the committee's existence, including the cost of agency staff time spent in support of the committee's activities. (3) The report shall cover the meetings and activities in the immediate proceedings 12 months and shall be filed with the board each January. It shall be signed by the presiding officer and appropriate department staff. 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 February 1, 1996. TRD-9601472 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 22, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 458-7236 Chapter 289. Radiation Control Control of Radiation 25 TAC sec.289.6 The Texas Department of Health adopts the repeal of existing sec.289.6, concerning the control of radio-frequency electromagnetic radiation, without changes to the proposed text as published in the September 26, 1995, issue of the Texas Register (20 TexReg 7792). The section is being repealed because it is not applicable to current technologies, nor is it consistent with federal requirements, and is therefore obsolete. No public comments were received concerning the proposal. The repeal is adopted under the Health and Safety Code, Chapter 401, which provides the Texas Board of Health with authority to adopt rules and guidelines relating to the control of radiation; and sec.12.001, which authorizes the board to adopt rules for the performance of every duty imposed by law on the board, the department, and the commissioner of health. This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on February 1, 1996. TRD-9601442 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 22, 1996 Proposal publication date: September 26, 1995 For further information, please call: (512) 458-7236 Chapter 295. Occupational Health Texas Enviromental Lead Reduction 25 TAC sec.sec.295.201-295.216, 295.218-295.220 The Texas Department of Health (department) adopts new sec.sec.295.201-295. 216 and sec.sec.295.218-295.220, concerning Texas Environmental Lead Reduction (TELR). Sections 295.201-295.214, 295.216 and 295.218-295.220 are adopted with changes to the proposed text as published in the December 12, 1995, issue of the Texas Register (20 TexReg 10476). Section 295.215 is adopted without changes and therefore will not be republished. Proposed sec.295.217 is being withdrawn from consideration as a rule. The new sections comply with Senate Bill 544 (SB 544), 74th Legislature, 1995, pertaining to regulation of lead-based paint activities in target housing. The sections allow Texas governmental entities to apply for and expend federal funds. The new sections include new requirements for accreditation of training providers, for certification of persons involved in lead-based paint abatement, and for standards of safe lead-based paint activities. SB 544 provides the department with the authority to collect fees to cover the costs to administer the program, and provides the department the authority to assess administrative, civil, and criminal penalties for violation of the Act. The new sections provide a means for reducing the prevalence of lead-based paint related diseases in children. It is estimated that over 5% of Texas children have elevated blood-lead levels. Availability of federal funding to conduct lead abatement will permit more rapid accomplishment of the department's objective to reduce the number of children with lead-based paint related illnesses. The following is a summary of comments received. Following each comment is the department's response. Comment: Concerning sec.295.201(a), one commenter suggested that it is not customary to have background information included in the regulations where it has the effect of law, and, if kept, should be moved to the preamble. Response: The department feels that some background information on the history of lead may be useful to the regulated community. Therefore, no changes were made as a result of the comment. Comment: Concerning sec.295.201(a), one commenter suggested that the word "lead" be inserted between ". . . Blood levels . . ." in the last sentence. Response: The department agrees, and the change has been made. Comment: Concerning sec.295.201(a), one commenter stated that the statement that 1.7 million children in the U.S. have elevated blood levels (EBLs) is misleading as it might be construed as meaning that the children had EBLs merely because of their exposure to deteriorated lead-based paint. The commenter requested this change because, in the case of at least one Texas county, the causes of EBLs in children are the result of other factors. Response: The department acknowledges that there are other sources of lead exposure that can result in lead poisoning in children. However, the department disagrees that this information, which was obtained from published literature, is misleading. The department feels that the statistic of 1.7 million children having EBLs as the result of exposure to lead is representative of childhood lead exposure in the U.S. Comment: Concerning sec.295.201(c), it appears that a part of (c)(1) was left out of the published rules. Is this correct? Response: The department agrees with the reviewer's observation and has inserted the missing wording in the final rules. Comment: Concerning sec.295.201(c)(2), one commenter requested that local health departments be exempted from these rules because of the financial burden that would be placed on them if they were required to obtain training and state certification. If this is not possible, the commenter suggested that the department fund training for local health inspectors. Two commenters asked that the certification fees for local health departments be waived. Response: The department disagrees that local health officials be exempted from the certification requirements, as there is a definite need for all persons involved in handling lead hazards to be properly trained, and to ensure that the health of the public, especially children, is protected. Comment: Concerning sec.295.201(c)(2), one commenter asked the department to clarify this sentence: "These sections also do not apply to persons who perform lead activities within residences that they own, unless the residence is occupied by a person or persons other than the owner or the owner's immediate family while the activities are being conducted." If a residence is vacant at the time when the lead activity will be conducted, does this mean the rules will not apply? Response: The statement means that homeowners themselves may do lead abatement in their homes whether occupied by the homeowner or their immediate family, or vacant, without being certified. The homeowner may not do abatement without being certified if the home is occupied by nonfamily members. However, if the homeowner hires a firm to do abatement in his home, whether it is vacant or not, then the firm must be certified. Comment: Concerning sec.295.201(c)(2), one commenter requested that the department delete the word "target" from the first sentence in this paragraph since "target housing" is defined in sec.295.202 and housing for the elderly is specifically excluded from that definition. Response: The department agrees and the change was made. Comment: Concerning sec.295.202, Definitions, one commenter requested that "unless the context clearly indicates otherwise" be deleted by the department as "this type of language appears to leave the door open for subjective decisions by inspectors or contractors as to the appropriateness of any one rule or the use of any group of rules." Response: The department agrees and the change was made. Comment: Concerning sec.295.202, one commenter requested changes or additions be made to the definitions of "abatement," "bare soil," "certified firm," and "encapsulant" that would change the scope of those definitions. Response: Making the requested changes and/or additions will affect the intent of the definition and cannot be done. The department is required by SB 544 to not exceed the EPA minimum requirements, while at the same time, not being less than the EPA minimum so that the state can obtain EPA accreditation. Based on the department's latest communication with the EPA, the proposed definition as written meets this required objective. Comment: Concerning sec.295.202, one commenter requested the addition of the definition of "operation and maintenance" to the rules' glossary as it is used frequently in the asbestos industry. Response: The department does not believe the addition of this definition would help clarify the rules and could cause some confusion. Comment: Concerning sec.295.202 and sec.295.212(d)(8), one commenter asked that specific post abatement clearance levels listed in the referenced HUD and EPA documents be given in the rules for clarification. Response: The department agrees that the inclusion of specific dust clearance levels would clarify this section. There are no specific post abatement clearance levels required by the federal government, only federal guidelines that are given in the documents listed in sec.295.203. We cannot adopt federal guidelines as rules at this time. We anticipate adopting the federal post abatement clearance levels when established by the federal government. In the interim, we strongly recommend that the post abatement clearance levels in the federal guidelines be used. Comment: Concerning sec.295.202, definition for "Abatement," one commenter suggested that in the definition of abatement, the phrase "in target housing" be added after "permanently eliminate lead-based paint hazards." Response: The department believes that the purpose of these rules as stated in sec.295.201(b) makes it clear that the rules apply to target housing only; therefore, the department does not feel that the requested addition is necessary. Comment: Concerning sec.295.202, definition for "Abatement" subparagraph (A), one commenter noted that for the department "to include the word any at the beginning of this definition would seem to include all the disciplines necessary to cause the abatement action, to include the inspector, risk assessment, project design as well as physical lead hazard removal," whereas in sec.295.212(d), only a department-certified worker or supervisor can conduct abatements. The commenter stated that if the inspector and the risk assessor are involved in an abatement project, sec.295.212 requires them to also be certified as a worker or a supervisor. The commenter requested clarification. Response: Any person performing abatement, i.e., measures intended to permanently remove lead-based paint hazards, as stated in sec.295.212, is required to be certified as a worker or a supervisor. Persons in the other disciplines, e.g., inspectors and risk assessors, that remove lead in performing their responsibilities, e.g., taking a paint sample for laboratory analysis, would not be considered as performing abatement and thus would not be required to be certified as a worker or supervisor. Comment: Concerning sec.295.202, definition for "Abatement" subparagraph (A) (i), one commenter suggested the term "replacement" should be changed to "removal" of lead-painted surfaces and fixture, as replacing a component is not a lead-based paint activity and is not covered by these rules as it involves installing a lead-free component. Response: The department agrees and has made the change. Comment: Concerning sec.295.202, definition for "Abatement" subparagraphs (A) (i) and (B)(ii), one commenter wanted clarification of the following: dust removal is considered as abatement and interim controls are excluded as abatement in the rules, but HUD defines dust removal as an interim control. Response: Dust removal by a homeowner while cleaning the home would be considered a temporary "interim control," but dust removal by a lead abater during abatement or during the final cleanup would be considered permanent removal or abatement of the dust. Comment: Concerning sec.295.202, definition for "Abatement" subparagraph (A) (iii)(II), one commenter suggested that sec.295.205 should read sec.sec.295.206- 295. 211 and that ": Application and Renewals" be replaced with "Requirements." Response: The department agrees and the change has been made. Comment: Concerning sec.295.202, definition for "Abatement" subparagraph (B), one commenter recommended that demolition of dangerous buildings be specifically excluded from the rules. Response: The department agrees that demolition of buildings is not specifically mentioned in the rule, and demolition is not mentioned in the EPA proposed rules. To further clarify this issue, the department has added language in sec.295.202 under the definition of abatement that will exclude the demolition of buildings. Comment: Concerning sec.295.202, definition for "Adequate quality control", one commenter noted that the department's definition failed to identify the person who is responsible for that function, thus making it appear as if this service could be provided by any non-certified individual applying whatever standard deemed appropriate. Response: The rules state that inspectors, risk assessors, workers, and supervisors have specific adequate quality control requirements. Refer to sec.295.212(a)(3), sec.295.212(b)(3), sec.295.212(c)(7), and sec.295.212(d)(8)(C). Comment: Concerning sec.295.202, definition for "Clearance levels", one commenter asked that the phrase "and other EPA-issued guidance documents" be deleted in this definition, as it is too vague. Response: The department agrees and has deleted the language. Comment: Concerning sec.295.202, definition for "Hands-on skills assessment", one commenter suggested that in this definition, the words "contained in" be replaced with "used by" for clarity. Response: The department agrees and the change has been made. Comment: Concerning sec.295.202, definition for "Inspection", one commenter suggested that this definition should begin as a new paragraph. Response: The department noted the error as a publication error. The department's intention was that "inspection" be a separate definition. Comment: Concerning sec.295.202, definition for "Lead-based paint activity", one commenter requested that the department define "risk reduction" as used in this definition. Response: The department feels that "risk reduction" has a plain and ordinary meaning and no special definition is required. Comment: Concerning sec.295.202, definition for "Recognized laboratory", one commenter suggested that in this definition, the comma after the word "recognized" should be located after the word "EPA." Response: The department agrees and the change has been made. Comment: Concerning sec.295.202, definition for "X-Ray Fluorescence Analyzer (XRF)", one commenter requested that in this definition the word "estimate" should be changed to "determine." Response: The department agrees and the change has been made. Comment: Concerning sec.295.203, one commenter stated that the provisions in the adopted by reference section are confusing. The commenter asked if these references are adopted for informational purposes only, or is TDH going to enforce these provisions? Response: The department removed the adoption by reference language to reflect that these were only guidelines. The referenced documents in this section are intended by the federal government as guidelines and thus they will not be enforced. Comment: Concerning sec.295.203, one commenter suggested that the department adopt by reference the OSHA Lead Standard for worker protection (29 CFR 1926. 62) unless the department was not going to enforce the worker protection rules during lead activities. Response: The department does not have the authority to enforce the OSHA Lead Standard for worker protection. However, the department reserves the right to make referrals to OSHA concerning infractions of the OSHA Lead Standard. Comment: Concerning sec.295.203(a), one commenter asked that the following be adopted by reference: 1) The Occupational Safety and Health Administration (OSHA) Regulations: 29 CFR Part 1926.53 (Ionizing Radiation) and 29 CFR Part 1910.96 (Ionizing Radiation); 2) 40 CFR Parts 260-279 (relating to hazardous waste) of the Resource Conservation and Recovery Act (RCRA); 3) 49 CFR Parts 100 through 199 (relating to the transportation of hazardous materials) of the Department of Transportation (DOT) regulations; 4) 30 Texas Administrative Code (TAC) Section 335, State of Texas Hazardous and Solid Waste Regulations; and 5) Texas Regulations for the Control of Radiation (TRCR). Response: SB 544 did not give the department the authority to enforce these regulations and therefore these regulations cannot be adopted by reference in these rules. Comment: Concerning sec.295.203(a), one commenter questioned the purpose of this section since the documents appear to be guidelines that are not enforceable by the department, and there are a variety of guidance documents that can be used. Response: The department agrees that the documents in sec.295.203(a) are guidelines and there are other available guidelines, but the department believes these guidelines are important and valuable resources, and that some persons may not know that they exist. Comment: Concerning sec.295.203(a), one commenter suggested that there are regulations that should be included in this section, such as the TNRCC's Subchapter S, regulation on Risk Reduction Standards. Response: The department is aware that there are other regulations that may be applicable when performing lead abatement, including TNRCC and OSHA regulations. However, the SB 544 does not give the department the authority to enforce TNRCC and OSHA regulations, and therefore these regulations cannot be cited in this section. Comment: Concerning sec.295.203(a)(2), one commenter noted that the title for 60 CFR 47248 is incomplete, and that the following words should be added: " . . . , Lead-Contaminated Dust, and Lead-Contaminated Soil" to the title. Response: The department agrees and this language has been added. Comment: Concerning sec.295.204(c)(1)(B), one commenter suggested that the wording be changed to read "a list of courses for which the training program provider is applying for accreditation." Response: The department agrees and the change has been made. Comment: Concerning sec.295.204(c)(2)(E), one commenter stated that the referenced materials in sec.295.203 are guidance materials with which compliance by training providers is not practical and may even be impossible. The commenter noted that since it is possible to make copies of the documents in sec.295.203(a) available to students, sec.295.204(c)(2)(E) should be reworded to require compliance with sec.295.203(b). Response: The department agrees with the commenter and made the change. Comment: Concerning sec.295.204(c)(3), one commenter stated that the department by stating that it "may also request additional materials retained by the training program provider under paragraph (1) of this subsection," "leaves the door open for a witch-hunt at the discretion of any compliance officer." The commenter stated that "the regulated community has a right to know what, if any, additional documentation may be required for licensure." The commenter asked for specific clarification or elimination of this sentence. Response: The intent of the sentence is not to withhold any licensure requirement from the regulated community or encourage overzealousness by its compliance officers. However, to make a proper compliance evaluation of this section, occasionally more information is necessary. To help clarify the intent the words, "If necessary to determine compliance with this subsection, . . . " have been added to this section. Comment: Concerning sec.295.204(d)(2)(B), one commenter was concerned about trainers not finding "approved" training courses to take as there are no Texas accredited courses presently available. The commenter requested that a "grandfather" clause be added for those prospective trainers who have worked or trained on lead remediation projects using the existing TNRCC and OSHA rules. Response: The reference section above refers to training requirements for principal instructors, not trainers. If the commenter's concern is training for the trainer those requirements are covered under sec.295.204(d)(1) and does not require taking an approved or Texas accredited course. Concerning training for principal instructors, for a few years, trainers in Texas and in other states have used the EPA model course curriculum to provide training in most of the lead disciplines, which would meet the requirements for principal instructors. As the department must not exceed the minimum EPA requirements as required by SB 544, the grandfather clause using the existing TNRCC and OSHA rules cannot be added. Comment: Concerning sec.295.204(d)(2)(B), one commenter preferred that the requirement to take at least 24 hours of training for a principal instructor be changed to a 32-hour requirement. Response: The proposed rule states "at least" and does not prohibit more training time, if desired. The EPA proposed rules have 24 hours, and per SB 544 the department cannot exceed this amount at this time. Comment: Concerning sec.295.204(d)(2)(C), two commenters asked for clarification of what is meant by "lead discipline." Response: Discipline is defined in sec.295.202. A lead discipline means a specific type or category of the lead-based paint activities for which individuals may receive training from accredited programs and become certified by the department. Comment: Concerning sec.295.204(d)(2)(C), one commenter requested that the statement "(C) at least one year of experience in a lead discipline" be deleted because "certifications in the lead disciplines won't exist until someone is trained and the trainer of such persons must be certified prior to commencing training." Response: The department disagrees with the commenter, since sec.295.204(d) (2)(C) requires experience, not certification, in a lead discipline. Comment: Concerning sec.295.204(d)(6)(D) and sec.295.204(e)(4), one commenter recommended that the project designer course be changed from the proposed eight- hour course to a 40-hour course including additional subject materials and a hands-on portion to better prepare the designer for planning actual abatement jobs. The commenter also stated that covering all of the subjects listed in the proposed curriculum in the eight-hour proposed time is difficult for a training provider. Response: The department agrees that additional course time may be better. However, the department must be in compliance with the minimum EPA requirements as required SB 544. Our best information from the EPA indicates these are their minimum course requirements. Comment: Concerning sec.295.204(d)(6)(E) and sec.295.204(e)(5), one commenter recommended that the lead abatement worker course be changed from the proposed 16-hour course to a 24-hour course that would include the additional subjects of respiratory protection and personal hygiene practices. The commenter also stated that covering all of the subjects listed in the proposed curriculum in the 16- hour proposed time is difficult for a training provider. Response: The department agrees that additional course time may be better. However, the department must be in compliance with the minimum EPA requirements as required SB 544. Our best information from the EPA indicates these are their minimum course requirements. Comment: Concerning sec.295.204(d)(8)(A), two commenters asked that requirement for listing the address of the trainee on the training certificates issued by the lead training providers be deleted due to space constraints on the certificate. Also, one of the commenters mentioned that trainees move frequently so it is difficult to have a current address on the certificate. The use of a social security number in lieu of the address was suggested. Response: The department agrees that requiring the trainee address to be on the training certificate would be unnecessarily burdensome. The sec.295.204(d) (8)(A) has been changed to delete the address requirement. The sec.295.204(d)(8) (A) requires a unique number to be put on the training certificate, which may be the person's social security number. Comment: Concerning sec.295.204(d)(8)(C), one commenter noted that the requirement to identify the "test passage date" on the training certificate is redundant and should be deleted. The commenter noted that there is no course completion without test passage. Response: The department agrees the test passage date does not have to be on the training certificate and it has been deleted as a requirement on the certificate, but will require the test results to be kept by the training manager by adding the words "and test passage date:" after the word certificate sec.295.204(j)(1)(F). Comment: Concerning sec.295.204(d)(8)(E), one commenter suggested that the word "provider" be inserted after "program." Response: The department agrees and has made the addition. Comment: Concerning sec.295.204(d)(9)(B), one commenter stated that review of instructor competency may not be necessary. However, if the department feels that it is, then that function should be left to the department and not to the training program manager. The commenter requested that this paragraph be deleted from the rules. Response: The department disagrees with deletion of sec.295.204(d)(9)(B). It is an important function and duty of the training managers to periodically review the competency of their instructors. This will not prevent the state's own evaluation of an instructor's competency. Comment: Concerning sec.295.204(d)(10), one commenter asked that the word "paint" be inserted between "lead-based" and "activities" in the last sentence. Response: The department agrees and has made the addition. Comment: Concerning sec.295.204(e)(3)(M), one commenter asked if the department is requiring that TNRCC's Subchapter S rules to be included in the training, and whether the department will require compliance with them? Response: The department is not requiring the inclusion of TNRCC rules in the lead training for supervisors and will not require compliance with TNRCC rules with the provisions of these rules. Comment: Concerning sec.295.204(e)(4), one commenter recommended that the minimum training curriculum requirements for project designers be changed to include instruction in cleanup and waste disposal methods. Response: The department agrees that these additions to the curriculum may be better. However, the department must be in compliance with the minimum EPA requirements as required in SB 544. Our best information from the EPA indicates these are their minimum course requirements. Comment: Concerning sec.295.204(f)(3), one commenter suggested revising the last sentence in this paragraph to read "passing students who have met all of the requirements of the training program provider will be provided with a refresher course completion certificate." The commenter noted that a trainer with a more stringent requirement than the department's may withhold a training certificate. Response: The department disagrees with the requested change. Based on the department's latest communication with the EPA, the language in this section, as written, is expected to be the same as in the EPA's final lead rules, and as required by SB 544, the department's rules must meet but not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.204(f)(6), one commenter suggested that in the last sentence, the term "provider" be inserted after "program" and that the phrase "after the reason for disapproval has been corrected," be added after "time." Response: The department agrees and the language has been added. Comment: Concerning sec.295.204(i)(2), sec.295.219(d), and sec.295.220(g), one commenter noted that the Act does not require the department to conduct formal hearings and recommends that the informal hearing procedures be adopted instead. Response: The department agrees and has changed these sections accordingly to allow the department's informal hearing procedures to be followed. Comment: Concerning sec.295.204(j)(1), one commenter requested the department change "programs" to "program providers." Response: The department agrees and has made the change. Comment: Concerning sec.295.204(j)(2), one commenter noted that it is more cost effective to the training provider and saves training space to store student records that are more than one year old at an off-site location. The commenter stated that on-site storage of records is an inappropriate requirement and should be removed from the rules. Response: The department must have on-site access to important documents during audits. Since certificates are now issued for a three-year period, a minimum of three years and six months for on-site storage is a reasonable requirement, so the statement will remain. Comment: Concerning sec.295.204(j)(3), one commenter requested that "or transferring the records" be deleted from this paragraph, since such a requirement is inappropriate. Response: The department disagrees with deletion of the statement. The department needs to be aware of the location of the training records for compliance inspections. Additionally, based on the department's latest communication with the EPA, the language in this section, as written, is expected to be the same as in the EPA's final lead rules, and as required by SB 544, the department's rules must meet but not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.205, one commenter noted that this section does not address the overall requirements for a person wishing to become certified in the various lead disciplines. The commenter suggested that sec.sec.295.206-295. 211 be referenced in this section as well. Response: The department agrees and the addition was made to sec.295.205(a). Comment: Concerning sec.295.205(a), one commenter requested that the word cashier be added in front of check or money order to prevent the department from accepting personal checks. This will ensure that there is no delay in application processing as a cashier's check can be cashed immediately, while there is sometimes a waiting period for personal checks to be cleared. Response: The department concurs with the recommendation and has made the change. Comment: Concerning sec.295.205(c)(1), one commenter asked for the TDH to clarify the meaning of "substantial violations." Response: The department agrees that this needs clarification. The words "substantial violations" were replaced with "assessed penalties from violations" for clarity Comment: Concerning sec.295.205(c)(14), one commenter asked if something was missing in the phrase ". . . any part of or its environment . . . " Response: The department agrees. Language was inadvertently omitted. The phrase was changed to reads ". . . any part of target housing or its environment." Comment: Concerning sec.295.205(g) and sec.295.204(g)(2), one commenter stated that the time requirements of these two sections conflict with each other, and asked that the renewal application time requirements be left as recommendations. Response: The department disagrees with the commenter. Section 295.205(g) is for certification renewal, whereas sec.295.204(g)(2) is for re-accreditation of a trainer. These requirements are independent and provide adequate review time for each application. Comment: Concerning sec.295.206, sec.295.207, sec.295.209, one commenter recommended that all inspectors, risk assessors, and project designers applying for department certification be required to show proof of professional liability coverage, not less than $1 million per claim, for protection from claims arising out of performance of professional services. Two commenters also suggested that persons applying to become a certified firm under sec.295.211 be required to have insurance. One commenter specified a lead-based paint endorsement to their Commercial General Liability policy with minimum bodily injury and property damage limits of $1 million per occurrence and products/completed operations coverage with a separate aggregate of $1 million. The policy should not exclude lead-based paint or any hazardous materials or pollution defined as lead-based paint, and should provide "occurrence" coverage without a sunset clause. Response: The department agrees that certification requirements of firms and persons under these rules should include some kind of financial assurance such as liability insurance. However, the EPA has no requirements in their proposed rules regarding any type of financial assurance that can be used to set the proper amount or type of assurance. The $1 million is an amount that was set based on the needs regarding asbestos abatement and are probably not applicable regarding lead abatement. After the department can determine a proper amount and method of financial assurance, the rules will be amended to include financial assurance. Comment: Concerning sec.295.206(a), sec.295.207(a), and sec.295.209(a), one commenter, in order to restrict the scope of work of a lead inspector, a lead risk assessor, and a lead project designer, suggested that the phrase "shall not engage in lead-based paint abatement or removal of lead-based paint hazards" be added to their certification requirements. Response: The department disagrees that the requested changes should be made to this section, based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as or similar to those in the EPA's final lead rules. As required by SB 544, the department's rules must not exceed minimum Federal final rules and regulations. Comment: Concerning sec.sec.295.206(a)-295.210(a) and sec.295.211(b), two commenters felt that TDH requiring annual recertification in these subsections exceeds the EPA's proposed rule recertification requirement of three years. Response: The department concurs that annual certification exceeds the EPA's proposed three-year recertification requirement. These sections will be changed to provide three-year term certificates. However, the fee will be prorated annually and be collected annually to fulfill the requirement that the fees are set to recover the cost of the program. Comment: Concerning sec.sec.295.206(b)-295.210(b), one commenter felt that the requirement for annual refresher courses exceeds minimum federal requirements. Response: The department acknowledges that the requirement for annual refresher courses exceeds the proposed minimum federal requirements. The requirement has been changed to a three-year period as in the EPA proposed rules. However, the department strongly encourages persons who are conducting lead-based paint activities in target housing to keep abreast of current regulations and lead abatement procedures by taking annual refresher courses. Comment: Concerning sec.sec.295.206(c), 295.207(c), and 295.208(c), one commenter asked if the disciplines for these sections will be required to take and pass an examination other than the course completion exam? Response: The department, at this time, requires only the passing of the course completion exam. However, a third party exam may be required in the future. Comment: Concerning sec.295.206(c)(2), one commenter suggested that the department require on-the-job training or experience as part of the inspector certification requirements. The commenter requested that the department substitute the language in sec.295.206(c)(2) with "Six months of on-the-job experience as an assistant to an "inspector" under the direct supervision of a "project designer," "risk assessor" or an "inspector" with one year minimum experience." Response: The department agrees that on-the-job training would be beneficial, but cannot make the requested change at this time. Based on the department's latest communication with the EPA, the language in this section, as written, is expected to be the same as in the EPA's final lead rules, and as required by SB 544, the department's rules must meet but not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.206(d)(2), one commenter recommended that the word "of" replace the word "in" before the words "target housing" for clarity. Response: The department concurs and has made the recommended change. Comment: Concerning sec.295.207(c)(1)(B)(i), one commenter requested that "public health" be added as a related field. Response: The department agrees and has added public health to this section. Comment: Concerning sec.295.207(c)(1)(B)(ii), four commenters requested that "Certified Safety Professionals (CSP)" be included to meet or exceed additional experience and/or education requirements to become a risk assessor. One commenter requested that "registered sanitarian" and "public health nurse" be added. Response: The department agrees and has added these suggested categories to this section. Comment: Concerning sec.295.207(c), one commenter noted that there were no requirements for on-the-job training or experience as part of the risk assessor certification requirements, and suggested adding a new paragraph in this section to read "Six months of on-the-job experience under the direct supervision of a Project Designer or a Risk Assessor with one year minimum experience." Response: The department agrees that on-the-job training would be beneficial, but cannot make the requested change at this time. Based on the department's latest communication with the EPA, the language in this section, as written, is expected to be the same as in the EPA's final lead rules, and as required by SB 544, the department's rules must meet but not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.207(d), two commenters recommended that the following statement be added to this section, since a risk assessor must also complete a lead inspector course: (6) perform lead inspector responsibilities as provided in sec.295.206(d) (relating to Inspector Certification Requirements) . Response: The department disagrees and is not in favor of placing the additional responsibilities on the risk assessor discipline. Although the risk assessor is authorized to collect lead samples and perform the same functions as the lead inspector, the two disciplines are distinct and separate from the other. The risk assessor may become certified as an inspector if these responsibilities are needed. Comment: Concerning sec.295.208(a), the commenter asked that language be added to require that a certified lead abatement supervisor be employed by a certified firm to engage in lead-based paint abatement or removal of lead-based paint hazards. Response: The department disagrees that the requested change should be made to this section, as it is based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as or similar to those in the EPA's final lead rules. As required by SB 544, the department's rules must not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.208(c)(1)(B)(ii), one commenter requested that this section be changed to read "at least two years of experience in environmental remediation work such as asbestos abatement or storage tank removal." Response: The department disagrees with the requested change. The language, as written in the rule would allow experience in both asbestos abatement and storage tank removal, and it has a broader scope of allowable experience. Additionally, based on the department's latest communication with the EPA, the language in this section, as written, is expected to be the same as in the EPA's final lead rules, and as required by SB 544, the department's rules must meet but not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.208(d)(6), one commenter felt that a supervisor should "restrict" accessibility rather than "maintain" accessibility. Response: The department disagrees, as "maintaining accessibility" refers to the supervisor, not the work site. The supervisor must be available either directly, or through a pager or answering service, to be present at the work site in no more than two hours, in accordance with sec.295.212(d)(2). Comment: Concerning sec.295.209, one commenter believes that project designer certification should be eliminated and that the work of the designer done by the risk assessor, because a certified risk assessor is capable of performing the duties of a project designer. Also, by including the project designer's responsibilities as written, the department is shifting the project design responsibilities to a different category. Response: The department disagrees that the lead project designer certification should be eliminated. Based on the department's latest communication with the EPA, it is our understanding that these requirements are likely to be the same as or similar to the EPA's final lead rules. Comment: Concerning sec.295.209(c)(1)(A), one commenter asked that since there are no lead project designer courses being offered that use the EPA model course curriculum, would it be possible for individuals who have received either inspector, risk assessor, or contractor/supervisor training from a trainer utilizing the EPA model course curriculum prior to January 1, 1996 to become eligible for certification as a project designer? Response: There are lead project designer courses being offered that use the EPA model course curriculum that would fulfill the requirements. The department will be glad to help locate one of these courses. Comment: Concerning sec.295.209(c)(1)(B)(i)-(ii), one commenter requested that the work experience requirements for a lead project designer be changed to include the same requirements needed to become an "individual asbestos consultant" in the State of Texas as both persons would have similar responsibilities. Response: The department disagrees that the work experience requirements for a lead project designer should be the same as those of an "individual asbestos consultant." The listed work experience and educational requirements are based on the department's latest communication with the EPA, with the understanding that these requirements are likely to be the same as or similar to those in the EPA's final lead rules. Comment: Concerning sec.295.209(d)(1) and (2), one commenter said these responsibilities of the project designer are the duties of the firm and wanted clarification. What are the department's opinion and intent of these sections? Response: These sections list the required responsibilities that a certified project designer must follow and the department intends to enforce. They could be considered duties of the certified firm that employs the designer. Comment: Concerning sec.295.209(d)(2), one commenter asked if the pre-abatement plan mentioned in this subsection is the same as the occupant protection plan mentioned throughout the other sections of the rules. Response: The pre-abatement plan may be similar to the occupant protection plan if the target housing is occupied. Comment: Concerning sec.295.211, one commenter suggested that certified firms receive some type of training, such as the contractor/supervisor or inspector/risk assessor course. Response: In the context of the rules, certified firms are companies and therefore cannot be trained, only its employees can be trained. The employees of a firm must receive training and become certified by the department for their specific job (i.e., worker, supervisor, etc.), before the firm can be certified by the department. Comment: Concerning sec.295.211(a), one commenter suggested that the phrase "shall not also engage in lead-based paint inspection and testing, risk assessment, risk reduction, lead abatement project design or planning, and post- abatement clearance testing" be added to this section. Response: The department cannot make the requested change, as the proposed language is based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as or similar to those in the EPA's final lead rules. As required by SB 544, the department's rules must not exceed minimum Federal final rules and regulations. Comment: Concerning sec.295.211(a), one commenter thought that this subsection required the training firms to become certified in the lead disciplines and requested that the language in this subsection be changed. Response: The department disagrees with the commenter and no change will be made. Training is not defined as a "lead-based paint activity," and therefore this section has no effect on a training activity. Comment: Concerning sec.295.211(c)(1), one commenter noted that the term "owner" may be too restrictive. Response: The department agrees and replaced "owner" with "owner or authorized agent of the owner" in this section and other relevant locations in the rules. Comment: Concerning sec.295.211(c)(1)(A), one commenter recommended that the following phrases be added: "(A) (after paint) . . . abatement or removal of lead-based paint hazards." Response: The department's intent was to allow firms to employ individuals in all the disciplines and not limit them to abatement type activities. Comment: sec.295.211(d), one commenter recommended adding "(6) to conduct abatement activities in accordance with the procedures and requirements of the occupant protection plan as well as industry accepted standards and guidelines" to the section. Response: The department disagrees with making the addition; sec.295.211(d) (1) covers the same requirements and it does not need to be restated again. Comment: Concerning sec.295.211(d)(1), one commenter asked why transportation of lead-based paint waste was not addressed in the proposed rules and gave some detailed examples of possible transportation requirements. Response: The department does not have the authority to regulate the transport of lead-based paint waste. The Texas Natural Resource Conservation Commission and the United States Department of Transportation have that authority. Comment: Concerning sec.295.212, one commenter recommended that lead inspections conducted by local health departments should not be covered by these rules. Also, the commenter recommended that lead inspectors should recognize other lead hazards such as water and folk remedies. Response: The department disagrees that lead inspections conducted by local health officials be exempted from the rules because all inspections should be conducted according to the same basic standards. While recognizing that there are causes of lead exposure to children other than deteriorating LBP, these rules were specifically designed in accordance with SB 544 to regulate activities involving LBP. These rules in no way prevent local health departments or other persons from following up on other potential sources of lead exposure. Comment: Concerning sec.295.212, sec.295.212(a)(1) and (d)(1), one commenter requested that in sec.295.212 the phrase "in target housing" be added at the end of the heading, and in sec.295.212(a)(1) after the phrase "lead-based paint inspections," in order to clarify that these standards do not apply to any other buildings; and in sec.295.212(d)(1) after the phrase "an abatement," to clarify that only abatements in target housing must use certified workers or supervisors. Response: The department believes that the purpose of these rules as stated in sec.295.201(b) makes it clear that the rules apply to target housing only. Therefore, the department does not feel that the requested addition is necessary. Comment: Concerning sec.295.212(a)(4)(I), one commenter recommended that the department reference the following with regard to X-ray fluorescence analyzers (XRFs): The Texas Regulations for the Control of Radiation-licensure, requirements for the radiation safety officer, and safety procedures; the OSHA 20 CFR 1910.96 and 1926.53-safety procedures, exposure monitoring; the DOT 49 CFR Part 173; and the Nuclear Regulatory Commission (NRC) requirements. Response: The department feels that persons purchasing XRFs are already aware of the regulations concerning radiation safety and licensure. Comment: Concerning sec.295.212(b)(2)(A), one commenter requested that the following phrase be added to this section: "(A) (after dwelling) . . . and common area." Response: The department concurs and has made the change. Comment: Concerning sec.295.212(b)(2)(B) and sec.295.212(c)(2), one commenter requested that the word "representative" be added to read "... each representative surface with deteriorated paint shall be tested for the presence of lead-based paint". Response: The department agrees and has added the word "representative" as requested. Comment: Concerning sec.295.212(b)(4) and sec.295.212(c)(8), one commenter requested the definition of "detectable levels of lead," as it relates to the collection and analyses of paint chip dust or soil samples. Response: Detectable level would be the lower limit of detection of lead content of the sample and would be determined based on the method used in the analysis; sec.295.212(e)(2) gives the laboratory standard to ensure the proper detection limit is met. Concerning sec.295.212(c)(9)(B)-(C), one commenter suggested that the phrase "address of residential dwelling" be added in place of "residences and buildings" in these two sections. Response: The department concurs with this request. To further clarify the language " . . . residential dwelling, multi-family dwelling and unit" replaces "residences and buildings." Comment: Concerning sec.295.212(d)(3), one commenter noted that this subsection mentions a "certified contractor," and as this is not mentioned elsewhere in the rules, the commenter recommends that this term be deleted. Response: The department concurs with this comment, and the words "contractor or" have been deleted from the rules. Comment: Concerning sec.295.212(d)(6)(A) and sec.295.212(d)(6), one commenter recommended that the department include the following methods: propane fueled heat grids; chemical stripping practices which utilize methylene chloride, and uncontained hydro blasting or high pressure washes. Response: The department agrees that these methods for lead abatement should be prohibited. However, the department cannot make the requested changes, as the proposed language is based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as or similar to those in the EPA's final lead rules. Comment: Concerning sec.295.212(d)(6)(B), one commenter noted that the "99. 997" should be "99.97". Response: The department agrees and the change has been made. Comment: Concerning sec.295.212(d)(7), one commenter asked that the department define the standard for "non-contaminated soil" that must be used to replace lead-contaminated soil. Response: The department cannot provide this standard until the federal government establishes one first, per the requirement of SB 544. However, based on the guideline referenced in sec.295.203(a)(2) a reasonable guideline to use for "non-contaminated soil" would be 400 ppm or less of lead until a specific standard is developed. Comment: Concerning sec.295.212(d)(8), one commenter suggested that a third party clearance testing and conflict of interest provisions be included. Response: The department acknowledges that these provisions would be appropriate additions to the rules, but EPA is not proposing these provisions in their rules. Therefore, the department cannot include these provisions at this time as the department cannot exceed minimum federal requirements. Comment: Concerning sec.295.212(d)(8)(E), one commenter requested that the "to" be replaced with "on" in the phrase ". . . conducted in or to the target housing . . .", so it would read: (E) (before abatement activities) conducted in or on the target housing. Response: The department concurs and has made the recommended change. Comment: Concerning sec.295.212(d)(8)(E), and sec.295.212(d)(8)(E)(iii), one commenter requested that the following words and phrases be added: "(E) (before abatement activities) on the target housing, and (iii) (before bare soil) in common areas, and on the dripline or next to the foundation below any abated exterior surface." Response: The department concurs and has made the recommended changes. Comment: Concerning sec.295.212(d)(8)(E)(ii), one commenter noted that this section mentions conducting an abatement with "no containment," and the commenter wanted to know when this could occur. Response: Chapter 8 of the document referenced in sec.295.203(a)(1) discusses abatement procedures that do not require containment. Comment: Concerning sec.295.212(d)(9), one commenter requested that the department define "random sampling" as it applies to clearance testing. Response: The department feels that "random sampling" has a plain and ordinary meaning and no special definition is required. Comment: Concerning sec.295.212(d), one commenter requested that the department add the following phrase: "(12) The certified firm is responsible for the safe and proper treatment, storage, transportation, and disposal of lead-based paint waste in accordance with applicable federal, state, and local requirements." Response: The department agrees that the addition of this statement may be useful. However, the department cannot make the requested changes, as the proposed language is based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as or similar to those in the EPA's final lead rules. Comment: Concerning sec.295.212(g), one commenter requested that the word "in" in the last sentence be deleted and replaced with "and 40 CFR 745." Response: The department agrees and the change has been made. Comment: Concerning sec.295.213, one commenter suggested that the first sentence indicates that lead-based paint activities must be conducted using only the standards found in sec.295.212, which the commenter feels are too vague. The commenter believes that the first sentence should be deleted, as the proposed rules reference other procedures and standards that must be followed. Response: The department disagrees to delete the sentence. First, the department believes that the standards in sec.295.212 are not vague and provide sufficient guidance. The language in sec.295.212 and the first sentence in sec.295.213, is based on the department's latest communication with the EPA, with the understanding that these requirements, as written, are likely to be the same as those in the EPA's final lead rules. Comment: Concerning sec.295.213, one commenter requested that local health departments conducting inspections on target housing, not related to abatement, should be exempted from this section. Response: The department disagrees that local health departments conducting inspections on target housing, not related to abatement, should be excluded. Inspections involving LBP must meet the minimum requirements sec.295.212, and must be conducted by certified individuals. Comment: Concerning sec.295.213, one commenter requested that the phrase "target housing" be added to clarify that the procedures and standards only apply to target housing. Response: The department believes that the purpose of these rules as stated in sec.295.201(b) makes it clear that the rules apply to target housing only; therefore, the department does not feel that the requested addition is necessary. Comment: Concerning sec.295.214, one commenter stated that if inspection and risk assessment are considered lead abatement activities under sec.295.202, then local health departments should not be kept from conducting inspections for the ten working day period required by the notification. Response: The department disagrees that inspection and risk assessment are considered to be lead abatement activities under sec.295.202; they are considered to be "lead-based paint activities" by the definition in sec.295.202. Referring to sec.295.214(a), it is stated that notifications will be required for "any lead-based paint abatement activity in target housing." Comment: Concerning sec.295.214(a), one commenter asked whose "original signature" is required on the notification form, and who is responsible for notifying the department of any lead-based paint abatement activity. Response: The department agrees that this section should be clarified. In sec.295.214(a), the original signature of the certified firm's owner or an authorized agent of the owner will be acceptable on the notification form. Also for clarity, in sec.295.214(b), the certified firm or its designated agent will be responsible for notifying the department. Language has been added to clarify these two subsections. Comment: Concerning sec.295.214(c), one commenter suggested that notice to the department should only be required for those planned and intended abatement activities, not "operations and activities" which "may" or "might" disturb lead. Response: The department agrees with this suggestion, and language has been added to indicate that only planned or intended abatement activities shall require notification to the department, except in the case of emergency notifications. The department has also clarified that the "start date" is the first day that lead abatement activities commence. Comment: Concerning sec.295.214(d), one commenter suggested that the words "department shall" be changed to "the certified firm shall" to reflect who needs to take the action; and then reword the two following subparagraphs to correspond with the change. Response: The department agrees and the appropriate changes have been made. Comment: Concerning sec.295.214(h), one commenter asked if there are any fees for amended notifications. Response: The department does not intend to charge fees for amended notifications. Comment: Concerning sec.295.214(h)(1) and (h)(3), one commenter asked if the $50 notification fee applied to a building or structure and not to individual units or residential dwellings within those buildings. The commenter also suggested that the following phrase be added to sec.295.214(h)(3) to clarify the term "project": "all dwelling units at the same street address constitute one project for the purposes of computing notification fees." Response: The department agrees with the suggested change and has included it in the final rules. Comment: Concerning sec.295.216, two commenters asked the department to clarify which fees are included in this exemption. One commenter asked if state government includes state agencies and suggested state agencies be included in the language. Response: The fees that are exempt are the accreditation fees for training programs that are operated by Federal, State, or local governments and nonprofit entities. Not exempt are: 1) the certification fees for the various disciplines and firms, and 2) the accreditation fees for the training programs operated for profit. The language in this section was reworded for better clarity. State agencies would be included under state governments and need not be stated in the language. Comment: Concerning sec.295.216, one commenter stated that there is no valid reason to exempt any group from paying the certification fee and that it will prevent control if no fee is required. Response: The department disagrees with the requested change for two reasons. First, the department will have the same control on the fee exempt trainer since all the other requirements are enforceable including de-accreditation, if warranted. Secondly, the department is required by SB 544 to become an authorized State program by the federal government, and Title X, section 402(a)(3) requires that authorized State programs exempt Federal, State, or local governments, and nonprofit entities from paying a fee. Comment: Concerning sec.295.216, one commenter felt that the fact nonprofit training programs are exempted from paying an accreditation fee to the department puts the private training programs, that have to pay the fee, at a competitive disadvantage. Therefore, the commenter recommended that nonprofit training programs should also be required to pay the fee. Response: The department is required by SB 544 to become an authorized State program by the federal government. Title X, section 402(a)(3) requires that authorized State programs exempt nonprofit training entities from paying the fee. Comment: Concerning sec.295.217, one commenter requested that this provision be deleted because it is contradictory in that it mentions "voluntary efforts, " but also indicates legal action will be taken for non-compliance making it unclear what is voluntary. The commenter also felt that this provision is duplicative because the agency's enforcement authority is explained in sec.295. 220. Response: The department agrees and has withdrawn sec.295.217 from permanent adoption. Comment: Concerning sec.295.218(c), one commenter recommended that this section be deleted as the SB 544 does not give the department the right of entry. Response: The department agrees and has deleted sec.295.218(c), and the subsections (d) and (e) have been changed to (c) and (d), respectively. Comment: Concerning sec.295.218(c), one commenter suggested the following changes to clarify why an inspector would enter various areas: "A department representative, upon presenting the department ID card, shall have the right to enter at all reasonable times the storage or office areas or vehicles to review records of lead-based paint activities in target housing to determine compliance with these regulations." Response: This subsection has already been deleted (see previous comment and response), so no response is necessary. Comment: Concerning sec.295.218(d), one commenter requested that the phrase in (d) "in accordance with these regulations" be added after "in the course of his official duties." Response: The department agrees with the requested change, and language has been added to the final rule to reflect this change. Comment: Concerning sec.295.218(e), one commenter suggested that the phrase "in target housing" be added after lead-based paint activities. Response: The department believes that the purpose of these rules as stated in sec.295.201(b) makes it clear that the rules apply to target housing only; therefore, the department does not feel that the requested addition is necessary. Comment: Concerning sec.295.220(b) and (f)(1), one commenter stated that the penalty of up to $10,000 per day per violation is in excess of the $5,000 penalty stipulated in SB 544. Response: The department agrees that the $10,000 per day per violation is in excess of the $5,000 penalty mentioned in SB 544. Section 295.220(b) and (f) (1) has been reduced to a penalty of $5,000 per day per violation Comment: Concerning sec.295.220(e), one commenter noted that this section references doubling a penalty for a second violation and raising the penalty up to five times, which would be in excess of the $5,000 limit. Response: The department concurs that with the proposed rule language the doubling or raising a penalty up to five times could increase the penalty in excess of the $5,000 limit. However, the department believes this rule is necessary to discourage repeat violations that are serious or significant in nature. To clarify the limit provided by law, language has been added to the rule stating that limit in any case may not exceed $5,000. Comment: Concerning sec.295.220(f)(3)(E), one commenter recommended that the statement "(E) proper risk assessment report not prepared" be removed, as the proposed rules do not specify when an inspection, risk assessment, or lead hazard screen must be performed. The commenter asked for a clarification as to when an inspection, a lead hazard screen, or a risk assessment must be performed. Response: The department disagreed and made no change. The purpose of the referenced statement is to require a report to be prepared when a risk assessment is performed. The documents listed in sec.295.203(a) provide the guidelines for when an inspection, a lead hazard screen, or a risk assessment must be performed. Comment: Concerning a general comment, one commenter stated that TDH has the authority to impose both civil and criminal penalties, but that there is no reference to this in the rules. Is this an oversight? Response: SB 544 gives the department the authority to seek both criminal and civil remedies through the judicial system. As the procedures for carrying out these provisions are addressed in the judicial process, the department elected to not reiterate these provisions in the rules. Comment: Concerning a general comment, one commenter noted that the word "certification" was used instead of "licensing" and asked what was the difference and whether the wording will be changed once the EPA's model accreditation comes out. Response: The department uses the word "certification" because it is used in the legislation requiring these rules as well as in the EPA's proposed rules. Licensing in the context of these rules has no significant difference from certification. There are no plans to change to licensing. Comment: Concerning a general comment, one commenter asked that a clause be added that would allow training by department staff for use and access to an XRF by local health departments, or that the number of samples allowed to be submitted to the TDH lab be less restrictive. Response: This clause would exceed the federal requirements to be included in these rules. The department wishes it had enough funds to perform more lab sample analyses and purchase sufficient XRF analyzers for use by all local health departments, but it does not at this time. However, the department will be glad to work with the local heath departments to do what it can to resolve particular problems. Comment: Concerning a general comment, regarding interfacing with existing state and federal lead regulations, one commenter asked whether the department's rules are intended to apply to all environmental consultants engaged in lead remediation activities, and how does the department propose to interface with the existing TNRCC rules. Response: These rules are applicable only to lead-based paint activities in target housing and are not applicable to lead remediation sites as regulated by TNRCC. Comment: Concerning a general comment, one commenter asked in exactly what way cities would be impacted by $15,000 in fees per year as referenced on page one of the rules. Response: This amount is the department's estimate of certification fees the local governments will pay to the state to have their employees certified to conduct lead-based paint activities. Comment: Concerning a general comment, one commenter noted that the fee structures for certification as a Firm, Risk Assessor, Project Designer, and an Inspector are high and well beyond similar requirements for asbestos licensure in Texas or other neighboring states. Response: The department disagrees. The Texas legislature and Title X, sec.402(a) requires that the program collect fees that will cover the cost of operating the program. The certification fees in this program are identical or very close as those presently being charged for licensing similar disciplines by the Texas asbestos program. At this time, the established fees are the best estimates of the amount necessary to cover the program's cost. In the future, the fee amounts will be evaluated and revised, either by decreasing or increasing, as necessary just to cover the program costs. Comment: Concerning a general comment, one commenter proposed adding the following provision that allows a violator 14 days to come into compliance before the administrative penalty is assessed: "A person found to be in violation of these rules must comply not later than the 14th day after the date of the finding. A person that does not comply before the 15th day after the date of the written notification of the violation is subject to an administrative penalty." Response: The department agrees that there should be some latitude to allow persons failing to comply with the rules some time to get into compliance; however, the department will not adopt a written policy at this time. The department anticipates that our compliance officers will have some discretion in determining what constitutes major versus minor infractions of the rules, and the department hopes for cooperative efforts between the regulated community and the department compliance officers. Several individuals and the following organizations provided the comments: U.S. Environmental Protection Agency, the City of Austin Department of Public Works and Transportation, the City of Austin Safety and Worker's Compensation Division, the City of Houston Health and Human Services Department, The University of Texas System Office of Environmental Affairs, Scientific Investigation and Instruction Institute, Texas Natural Resource Conservation Commission, Professional Safety Training Inc., San Antonio Metropolitan Health District, NATEC, Austin/Travis County Health and Human Services Department Environmental Health Services Division, The Texas A&M University System Texas Engineering Extension Service, Harris County Health Department, Phase One Technologies, Construction Safety and Health Inc., American Society of Safety Engineers, American Society of Safety Engineers-Central Texas Chapter, and Texas Department of Health staff. The commenters were generally supportive of the rules. However, they had questions, comments, suggestions and concerns about specific sections. Comments were received from the El Paso City-County Health and Environmental District after the closing date. There was not sufficient time to address their comments, however, these comments will be considered the next time these rules are amended. The District stated that they "understand the problem related to lead in paint and fully supports the proposed lead regulations." The new sections are adopted under the Texas Revised Civil Statutes, Article 9029, sec.3, which provide the department with the authority to adopt rules necessary to carry out its powers, duties, and responsibilities relating to establishment of a program for certification of a person involved in a lead- based paint activity in target housing and for accreditation of training providers in compliance with federal law and rules; and Texas Health and Safety Code, sec.12.001(b)(1) which requires the department to adopt rules for the performance of every duty imposed upon it by law. sec.295.201. General Provisions. (a) History. Lead has long been known to be a poison. A primary source of lead in the residential environment is lead-based paint, which was widely used in household paints before 1978. The exposure to lead-based paint in residential environments comes directly from deteriorating or damaged painted surfaces as well as from dusts and soils that have been contaminated by lead-based paint. Adults and particularly children can be affected by lead-based paint. It is estimated that 1.7 million American children have elevated blood lead levels as a result of their exposure to lead. (b) Purpose. The purpose of these sections is to establish the means to control and minimize public exposure to lead by regulating lead-based paint activities in target housing. (c) Scope (for the purposes of certification and accreditation). (1) Rules application. These sections contain procedures and requirements for the accreditation of lead training providers, procedures and requirements for the certification of individuals and firms engaged in lead-based paint activities in target housing, and standards for performing such activities. These sections also require that all lead-based paint activities in target housing be performed by certified individuals. (2) Exclusions. These sections do not apply to housing for the elderly or persons with disabilities, unless a child who is younger than six years of age resides or is expected to reside in that housing, nor do these sections apply to target housing with zero bedrooms. These sections also do not apply to persons who perform lead activities within residences which they own, unless the residence is occupied by a person or persons other than the owner or the owner's immediate family while the activities are being conducted. (d) Severability. Should any section or subsection in this chapter be found to be void for any reason, such finding shall not affect all other sections. sec.295.202. Definitions. The following words and terms, when used with these sections, shall have the following meaning. Abatement- (A) Includes any measure or set of measures designed to permanently eliminate lead-based paint hazards. Abatement includes, but is not limited to: (i) the removal of lead-based paint and lead-contaminated dust, the permanent containment or encapsulation of lead-based paint, the removal of lead-painted surfaces or fixtures, and the removal or covering of lead-contaminated soil; (ii) all preparation, cleanup, disposal, and post-abatement clearance testing activities associated with such measures; and (iii) abatement projects, which specifically include, but are not limited to: (I) projects for which there is a written contract or other documentation, which provides that an individual or firm will be conducting activities in target housing that: (-a-) shall result in the permanent elimination of lead-based paint, lead- contaminated dust or soil, and other lead-based paint hazards; or (-b-) are described in subsections sec.295.202(A)(i) and (ii) of this paragraph; (II) projects involving the permanent elimination of a lead-based paint hazard, lead-based paint, and lead-contaminated dust or soil, conducted by persons certified in accordance with the sections relating to the certification requirements unless such projects are covered by subparagraph (B) of this section; (III) projects involving the permanent elimination of a lead-based paint hazard, lead-based paint, and lead-contaminated dust or soil, conducted by persons who, through their company name or promotional literature, represent, advertise, or hold themselves to be in the business of performing lead-based paint activities as identified and defined by this section, unless such projects are covered by subparagraph (B) of this section; or (IV) projects involving the permanent elimination of lead-based paint hazards, lead-based paint, or lead-contaminated dust or soil, that are conducted in response to State or local abatement orders. (B) Excludes: (i) renovation, remodeling, or landscaping activities, which are not designed to permanently eliminate lead-based paint hazards, but, instead, are designed to repair, restore, or remodel a given structure or dwelling, even though these activities may incidently result in a reduction or elimination of lead-based paint hazards; and (ii) interim controls, operations and maintenance activities, or other measures and activities designed to temporarily, but not permanently, reduce lead-based paint hazards ;and (iii) demolition of target housing buildings. Accredited training program-A training program that has been accredited by the Texas Department of Health (department) to provide training for persons engaged in lead-based paint activities. Act-Senate Bill 544 as passed in the 74th Legislature, 1995. Adequate quality control-A plan or design to ensure the authenticity, integrity, and accuracy of lead-based paint samples, including dust, soil, and paint chip or paint film samples. Adequate quality control also includes provisions for representative sampling. Bare soil-Soil not covered with grass, sod, or some other similar vegetation. Bare soil includes sand. Board-The Texas Board of Health. Certified firm -A company, contractor, partnership, corporation, sole proprietorship, association, or other business entity that performs lead-based paint activities, and that has been certified by the department. Certified inspector -A person who has been certified by the department to conduct lead inspections and sample for the presence of lead in paint, dust, and soil for the purposes of abatement cleanup and clearance testing. Certified lead worker-A person who has been certified by the department to perform abatements, as defined by this section. Certified project designer-A person who has been certified by the department to plan and design abatement projects. Certified risk assessor-A person who has been certified by the department to conduct lead risk assessments. Risk assessors also sample dust and soil for the purposes of lead abatement cleanup and clearance testing. Certified supervisor -A person who has been certified by the department to supervise and conduct lead abatements, or has been certified by the department to plan and design abatement projects involving fewer than ten units. Clearance levels -Values that indicate the maximum amount of lead permitted in dust on a surface following completion of an abatement activity. Clearance levels that are appropriate for the purposes of this section may be found in the Environmental Protection Agency Guidance on Residential Lead-Based Paint, Lead- Contaminated Dust, and Lead-Contaminated Soil (60 Federal Register 47248 (1995). Commissioner-The Texas Commissioner of Health. Common area-A portion of target housing that is generally accessible to all occupants. Such an area may include, but is not limited to, hallways, stairways, laundry and recreational rooms, playgrounds, community centers, garages, and boundary fences. Component or building component-A specific design or structural elements or fixtures of a target housing that are distinguished from each other by form, function, and location. These include, but are not limited to, interior components such as: ceilings, crown molding, walls, chair rails, doors, door trim, floors, fireplaces, radiators and other heating units, shelves, shelf supports, stair treads, stair risers, stair stringers, newel posts, railing caps, balustrades, windows and trim (including sashes, window heads, jambs, sills or stools and troughs), built-in cabinets, columns, beams, bathroom vanities, counter tops, and air conditioners; and exterior components such as: painted roofing, chimneys, flashing, gutters and downspouts, ceilings, soffits, fascias, rake boards, cornerboards, bulkheads, doors and door trim, fences, floors, joists, lattice work, railings and railing caps, siding, handrails, stair risers and treads, stair stringers, columns, balustrades, window sills or stools and troughs, casings, sashes and wells, and air conditioners. Containment-A regulated area that has been sealed and designed to prevent the release of lead-containing dust or materials into surrounding areas. Course agenda-An outline of the key topics to be covered during a training course, including the time allotted to teaching each topic. Course test-An evaluation of the overall effectiveness of the training which shall test the trainees' knowledge and retention of the topics covered during the course. Course test blue print-Written documentation of the proportion of course test questions devoted to each major topic in the course curriculum. Department-The Texas Department of Health. Deteriorated paint -Paint that is cracking, flaking, chipping, chalking, or peeling from a building component or unit. Discipline-One of the specific types or categories of lead-based paint activities for which individuals may receive training from accredited programs and become certified by the department. For example, "lead worker" is a discipline. Distinct painting history-The application history, as indicated by its visual appearance or a record of application, over time, of paint or other surface coatings to a component, room, or unit of a building structure. Documented methodologies -Methods or protocols used to sample for the presence of lead in paint, dust, and soil. Documented methodologies may be found in the United States Department of Housing and Urban Development (HUD) Guidelines for the Evaluation and Control of Lead-Based Paint Hazards in Housing; the EPA Guidance on Residential Lead-Based Paint, Lead-Contaminated Dust, and Lead-Contaminated Soil (60 Federal Register 47248 (1995); the EPA Residential Sampling for Lead: Protocols for Dust and Soil Sampling, EPA report number 747-R-95-001 (March, 1995) and other EPA sampling guidance. Encapsulant-A substance that forms a barrier between lead-based paint and the environment using a liquid-applied coating (with or without reinforcement materials) or an adhesively bonded covering material. Encapsulation-The application of an encapsulant. Enclosure-A process that makes lead-based paint inaccessible by providing a physical barrier that is mechanically attached to a surface. EPA-The United States Environmental Protection Agency. Federal Law and Rules-Applicable federal laws and regulations adopted in these sections: (A) Toxic Substances Control Act (15 United States Code, sec.2681 et seq) Title IV, and the rules adopted by the EPA under that law for authorization of state programs; (B) Title X, Residential Lead-Based Paint Hazard Reduction Act of 1992, and any regulations or requirements adopted by the HUD regarding eligibility for grants to states and local governments; and (C) any other requirements adopted by a federal agency with jurisdiction over lead hazards. Guest instructor -An individual designated by the training program manager to provide instruction specific to the lecture, hands-on activities, or work practice components of a course. Hands-on skills assessment-An evaluation which tests the trainees' ability to perform satisfactorily the work practices and procedures used by a discipline, as well as any other skills covered in a training course. Historical records -Documentation which identifies the material makeup (including brand, color type, and lead content) and dates of application of paint and other surface coatings. HEPA-A high-efficiency particulate air filter, capable of trapping and retaining 99.97% of mono-dispersed airborne particles 0.3 microns or larger in diameter. HUD-The United States Department of Housing and Urban Development. HVAC-Heating, ventilation, and air conditioning systems. Inspection-A surface-by-surface investigation by a certified inspector to determine the presence of lead-based paint. Interim certification -The status of an individual who has successfully completed the appropriate training course in a discipline from an accredited training program, and has fulfilled the department's fee and application requirements, but has not yet received formal certification in that discipline from the department. Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. Interim controls -A set of measures designed to temporarily reduce human exposure or likely exposure to lead-based paint hazards, including specialized cleaning, repairs, maintenance, painting, temporary containment, ongoing monitoring of lead-based paint hazards or potential hazards, and the establishment and operation of management and resident education programs. Lead-based paint -Paint or other surface coatings that contain lead in excess of 1.0 milligrams per centimeter squared or more than 0. 5% by weight. Lead-based paint activity-Inspection, testing, risk assessment, risk reduction, lead abatement project design or planning, or abatement or removal of lead-based paint hazards. Lead-based paint hazard-Any condition that causes exposure to lead from lead-contaminated dust, lead-contaminated soil, or lead-contaminated paint that is deteriorated or present in accessible surfaces, friction surfaces, or impact surfaces that would result in adverse human health effects as established by documented methodologies. Lead-contaminated dust -Surface dust in target housing that contains an area or mass concentration of lead at or in excess of levels determined to be hazardous as established by documented methodologies. Lead-contaminated soil -Bare soil at target housing that contains lead at or in excess of levels determined to be hazardous as established by documented methodologies. Lead-hazard screen -A risk assessment activity that involves limited paint and dust sampling to determine the presence of lead-based paint or a lead-based paint hazard. Living area-Areas of a target housing unit used by one or more children younger than six years of age, including, but not limited to, living rooms, kitchen areas, dens, play rooms, and children's bedrooms. Multi-family dwelling -A building that has more than one residential dwelling unit. OSHA-The Occupational Safety and Health Administration of the United States Department of Labor. Permanently covered soil-Soil which has been separated from human contact by the placement of a barrier consisting of solid, relatively impermeable materials, such as pavement or concrete. Grass, mulch, and other landscaping materials are not considered permanent covering. Person-An individual, corporation, company, contractor, subcontractor, association, firm, partnership, joint stock company, foundation, institution, trust, society, union, governmental entity, or any other association of individuals. Principal instructor -The individual who has the primary responsibility for organizing and teaching a particular course. Recognized laboratory -An environmental laboratory recognized by EPA, pursuant to the Toxic Substances Control Act (TSCA) sec.405(b), as being capable of performing an analysis for lead content in materials, including paint, soil, and dust. Residential dwelling -A dwelling that is: (A) a detached single family dwelling unit, including attached structures such as porches and stoops; or (B) a single family dwelling unit in a structure that contains more than one separate residential dwelling unit, which is used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more persons. Risk assessment -An assessment consists of: (A) an on-site investigation conducted by a certified risk assessor to determine the existence, nature, severity, and location of lead-based paint hazards; and (B) a report by the person or the firm conducting the risk assessment, explaining the results of the investigation and options for reducing lead-based paint hazards. Room-An enclosed or semi-enclosed living space within a residential dwelling. Target housing -Any housing constructed prior to 1978, except housing for the elderly or persons with disabilities (unless any child who is younger than six years of age resides or is expected to reside in such housing) or any 0- bedroom dwelling. As defined in this section, target housing includes the terms residential dwelling, multi-family dwelling, and unit. Training curriculum -An established set of course topics for instruction in an accredited training program for a particular discipline designed to provide specialized knowledge and skills. Training hour-At least 50 minutes of actual teaching, including, but not limited to, time devoted to lecture, learning activities, small group activities, demonstrations, evaluations, and/or hands-on experience. Training manager -The individual responsible for administering a training program and monitoring the performance of principal instructors and guest instructors. Unit-A room or connected group of rooms used or intended to be used by a single tenant or owner. Visual inspection for clearance testing-The visual examination of a residential dwelling or a room following an abatement to determine whether or not the abatement has been successfully completed, as indicated by the absence of visible residue, dust, and debris. Visual inspection for risk assessment-The visual examination of a residential dwelling or a room to determine the existence of deteriorated lead- based paint or other potential sources of lead-based paint hazards. X-Ray Fluorescence Analyzer (XRF)-An instrument used to determine the concentration of lead in a sample; readings are in milligrams per square centimeter (mg/cm[sup]2 ). sec.295.203. Federal Guidelines. (a) The following federal guidelines provide additional information for conducting lead-based paint activities: (1) United States Department of Housing and Urban Development (HUD), titled "Guidelines for the Evaluation and Control of Lead-based Paint Hazards in Housing", June 1995, issued pursuant to Section 1017 of the Residential Lead- Based Paint Hazard Reduction Act of 1992; (2) "Guidance on Residential Lead-Based Paint, Lead-Contaminated Dust, and Lead-Contaminated Soil", Environmental Protection Agency, 60 Federal Register 47248 (1995); and (3) "Residential Sampling for Lead: Protocols for Dust and Soil Sampling", EPA, EPA report number 747-R-95-001 (March 1995). (b) Copies of the documents in subsection (a) of this section are available for review at any department-accredited training provider or the Texas Department of Health, Division of Occupational Health, Austin, Texas, and may be reviewed during normal business hours. sec.295.204. Accreditation of Training Program Providers. (a) Accreditation requirement. (1) A training program provider may seek accreditation from the department to offer courses in any of the following disciplines: (A) inspector; (B) risk assessor; (C) supervisor; (D) project designer; and (E) worker. (2) A training program provider may also seek accreditation to offer refresher courses for each of the disciplines listed in paragraph (1) of this subsection. (3) A training program provider shall not provide, offer, or claim to provide department-accredited training courses without applying for and receiving accreditation from the department as required under subsection (c) of this section. (b) Fee. An annual fee for lead training program provider accreditation shall be $500. The fee payment must accompany the application. After accreditation the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. (c) Application process. The following are procedures a training program provider shall follow to receive department accreditation to offer lead-based paint activities courses. (1) A training program provider seeking accreditation shall submit a written application to the department containing the following information: (A) the training program provider's name, address, and telephone number; (B) a list of courses for which the training provider is applying; (C) a statement signed by the training program manager certifying that the training program meets the minimum requirements established in this section. If a training program provider uses EPA-developed model training materials, the training program manager shall include a statement certifying that, as well. If a training program provider does not use EPA-developed or department-developed training materials, its application for accreditation shall include: (i) a copy of the student and instructor manuals to be used for each course; and (ii) a copy of the course agenda for each course, which must include the time allotted for teaching each course topic. (2) All training program providers shall include in their application for accreditation the following: (A) a description of the facilities and equipment available for lecture and hands-on training; (B) a copy of the course test blueprint for each course; (C) a description of the activities and procedures that will be used for conducting the assessment of hands-on skills for each course; (D) a copy of the quality control plan as described in subsection (d)(9) of this section; and (E) a statement certifying compliance with sec.295.203(b) of this title (relating to Federal Guidelines). (3) The department shall approve or disapprove an application for accreditation no more than 30 days after receiving a complete application from a training program provider. In the case of approval, a certificate of accreditation shall be sent to the applicant within 60 days of the applicant meeting all accreditation requirements and receipt of all acceptable documents at the department. In the case of disapproval, a letter describing the reasons for disapproval shall be sent to the applicant. Prior to disapproval, the department may, at its discretion, work with training program providers to address inadequacies in the application for accreditation. If necessary to determine compliance with this subsection the department may also request additional materials retained by the training program provider under paragraph (1) of this subsection. If a training program provider's application is disapproved, the program may reapply for accreditation at any time by following the procedures in subsections (b) and (c) of this section. (4) A training program provider may apply for accreditation to offer courses or refresher courses in as many training disciplines as it chooses. A training program provider may seek accreditation for additional courses at any time as long as the program can demonstrate that it meets the requirements of this section. (d) Minimum requirements for the accreditation of training program providers. For a training program provider to obtain accreditation from the department to offer courses in lead-based paint activities, the program shall meet the following minimum requirements for each discipline for which the program is seeking accreditation. (1) The training program provider shall employ a training manager who has: (A) at least one year of experience in managing an occupational health and safety training program specializing in environmental hazards; and at least two years of experience, education, or training in teaching adults; or (B) a bachelor's or graduate degree in building construction technology, engineering, industrial hygiene, safety, public health, education, or business administration or program management; or (C) two years of experience in managing an occupational health and safety training program specializing in environmental hazards. (2) The training program manager shall designate a qualified principal instructor for each course who has: (A) demonstrated experience, education, or training in teaching workers/adults; (B) successfully completed at least 24 hours of instruction from a trainer utilizing the EPA model course curriculum; or at least 24 hours of lead-specific training from a department-accredited training provider; and (C) at least one year of experience in a lead discipline. (3) The principal instructor shall be responsible for the organization of the course and oversight of the teaching of all course material. The training program manager may designate guest instructors as needed to provide instruction specific to the lecture, hands-on activities, or work practice components of a course. (4) The following documents shall be recognized by the department as proof that training managers and principal instructors meet the relevant education, work experience, and/or training requirements specifically listed in paragraphs (1) and (2) of this subsection. This documentation need not be submitted with the accreditation application, but shall be retained and verified by the training program provider as required by the recordkeeping requirements contained at subsection (j) of this section. Those documents include the following: (A) official academic transcripts, as proof of meeting the education requirements; (B) resumes, letters of reference, or documentation of work experience, as records of meeting the work experience requirements; and (C) certificates from train-the-trainer courses and lead-specific training courses, as proof of meeting the training requirements. (5) The training program provider shall ensure the availability of and provide adequate facilities for the delivery of the lecture, course test, hands- on training, and assessment activities. This includes providing training equipment that reflects current work practices and maintaining or updating the equipment and facilities as needed. (6) To become accredited in the following disciplines, the training program provider shall provide training courses that meet the following training hour requirements. (A) The inspector course shall last a minimum of 24 training hours, with a minimum of eight hours devoted to hands-on training. The curriculum for the inspector course is contained in subsection (e)(1) of this section. (B) The risk assessor course shall last a minimum of 16 training hours. The curriculum for the risk assessor course is contained in subsection (e)(2) of this section, and must include at least four hours of hands-on training activities. (C) The supervisor course shall last a minimum of 32 training hours, with a minimum of eight hours devoted to hands-on activities. The curriculum for the supervisor course is contained in subsection (e)(3) of this section. (D) The project designer course shall last a minimum of eight training hours. The curriculum for the project designer course is contained in subsection (e)(4) of this section. (E) The lead abatement worker course shall last a minimum of 16 training hours, with a minimum of eight hours devoted to hands-on training activities. The curriculum for the worker course is contained in subsection (e)(5) of this section. (7) For each course offered, the training program provider shall conduct a course test and a hands-on skills assessment at the completion of the course. Each individual must successfully complete the hands-on skills assessment and receive a passing score of 70% or above on the course test to pass any course. (A) The training manager is responsible for maintaining the validity and integrity of the hands-on skills assessment to ensure that it accurately evaluates the trainees' performance of the work practices and procedures associated with the course topics contained in subsection (e) of this section. (B) The training manager is responsible for maintaining the validity and integrity of the course test to ensure that it accurately evaluates the trainees' knowledge and retention of the course topics. (C) The course test shall be developed in accordance with the test blueprint submitted with the training accreditation application. (8) Training program providers shall issue unique course completion certificates to each individual who passes the training course. The course completion certificate shall include: (A) the name and a unique identification number or social security number of the individual; (B) the name of the particular course that the individual completed; (C) the date of course completion; (D) the expiration date of training certification, which shall be one year from the date of course completion; and (E) the name, address, and telephone number of the training program provider. (9) The training manager shall develop and implement a quality control plan. The plan shall be used to maintain and improve the quality of the training program over time. This plan shall contain at least the following elements: (A) procedures for periodic revision of training materials and the course test to reflect innovations in the field; and (B) procedures for the training manager's annual review of instructor competency. (10) Training program providers must offer courses which teach the standards for conducting lead-based paint activities contained in sec.295.212 of this title (relating to Standards for Conducting Lead-Based Paint Activities), and other such standards adopted by the department. These standards shall be taught in the appropriate courses to provide trainees with the knowledge needed to perform the lead-based paint activities they are responsible for conducting. (11) The training manager shall be responsible for ensuring that the training program complies at all times with all of the requirements in subsection (e) of this section. (12) The department may audit the training program provider to verify the contents of the application for accreditation as described in subsection (c) of this section. (13) If the applicant is a Texas corporation, a certificate of good standing issued by the Texas State Comptroller's Office must be submitted with the application for accreditation. (e) Minimum training curriculum requirements. To become accredited to offer lead-based paint activities instruction in the specific disciplines listed in paragraphs (1)-(5) of this subsection, training program providers must ensure that their courses of study include the following course topics. Requirements beginning with an asterisk (*) indicate areas that require hands-on activities as an integral component of the course. (1) Inspector instruction: (A) role and responsibilities of inspector; (B) background information on lead and its adverse health effects; (C) background information on Federal, State, and local regulations that pertain to lead-based paint; (D) *lead-based paint inspection methods, including selection of components for sampling or testing; (E) *paint, dust, and soil sampling methodologies; (F) *clearance standards and testing, including random sampling; (G) *formulation and implementation of the final inspection report; and (H) recordkeeping. (2) Risk assessor instruction: (A) role and responsibilities of the risk assessor; (B) collection of background information to perform a risk assessment; (C) sources of environmental lead contamination such as paint, surface dust and soil, water, air, packaging, and food; (D) *visual inspection for the purposes of identifying lead-based paint, lead- contaminated dust, and lead-contaminated soil; (E) lead hazard screen protocol; (F) *sampling for other sources of lead exposure; (G) *interpretation of lead-based paint and other lead sampling results; (H) development of hazard control options, the role of interim controls, and operations and maintenance to reduce lead hazards; and (I) preparation of a final risk assessment report. (3) Supervisor instruction: (A) role and responsibilities of the supervisor; (B) background information on lead and its adverse health effects; (C) background information on Federal, State, and local regulations that pertain to lead-based paint abatement; (D) liability and insurance issues relating to lead-based paint abatement; (E) contract specifications and cost estimation; (F) community relations; (G) project management and supervisory techniques; (H) *risk assessment and inspection report interpretation; (I) development and implementation of an occupant protection plan; (J) *hazard recognition and control; (K) *lead-based paint abatement and lead hazard reduction methods, including restricted practices; (L) *interior dust abatement/cleanup or lead hazard control and reduction methods; (M) *soil and exterior dust abatement or lead hazard control and reduction methods; (N) clearance standards and testing; (O) cleanup and waste disposal; and (P) recordkeeping. (4) Project designer instruction: (A) role and responsibilities of project designer; (B) contract specifications and cost estimation for abatement projects of ten units or larger; (C) development and implementation of an occupant protection plan for abatement projects of ten units or larger; (D) lead-based paint abatement and lead hazard reduction methods, including restricted practices for abatement projects of ten units or larger; (E) interior dust abatement/cleanup or lead hazard control and reduction methods for abatement projects of ten units or larger; (F) clearance standards and testing for abatement projects of ten units or larger; and (G) integration of lead-based paint abatement methods with modernization and rehabilitation projects for abatement projects of ten units or larger. (5) Lead abatement worker instruction: (A) role and responsibilities of lead abatement worker; (B) background information on lead and its adverse health effects; (C) background information on Federal, State and local regulations that pertain to lead-based paint abatement; (D) *hazard recognition and control; (E) *lead-based paint abatement and lead hazard reduction methods, including restricted practices; (F) *interior dust abatement methods/cleanup or lead hazard reduction; and (G) *soil and exterior dust abatement methods or lead hazard reduction. (f) Minimum requirements for the accreditation of refresher training program providers. A training program provider may apply for accreditation to teach as many different refresher training courses as it chooses. To teach an accredited refresher course, a training program provider must be accredited, or concurrently applying for accreditation, to provide instruction in the corresponding full course (e.g., lead-based paint inspector, abatement supervisor). To obtain department accreditation to offer refresher training, a training program provider must meet the following minimum requirements. (1) An accredited refresher training course for each discipline shall address the following topics: (A) an overview of current safety practices relating to lead-based paint activities in general as well as discipline specific information; (B) current laws and regulations relating to lead-based paint activities in general as well as discipline specific information; and (C) current technologies relating to lead-based paint activities in general as well as discipline specific information. (2) The course shall last a minimum of eight training hours. (3) Each student shall be required to pass a course test that covers all of the topics contained in the course. Passing students shall be provided with a refresher course completion certificate. (4) A training program provider seeking refresher course accreditation shall submit to the department a written application containing the following: (A) the training program provider's name, address, and telephone number; (B) a list of the refresher courses for which it is applying for accreditation; (C) a copy of student and instructor manuals for the course; and (D) a statement signed by the training program manager certifying that the program complies at all times with all requirements in this subsection. (5) If a training program provider applies for accreditation of a refresher course concurrently with its application for accreditation of the corresponding training course, the department shall use the approval procedure described in subsection (c) of this section. (6) If an application for refresher training accreditation is received apart from an application for accreditation as described in subsection (c) of this section, the department shall approve or disapprove a request for refresher training accreditation within 30 days of receiving a complete application. In the case of approval, a certificate of refresher training accreditation shall be sent to the applicant within 60 days of the applicant meeting all accreditation requirements and receipt of all acceptable documents at the department. In the case of disapproval, a letter describing the reasons for disapproval shall be sent to the applicant. The department may, at its discretion, work with training program providers to address inadequacies in the application for refresher accreditation. If a training program provider's application is disapproved, the training program provider may reapply at any time after the reason for disapproval has been corrected. (g) Re-accreditation of training programs. (1) Unless re-accredited, a training program provider's accreditation shall expire three years after the date of issuance. If a training program meets the requirements of this section, the training program provider shall be re- accredited. (2) A training program provider seeking re-accreditation shall submit an application to the department no later than 60 days before its accreditation expires. If a training program provider does not submit its application for re- accreditation by that date, the department cannot guarantee the application will be reviewed and acted upon before the end of the provider's accreditation period. (3) The training program provider's application for re-accreditation shall contain: (A) the training program provider's name, address, and telephone number; (B) a list of courses for which it is applying for re-accreditation; (C) a description of any changes or updates to the training facility or equipment since its last application was approved; and (D) a certified statement signed by the program manager stating: (i) the training program provider complies at all times with all requirements in subsection (d) of this section; and (ii) the recordkeeping and reporting requirements of subsection (j) of this section will be followed. (4) The department may audit the training program provider to verify the contents of the application for re-accreditation as described in paragraph (3) of this subsection. (h) Suspension, deaccreditation, and modification of accredited training programs. (1) The department may, after notice and an opportunity for hearing, suspend, deaccredit, or modify training program accreditation if a training program, training manager, or other person with supervisory authority over the training program has: (A) misrepresented the contents of a training course to the department and/or the student population; (B) failed to submit required information or notifications in a timely manner; (C) failed to maintain required records; (D) falsified accreditation records, instructor qualifications, or other accreditation information; (E) failed to comply with the training standards and requirements in this section; (F) failed to comply with Federal, State, or local lead-based paint statutes or regulations; or (G) made false or misleading statements to the department in its application for accreditation or re-accreditation which the department relied upon in approving the application. (2) In addition to an administrative or judicial finding of violation, execution of a consent agreement in settlement of an enforcement action constitutes, for purposes of this subsection, evidence of a failure to comply with relevant statutes or regulations. (i) Procedures for suspension, deaccreditation or modification of training program accreditation. (1) When the department decides to suspend, deaccredit, or modify the accreditation of a training program, it shall notify the affected entity in writing of the following: (A) the assertion of laws and facts upon which the suspension, deaccreditation, or modification is based; (B) the commencement date and duration of the suspension, deaccreditation, or modification; (C) actions, if any, which the affected entity may take to avoid suspension, deaccreditation, or modification, or to receive accreditation in the future; (D) the opportunity and method for requesting a hearing prior to final departmental action to deaccredit, or suspend or modify accreditation; and (E) any additional information, as appropriate, which the department may provide. (2) If a hearing is requested by the accredited training program pursuant to subsection (h)(1) of this section, the person charged shall be given the opportunity for a hearing conducted in accordance with the department's informal hearing procedures in Chapter 1 of this title (relating to the Board of Health). (j) Training program recordkeeping requirements. (1) Accredited training program providers shall maintain and make available to the department, if requested, the following records: (A) all documents specified in subsection (d)(4) of this section that demonstrate the qualifications listed in subsection (d)(1) and (2) of this section of the training manager and principal instructors; (B) current curriculum/course materials and documents reflecting any changes made to these materials; (C) the course test blueprint; (D) information on how the hands-on assessment is conducted including, but not limited to, who conducts the assessment, how the skills are graded, what facilities are used, and the pass/fail rate; (E) the quality control plan as described in subsection (d)(9) of this section; (F) results of the students' hands-on skills assessments and course tests, and a record of each student's course completion certificate and test passage date; and (G) any other material not listed in subparagraphs (A)-(F) of this paragraph that was submitted to the department as part of the program's application for accreditation. (2) The training program shall retain the records required by paragraph (1) of this subsection at the location (i.e., address) specified on the training program accreditation application (or as modified in accordance with paragraph (3) of this subsection) for a minimum of three years and six months. (3) The training program shall notify the department in writing within 30 days of relocating its business or transferring the records. sec.295.205. Certification: Applications and Renewals. (a) General requirements. Applications for certification under these sections must be made on forms provided by the Texas Department of Health (department), shall be signed by the applicant, and must be accompanied by a cashier check or money order for the amount of the certification or certification renewal fee. Only applications which are complete shall be considered by the department; the burden of proof for all requirements for certification rests with the applicant. For specific requirements for the various certification disciplines, refer to the sections of this undesignated head relating to certification requirements. (b) Inquiries. Potential applicants who wish to discuss or obtain information concerning qualification requirements may do so by calling the department's Environmental Lead Program at (512) 834-6600 or (800) 572-5548. (c) Denials. The department may deny an application for certification (applicants may not reapply for the time periods specified) to those who fail to meet the standards established by these sections, including, but not limited to: (1) past history of assessed penalties from violations of these sections by the applicant and/or the applicant's employees or agents-three years; (2) evidence that the applicant cannot be legally employed in the United States-90 days; (3) fraud, misrepresentation, or deception in obtaining, attempting to obtain, or renewing a certificate-three years; (4) failure to submit the required information and/or documentation within 90 days of a written request by the department-90 days; (5) failure to submit the required fee-90 days; (6) failure to maintain or to permit inspection of the records required of all certified persons-one year; (7) employing or permitting an unauthorized person or individual to work on any lead project or operation-one year; (8) engaging in or attempting to engage in an lead-related activity without a valid certification-three years; (9) failure to comply with any rule adopted by the board or order issued by the department-three years; (10) failure to provide notice of a lead project or operation as required by these sections-two years; (11) conviction within the past five years of a felony or a misdemeanor related to conditions for which a person engaged in lead activities-three years; (12) failure of a certified person to complete their responsibilities during a lead project or operation due to insufficient financial resources-three years; (13) failure to prevent lead contamination of areas adjacent to the abatement area-three years; or (14) failure to decontaminate any part of target housing or its environment, or any persons inadvertently contaminated with lead as a result of the persons' actions while exercising their duties under these sections-three years. (d) Administrative penalty. In accordance with sec.295.220 of this title (relating to Compliance: Administrative Penalty) an administrative penalty may be assessed, for fraud or misrepresentation in obtaining, attempting to obtain, or renewing a certification. (e) Processing applications and renewals. (1) Time periods. Applications for certification shall be processed in accordance with the following time periods: the time from the receipt of a written application to the date of issuance of a written notice outlining the reasons why the application is unacceptable is 60 days; the certification will be issued within 90 days of the applicant meeting all the certification requirements and receipt of all acceptable documents at the department. (2) Reimbursement of fees. Initial application or renewal fees will be refunded only when the department does not process a completed application in the time period specified. If fee amounts are in excess of the correct fee amount, the excess payment will be reimbursed. Otherwise, fees for applications and renewals are not eligible for refund. (A) Denial of an application, failure to qualify, or abandonment of the application do not constitute grounds for reimbursement. Abandonment is defined as failure to respond to a written request of the department by the applicant for a period of 90 days. (B) A denial of an application or a request for renewal may be appealed by the applicant. The details for requesting a hearing are included in each letter of denial. (3) Appeal. If the request for full reimbursement authorized by this subsection is denied, the applicant may then appeal to the commissioner of health for a resolution of the dispute. The applicant shall give written notice to the commissioner by writing to the administrator, lead certification program, the designated representative of the commissioner, requesting full reimbursement of all filing fees paid because his/her application was not processed within the prescribed time period. The program administrator shall submit a written report of the facts related to the processing of the application and good cause for exceeding the established time periods. The commissioner will determine the final action and provide written notification of his/her decision to the applicant and the program administrator. (4) Contested case hearing. If at any time during the processing of the application, a contested case proceeding arises, the time periods in the department's formal hearing procedures, sec.1.34 of 25 TAC (Texas Administrative Code) (relating to Time Periods for Conducting Contested Case Hearings), are applicable. (f) Renewal notices. At least 30 days before a certificate expires, the department, as a service to the certified person, shall send a renewal notice to the certified person, by first-class mail to the last known address of the certified person. It remains the responsibility of the certified person to keep the department informed of their current address, or change of address for all certification categories, and to take action to renew their certificate whether or not they have received the notification from the department. The renewal notice will state: (1) the type of certification requiring renewal; (2) the time period allowed for renewal; and (3) the amount of the renewal fee. (g) Renewal requirements. No sooner than 60 days before the certification expires, the certification may be renewed for an additional three-year term providing that the person: (1) is qualified to be certified; (2) pays to the department the proper amount of the non-refundable renewal fee; (3) submits to the department a renewal application on the prescribed form along with all required documentation; (4) completes successfully the requirements for renewal and examination, if required; (5) has complied with all final orders resulting from any violations of these sections; and (6) submits a copy of the required refresher training course certificates, if required. (h) Prohibition. To practice with a lapsed certificate is prohibited, regardless of when the renewal application is received. Also, certificates which have lapsed for a period exceeding 180 days cannot otherwise be renewed. A new application subject to current qualifications is required. (i) Replacements. A certified person may obtain a replacement certificate by submitting such request in writing along with the reissuance fee of $20. (j) Retention of control. The department may, at any time after the filing of any application and before the expiration of any certification, require: (1) additional written information and assurances; and (2) cooperation with any inspections initiated by the department, or the production of any documentary or other evidence that the department considers necessary to determine whether the certification should be granted, delayed, denied, modified, suspended or revoked. sec.295.206. Inspector: Certification Requirements. (a) Certification requirements. A person must be certified as a lead inspector to engage in lead inspection of target housing. Such certification is valid for a period of three years from the date the certificate application is approved by the department. (b) Application for renewal. To become re-certified, the inspector must complete an inspector refresher training course prior to the inspector's certificate expiration date and follow the procedures contained in sec.295.205 of this title (relating to Certification: Applications and Renewals). (c) Specific requirements. (1) Applicants for certification as lead inspectors are required to successfully complete and receive a course completion certificate from a state- accredited training provider. (2) No additional educational requirement or experience is required. (3) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (4) Certification issued by the state shall be valid for three years. (5) Any individual can fulfill the requirements of paragraph (1) of this subsection by showing proof of the successful completion, between October 1, 1990, and August 1996, of a lead inspector training course which utilized the Environmental Protection Agency model course curriculum. (d) Responsibilities. The responsibilities of the certified lead inspector are as follows: (1) conduct post-abatement soil and dust clearance testing following procedures in sec.295.212 of this title (relating to Standards for Conducting Lead-Based Paint Activities); (2) conduct lead-based paint inspections of target housing that measure the concentration of lead in paint on a surface-by-surface basis; and (3) complete an inspection report. (e) Fees. An annual fee for lead inspector certification shall be $150. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.207. Risk Assessor: Certification Requirements. (a) Certification requirements. A person must be certified as a lead risk assessor to engage in lead risk assessment of target housing. Such certification is valid for a period of three years from the date the certificate application is approved. (b) Application for renewal. To become re-certified, the risk assessor must complete a refresher training course prior to the risk assessor's certificate expiration date and follow the procedures contained in sec.295.205 of this title (relating to Certification: Applications and Renewals). (c) Specific requirements. (1) Applicants for certification as lead risk assessors are required to: (A) successfully complete and receive a course completion certificate from a department-accredited training provider; (B) meet or exceed the following additional experiences and/or education requirements: (i) bachelor's degree and one year of experience in a related field (e.g. lead, asbestos, public health, or environmental remediation work); or (ii) certification as an industrial hygienist, an engineer, a public health nurse, a professional registered sanitarian, a certified safety professional, a registered architect, or an environmental scientist; or (iii) a high school diploma (or equivalent), plus at least three years of experience in a related field. (2) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (3) Certification issued by the department shall be valid for three years. (4) Any individual can fulfill the requirements of paragraph (1)(A) of this subsection by showing proof of the successful completion, between October 1, 1990, and August 1996, of a lead inspector training course and a lead risk assessor training course which utilized the Environmental Protection Agency model course curriculum. (d) Responsibilities. The responsibilities of the certified lead risk assessor are as follows: (1) conducting a risk assessment and other lead hazard assessment activities (such as screening a residence for lead hazard) in target housing; (2) completing a risk assessment report; (3) interpreting the results of assessments; (4) identifying hazard control strategies to reduce or eliminate lead exposures; and (5) conducting post-abatement soil and dust clearance sampling and evaluating the results. (e) Fees. An annual fee for lead risk assessor certification shall be $300. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.208. Lead Abatement Supervisor: Certification Requirements. (a) Certification requirements. A person must be certified as a lead abatement supervisor to engage in such activity in target housing. Such certification shall be valid for a period of three years from the date the certificate application is approved by the department. (b) Application for renewal. To become re-certified, the lead abatement supervisor must complete a supervisor refresher training course prior to the supervisor's certificate expiration date and follow the procedures contained in sec.295.205 of this title (relating to Certification: Applications and Renewals). (c) Specific requirements. (1) Applicants for certification as lead abatement supervisors are required to: (A) successfully complete a lead supervisor training course and receive a course completion certificate from a department-accredited training provider; and (B) meet or exceed the following additional experiences and/or education requirements: (i) one year of experience as a lead abatement worker; or (ii) at least two years experience in a related field (e.g. asbestos or environmental remediation work), or in the building trades. (2) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (3) Certification issued by the department shall be valid for three years. (4) Any individual can fulfill the requirements of paragraph (1)(A) of this subsection by showing proof of the successful completion, between October 1, 1990, and August 1996, of a lead supervisor training course which utilized the Environmental Protection Agency model course curriculum. (d) Responsibilities. The responsibilities of the certified lead abatement supervisor are to: (1) determine the most appropriate course of action to eliminate identified lead hazards; (2) ensure that all abatement activities in target housing are completed according to the standards outlined in sec.295.212 of this title (relating to Standards for Conducting Lead-Based Paint Activities); (3) supply personal protection equipment to employees and to train employees who perform lead-related activities in the use of equipment, and to supervise their compliance; (4) ensure that abatement activities are conducted in accordance with regulatory requirements; (5) in projects involving the abatement of less than ten units, develop a written pre-abatement plan and an abatement report for each assigned unit; (6) maintain accessibility at all times when abatement activities are being conducted; (7) ensure completion of all abatement activities according to these sections; (8) assume the duties of lead abatement workers or perform activities affecting lead materials; (9) cooperate with department personnel in the discharge of their official duties to conduct inspections and investigations, as described in sec.295.218 of this title (relating to Compliance: Inspection and Investigations); and (10) maintain standards of operation, including Environmental Protection Agency (EPA) and Occupational Safety and Health Administration of the United States Department of Labor (OSHA) regulations. (e) Fees. An annual fee for lead supervisor certification shall be $150. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.209. Project Designer: Certification Requirements. (a) Certification requirements. A person must be certified as a lead project designer to engage in such activity in target housing. Such certification shall be valid for a period of three years from the date the certificate application is approved by the department. (b) Application for renewal. To become re-certified, the project designer must complete a refresher training course prior to the project designer's certificate expiration date and follow the procedures contained in sec.295.205 of this title (relating to Certification: Applications and Renewals). (c) Specific requirements. (1) Applicants for certification as a lead abatement project designer are required to: (A) successfully complete a lead project designer training course and receive a course completion certificate from a department-accredited training program; and (B) meet or exceed the following additional experiences and/or education requirements: (i) a Bachelor's degree in engineering, architecture, or a related profession, and one year of experience in building construction and design or a related field; or (ii) four years of experience in building construction design or a related field. (2) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (3) Certification issued by the department shall be valid for three years. (4) Any individual can fulfill the requirements of paragraph (1)(A) of this subsection by showing proof of the successful completion, between October 1, 1990, and August 1996, of a lead abatement project designer training course which utilized the Environmental Protection Agency model course curriculum. (d) Responsibilities. The responsibilities of the certified lead abatement project designer are to: (1) comply with standards of operation, including EPA and OSHA regulations; (2) conduct abatement activities in accordance with the procedures and requirements of the pre-abatement plan; and (3) cooperate with department personnel in the discharge of their official duties to conduct inspections and investigations, as described in sec.295.218 of this title (relating to Compliance: Inspections and Investigations). (e) Fees. An annual fee for lead project designer certification shall be $300. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.210. Lead Abatement Worker: Certification Requirements. (a) Certification requirements. A person must be certified as a lead abatement worker to engage in such activity in target housing. Such certification shall be valid for period of three years from the date the certificate application is approved by the department. (b) Application for renewal. To become re-certified, the lead abatement worker must complete a refresher training course prior to the worker's certificate expiration date and follow the procedures contained in sec.295.205 of this title (relating to Certification: Applications and Renewals). (c) Specific requirements. (1) Applicants for certification as lead abatement workers are required to successfully complete a lead abatement worker training course and receive a course completion certificate from a department-accredited training program. (2) No additional educational requirement or experience is specified. (3) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (4) Certification issued by the department shall be valid for three years. (5) Any individual can fulfill the requirements of paragraph (1) of this subsection by showing proof of the successful completion, between October 1, 1990, and August 1996, of a lead abatement worker training course which utilized the Environmental Protection Agency model course curriculum. (d) Fees. An annual fee for lead worker certification shall be $50. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.211. Firms: Certification Requirements. (a) Certification requirements. All firms engaged in or offering to perform lead-based paint activities must be certified by the department. (b) Application for renewal. To maintain certification, the firm must seek re-certification by submitting an application to the department no later than 30 days before its certification expires. If the certified firm does not submit its application for re-certification by that date, the department cannot guarantee that the application will be reviewed and acted upon before the end of the firm's certification period. (c) Specific requirements. (1) A firm seeking certification shall submit to the department a letter signed by the firm's owner or an authorized agent of the firm certifying that the firm will: (A) only employ certified employees to conduct lead-based paint activities; and (B) follow the standards for conducting lead-based paint activities set out in sec.295.212 of this title (relating to Standards for Conducting Lead-Based Paint Activities). (2) The firm shall maintain all records pursuant to the requirements in sec.295. 212 of the title. (3) Interim certification will be granted upon receipt of a complete application and fee, and shall expire within six months, or upon issuance or denial of department certification. (4) Certification issued by the state shall be valid for three years or upon subsequent recertification. (d) Responsibilities. The responsibilities of a certified firm are: (1) to comply with the standards of operation, including EPA and the Occupational Safety and Health Administration of the United States Department of Labor (OSHA) regulations; (2) to provide required notification to the department about impending abatement projects, changes requiring re-notification, and emergency notifications, as described in sec.295.214 of this title (relating to Notifications); (3) to supply and train employees who perform lead-based paint abatement activities in the use of personal protection equipment, and to supervise their compliance; (4) to maintain the current training status of each employee and the annual physical examination; and (5) to assist department personnel in the discharge of their official duties to conduct inspections and investigations, as described in sec.295.218 of this section (relating to Compliance: Inspections and Investigations). (e) Fees. An annual fee for lead firm certification shall be $500. The fee must accompany the certification application. After certification the fee shall be paid in full each year on or before the day of the month of the expiration date given on the certificate. sec.295.212. Standards for Conducting Lead-Based Paint Activities. (a) Inspection. (1) Lead-based paint inspections shall be conducted only by persons certified by the department as an inspector or risk assessor and must be conducted according to the procedures in this section. (2) When conducting an inspection, the following locations shall be tested for the presence of lead-based paint. (A) For every residential dwelling, each component with a distinct painting history in every room, and each exterior component with a distinct painting history shall be tested for lead-based paint, except those components that the inspector or risk assessor determines to have been replaced after 1978, or to not contain lead-based paint. (B) If conducting an inspection in a multi-family dwelling, all components with a distinct painting history in every common area, except those components that the inspector or risk assessor determines to have been replaced after 1978, or to not contain lead-based paint. (3) The collection and analysis of paint samples to determine the presence of lead-based paint shall be conducted using documented methodologies which incorporate adequate quality control procedures. (4) The certified inspector shall prepare an inspection report which shall include the following information: (A) date of inspection; (B) address of buildings and units; (C) date of construction of buildings and units; (D) unit numbers (if applicable); (E) name, address, and telephone number of the owner of buildings and units; (F) name, signature, and certification number of each certified inspector and/or risk assessor conducting testing; (G) name, address, and telephone number of the certified firm employing each inspector and/or risk assessor; (H) name, address, and telephone number of each recognized laboratory conducting an analysis of collected samples; (I) each testing method and device and/or sampling procedure employed for paint analysis, including quality control data and, if used, the serial number of any XRF device; (J) specific locations of each painted component tested for the presence of lead-based paint; and (K) the results of the inspection expressed according to the sampling method used. (b) Lead hazard screen. (1) A lead hazard screen shall be conducted only by persons certified by the department as a risk assessor. (2) If conducted, a lead hazard screen shall be conducted as follows. (A) A visual inspection of the residential dwelling and common area shall be conducted to: (i) determine if any deteriorated paint is present; and (ii) locate at least two dust sampling locations. (B) If deteriorated paint is present, each representative surface with deteriorated paint shall be tested for the presence of lead-based paint. (C) In residential dwellings, two composite dust samples shall be collected, one from the floors and the other from the windows, in rooms where one or more children, age six and under, are most likely to come in contact with dust. (D) In multi-family dwellings, in addition to the floor and window samples required in subparagraph (C) of this paragraph, the risk assessor shall also collect composite dust samples from any common areas where one or more children are likely to come into contact with dust. (3) Any paint and dust samples shall be taken using documented methodologies that incorporate adequate quality control procedures. (4) Any collected paint chip or dust samples shall be analyzed according to subsection (e) of this section to determine if they contain detectable levels of lead that can be quantified numerically. (5) The lead hazard screen is an indicator of the desirability for a risk assessment if: (A) the lead levels for dust on floors or in windows is greater than one-half the applicable clearance levels for that component; or (B) the analysis of the deteriorated paint samples establishes the presence of lead-based paint. (6) The risk assessor shall prepare a risk assessment report, which shall include the following information: (A) the information required in a risk assessment report as specified in subsection (c) of this section, excluding paragraphs (9)(O)-(R) of subsection (c); and (B) recommendations concerning the desirability for follow-up risk assessments. (c) Risk assessment. (1) A risk assessment shall be conducted only by persons certified by the department as risk assessors and must be conducted according to the procedures in this subsection. (2) A visual inspection for risk assessment of the residential dwelling shall be undertaken to locate the existence of deteriorated paint and other potential sources of lead-based paint hazards. If deteriorated paint or other potential sources of lead-based paint hazards are present, each surface with deteriorated paint or each painted surface which is a potential lead-based paint hazard shall be tested for the presence of lead. (3) Background information shall be collected regarding the physical characteristics of the residential dwelling and occupant use patterns that may pose a lead-based paint exposure to one or more children younger than six years of age. (4) In residential dwellings, dust samples (composite or single-surface samples) shall be collected in living areas where one or more children are most likely to come into contact with dust. (5) For multi-family dwellings, the samples required in paragraph (4) of this subsection shall be taken. In addition, window and floor dust samples (composite or single-surface samples) shall be collected in the following locations: (A) common areas adjacent to the sampled unit; and (B) other common areas in the building that the risk assessor determines may pose a lead-based paint hazard to one or more children age six years and under. (6) Soil samples shall be collected and analyzed for lead concentrations in the following locations: (A) exterior play areas where bare soil is present; and (B) dripline/foundation areas where bare soil is present. (7) Any paint, dust, or soil samples shall be taken using documented methodologies that incorporate adequate quality control procedures. (8) Any collected paint chip, dust, or soil samples shall be analyzed according to subsection (e) of this section to determine if they contain detectable levels of lead that can be quantified numerically. (9) The certified risk assessor shall prepare a risk assessment report which shall include the following information: (A) date of assessment; (B) address of residential dwelling, multi-family dwelling, or unit; (C) date of construction of residential dwelling, multi-family dwelling, or unit; (D) unit numbers (if applicable); (E) name, address, and telephone number of the owner of residences and buildings; (F) name, signature, and certification number of the certified risk assessor conducting the assessment; (G) name, address, and telephone number of the certified firm employing each risk assessor; (H) name, address, and telephone number of each recognized laboratory conducting analysis of collected samples; (I) results of the visual inspection; (J) testing method and sampling procedure for paint analysis employed; (K) specific locations of each painted component tested for the presence of lead-based paint; (L) all data collected from on-site testing; (M) all results of laboratory analysis on collected paint, soil, and dust samples; (N) any other sampling results; (O) any background information collected pursuant to paragraph (3) of this subsection; (P) to the extent that they are used as part of the lead-based paint hazard determination, an evaluation of the adequacy of any previous inspections or analyses for the presence of lead-based paint, or other assessments of lead- related hazards; (Q) a description of the location, type, and severity of identified lead-based paint hazards and any other potential lead hazards; and (R) a description of recommended interim controls and/or abatement options for each identified lead-based paint hazard, and a suggested prioritization for taking each action based on the immediacy and severity of the hazard. (d) Abatement. (1) An abatement shall be conducted only by an individual certified by the department as a worker or supervisor, and if conducted, shall be conducted according to the procedures in this subsection. (2) A certified supervisor is required for each abatement project and shall be onsite during all work site preparation and during the post-abatement cleanup of work areas. At all other times when abatement activities are being conducted, the certified supervisor shall be available either directly or through a pager or answering service, and able to be present at the work site in no more than two hours. (3) The certified supervisor and the certified firm employing that supervisor shall ensure that all abatement activities are conducted according to the requirements of this subsection and all other Federal, State and local requirements. (4) Notification of the commencement of lead-based paint abatement activities in multi-family dwellings or as a result of a Federal, State, or local order shall be given to the department, according to the procedures established in sec.295.214 of this title (relating to Notifications), prior to the commencement of abatement activities. (5) A written occupant protection plan shall be developed for all abatement projects and shall be prepared according to the following procedures. (A) The occupant protection plan shall be unique to each residential dwelling and developed prior to the abatement. The occupant protection plan shall describe the measures and management procedures that will be taken during the abatement to protect the building occupants from exposure to any lead-based paint hazards. (B) A certified project designer shall prepare the occupant protection plan for projects in which ten or more residential dwellings will be abated. A certified supervisor or project designer shall prepare the occupant protection plan for projects in which fewer than ten residential dwellings will be abated. (6) The following work practices shall be restricted during an abatement as follows. (A) Open-flame burning or torching of lead-based paint is prohibited. (B) Machine sanding or grinding or abrasive blasting or sandblasting of lead- based paint is prohibited unless used with High Efficiency Particulate Air (HEPA) exhaust control capable of removing particles of 0.3 microns or larger from the air at 99.97% or greater efficiency. (C) Dry scraping of lead-based paint is permitted only in conjunction with heat guns or around electrical outlets or when treating defective paint spots totaling no more than three square feet in any one room or totaling no more than 20 square feet on exterior surfaces. (D) Operating a heat gun on lead-based paint is permitted only at a temperature below 1,100 degrees Fahrenheit. (7) If conducted, soil abatement shall be conducted in one of the following ways. (A) If soil is removed, the lead-contaminated soil shall be replaced with non- contaminated soil. (B) If soil is not removed, the lead-contaminated soil shall be permanently covered. (8) The following post-abatement clearance procedures shall be performed by a certified inspector or risk assessor. (A) Following an abatement, a visual inspection shall be performed to determine if deteriorated painted surfaces and/or visible amounts of dust are still present. If deteriorated painted surfaces or visible amounts of dust are present, these conditions must be eliminated prior to the continuation of the clearance procedures. (B) Following the visual inspection, clearance sampling for dust shall also be conducted. Clearance sampling may be conducted by employing single-surface sampling or composite sampling techniques. (C) Dust samples for clearance purposes shall be taken using documented methodologies that incorporate adequate quality control procedures. (D) Dust samples for clearance purposes shall be taken a minimum of one hour after completion of final post-abatement clean-up activities. (E) The following locations shall be sampled for lead-contaminated dust based upon the extent of abatement activities conducted in or on the target housing. (i) After conducting an abatement with containment between abated and unabated areas, one sample shall be taken from one window (if available) and the floor of each room within the containment area. In addition, one sample shall be taken from the floor outside the containment area. (ii) After conducting an abatement with no containment, two dust samples shall be taken from every room in the residential dwelling unit. One sample shall be taken from one window (if available) and the floor of each room. (iii) Following an exterior paint abatement, at least two dust samples shall be taken from the closest horizontal surface in the outdoor living area, including but not limited to, a patio, deck, porch, sidewalk, or stoop. In addition, a visual inspection shall be conducted to determine the presence of paint chips in bare soil in common areas, on the dripline or next to the foundation below any abated exterior surface. If paint chips are present, they must be removed from the site and properly disposed, according to all applicable Federal, State and local requirements. (F) The certified inspector or risk assessor shall compare the residual lead dust level (as determined by the laboratory analysis) from each dust sample with applicable clearance levels for lead in dust on floors, windows, and exterior surfaces. If the residual dust levels in a sample exceed the clearance levels, all the components represented by the failed sample shall be recleaned and retested until clearance levels are met. (9) In a multi-family dwelling with similarly constructed and maintained units, random sampling for the purposes of clearance may be conducted, provided: (A) the individuals who abate or clean the units do not know which units will be selected in the sample; (B) a sufficient number of units are selected for sampling to provide a 95% level of confidence that no more than 5.0% or 50 of the units (whichever is smaller) in the sampled population exceed the appropriate clearance levels; and (C) the selected units are sampled and evaluated for clearance according to the procedures found in paragraph (8) of this subsection. (10) A certified supervisor or project designer shall prepare abatement reports for projects consisting of less than ten units. A certified project designer shall prepare an abatement report for projects consisting of ten or more units. (11) An abatement report shall be prepared by a certified supervisor or project designer as required in this section. The abatement report shall include the following information: (A) start and completion dates of abatement; (B) the name and address of each certified firm conducting the abatement and the name of each supervisor assigned to the abatement project; (C) the occupant protection plan prepared pursuant to sec.295. 212(d)(5); (D) the name, address, and signature of each certified risk assessor or inspector conducting clearance sampling and the date of clearance testing; (E) the results of clearance testing and all soil analyses (if applicable) and the name of each recognized laboratory that conducted the analyses; and (F) a detailed written description of the abatement, including abatement methods used, locations of rooms and/or components where abatement occurred, and reason for selecting particular abatement methods for each component. (e) Collection and laboratory analysis of samples. Any paint chip, dust, or soil samples collected pursuant to the standards contained in this section shall be: (1) collected by persons certified by the department as an inspector or risk assessor; and (2) analyzed by a laboratory recognized by the Environmental Protection Agency pursuant to sec.405(b) of the Toxic Substances Control Act (TSCA) as being capable of performing analyses for lead in paint chip, dust, and soil samples. (f) Composite dust sampling. Composite dust sampling may only be conducted in the situations specified in subsections (b) -(d) of this section. If such sampling is conducted, the following conditions shall apply: (1) composite dust samples shall consist of at least two subsamples; (2) every component that is being tested shall be included in the sampling; and (3) composite dust samples shall not consist of subsamples from more than one type of component. (g) Recordkeeping. All reports required in this section shall be maintained by the certified firm or individual contractor, who prepared the report, for no fewer than three years. The certified firm or individual contractor also shall provide copies of these reports to the building owner who contracted for its services. Building owners are subject to the requirements mandated under sec.1018 of the Residential Lead-Based Paint Hazard Reduction Act of 1992 and 40 Code of Federal Regulations, sec.745, Subpart F, "Disclosure of Information Concerning Lead-Based Paint Upon Transfer of Residential Property." sec.295.213. Lead-Based Paint Activities Requirements. Lead-based paint activities, as defined in sec.295.202 of this title (relating to Definitions) shall only be conducted according to the procedures and standards contained in sec.295.212 of this title (relating to Standards for Conducting Lead-Based Paint Activities). No persons may offer to perform or perform any lead-based paint activity unless certified to perform that activity according to the procedures in sec.295.205 of this title (relating to Certification: Application and Renewals) through sec.295.211 of this title (relating to Lead Firms: Certification Requirements). sec.295.214. Notifications. (a) General provision. The Texas Department of Health (department) shall be notified by the certified firm's owner or an authorized agent of the firm in writing on a form specified by the department of any lead-based paint abatement activity in target housing. Notification shall be made to the department no less than ten working days (not calendar days) prior to commencement of the activity and shall be submitted on the form specified by the department. Abatement notifications involving one or more units at the same address may be submitted on a single notification form. There must be only one address per each notification form submitted to the department. The department notification form must be filled out completely and properly. Blanks which do not apply shall be marked "N/A". The designation of "N/A" will not be accepted for references requiring identification of the work site, building description, building owner, abatement and transportation companies, and individuals required to be identified on the notification form. An original signature is required of the certified firm's owner or an authorized agent of the firm on each notification form. A copied signature is not acceptable. The notification shall be considered invalid unless it contains an original signature. (b) Responsibility. It is the responsibility of the certified firm's owner or an authorized agent of the firm to notify the department under this section. (c) Timeliness of notification. Written notifications of lead abatement activity must be hand delivered, express mailed, or postmarked at least ten working days (not calendar days) before the start of lead-based paint abatement. Notifications must be delivered by United States Postal Service, commercial delivery service, or by hand delivery. Telephone facsimile (FAX) is not permitted. The start date is considered to be the date when lead-based paint abatement begins. (d) Start-date change to later date. When lead abatement activity will begin later than the date contained in the notice, the certified firm's owner or an authorized agent of the firm shall: (1) notify the Environmental Lead Program or Regional Office of the changed start date by telephone as soon as possible but prior to the original start date. An amended notification is required in writing immediately following the foregoing notification; and (2) provide the Environmental Lead Program or Regional Office with a written notice of the new start date as soon as possible before, but no later than the original start date. Delivery of the updated notice by the United States Postal Service, commercial delivery service, or hand delivery is acceptable. (e) Start-date change to earlier date. When lead abatement will begin on a date earlier than the date contained in the notice, the certified firm's owner or an authorized agent of the firm shall provide the department with a written notice of the new start date at least ten working days before the start of work. (f) Start-date/stop-date (completion date) requirement. In no event shall lead abatement activity, as covered by this section, begin or be completed on a date other than the date contained in the written notice. Amendments to start date changes are to be submitted as required in subsections (d) and (e) of this section. An amendment is required for any stop dates which change by more than one work day for each week (seven calendar day period) for which the project has been scheduled and notification submitted. The certified firm shall provide schedule changes to the department no less than 24 hours prior to the change or completion of the project. Emergency notification can be confirmed with the department telephonically and followed up in writing. (g) Provision for emergency. In the event of lead abatement made necessary by an unexpected or unplanned lead incident, notification will be made as soon as practicable, but not later than the following work day after the occurrence of the incident. Initial notification can be made by telephone, followed by formal notification on the department's notification form. Emergencies shall be documented to the extent that the need for the emergency is evident. An emergency lead abatement operation means a lead abatement operation that was not planned, but results from a sudden, unexpected event. This event if not immediately attended to, presents a public health or safety hazard, and is necessary to protect equipment from damage, or is necessary to avoid imposing an unreasonable financial burden. This term includes operations necessitated by non-routine failures of equipment. This term does not include immediate abatement work resulting solely from a lack of adequate planning for foreseeable lead abatement activity. (h) Lead abatement notification fees. (1) Applicability. The certified firm's owner or an authorized agent of the firm shall remit to the department a fee that is based on each individual and separate residential dwelling or multi-family dwelling at the same address to be abated. (2) Payment. An invoice for the required fee will be sent to the person submitting the notice after the notification has been received by the department. Fee amounts, address, and fund numbers are included on the form. (3) Fees. The notification fee for each project is $50. All dwelling units at the same street address constitute one project for purposes of computing notification fees. (4) Nonpayment of fees. Failure to pay the required fee after an invoice has been sent shall be considered a violation and may subject the certified firm to administrative penalties as listed in sec.295.220 of this title (relating to Compliance: Administrative Penalty). The certified firm may also be subject to civil or criminal penalties if applicable. Governmental organizations may submit a copy of the interagency transfer document or a statement that a check has been requested and is in processing. Payment must then be received no later than 60 days following the invoice date. sec.295.216. Fee Exemption. Accreditation fees for training programs shall not be imposed on any Federal, State or local government, or nonprofit entities. sec.295.218. Compliance: Inspections and Investigations. (a) The Texas Department of Health (department) shall maintain the right to inspect or investigate the practices of any person involved in lead-based paint activities in target housing as defined in these sections. (b) Advance notice of inspections or investigations by the department is not required. (c) Authority and responsibility for the qualifications, health status, and personal protection of department representatives resides with the department. A department representative shall not be impeded or refused entry in the course of his official duties in accordance with these regulations by reason of any regulatory or contractual specification. (d) All persons engaged in lead-based paint activities must have the department-issued ID card present at the worksite. sec.295.219. Compliance: Reprimand, Suspension, Revocation. (a) After notice to the certified or accredited person of an opportunity for a hearing in accordance with subsection (d) of this section, the Texas Department of Health (department) may reprimand the person or modify, suspend, suspend on an emergency basis, or revoke a certificate or accreditation under the Texas Environmental Lead Reduction Act. (b) A department representative, upon presenting appropriate credentials, shall have the right to enter at all reasonable times any area or environment, including but not limited to any containment work area, building, construction site, storage, vehicle, training facility, or office area to inspect and investigate for compliance with these sections, to review records, to question any person, or to locate, identify, and assess the condition of lead-based paint-containing material. (c) The department may reprimand any certified or accredited person, or may suspend or revoke a certification or accreditation for: (1) failure to comply with any provision of the Act, any rule adopted by the Texas Board of Health, or any order issued by the department or a court; (2) failure to comply with applicable federal or state standards for lead- based paint activities; (3) failure to maintain records as required by these sections; (4) failure to meet the qualifications for which one holds a certification or accreditation; or (5) fraudulently, by misrepresentation, or deceptively obtaining or attempting to obtain a certification or contract for a lead-based paint activity; or (6) falsifying records that are required to be maintained by this section. (d) The contested-case hearing provisions of the Administrative Procedure Act, Texas Government Code, Chapter 2001, shall not apply to any enforcement action proposed to be taken under this section. Rather, the department's informal procedures shall apply. Additionally, in cases where the department proposes to deny the issuance or renewal of certification or accreditation, the burden of proof shall be on the applicant to show that said applicant has met requirements or criteria for certification or accreditation. (e) If a certification or accreditation issued under these sections has been suspended, the person(s) named in the suspension are not eligible to reapply for certification or accreditation under these sections for one year. (f) If a certification issued under these sections has been revoked, the person(s) named in the revocation are not eligible to reapply for certification under these sections for three years. sec.295.220. Compliance: Administrative Penalty. (a) If a person violates the Texas Environmental Lead Reduction Act, or a rule adopted or order issued under the Act, the Texas Department of Health (department) may assess an administrative penalty. (b) The penalty shall not exceed $5, 000 a day per violation. Each day a violation continues will be considered a separate violation. The total penalty will be the sum of all individual violation penalties. (c) In assessing administrative penalties, the department shall consider the: (1) history of previous violation(s); (2) seriousness of the violation(s); (3) hazard to the health and safety of the public; and (4) demonstrated good faith, and any other matter which justice may require. (d) Individual violations may be reduced or enhanced based on the considerations listed in subsection (c) of this section, or any others that justice may require. A maximum reduction or enhancement of 50% per individual violation may be considered, based on the facts presented to the department. (e) A person is subject to double the initial penalty on second finding of violation of any provision of the Act or rules. Third and subsequent violations of a provision are subject to five times the initial penalty. In any case, the penalty shall not exceed $5,000 a day per violation. (f) Violations shall be placed in one of the following severity levels. (1) Critical violation. Severity Level III covers violations that are most significant and have a direct negative impact on public health and safety. The base penalty for a Level III violation, first occurrence will not exceed $5,000 per day, per violation. Examples of Level III violations include, but are not limited to: (A) failing to establish effective containment during abatement of lead; (B) permitting disposal of lead-containing material from abatement projects at uncontrolled sites; (C) working without certification or accreditation from the department or with improper (forged, altered, etc,) certification or accreditation; (D) failing to adequately prevent public entry to potentially contaminated areas; (E) submitting a forged or altered training certification in order to obtain a training provider accreditation or other certificate; (F) training without obtaining accreditation to provide training from the department, or training with an improper accreditation; (G) providing training certificates to persons who have not attended the required training course as specified by the department; or (H) failing to submit a notification or to pay the required fee. (2) Serious violation. Severity Level II covers violations that are significant and which, if not corrected, could threaten public health and safety. The base penalty for Level II violations on a first occurrence will not exceed $2,000 per day, per violation. Examples of Level II violations include, but are not limited to: (A) using prohibited lead abatement methods such as open-flame burning or torching, machine sanding or grinding without a high-efficiency particulate air (HEPA) vacuum tool, uncontained hydroblasting or high pressure washing, abrasive blasting or sand blasting without HEPA vacuum exhaust tools; (B) working with a lapsed or suspended certification; (C) submitting an improper notification; (D) failing to conduct a training course for the specified time period as required in sec.295.204 of this title; or (E) training with a lapsed training provider accreditation. (3) Significant violation. Severity Level I covers violations that are of more than minor significance and, if left uncorrected, could lead to more serious circumstances. This category shall include fraud and misrepresentation. The base penalty for Level I violations on first occurrence will not exceed $1,000 per day, per violation. Examples of Level I violations include, but are not limited to: (A) certified supervisor not onsite or available directly through a pager or answering service; (B) written occupant protection plan not prepared; (C) worker certificate not on a job site; (D) training provider fails to submit information to the department regarding training course schedules, or to notify the department of cancellations within the specified time periods; or (E) proper risk assessment report not prepared. (g) The person charged with the violation will be given the opportunity for a hearing conducted in accordance with the department's informal hearing procedures in Chapter 1 of this title (relating to the Board of Health). (h) The hearing regarding a proposed administrative penalty may be consolidated with another hearing on an administrative penalty. (i) If the person charged with the violation fails to request a hearing within 30 days following receipt of a notice of violation, an administrative penalty may be assessed after the Commissioner of Health has determined that a violation did occur and the amount of the penalty is warranted. 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 29, 1996. TRD-9601241 Susan K. Steeg General Counsel Texas Department of Health Effective date: February 19, 1996 Proposal publication date: December 12, 1995 For further information, please call: (512) 458-7236 TITLE 28. INSURANCE Part I. Texas Department of Insurance Chapter 3. Life, Accident and Health Insurance and Annuities Subchapter JJ. Minimum Registration, Disclosure and Nondiscrimination Requirements for Viatical Settlements 28 TAC sec.sec.3.10001-3.10018 The Texas Department of Insurance adopts new Subchapter JJ, sec.sec.3.10001-3. 10018, concerning regulation of viatical settlements, with changes to the proposed text as published in the November 24, 1995, issue of the Texas Register (20 TexReg 9802). The sections are necessary to: provide consumer protection in a viatical settlement transaction for the person with a catastrophic or life-threatening illness or condition who sells or otherwise transfers a life insurance policy, or its death benefit, or who attempts to do so; establish requirements for registration, disclosure and form approval for persons engaged in the business of viatical settlements; define prohibited practices for persons engaged in, or involved in transactions relating to, the business of viatical settlements; ensure that a viator's rights under the Insurance Code and this subchapter remain protected if a viatical settlement company sells or otherwise transfers the life insurance policy or death benefits under the policy to another person; protect the confidentiality of the personal, financial and medical information of persons who sell or otherwise transfer their life insurance policies or death benefits under such policies, or who seek to do so; and provide enforcement mechanisms to ensure that persons engaged in, or involved in transactions relating to, the business of viatical settlements comply with the Insurance Code and this subchapter. The sections will implement Insurance Code, Article 3.50-6A as amended by the 74th Legislature, 1995. The sections as adopted differ in some respects from the proposed sections based on further study generated by the comments received. The agency's response to comments, including specific changes to the sections and reasoned justification for the changes, are addressed in the paragraphs that follow. Section 3.10001 sets forth the scope and purpose of the subchapter and includes a severability provision. Section 3.10002 contains definitions used in the subchapter. Section 3.10003 requires all viatical settlement companies and brokers doing business in Texas to register and pay initial fees. Section 3.10004 requires registered viatical settlement companies and brokers to pay annual fees. Section 3.10005 requires companies to file periodic reports containing specified information on viatical settlement transactions with viators in Texas. The section also requires each viatical settlement broker to file periodic reports regarding its transactions with viatical settlement companies and other brokers. Section 3.10006 requires each viatical settlement company to submit to the department for approval all forms used by the company to effect a viatical settlement with a viator. Section 3.10007 requires companies and brokers to file advertising materials, informational materials and certain viator-requested revisions to contracts with the department for informational purposes. Section 3.10008 requires companies to provide a viator with written informational materials at the time the viator applies for a viatical settlement. Section 3.10009 specifies certain provisions that must be included in applications and contracts used to effect viatical settlements and also delineates prohibited practices related to applications and contracts. Section 3.10010 prohibits companies and brokers from disseminating misleading advertising or other solicitation materials. Section 3.10011 sets forth disclosure requirements and prohibited practices relating to payment of commissions or other compensation. Section 3.10012 places limits on contacting a viator for health status inquiries. Section 3.10013 requires certain disclosures in relation to assignment and resale of policies and prohibits a company from transferring policies to an unregistered person unless that person designates a registered company or broker to make all inquiries to the viator. Section 3.10014 requires companies or others obtaining medical, financial or personal information about viators to maintain such information in strict confidence. Section 3.10015 prohibits operating as an unregistered company or broker. Section 3.10016 delineates enforcement procedures for denying applications for certificates of registration or revoking such certificates, for alternative sanctions against registered companies or brokers, and for stopping and sanctioning companies or brokers who operate in Texas without a certificate of registration. The section also describes the applicability of article 1.10D to the department's regulatory authority over viatical settlement companies and brokers, and sets forth additional investigatory powers of the department. Section 3.10017 establishes the procedures for approval and other determinations by the department and the commissioner. Section 3.10018 contains forms that set out the required format for applications and reporting filings by viatical settlement companies and brokers. Copies of these forms are on file with the office of the Secretary of State, Texas Register Section. Copies of these forms may be obtained from the Texas Department of Insurance, Publication Department, MC 108-5A, P.O. Box 149104, Austin, Texas 78714-9104. Most commenters expressed general support for the rules as proposed. Some commenters supported the sections as proposed without changes. Others offered comments or concerns on specific sections of the rules. Several commenters stated that the sections will protect consumers, including persons with AIDS and older citizens who may be especially physically and financially vulnerable due to having a catastrophic or life-threatening illness or condition, without imposing onerous regulation on the viatical settlement industry. These commenters stated that the sections are needed to regulate a necessary industry that creates an important safety net for persons with terminal illnesses, but in which there is great potential for harm. Some commenters discussed complaints by persons viaticating their policies involving unfair practices by some segments of the viatical settlement industry. These complaints included the release of confidential information such as a viator's medical records by a company without viator consent; misrepresentations about prompt payouts and the failure to inform viators about the consequences of entering into a viatical settlement upon taxation, access to supplemental security income and access to public assistance programs. One commenter stated that the legislative intent of Insurance Code, Article 3.50-6A and rules to be adopted under the statute was to avoid these and other types of unfair practices by providing for confidentiality for viators, requiring companies to submit periodic reports enabling the department to study the viatical settlement market, requiring financial audits, requiring companies to disclose information to viators enabling the viators to protect their rights and providing effective enforcement tools used to protect consumers against unjust settlements or other unfair practices. Other commenters stated that the sections should ensure the accountability of the viatical settlement industry by requiring the registration of companies and brokers, requiring industry advertising that is honest and accurate, requiring disclosures to viators that will help them make informed choices about entering into a viatical settlement, protecting the confidentiality of viators' personal information and ensuring fair rates of return. Another commenter stated that many companies already comply with the escrow, recordkeeping and disclosure requirements embodied in the rules. Agency Response: The agency agrees with the commenter's statement of legislative intent and believes that the adopted sections meet this intent. With the exception of the requirement for a financial audit, the sections incorporate the items mentioned by the commenter as being within the legislative intent of the statute. The agency has deleted the requirement for a financial audit as explained in the responses to comments concerning sec.3. 10005. The sections are intended to provide fairness and consumer protection to persons with life-threatening or catastrophic illnesses or conditions who sell or attempt to sell their life insurance policies while providing for the reasonable regulation of the viatical settlement industry. The sections are also intended to assist prospective viators in making informed decisions before selling their life insurance policies. Agency staff is also aware of examples of unfair practices in the nature of those mentioned by the commenters. The sections are intended to prevent these types of unfair practices and to provide enforcement mechanisms to address future occurrences of such practices. General: A commenter stated that the proposed rules are more expansive than those in other states. This commenter also disagreed with the statement that there will be no fiscal impact on state or local government as a result of enforcement stating that the State of Texas will incur some administrative expense in monitoring compliance and administering the sections. The commenter also stated that the rules create potential for consumers to refrain from purchasing life insurance policies in Texas. The commenter also stated that the rules go beyond the legislature's purpose to register those operating within the viatical settlement industry and to provide consumer protection. Agency Response: The agency disagrees that the sections are onerous or too "expansive," go beyond the legislative purpose, create potential problems for consumers or that the fiscal note was incorrect. The agency has based these sections on the purposes and directives set forth in Insurance Code, Article 3. 50-6A and on information concerning the viatical settlement industry the agency has received from other regulatory bodies, the viatical settlement industry, the insurance industry, consumer groups and individuals. The regulations differ in many respects from those in other states, perhaps most notably in that guaranteed minimum payouts are not included. The department will administer the sections using existing staff and resources, so no additional administrative costs will be incurred. To provide for a more efficient administration of the sections, the agency has revised the registration forms at sec.3.10018, Figures 1 and 2, by adding a few categories of information to make the processing and tracking of information relating to entities engaged in viatical settlements similar to the processing and tracking of information for other types of persons or entities (insurance companies and agents) the department regulates. These minor changes will reduce costs to the agency by enhancing the agency's efficiency in processing the forms received and tracking information electronically. Additionally, the words "viators in or from Texas" have been changed wherever they occurred in sec.3.10003 and on the relevant forms and the words "in Texas" or "with viators in Texas" have been substituted. Similar modifications have been made to sec.3. 10005. This will significantly reduce the amount of statistical information submitted to the department for its review. General: A number of commenters stated that in developing the sections, the agency's staff engaged in a fair and open process, giving all parties involved ample opportunity to provide input both informally and formally. One of these commenters stated that persons living with HIV and AIDS have been represented in the process and have participated in discussions about the sections. Another commenter, however, expressed a concern that persons with AIDS may have been left out of the rulemaking process. Agency Response: Prior to proposing these sections, department staff conducted an informal meeting with interested parties including representatives of the viatical settlement industry, the insurance industry, consumer groups and AIDS service organizations. The agency based some provisions of the proposed rules upon information it received informally. The agency received written public comments on the proposed rules and held a public hearing to receive additional public comments. The agency reviewed and considered all the comments it received. The adopted sections differ in some respects from the sections as proposed based on further study generated by the public comments received. The department appreciates all of the comments it has received and the information provided at the public hearing. General: A commenter expressed opposition to onerous and unnecessary regulation of the viatical settlement industry. Of particular concern to the commenter is any regulation that requires a guaranteed minimum payout. Another commenter also stated that the department should not set a minimum payout for viatical settlements. This commenter stated that without further information about trends in the viatical settlement industry, minimum payouts may restrict consumers' ability to sell their life insurance policies. The commenter stated that currently, whether a payout is favorable must be determined on a case-by-case basis considering factors such as life expectancy and current market rates. Another commenter stated that the sections should require viators to notify their spouses that they are entering into a viatical settlement. Agency Response: The sections do not require minimum guaranteed payouts as are required by regulation in other states. The agency agrees that whether the amount of a payout is fair in a particular case must be determined in light of the circumstances of that transaction, viewed within the context of the viatical settlement market. The agency believes that requiring spousal notification of a viatical settlement would exceed the scope of Insurance Code, Article 3.50-6A. As discussed in the following paragraph, the agency will review the appropriateness of rules concerning the relationship between viatical settlement companies and insurance companies that issue the life insurance policies that are the subject of viatical settlements. As part of that review, the agency will consider whether a rule concerning spousal notification may also be appropriate. General: Several commenters stated that the rules need to regulate the relationship between viatical settlement companies and insurance companies that issue the life insurance policies subject to viatication. One of these commenters stated that the rules need to regulate life insurance companies by requiring them to: timely respond to requests for information; disclose to an employee leaving employment that a new "contestability" period begins if converting from a group to an individual policy; disclose alternatives to payment of accelerated benefits; disclose the effect on tax liability and eligibility for social services if accelerated benefits are received and disclose "lapse rates" on policies. According to this commenter, the rules should also prohibit insurers from denying approval to transfer an insurance policy. Some commenters stated that the rules should help expedite viatical settlements by imposing upon insurers a ten-day response time to requests for information and should prohibit insurers from preventing assignments for value. Insurers should also be prohibited from charging fees for verification of coverage or other administrative fees associated with a viatical settlement to policy owners, viatical settlement companies or brokers. Another commenter stated that although the commenter realized that rules addressed at the relationship between insurance companies and viatical settlement companies are outside the scope of this rulemaking, the department should consider the development of such rules in the future. Agency Response: The agency believes that these commenters have raised important concerns. The recommendations made are beyond the scope of the present rulemaking; however, the agency will fully consider these suggestions and review the relevant statutes to determine if further rulemaking concerning these issues may be appropriate. General: A commenter stated that the department should provide a telephone number for viators who may wish to file a complaint against a viatical settlement company. Agency Response: Complaints will be received by the department's Consumer Protection Division. Section 3.10009 requires a toll free number, 1-800-252-3439, to be included in all viatical settlement applications. Consumers can use this number to report complaints to the department or receive information about viatical settlements generally. Section 3.10001, Purpose, scope, severability. A commenter stated that the purpose statement expands the limited purpose defined by Insurance Code, Article 3.50-6A. Agency Response: The agency disagrees with this comment. The section sets forth both the purpose and the scope of the subchapter. All of the items listed in the subsection fall within the intent of Insurance Code, Article 3.50- 6A. Section 3.10002(a)(3), Policy. A commenter stated that the definition of "policy" does not fall within the scope of Insurance Code, Article 3.50-6A. Agency Response: The agency disagrees. The term "policy" is defined to encompass various form of contracts for life insurance as well as death benefits under a contract. Because a viatical settlement can be effected through several means- for example, by transferring ownership of a policy or by irrevocably assigning death benefits under a policy-the broad definition of "policy" is necessary to accomplish the statutory purpose of Insurance Code, Article 3.50-6A to protect all viators, regardless of how they transfer rights under their policies. Section 3.10002(a)(6), Viatical Settlement Broker. A commenter stated that the definition of "viatical settlement broker" is too broad and could be read to require the following persons or entities to register as brokers: AIDS service organizations who receive funds from viatical settlement companies; purely administrative employees of companies or brokers; and an attorney or accountant who accepts a contingent fee based upon the amount of the negotiated viatical settlement. Another commenter expressed a concern that the advertising provisions in the definition of "referral agent" in subsection (a) (4) of this section, read together with the definition of "viatical settlement broker," may encompass tax advisors and medical case managers who offer their counseling services through advertising. Agency Response: The agency believes that an AIDS service organization would not ordinarily receive compensation based upon an individual settlement transaction and thus would not be likely to fall within the definition of broker unless it did receive such compensation. It is likely that a viator's tax advisor or medical case manager is prohibited under any circumstances from accepting referral fees from a viatical settlement company under sec.3.10011(b) of these sections. The agency believes that any person or entity that is advertising the availability of viatical settlements should register as a broker. However, if a person or entity receiving referral fees advertises in a manner not directed at potential viators and not promoting the availability of viatical settlements, such advertising will not alone require the person or entity to register as a broker. The definition of "referral agent" in subsection (a)(4) has also been revised to further clarify this advertising issue. Purely administrative employees of companies or brokers would not need to register individually as brokers. The agency agrees that clarification is needed to exclude from the definition of "broker" an attorney or accountant who, in representing a viator, accepts a contingent fee from a viator. Language has been added to this section to exclude an attorney or accountant serving in this capacity from the definition of "viatical settlement broker." Section 3.10002(a)(7), Viatical settlement company. Some commenters requested that the definition of "viatical settlement company" be revised to exclude passive investors. One of these commenters suggested that a new subparagraph (D) be added to the definition of "viatical settlement company" to exclude from the definition "any person who enters into a viatical settlement and who has appointed a registered viatical settlement company to act as that person's agent in such transaction." The commenter further stated that the definition should exclude trust companies since they are regulated by other state agencies and serve similar functions to the other entities excluded under the definition. According to the commenter, the definition should not exclude insurance companies if the viator is provided an acceleration of benefits option. Under those circumstances the insurer should provide disclosure and other information required by the rules to be provided by viatical settlement companies. Agency Response: The agency agrees with the commenters that passive investors should be excluded from the definition of "viatical settlement company;" however, the agency believes the specific language suggested by one commenter is too broad and would include more than just passive investors. The definition of "viatical settlement company" has been modified to add between "viator" and "or who attempts" the following language: "either on the person's own behalf or as an attorney in fact or other agent for persons referenced in subparagraph (D) of this paragraph... ." New subparagraph (D) has been added to exclude from the definition of "viatical settlement company" a person whose sole activity consists of providing funds to effect the settlement in exchange for future investment proceeds and who has appointed a viatical settlement company to act as the person's agent in the transaction. The agency disagrees that trust companies should be excluded from the definition. If a trust company engages in the activities set forth in the definition of a "viatical settlement company," it is subject to these sections. Insurance companies offering accelerated benefits are governed by other laws in the Insurance Code. The agency will review those laws to determine if additional rules may be appropriate. Section 3.10003, Registration and initial fees and reports. Some commenters addressed the registration requirements of this section. These commenters stated that the requirement for companies who register prior to March 1, 1997, to report historical data amounts to a retroactive application of law. According to one of these commenters, the proposed registration of viatical settlement companies amounts to a "licensing requirement." This commenter asserted that Insurance Code, Article 3.50-6A does not authorize the department to require financial, associational, reporting, oath or other components as a part of an application for registration. This commenter also asserted that provisions requiring companies to disclose historical data will harm consumers and result in a reduction of the funds available to viators. The commenter also stated that three to four months may not be sufficient time for a broker or company to comply with the requirements of subsection (e). Finally, this commenter expressed a concern that a denial of an application for a certificate of registration by department staff could occur without affording the applicant due process. Agency Response: The section concerning registration of viatical settlement companies requires companies seeking to register to send in a registration form; to pay a registration fee; to submit samples of its viatical settlement forms, advertising and informational materials and, if a company applies for registration prior to March 1, 1997, to report historical data for 1995 and 1996. The historical data mirrors the type of information that viatical settlement companies will be required to report annually under other sections. The compilation of this data is valuable to the department because it allows the department to learn about the condition of the viatical settlement industry in Texas, including developing trends in the industry and the volume of business being conducted in the state. The data will provide the department with needed information without which the department could not fulfill its responsibility to regulate these entities and to protect consumers. Viatical settlement companies already compile this data and report it to other states and, in some instances, may disclose it to potential investors and viators. The agency disagrees that the historical data reporting amounts to retroactive application of Texas law. The section does not change or affect the transactions from which this data is drawn. The agency further disagrees that these minimal registration requirements violate the intent of Insurance Code, Article 3.50-6A. The stated purpose of the statute is to register persons engaged in the business of viatical settlements and to provide consumer protection. The registration requirements, including the requirement to submit historical data, meet both purposes. The agency also disagrees with the commenter that the requirement for companies to report this data would result in a reduction of funds available to viators. Neither this section nor any other requires companies to submit reports containing the names of viators, their policy numbers or other information from which the identity of individual viators or investors could be traced. In fact, the rules prohibit companies from disclosing such identifying information about viators in their periodic reports to the department. The agency has deleted the words "or from Texas" from subsection (b)(5) of the section and substituted "with viators in Texas." This will significantly reduce the amount of information Texas companies doing a high volume of business outside the state will be required to report to the department. This change is intended to narrow only the reporting requirements. The definition of "viatical settlement" remains unchanged and the change to this section does not alter the breadth of the department's enforcement ability. Viatical settlement companies and brokers must comply with the laws in this and other states where they transact business. Insurance Code, Article 3.50-6A, was effective on January 1, 1996. The agency believes that the grace period for registration established in subsection (e) of this section is reasonable. The section clearly provides due process for an applicant whose application has been denied by allowing the applicant to request a hearing on the denial. A final decision would be made by the Commissioner of Insurance after this hearing. Section 3.10005, Reporting requirements. Several commenters expressed particular support for this section as proposed, because statistical data about viatical settlement transactions can provide the department with the first accurate picture of financial trends in the viatical settlement industry and facilitate the department's regulation of the industry. One of these commenters stated that consumers also need access to this data. A commenter stated that viatical settlement companies should not be required to report the names of those who have sold their policies. A commenter disagreed with the reporting requirements. This commenter stated that Insurance Code, Article 3. 50-6A does not contain authorization to require extensive reporting requirements. Additionally, the commenter suggested that the required information is highly personal and no controls are set forth to protect confidentiality. Another commenter recommended changing the requirement for quarterly reports to annual reports. A commenter stated that the requirement in subsection (b)(1) of this section for an audited financial statement prepared by an independent certified public accountant should be deleted because, according to the commenter, the financial solvency of the viatical settlement company is made irrelevant by other provisions of the rules establishing requirements for methods of payout. According to the commenter, these provisions are sufficient to protect viators' rights. Agency Response: Insurance Code, Article 3.50-6A gives the Commissioner of Insurance the responsibility to adopt rules to protect persons with terminal or life-threatening illnesses or conditions who sell or attempt to sell their life insurance policies. The reporting requirements, which seek only the most basic information on viatical settlements, are a reasonable means for the department to evaluate and monitor the viatical settlement industry. The agency agrees with the commenters that the department's ability to evaluate and monitor this industry is essential to fulfilling the department's duty to protect consumers. The information will enable the department to evaluate the rate of return in the Texas market and will allow department staff to keep abreast of trends in the industry. The information will also enable the department to gauge the volume of activity in Texas. The agency cannot fulfill its duty to regulate this fledgling industry without sufficient information. The periodic reporting requirements are thus a vital component of these sections. The language of subsections (b), (c) and (d) have been modified to clarify the agency's intent to require statistical data from transactions in Texas. The sections neither require nor allow the disclosure of the names of viators or any other identifying information from which individual viators can be traced; the reporting requirements were specifically designed to protect viators' confidentiality. Viatical settlement companies already compile the information required to be reported and report it to other states and, in some instances, disclose such data to potential investors and viators. The agency believes the quarterly reports are appropriate and should be retained for the limited duration provided in the section. The section only requires quarterly reporting through March 1, 1997. Companies and brokers would then file annual reports. Receiving quarterly reports will enable the agency to quickly obtain information about the viatical industry in Texas and to monitor trends. The quarterly reports seek limited data that companies already collect for themselves and the agency believes this will not place an unfair burden on companies. The agency agrees with the commenter that the financial audit requirement in subsection (b)(1) of this section should be deleted because other sections establish requirements for processing payouts which appear to make the requirement for an annual certified financial audit irrelevant at this time. Moreover, as previously explained in response to comments above, the agency will obtain information crucial for monitoring and evaluating the viatical settlement industry from the required periodic reports. Some of this information could be duplicative of information submitted in annual financial statements. The agency will monitor the operation of these rules to determine whether the agency should reconsider the desirability of the audit requirement. Paragraph (1) of subsection (b) of this section has been deleted. Section 3.10006, Approval of forms relating to viatical settlements. A commenter stated that the contract forms used to transact a viatical settlement should be designed to enhance consumer protection. This commenter suggested that all new forms should be developed by the department and reviewed by consumer groups. Another commenter suggested eliminating the requirement found in subsection (b) of this section for attorney certification of forms for use prior to department approval. This commenter stated that instead, the section should allow an officer of the viatical settlement company to make the certification. Another commenter stated that the 60-day lead time for approval of forms by the department seems excessive and recommends a five-day lead time. A commenter suggests that subsection (e) of this section as written with reference to "viatical settlement market," is in conflict with the previous section which references "viatical settlement companies." Another commenter pointed out that a typographical error appears in subsection (e)(2) of this section, which is an apostrophe in "disapproval's. " A commenter requested latitude in the placement of the required form number as required by subsection (e)(8) of this section. Agency Response: The section requires the review of forms used to effect viatical settlements by the department. The agency disagrees that all forms used to effect viatical settlements should be developed by the department and believes that companies should be able to vary their forms so long as the forms comply with the law and do not contain misleading information. The agency agrees with the commenter that company officer certification should be allowed but believes this should be allowed as an alternative to attorney certification rather than eliminating attorney certification as the commenter suggests. Retaining the attorney certification as an alternative would provide companies another option. Language has been added to the section to provide for certification by an attorney or any authorized representative of the company. The agency disagrees that only 5 days should be allowed for agency approval of forms. The grace period contained in sec.3.10003(e) allows companies to continue using forms that they now use during the pendency of their application and the agency's form review, provided they apply for registration before April 1, 1996. After expiration of this grace period, sixty days is a reasonable time for agency staff to review and approve forms before companies use them. Approval of forms before their use is consistent with the intent of Insurance Code, Article 3.50-6A(c)(2). The agency agrees with the commenter that the words "viatical settlement market" should be changed. Those words have been deleted and subsection (e) now references all forms "filed pursuant to this section." The misplaced apostrophe had been deleted from subsection (e)(2) of this section. The agency corrected a typographical error in subsection (e)(3) of this section in that the word "form" has been included as the last word of the sentence. The agency disagrees with the comment concerning placement of the form numbers. This placement is consistent with requirement for other forms required to be filed with the department and will facilitate review of the information submitted. Section 3.10007, Filings for informational purposes. A commenter suggested deleting subsection (c) of this section which requires that companies file with the department for informational purposes only contracts containing viator- requested changes accompanied by a written statement from the viator's attorney that the viator requested the change after consultation. As an alternative to deleting the provision, the commenter suggested that such contract modifications should only be filed annually with a company's annual report. Agency Response: The agency disagrees with eliminating this provision. The contract changes are filed for information only and are not subject to department approval. Thus, a viatical settlement transaction will not be delayed as a result of viator- requested changes in the contract. One purpose for these information-only filings is to allow the department to evaluate to what extent viatical settlement contracts may be changed from the standard forms approved by the department based upon viator request. Reviewing these changes will help department staff gain knowledge about contract provisions from a viator point of view and will assist staff in fulfilling its duty to approve standard contract forms. The section protects viator confidentiality, requiring any viator- identifying information to be deleted from these filings. The agency disagrees that contract modifications should be filed only on an annual basis with a company's annual report. Because these changes are filed after the transaction has taken place, it should not be burdensome for companies to submit these changes as they are made. To clarify that the modified contracts are to be filed after a transaction has occurred, the agency has deleted the word "proposed" in subsection (c) of this section. The agency has added language to subsection (b) of this section for clarification with respect to the filing of advertising. In subsection (c) of this section, the agency has changed the word "counsel" to "attorney" for consistency within the sections. Section 3.10008, Required informational materials. A commenter stated that it would be difficult to meet this section's requirement to provide in informational materials broad accurate statements describing the tax consequences or possible consequences of the viatical settlement on a viator's ability to receive public assistance. The commenter suggested that the viator should simply be referred to a certified public accountant and/or attorney to explain the specific consequences of the transaction. Another commenter requested that the department recognize the existence of solicitation brochures used to invite prospective viators to request informational brochures. The commenter requested that the section allow for the distribution of the required information in a "packet" or on videotape rather than requiring a "brochure." Another commenter requested that the section require the informational materials to contain the definitions used in these sections. Agency Response: The agency agrees that promulgating standardized language concerning tax or other financial consequences of entering into a viatical settlement would be beneficial to companies and viators. Such language has been added to the section and the section has been reorganized. The agency recognizes that different companies may wish to use different formats for the information required to be disclosed. The agency has changed the title of this section from "informational brochure" to "informational materials" and has deleted the term "booklet" and substituted "written informational materials." The agency has also deleted the term "brochure" wherever it occurred in other sections and substituted "written informational materials." The agency disagrees that the sections should allow the communication of information in formats other than by written materials, such as making a videotape available to prospective viators. A videotape may not, in all instances, be given to the viator to keep and even if it were, not all viators may have access to video viewing equipment. The agency disagrees with the commenter that the section should require the informational materials to include all definitions used in these sections. Companies may include these definitions, however. In any case, the sections prohibit companies from making misrepresentations in their informational materials. Thus, any terms or definitions used in these materials must be accurate. Section 3.10009(a), Settlement application forms. A commenter recommended that the requirement in subsection (a)(1)(B) of this section for information to be provided in Spanish as well as in English be eliminated because viatical settlement companies do not buy policies from insurance companies in Mexico and do not sell policies to non-residents. This commenter also stated that if there are state-to-state variations in the application form requirements, the department should permit viatical companies to enclose a "Texas" notice to avoid companies having to have a separate set of forms or separate application for each state in which they operate. Agency Response: The agency disagrees with the commenter that the Spanish language requirement should be deleted from subsection (a)(1)(B). Some viators in Texas may read and understand Spanish better than English and the disclosure is intended to assist viators in making informed choices. The section contains the Spanish language paragraph for use by companies and it should not be overly burdensome for companies to include this language in their applications. The agency agrees with the commenter that companies should be able to enclose a "Texas" notice with application forms they may use in other states. Language has been added to require that if companies opt to use a "Texas" notice they must place the information required by these sections on a supplement page attached to the front of the application. Section 3.10009(a)(2), Physician's statement. Several commenters objected to the requirement in subsection (a)(2) for a physician's statement to be included in the application. These commenters stated that this requirement has the potential to prevent a person diagnosed with AIDS from being able to enter into viatical settlements and that existing contract law provides a remedy for individuals who enter into a contractual agreement without the mental competence to do so. Agency Response: The agency has deleted the requirement for a physician's statement as requested by the commenters and agrees that existing contract law already provides a remedy if persons enter into a contract without the mental capacity to do so. Subsection (a)(2) has been deleted. Section 3.10009(b)(1), Rescission by a viator. A commenter suggested that the date the monies are placed in an escrow account is considered a "non-event" to the viator and that allowing the rescission period to commence on the date an escrow is established does not give the viator a meaningful opportunity to rescind. A company should be required to escrow the funds when the offer is made or accepted. Agency Response: The agency disagrees. The sections allow companies to place funds in escrow during the rescission period so that both parties will be protected should a viator reconsider and rescind the contract. Section 3.10009(b)(2), Payment of settlement proceeds. A commenter requested clarification of subsection (b)(2) concerning when settlement proceeds that are to be paid in installments should be withdrawn from the escrow account. Another commenter suggested that this subsection should provide that the transfer of the proceeds to the viator should occur no later that 48 hours after receipt by the purchaser of acknowledgment of the transfer of the policy. Agency Response: The agency agrees and subsection (b)(2)(B) has been changed to more accurately reflect when settlement proceeds that are to be paid in installments should be withdrawn from the escrow account. Subsection (c)(5) of sec.3.10009 has been changed to allow settlement proceeds to be paid in installments only through the purchase of either an annuity from a licensed insurance company or through an escrow or trust account established by a licensed bank. Subsection (b)(2)(B)(ii) has also been changed to provide for proceeds to be transferred to purchase an instrument used to effect installment payments in a manner not prohibited by subsection (c)(5). The agency agrees that there should be no delay in the transfer of funds to the viator. The section as written contemplates immediate transfer of proceeds upon receipt by the purchaser of acknowledgment of the transfer. Section 3.10009(b)(4), Designation of contact for health status inquiries. A commenter recommended deletion of the paragraph requiring contracts to include a provision for the viator to designate a contact for inquiries about the viator's health status. Agency Response: The agency disagrees. Reasonable limits on direct contacts with the viator for health status purposes are important to protect the privacy of the viator. The section protects the privacy of the viator while also providing a mechanism for investors to monitor their investment. Section 3.10009(b)(6), Transfer of the policy. A commenter recommended deleting this portion of sec.3.10009 which requires contracts to contain a provision disclosing to viators whether the company intends to sell or transfer a policy and identifying the buyer or transferee. The commenter stated that if the department needs such information it should ask for it in the annual report. Agency Response: The agency disagrees. The disclosure required by this paragraph is made to the viator rather than to the department. Insurance Code, Article 3.50-6A directs the commissioner to promulgate rules relating to assignment or resale of viaticated policies. The provision is intended to help viators make informed decisions about selling their policies. Section 3.10009(b)(7), Notarized Statement. A commenter requested modification of the requirement for a contract to include an acknowledgment page containing a notarized statement by a viator. The commenter believed that under some circumstances it may be difficult for a viator to obtain the services of a notary. Agency Response: The agency disagrees and believes that it should not be too burdensome to obtain the notarization. The viatical settlement company is free to provide notary services to viators for such purposes. Section 3.10009(c), Non-discrimination. Several commenters supported the non- discrimination components of the section as proposed and stated that the language in this section will ensure that discrimination of any type will not be tolerated within the viatical settlement industry. Another commenter suggested that certain factors, such as age and gender, must be considered in determining life expectancy. This commenter suggested that the term "unfairly" be added to modify the word "discriminate" in subsection (c)(2). Another commenter stated, however, that if the word "unfairly" is added to subsection (c)(2), the subsection should also require the viatical company to produce data to support an argument that it is not unfairly discriminating. A commenter who is a representative of a viatical settlement company stated that one of its lending sources will not provide funds for the purchase of life insurance policies from persons with dependents. Therefore a viatical settlement company might appear to discriminate against a person with dependents when, in fact, it cannot obtain funding to purchase the policy. Another commenter requested deletion of many of the categories of persons in subsection (c)(2) because, according to the commenter, including these categories exceeds legislative intent and unduly burdens the right to contract. The commenter also requested deletion of the prohibition against discrimination between viators with dependents and those without in subsection (c)(3). Agency Response: The agency agrees that the non- discrimination provisions are an important component of these sections and will provide protection for viators consistent with the intent of Insurance Code, Article 3. 50-6A(b)(4)(A). The agency believes that these provisions enhance viators' ability to enter into viatical settlements rather than limit or burden their ability to contract. The agency agrees that the life expectancy exception in subsection (c)(2) of sec.3.10009 should be clarified. The language of this subsection has been revised to prohibit discrimination based on the factors set forth "except when such factors affect the life expectancy of the viator." The subsection as modified eliminates the need to add the term "unfairly." Subsection (c)(2) prohibits discrimination unrelated to life expectancy. The subsection does not suggest, however, that a company would be in violation of the prohibition under circumstances in which a funding source refuses to fund a particular settlement. Section 3.10009(c)(4), Prohibited practices relating to applications and contracts. Many commenters supported the provision allowing the commissioner to prohibit a payment to a viator that is unjust. A commenter stated, however, that the provision should be deleted because Insurance Code, Article 3.50-6A was only intended to allow the department to collect information on viatical settlement payouts but not to prohibit a payout that is unjust based upon the amount. Another commenter stated that instead of prohibiting unjust settlements, the section should establish minimum payout percentages. Agency Response: The section does not require minimum payout percentages. The agency believes that without more information about the viatical settlement industry, it would be inappropriate at this time to establish guaranteed minimum payout percentages. Whether the rate of return in a particular transaction is unfair would be determined on a case-by-case basis in light of the circumstances related to that transaction, viewed within the context of the viatical settlement market. The subsection lists criteria that the commissioner would use to evaluate whether the amount of a particular payment is unjust. At times when the market is very competitive and the product is marketed to sophisticated consumers who are able to compare offers, the agency does not expect to receive many complaints concerning unjust payments. The department is concerned, however, that consumers will be vulnerable in the absence of a prohibition against unjust payments, particularly when the market is less competitive or when the product is marketed to the elderly, to less sophisticated consumers or to consumers who are physically or financially unable to make comparisons. The agency believes that to effectively fulfill the responsibility to protect viators, the commissioner should be able to prohibit payments that are unjust. The reporting requirements in sec.3.10005 will enable the department to compile sufficient non-confidential statistical data to enable viators and companies to compare settlement offers against industry standards. This will enable viatical settlement companies to avoid making unjust payments. The reported data will also give the department an objective means to analyze what is fair or unfair market conduct. To clarify the intent to establish an objective means of comparing a particular payment to known market rates, the agency has deleted the words "nationally or" from the subsection. Section 3.10009(c)(5), Installment payments. Several commenters stated that subsection (c)(5) of sec.3.10009 as proposed may restrict the ability of a viator to arrange for installment payments of monies by making this payment option available only if the viatical settlement company is registered as a bank. One of these commenters suggested that an installment payment option should be made available for use with any bank, trust, credit union, savings and loan or other lending institution so long as the entity is an escrow agent with independent ownership from that of the viatical settlement company or broker. This commenter further suggested that there should be a prohibition against shared ownership interests of a viatical settlement company or broker and the escrow or trust agent. Another commenter suggested that the provision should allow installment payments if the viatical settlement company or affiliate has been licensed in this or any other state to act as an insurance company. Alternatively, the commenter suggested adopting provisions requiring the purchase of an annuity, guarantee, letter of credit or similar financial instrument acceptable to the department issued by a licensed insurance company or bank. As another alternative the commenter suggested allowing instruments guaranteed by a bank or insurance company rather than issued by them to avoid transaction costs that may reduce the amount paid to the viator. Additionally, the commenter suggested that the annuity, or comparable instrument, be in the amount equal to the sum of the future payments on the viaticated policy. Agency Response: Installment payments may be advantageous to some viators. The agency has changed subsection (c)(5) of sec.3.10009 to allow settlement proceeds to be paid in installments only through the purchase of either an annuity from a licensed insurance company or through an escrow or trust account established through a licensed bank. The agency disagrees with other language suggested by the commenters and disagrees with allowing viatical settlement companies to issue instruments guaranteed by an insurance company or bank. These suggestions would increase the risk to the viator and some of the commenters' suggested alternatives may constitute unauthorized insurance under Insurance Code, Article 1.14-1. Section 3.10010, Advertising and solicitation. A commenter requested deletion of any reference to Insurance Code, Article 21.21 or Texas Administrative Code, Title 28, Chapter 21, Subchapter B because, according to the commenter, incorporating these provisions by reference is not authorized by Insurance Code, Article 3.50-6A. Agency Response: The agency disagrees with this commenter. Including a prohibition against false or misleading advertising is a component of providing consumer protection to viators. The agency is aware of examples of misleading advertising by viatical settlement companies. Article 3.50-6A directs the commissioner to incorporate by reference any provisions of the Insurance Code that the commissioner believes should apply to viatical settlements to ensure consumer protection. Incorporating Article 21.21 and related rules provides guidance for companies and brokers concerning what would be considered to be misleading advertising. Incorporating this article also ensures that the department will evaluate advertising in the viatical industry in a manner that is consistent with its evaluation of other entities regulated by the department. Section 3.10012, Health status inquiries. A commenter stated that subsection (a) of this section prohibiting persons from contacting a viator or viator's designee concerning the viator's health status unless the person is a registered company or broker should be eliminated because it is not consistent with legislative intent. Another commenter stated that the prohibition on contacting a viator more frequently than every 30 days allows too frequent contacts and should be changed to 60 days. Another commenter stated that the subsection should be clarified to allow a company to contact a viator within 30 days of the application process to determine whether there has been a change in health status. This could be more favorable to the prospective viator because it may result in a higher purchase price. Agency Response: The agency disagrees that restrictions on contacts with the viator to determine health status is outside the intent of Insurance Code, Article 3.50-6A. Normally a licensed company will be the party to the contract with the viator and the rule does not prohibit the company from contacting the viator. The agency believes that this subsection, along with subsection (b) which limits the number of contacts to once every 30 days constitute reasonable limits designed to protect viators from harassment. Language has been added to subsection (b) to clarify that the limits on contacts with viators will apply once a viator has entered into a viatical settlement with a viatical settlement company. Section 3.10013, Assignment or resale of policies. A commenter recommends deletion of the words "without the consent of the viator" from subsection (a) of this section and the reference in that subsection to sec.3.10009(b)(6) because, according to the commenter, after the policy is sold, the viator retains no property rights in the policy. The commenter further suggests that the words in subsection (b) "no viatical settlement company shall sell or otherwise transfer" should be replaced with "when a viatical settlement company sells or otherwise transfers ... then ... shall appoint...." Agency Response: The purpose of subsection (a) of this section, along with sec.3. 10009(b)(6) is to ensure that the viator is informed that the policy may be transferred to other persons, not to prevent the transfer. The agency disagrees that these provisions should be eliminated because they assist viators in making informed decisions before selling their policies and is consistent with the intent of Insurance Code, Article 3.50-6A(c)(5). The agency believes that the subsections should be revised to more clearly reflect this purpose. Subsection (a) as revised provides for enforcement under sec.3. 10016 for failure to disclose to a viator a sale or transfer of the policy rather than prohibiting the sale or transfer. The language in subsection (b) has been revised similarly. Section 3.10014, Confidentiality. A number of commenters expressed support for this section. One of these commenters stated that persons living with AIDS can be the subject of discrimination by persons who learn of their illness and that the steps taken in these sections to protect the confidentiality of viators are especially important. Another commenter stated that this section reduces the potential for sensitive information about a viator being released to the public but expressed a concern that mandatory disclosure of sensitive personal information of both consumers and viators to a governmental entity creates a risk that the information may be deemed "public information" and therefore become available to the public. Agency Response: The agency strongly agrees with the need to protect the confidentiality of viators. This section is intended to prevent the disclosure of any identifying or medical information obtained by a viatical settlement company or broker concerning a viator or a viator's family, spouse or significant other. The agency is aware of situations in which a viatical settlement company or its licensee has disclosed the names of viators, their policy numbers and sensitive medical information in marketing materials aimed at investors. This section will prohibit such disclosures. It will allow companies to disclose such sensitive information only to the extent that the viator consents and the disclosure is necessary to effect the viatical settlement between the viator and the company. To further clarify the narrow circumstances under which the identity of the viator can be disclosed by viatical settlement companies, the language of subsection (a)(1) has been changed to: "is necessary to effect the viatical settlement between the viator and the viatical settlement company and the viator provides prior and knowing written consent to the disclosure." The section also prohibits companies from disclosing confidential information about viators when making periodic reports to the department. Information is excepted from the Texas Open Records Act, and thus is protected from becoming public if it is considered to be confidential by law, either constitutional, statutory or judicial decision. The section also ensures the confidentiality of information obtained by the department under subpoena in an enforcement action by making Insurance Code, Articles 1.10D and 1.19-1 applicable pursuant to Insurance Code, Article 3.50-6A, sec.3. These statutes create an exception to the Texas Open Records Act when the information is obtained by the department's fraud unit and in cases in which the department obtains information under a subpoena. The Texas Open Records Act also recognizes an exception for information held by a law enforcement agency relating to criminal enforcement matters. Section 3.10015, Prohibition against unregistered company. Several commenters stated that subsection (c) of this section, combined with sec.3. 10016(d), would place substantial and unfair responsibilities on a life insurer to verify that a viatical settlement company is registered before effecting the transfer of rights to the company. One commenter suggested remedying this problem by requiring a viatical settlement company or broker to submit proof of registration at the time the company or broker submits a request to the insurance company relating to a transfer of rights under a policy. Other commenters suggested that Insurance Code, Article 3.50-6A did not give the commissioner authority to promulgate rules regulating the activity of insurance companies. The commenters contended that the owner of a policy has the right to designate any beneficiary the owner chooses, and the insurer has no right to interfere with the decision. Placing the burden of investigating registration status of a viatical settlement company on insurers might delay payments to beneficiaries (causing a violation of Unfair Claim Settlement Practices Act). Also, an insurer might make a good faith mistake about a viatical settlement company's status. According to the commenters, responsibility should be solely on a viatical settlement company to meet any statutory and regulatory requirements. Agency Response: The agency believes that these commenters' concerns have merit. It was not the agency's intention to interfere with or restrict the rights of policyholders to designate beneficiaries. Subsection (c) of sec.3.10015 and subsection (d) of sec.3.10016 as proposed have been deleted. The agency will consider alternatives for verifying registration of viatical settlement companies, including the suggestion made by the commenter, and will review the relevant statutes to determine if further rulemaking may be appropriate. Section 3.10016, Enforcement. A commenter suggested that the word "material" be inserted between "any" and "fact" in subsection (a)(1) because denial of an application or revocation of a certificate of registration due to inadvertent or insignificant errors is unnecessary and unduly burdensome. This commenter also stated that subsection (a)(5) should not make violations of federal securities laws a potential subject for denial or revocation of a registration and that the paragraph as worded creates a double jeopardy problem. The commenter also suggests elimination of references to Insurance Code, Articles 1.19-1 and 1.24 in subsection (f) of the section because, according to the commenter, this was not authorized by Insurance Code, Article 3.50-6A. Agency Response: Based upon the recommendation of the commenter, the agency has added the word "material" to subsection (a)(1). The section provides only for civil sanctions rather than criminal sanctions so that no double jeopardy issues are raised. The agency has clarified subsection (a), however, to reflect the intent to focus on violations of securities laws related to the business of viatical settlements: language has been deleted from subsection (a)(5) and a new subsection (a)(6) has been added. The agency disagrees that references to Insurance Code, Articles 1.19-1 and 1.24 should be eliminated. Insurance Code, Article 3.50-6A, sec.4 expressly contemplates that rules would incorporate more provisions of the Insurance Code than are expressly set forth in the statute. Article 3.50-6A, sec.3 gives the commissioner the responsibility to enforce this statute and these sections through the application of Insurance Code, Articles 1.10, 1.10D and 1.10E. Insurance Code, Articles 1.19-1 and 1.24 are discovery tools for the department to gather evidence for potential enforcement actions. The agency believes that Article 3.50-6A contemplates incorporating such discovery tools into these sections to enable the department to carry out its enforcement responsibility. Section 3.10018, Adoption of forms. The agency has deleted the index to forms as unnecessary in light of the specific references to the forms in other sections. The agency believes that clarification is needed in Figure 1 and Figure 2 to distinguish an initial application from an application filed to reflect a change to the information submitted in the initial application. Item 1 has been added to both forms to incorporate an area to designate whether the application is an initial application or an application based on changes. The agency corrected a typographical error it identified in Figure 2 under "Reports of Historical Data" and changed a reference to sec.3.10017 in this Figure to sec.3.10018. The agency also corrected a typographical error in Figures 3 and 4, has changed the due date of the April 1996-June 1996 report to August 15, 1996, and has changed the due date for reporting historical data from March 1, 1996 to the date of the initial application. For: Coalition for Texans with Disabilities, Office of Public Insurance Counsel, individual commenters. For with changes: Affirmative Lifestyles, Inc., American Association of Retired Persons, American Counsel of Life Insurance, Capitol Area Legal Project, Life Benefactors, L.P., Life Partners, National Association of People with Aids (NAPWA), National Viator Representatives, Inc., Texas AIDS Network, Texas Life Insurance Association, Texas Legal Reserve Officials Association (TLROA), USAA Life Investment Trust, Viaticus, Inc., individual commenters. The new sections are adopted under the Insurance Code, Articles 3.50-6A and 1.03A and Government Code, sec.sec.2001.004, et seq. Article 3.50-6A requires the Commissioner to register viatical settlement companies and brokers doing business in Texas and to provide consumer protection to persons with life- threatening illnesses who may sell or otherwise transfer their life insurance policies to viatical settlement companies The article authorizes the commissioner to adopt reasonable rules to implement and enforce the article. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance. The Government Code, sec.sec.2001.004 et seq authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and prescribes the procedures for adoption of rules by a state administrative agency. sec.3.10001. Purpose, Scope and Severability. (a) Scope and purpose. This subchapter implements the provisions of the Insurance Code, Article 3.50-6A. The commissioner enacts these rules for the following purposes. (1) to provide consumer protection in a viatical settlement transaction for the person with a terminal illness who sells or otherwise transfers a life insurance policy or its death benefit, or who attempts to do so; (2) to establish requirements for registration, disclosure and form approval for persons engaged in the business of viatical settlements; (3) to define prohibited practices for persons engaged in, or involved in transactions relating to, the business of viatical settlements; (4) to ensure that a viator's rights under the Insurance Code and this subchapter remain protected if a viatical settlement company sells or otherwise transfers the life insurance policy or death benefits under the policy to another person; (5) to protect the confidentiality of the personal, financial and medical information of persons who sell or otherwise transfer their life insurance policies or death benefits under such policies, or who seek to do so; and (6) to provide enforcement mechanisms to ensure that persons engaged in, or involved in transactions relating to, the business of viatical settlements comply with the Insurance Code and this subchapter. (b) Severability. If a court of competent jurisdiction holds that any provision of this subchapter is inconsistent with any statutes of this state, is unconstitutional or for any other reason is invalid, the remaining provisions shall remain in full effect. If a court of competent jurisdiction holds that the application of any provision of this subchapter to particular persons, or in particular circumstances, is inconsistent with any statutes of this state, is unconstitutional or for any other reason is invalid, the provision shall remain in full effect as to other persons or circumstances. sec.3.10002. Definitions. (a) The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. (1) Identity-The complete name, last known business address and last known business telephone number of a person, and, if the person is an entity rather than an individual, the form of the entity. (2) Person-An individual, corporation, trust, partnership, association, or any other legal entity. (3) Policy-An individual life insurance policy, a rider to an individual life insurance policy, a certificate or a rider to a certificate evidencing coverage under a group life insurance policy. The term also is used to refer to the death benefit of a policy (that is, a reference to selling or otherwise transferring a policy also encompasses selling, or otherwise transferring the death benefit of a policy or irrevocably designating a beneficiary to receive the death benefit). (4) Referral agent-A person who, for compensation, refers or introduces a viator to a viatical settlement company or broker, but does not advertise his or her services as a referral agent, the availability of viatical settlements or on behalf of any viatical settlement company or broker, or perform services or take part in negotiations relating to effecting a viatical settlement. A referral agent who makes five or more such referrals in a calendar year must register as a viatical settlement broker. (5) Viatical settlement-An agreement that is solicited, negotiated, offered, entered into, delivered, or issued for delivery in this state, under which a person acquires, through assignment, transfer, sale, devise, bequest, or otherwise, a policy insuring the life of an individual with a catastrophic or life-threatening illness or condition by paying the owner or holder of the policy compensation, or anything of value, that is less than the expected death benefit of the policy. (6) Viatical settlement broker-A person, including an insurance agent licensed by the commissioner, who is not a viatical settlement company and who for a commission or other form of compensation, or in the hopes of obtaining such compensation: (A) offers or advertises the availability of viatical settlements; (B) offers or attempts to negotiate a viatical settlement between a viator and a viatical settlement company; (C) in regards to a potential viatical settlement, performs services relating to the gathering, organization or analysis of medical, financial or personal information about a viator; or (D) acting as a referral agent, refers or introduces a viator to a viatical settlement company or broker five or more times in a calendar year. The term does not include: an attorney, accountant, or person acting under power of attorney from the viator, who is retained to represent the viator and whose compensation is paid entirely by the viator without regard to whether a viatical settlement is effected; an attorney or accountant representing the viator in relation to the viatical settlement, who receives a contingent fee from the viator; a person who solicits only potential investors in viatical settlements, and who does not in any way advertise, solicit or promote viatical settlements in a manner that reasonably could attract viators; or any print, broadcast or other media which prints or broadcasts advertisements of a viatical settlement company or broker. (7) Viatical settlement company-A person who enters into a viatical settlement with a viator either on the person's own behalf or as an attorney in fact or other agent for persons referenced in subparagraph (D) of this paragraph, or who attempts to do so through negotiations, solicitation, or acquisition of medical, financial or personal information from or about a viator. The term does not include: (A) a bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a policy as collateral for a loan; (B) the issuer of a policy that makes a loan or pays benefits, including accelerated benefits, under the policy or in exchange for surrender of the policy; (C) any person who, within a three-year period, enters into viatical settlements with no more than one viator, provided that the person enters into no more than three viatical settlements with that viator; or (D) any person who may be a party to a viatical settlement, but whose sole activity related to the transaction is providing funds to effect the viatical settlement in exchange for future investment proceeds, and who has appointed in writing a registered viatical settlement company to act as the person's agent in such transactions. (8) Viator-An individual who: (A) is the owner or holder of a policy insuring the life of an individual who has a catastrophic or life-threatening illness or condition; and (B) enters into a viatical settlement with a viatical settlement company, or attempts to do so through inquiry to or negotiation with a viatical settlement company or broker, or through providing, or consenting to the provision of, medical, financial or personal information to a viatical settlement company or broker. The term does not include a viatical settlement company that sells, transfers or pledges a policy that it has purchased from a viator. (b) Article 1.01A, Insurance Code, which includes definitions of "department" and "commissioner" and describes the structure of the Texas Department of Insurance, applies to this subchapter and to Article 3.50-6A, Insurance Code. sec.3.10003. Registration and Initial Fees and Reports. (a) Subject to the grace period allowed by subsection (e) of this section, a person shall not act as a viatical settlement company or broker unless the person holds a certificate of registration issued by the commissioner. (b) To obtain a certificate of registration as a viatical settlement company, a person must apply to the department in the format prescribed by Figure 1 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-CO.APP). The application form must be accompanied by: (1) a registration fee in the amount of $250, in the form of a cashier's check or money order made payable to the Texas Department of Insurance; (2) samples of all forms that the company uses or plans to use to enter into viatical settlements with viators, and that must be approved by the department pursuant to sec.3.10006 of this title (relating to Approval of Forms Relating to Viatical Settlements); (3) the written informational materials that are required by sec.3.10008 of this title (relating to Required Informational Materials), and must be filed pursuant to sec.3.10007 of this title (relating to Required Filings for Informational Purposes); (4) samples of all advertising or other solicitation materials that the company is disseminating or plans to disseminate in Texas, and must be filed pursuant to sec.3.10007 of this title (relating to Required Filings for Informational Purposes); (5) (if the viatical settlement company is applying on or before March 1, 1997) historical data regarding the company's conduct of the business of viatical settlements with viators in Texas, in the format prescribed by Figure 3 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-CO.RPT). (c) To obtain a certificate of registration as a viatical settlement broker, a person must apply to the department in the format prescribed by Figure 2 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-BR.APP). The application form must be accompanied by: (1) a registration fee in the amount of $125, in the form of a cashier's check or money order made payable to the Texas Department of Insurance; (2) (if the viatical settlement broker is not a referral agent) samples of all advertising or other solicitation materials that the broker is disseminating or plans to disseminate in Texas, as must be filed pursuant to sec.3.10007 of this title (relating to Required Filings for Informational Purposes); (3) a list identifying all viatical settlement companies or brokers which have paid or shared commissions with the broker in relation to viatical settlement transactions with viators in Texas, or with which the broker intends to transact business in or from Texas during the first year of registration; (4) (if the viatical settlement broker is applying on or before March 1, 1997) historical data regarding the broker's conduct of the business of viatical settlements in relation to viatical settlement transactions with viators in Texas, in the format prescribed by Figure 4 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-BR.RPT). (d) If a viatical settlement company or broker has complied with all application procedures in subsections (b) and (c) of this section, the commissioner shall issue the viatical settlement company or broker a certificate of registration unless the department determines that the application should be denied based on any one or more of the factors set forth in subsection (a) of sec.3.10016 of this title (relating to Enforcement). The department shall provide written notice to an applicant of the denial of the application and the applicant may make a written request for a hearing to the Chief Clerk, Texas Department of Insurance, P.O. Box 149104, Mail Code 113-1C, Austin, Texas 78714- 9104, within 30 days after denial of the application by the department. The department may use the investigatory or subpoena powers referenced in sec.3.10016 of this title (relating to Enforcement) to perform any investigation of an applicant that the department deems necessary. (e) Each viatical settlement company or broker which has filed an application for a certificate of registration and has submitted the accompanying materials required in this section on or before April 1, 1996, or the 90th day after the commissioner promulgates the sections of this subchapter, whichever date is earlier: (1) may do the business of viatical settlements until the commissioner approves the application, or the department issues a notice of denial regarding the application; (2) may continue to use the forms submitted pursuant to this section and sec.3. 10006 of this title (relating to Approval of Forms Relating to Viatical Settlements), until the commissioner has completed the review of the forms and either has approved or disapproved them. (f) In complying with the reporting requirements of this section, viatical settlement companies or brokers shall not include the name of the viator, or in any other way compromise the anonymity of the viator, or the viator's family, spouse or significant other. (g) The registration of any viatical settlement company or broker with a principal place of business outside of Texas shall not be approved unless the application is accompanied by: (1) a written designation of an agent for service of process in Texas; and (2) a written irrevocable consent to the jurisdiction of the commissioner and Texas courts. (h) If there is a material change to any information provided in an application by a viatical settlement company or broker, the company or broker shall submit a new application containing the changed information. sec.3.10004. Annual Fees. (a) On or before March 1 of each year, beginning on March 1, 1997, viatical settlement companies shall submit to the department an annual renewal fee in the amount of $250, or, if the company has been registered less then 12 months in the previous calendar year, a prorated amount of $0.68 multiplied by the number of days registered in the previous calendar year, in the form of a cashier's check or money order made payable to the Texas Department of Insurance. (b) On or before March 1 of each year, beginning on March 1, 1997, viatical settlement brokers must submit to the department an annual renewal fee in the amount of $125, or, if the broker has been registered for less than 12 months in the previous calendar year, a prorated amount of $0.34 multiplied by the number of days registered in the previous calendar year, in the form of a cashier's check or money order made payable to the Texas Department of Insurance. sec.3.10005. Reporting Requirements. (a) If a viatical settlement company has applied for a certificate of registration on or before March 1, 1997, it shall submit to the department quarterly reports, in the format prescribed by the form included as Figure 3 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-CO.RPT), as such reports become due pursuant to the timetable specified on the first page of Figure 3. The report will consist of data relating to events or transactions that occurred during the three-month period preceding the report. Beginning March 1, 1997, viatical settlement companies shall submit reports to the department annually, as set forth in subsection (b) of this section. (b) On or before March 1 of each year, beginning on March 1, 1997, viatical settlement companies shall submit to the department an annual report, consisting of data relating to viatical settlement transactions with viators in Texas during the previous calendar year, as specified in Figure 3 in sec.3. 10018 of this title (relating to Application and Reporting Forms) (Form VIAT-CO.RPT). (c) If a viatical settlement broker has applied for a certificate of registration on or before March 1, 1997, it shall submit to the department quarterly reports relating to viatical settlement transactions with viators in Texas, in the format prescribed by Figure 4 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-BR.RPT), as such reports become due pursuant to the timetable specified on the first page of Figure 4. The report will consist of data relating to events or transactions that occurred during the three-month period preceding the report. Beginning March 1, 1997, viatical settlement brokers shall submit reports to the department annually, as set forth in subsection (d) of this section. (d) On or before March 1 of each year, beginning on March 1, 1997, viatical settlement brokers registered in this state must submit to the department data relating to viatical settlement transactions with viators in Texas that occurred during the previous calendar year, as specified in Figure 4 in sec.3.10018 of this title (relating to Application and Reporting Forms) (Form VIAT-BR.RPT). (e) In complying with the reporting requirements of this section, viatical settlement companies or brokers shall not include the name of the viator, or in any other way compromise the anonymity of the viator, or the viator's family, spouse or significant other. sec.3.10006. Approval of Forms Relating to Viatical Settlements. (a) A viatical settlement company shall not enter into a viatical settlement with a viator in this state unless all forms used in effecting the settlement with the viator, including the application, have been filed with and approved by the department. Such forms submitted for approval must include any forms prepared and processed by a viatical settlement broker, but relied upon by the viatical settlement company in effecting the settlement. (b) Except as allowed under the initial grace period set forth in subsection (e) of sec.3.10003 of this title (relating to Registration and Initial Fees), all forms that a viatical settlement company proposes to use in effecting viatical settlements with viators in this state must be filed with the department at least sixty days prior to use of the forms. If the forms have not been disapproved, and if corrections have not been requested, the company may use the forms at the end of sixty days from the date the form is received by the department, or the date the department issues a certificate of registration to the company, whichever date is later, provided that an attorney licensed to practice law in this state, or any authorized representative of the company, files a certification on behalf of the company, stating that: (1) the certification is filed on behalf of the viatical settlement company, which agrees to be bound by it; (2) the attorney or representative has reviewed and is familiar with all applicable statutes and rules relating to viatical settlements; (3) the attorney or representative has analyzed the forms filed with the department, and, based on the attorney or representative's best knowledge and belief, the forms comply with all applicable statutes and rules of this state relating to viatical settlements. (c) If the department disapproves any such form, the viatical settlement company, upon written notice of such disapproval, shall stop using the form immediately. The department may require a viatical settlement company to replace disapproved forms used to effect viatical settlements during the pendency of the department's review with amended or reissued forms that meet the department's approval. (d) The department may disapprove any form filed pursuant to this section, or, withdraw a previous approval of any form, if: (1) the form fails to comply with any applicable provision of the Insurance Code or the sections promulgated under this subchapter; or (2) the content of the form is unjust, encourages misrepresentation or is in any way deceptive. (e) All forms filed pursuant to this section shall be submitted in duplicate in accordance with the following procedures: (1) The transmittal letter shall be submitted in duplicate and shall specify that the form is for use in the viatical settlement market. The transmittal letter must identify the type of form and explain the purpose and use of the form. (2) Form filings shall be submitted to the Life/Health Group, Filings Intake, Mail Code 106-1E, Texas Department of Insurance, P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas 78701. To expedite the return of notices of proposed disapprovals or approvals, a company may enclose an overnight mail envelope together with either a completed form for transmittal or the company's billing number. (3) The form filing must identify the type of filing as a viatical settlement form and explain the purpose and use of the form. (4) All correspondence and forms, including resubmissions and corrections for pending forms, shall be submitted in duplicate. (5) All forms must be filled in with specimen language and specimen fill-in material. (6) Forms shall be submitted on paper that will accept a rubber stamp and that is suitable for permanent filing and microfilming. Glossy stock paper is not acceptable. (7) All filings must be legible. (A) Forms and corrections shall be submitted for review on 8 1/2 by 11 paper. (B) Forms and corrections should not be submitted for review in any print format which consists of materials bound or printed on paper other than 8 1/2 by 11. (C) Forms and corrections may be submitted in typewritten, computer generated, or printer's proof format. (D) Handwritten forms or handwritten corrections will not be accepted. (8) Each form shall be designated by a form number sufficient to distinguish it from all other forms used by the viatical settlement company. The form number shall be located in the lower left-hand corner of the cover page or on the first page of the form if the form number would be visible with the cover closed. (9) One person shall be designated as the contact person for each filing submitted. Said submission should provide the name, address and phone number of the contact person for that filing. If the forms are submitted by anyone other than the company itself, the forms shall be accompanied by a dated letter executed by an officer of the company designating as contact person for that filing the consulting firm, actuary, legal counsel, or other contact person. sec.3.10007. Required Filings for Informational Purposes. (a) Each viatical company shall file with the department a copy of the written informational material required by sec.3.10008 of this title (relating to the Required Informational Materials), on or before the date the brochure is disseminated to viators. (b) Each viatical settlement company or broker shall file with the department all advertising or other solicitation materials used to market viatical settlements or the company or broker's services to viators or prospective viators in this state, on or before the date such materials are published or disseminated. Advertising submitted with the application for registration should be submitted to the address specified in sec.3.10006(e)(2) of this title (relating to Approval of Forms Relating to Viatical Settlements). Subsequent filings of advertising should be sent directly to the Advertising Unit of the Consumer Protection Division, Texas Department of Insurance, Mail Code 111-2A, P.O. Box 149104, Austin, Texas 78714-9104 or 333 Guadalupe, Austin, Texas 78701. (c) If a viator represented by an attorney requests any substantive revision in a contract effecting a viatical settlement, the viatical settlement company must file the contract, as revised, with the department, redacting all information made confidential by sec.3.10014 of this title (relating to Confidentiality). Provided that this submission is accompanied by a written certification from the viator's stating that the viator has requested the substantive revision after consultation with the viator's attorney, the submission of the revised contract will be for informational purposes, rather than for prior approval. (d) The filings required by this section are for informational purposes only. Viatical settlement companies or brokers may use or disseminate the materials referenced in subsections (a)-(c)of this section without the prior approval of the department. sec.3.10008. Required Informational Materials. (a) With each application for a viatical settlement, the viatical settlement company shall deliver to the applicant written informational materials setting forth the company's full name and home office address. (b) The written informational materials must include the following statements: (1) "Persons with catastrophic or life-threatening illnesses or conditions may have alternatives to viatical settlements, including accelerated benefits offered by the issuer of the policy, loans secured by the policy and surrender of the policy for cash value." (2) "A viator may incur tax consequences from entering into a viatical settlement. Persons interested in entering into a viatical settlement should consult their tax advisor." (3) "A viatical settlement may affect a viator's ability to receive supplemental social security income, public assistance and public medical services. Persons interested in entering into a viatical settlement should consult an attorney, financial advisor or social services agency regarding these potential consequences." (4) "The proceeds of a viatical settlement payable to the viator may not be exempt from the viator's creditors, personal representatives, trustees in bankruptcy and receivers in state or federal court. Persons interested in entering into a viatical settlement should consult an attorney or financial advisor regarding these potential consequences." (c) The written informational materials must explain: (1) How viatical settlements operate; (2) The viator's right to rescind a viatical settlement not later than the 15th day after the date either that the viator receives the viatical settlement proceeds, or the proceeds are placed in escrow, as allowed by sec.3.10009 of this title (relating to Application and Contract Forms: Required Provisions and Prohibited Practices). (3) The viator's right to know, upon request, the identity of any person who will receive a commission or other form of compensation from the viatical settlement company or broker with respect to the viatical settlement and the amount and terms of such compensation. (4) The limits and options regarding contacts for determination of health status set forth in subsection (b)(4) of sec.3.10009 of this title (relating to Application and Contract Forms: Required Provisions and Prohibited Practices) and sec.3.10012 of this title (relating to Contacting the Viator for Health Status Inquiries: Limits and Prohibited Practices); (5) Every viator's right to confidentiality under sec.3.10014 of this title (relating to Confidentiality); (6) That if the policy that is the subject of a viatical settlement contains a provision for double or additional indemnity for accidental death, or contains riders or other provisions insuring the lives of spouses, family members or anyone else other than the person with the catastrophic or life-threatening illness, the viatical settlement contract will affect those provisions or riders and may cause spouses, family members or others to lose the additional benefits afforded by those provisions or riders. sec.3.10009. Application and Contract Forms: Required Provisions and Prohibited Practices. (a) All application forms used to effect viatical settlements shall contain the following information in English and in Spanish, which either must be displayed prominently and in bold print on the front page of the application, or on a supplement attached to the front of the application: (1) In English: "Receipt of a viatical settlement may affect your eligibility for public assistance programs such as medical assistance (Medicaid), Aid to Families with Dependent Children (AFDC), supplementary social security income (SSI), and drug assistance programs. The money you receive for your life insurance policy also may be taxable. Before completing a viatical settlement contract, you are urged to consult with a qualified tax advisor and with social service agencies concerning how receipt of such a payment will affect you, your family, and your spouse's eligibility for public assistance. For more information about viatical settlements generally, contact the Texas Department of Insurance, at 1-800-252-3439." FIGURE 1: 28 TAC sec.3.10009(a)(2) (b) All forms of contract used to effect viatical settlements shall contain: (1) a provision that the viator may rescind the viatical settlement not later than the 15th day after either the date that the viator receives the proceeds of the viatical settlement, or, at the option of the viatical settlement company, the date the proceeds are placed in escrow as provided by subsection (b)(2)B) of this section; (2) a provision that upon receipt from the viator of documents to effect the transfer of the policy, the viatical settlement company may at its option either: (A) make unconditional payment to the viator immediately, either in a lump sum or in installment payments in a manner not prohibited by subsection (c)(5) of this section; or (B) pay the proceeds of the settlement to an escrow or trust account managed by a trustee or escrow agent in a national or state bank that is a member of the Federal Deposit Insurance Corporation, where such proceeds shall remain until: (i) the proceeds are disbursed to the viator upon acknowledgment of the transfer of the policy by the issuer of the policy, or the expiration of the rescission period without rescission by the viator, whichever occurs later; (ii) the proceeds are transferred to purchase an instrument used to effect installment payments in a manner not prohibited by subsection (c)(5) of this section; or (iii) the proceeds are returned to the viatical settlement company upon notice of the viator's rescission within the rescission period; (3) a provision that the forms used to effect the viatical settlement, together with the application, constitute the entire contract between the viatical settlement company and the viator; (4) a provision that the viator may designate any adult individual in regular contact with the viator as the contact for all inquiries about the viator's health status, and, if such designation is made, a viatical settlement company cannot make such an inquiry to the viator, unless the company is unable, after diligent effort, to contact the designee for more than 30 days. The viator may change this designation at any time, upon written notice to the viatical settlement company; (5) a provision disclosing that the viatical settlement company could sell or otherwise transfer the policy that is the subject of the viatical settlement to a person unknown to the viator, without the viator's consent; (6) if the viatical settlement company intends to sell or otherwise transfer the policy that is the subject of the viatical settlement to a particular person or persons, a provision disclosing the company's intent to sell or otherwise transfer the policy, and the identity of the person or persons to whom the initial company proposes to sell or otherwise transfer the policy; (7) an acknowledgment page, which a prospective viator must sign before a notary, stating that the prospective viator acknowledges that he or she: (A) has a life-threatening illness; (B) has received and read the written informational materials required by sec.3.10008 of this subchapter (relating to Required Informational Materials); (C) has received and read all of the documents used to effect the viatical settlement; (D) is entering into the viatical settlement knowingly and voluntarily; (8) a full disclosure regarding what effect the viatical settlement will have on payment of premiums and disposition of proceeds, cash values and dividends, if the policy that is the subject of the viatical settlement contains a provision for double or additional indemnity for accidental death, or contains riders or other provisions insuring the lives of spouses, family members or anyone else other than the person with the life-threatening illness. (c) Prohibited practices relating to applications and contracts. A viatical settlement company or broker shall not: (1) condition the consideration of an application on exclusive dealing between the viator and the viatical settlement company or broker; (2) discriminate in the availability or terms of viatical settlements on the basis of race, color, national origin, creed, religion, occupation, geographic location, marital or family status, sexual orientation, age, gender, disability or partial disability (except when any such factor affects the life expectancy of the viator); (3) discriminate between viators with dependents and those without dependents; (4) enter into any viatical settlement that provides a payment to the viator that is unjust (In determining whether a payment is unjust, the commissioner may consider, among other factors, the life expectancy of the viator, the applicable rating of the insurance company that issued the subject policy by a rating service generally recognized by the insurance industry, regulators and consumer groups, and the prevailing discount rates in the viatical settlement market in Texas, or if insufficient data is available for Texas, the prevailing rates nationally or in other states that maintain such data.) or; (5) enter into a viatical settlement in which payments of proceeds are made in installments, unless the settlement is effected through an annuity purchased from an insurance company licensed by this state or any other state in the United States, or through an escrow or trust account which provides for installment refunds and which is established by a bank licensed by this state or any other state in the United States. sec.3.10010. Advertising and Other Solicitation. Prohibited Practices. No viatical settlement company or broker shall advertise or in other way solicit business in a manner that is untruthful or misleading by fact or implication. In considering whether or not the advertising or other solicitation is untruthful or misleading, the commissioner may use the standards set forth in this subchapter, Article 21.21, Insurance Code, and Subchapter B of Chapter 21, of this title (relating to Insurance Advertising, Certain Trade Practices, and Solicitation). sec.3.10011. Payment of Commissions or other Forms of Compensation: Disclosure and Prohibited Practices. (a) Upon request of the viator at or before the time a viatical settlement is executed, the viatical settlement company, viatical settlement broker, or both, shall disclose in writing to the viator: (1) the identity of any person who will receive a commission or other form of compensation from the viatical settlement company or broker with respect to the viatical settlement; and (2) the amount and terms of the compensation. (b) A viatical settlement company or broker shall not pay or offer to pay any referral or finder's fee, commission, or other compensation to a viator's physician, attorney, accountant, social worker, case manager or other person providing medical, social, legal or financial planning or other counseling services to the viator. sec.3.10012. Contacting the Viator for Health Status Inquiries: Limits and Prohibited Practices. (a) No person shall contact a viator or the viator's designee (as provided for in subsection (b)(4) of sec.3.10009 of this title (relating to Application and Contract Forms: Required Provisions and Prohibited Practices)), for determining the viator's health status, unless that person is registered as a viatical settlement company or broker in this state. (b) Once a viator has entered into a viatical settlement with a viatical settlement company, no viatical settlement company or broker shall contact the viator, or the viator's designee, to determine the viator's health status more frequently than once every 30 days. sec.3.10013. Assignment or resale of policies: Disclosure and Prohibited Practices. (a) As to viatical settlements executed after the effective date of this subchapter, any viatical settlement company that sells or otherwise transfers any policy that is the subject of a viatical settlement without making the disclosures to the viator required by subsections (b)(5) and (b)(6) of sec.3.10009 of this title (relating to Application and Contract Forms; Required Provisions and Prohibited Practices) is subject to discipline by the commissioner under sec.3.10016 of this title (relating to Enforcement). (b) At the time a viatical settlement company sells or otherwise transfers its interest in any policy that is the subject of a viatical settlement to any person not registered pursuant to this subchapter, the purchaser or transferee must appoint, in writing, either the viatical settlement company that entered into the viatical settlement or a broker who received commissions from the viatical settlement to make all inquiries to the viator, or the viator's designee, regarding health status of the viator or any other matters. A viatical settlement company that sells or otherwise transfers such a policy to a purchaser or transferee who does not make such an appointment commits a violation of this section, and is subject to discipline by the commissioner under sec.3.10016 of this title (relating to Enforcement). sec.3.10014. Confidentiality. (a) All medical, financial or personal information solicited or obtained by a viatical settlement company or broker about a viator, including the viator's identity or the identity of family members, a spouse or a significant other, is confidential and shall not be disclosed in any form to any person, unless disclosure: (1) is necessary to effect the viatical settlement between the viator and the viatical settlement company and the viator provides prior and knowing written consent to the disclosure; or (2) is provided to the department in the form of statistical data from which the identity of the viator cannot be traced, in response to the reporting requirements set forth in sec.3.10005 of this title (relating to Annual Reporting Requirements) and in Figures 3 and 4 contained in sec.3.10018 of this title (relating to Application and Reporting Forms); or (3) is provided to the department in response to a subpoena from the commissioner, pursuant to the enforcement powers set forth in sec.3.10016 of this title (relating to Enforcement). (b) All persons to whom the confidential information referenced in subsection (a) of this section is disclosed pursuant to the viator's consent shall maintain the confidentiality of such information, and not disclose it to any other person in any form, without prior and knowing written consent of the viator. (c) The confidentiality of information obtained by the department or the commissioner pursuant to the subpoena powers set forth in sec.3.10016 of this title (relating to Enforcement), is protected by the confidentiality provisions of either Article 1.10D or Article 1.19-1, Insurance Code, depending on which article is used to subpoena the information. (d) All medical information solicited or obtained by a viatical settlement company or broker about a viator further shall be subject to applicable provisions of the laws of this state, and of the United States, relating to the confidentiality of medical information. sec.3.10015. Prohibition Against Operating As, or Doing Business with, an Unregistered Company or Broker. (a) No person shall act as a viatical settlement company or broker without first obtaining a certificate of registration from the Texas Department of Insurance, except as allowed under the grace period set forth in subsection (e) of sec.3.10003 of this title (relating to Registration and Initial Fees). (b) After expiration of the grace period set forth in subsection (e) of sec.3.10003 of this title (relating to Registration and Initial Fees), no viatical settlement company or broker registered pursuant to this subchapter shall participate in a viatical settlement, or pay or share commissions, with a company or broker not registered pursuant to this subchapter. sec.3.10016. Enforcement. (a) If a viatical settlement company or broker files a request for hearing on the department's denial of the company or broker's application for a certificate of registration, or if the department seeks revocation of the certificate of registration issued to any company or broker, the commissioner may deny the application or revoke the certificate if the commissioner determines, after notice and opportunity for hearing, that the company or broker, or any officers, directors, controlling shareholders of the company or broker, or any employees or affiliates of a company or broker who themselves are acting as a broker: (1) misrepresented any material fact in its application for the certificate of registration; (2) has been convicted, within the ten years prior to the date of the application, of a felony or other crime involving fraud in any jurisdiction; (3) is conducting its financial affairs in such a manner as to jeopardize any viator's rights, under this subchapter or the terms of a viatical settlement, to prompt or full payment of proceeds from a viatical settlement; (4) is engaging in the business of viatical settlements unlawfully in any other state; (5) has violated any provision of Article 3.50-6A, Insurance Code, or this subchapter, or any other insurance law of this state made applicable to viatical settlement companies or brokers by Article 3.50-6A or this subchapter; or (6) while engaging in the business of viatical settlements, has violated any state or federal securities laws. (b) After notice and the opportunity for a hearing, if the commissioner finds that a viatical settlement company or broker has committed conduct specified in subsection (a) of this section, the commissioner may, in lieu of revocation, order one or more of the sanctions set forth in subsections (a)(1)-(a)(4) of the Insurance Code, Article 1.10, sec.7. (c) If the commissioner determines, after notice and opportunity for a hearing, that any person is acting unlawfully as a viatical settlement company or broker in this state without a certificate of registration, or that such person is violating any other provision of Article 3.50-6A, Insurance Code, or this subchapter, or any other insurance law of this state made applicable to viatical settlement companies or brokers by Article 3.50-6A or this subchapter, the commissioner: (1) shall order such person to immediately cease and desist from doing the business of viatical settlements until the person fully complies with all registration requirements of the Insurance Code and this subchapter; (2) shall order such person to cease and desist from violating any other applicable provisions of the Insurance Code or this subchapter; (3) may order such person to pay an administrative penalty in accordance with Article 1.10E, Insurance Code; and (4) may order such person to make complete restitution to all persons in Texas harmed by the person's illegal conduct, in a form and amount, and within a time period, determined by the commissioner. (d) If a person violates any penal law while engaging in the business of viatical settlements, or while attempting to defraud a viatical settlement company or broker, the commissioner and the insurance fraud unit of the department shall have all powers against such person under Article 1.10D, Insurance Code, that the commissioner and the fraud unit have against a person who commits a fraudulent insurance act, as defined in Article 1.10D. (e) In order to facilitate enforcement of Article 3.50-6A, Insurance Code, other applicable insurance laws and this subchapter, the department may utilize the provisions of Articles 1.19-1 and 1.24, Insurance Code, which hereby are made expressly applicable to investigations of viatical settlement companies or brokers (whether registered by the commissioner, applying for a certificate of registration or unlawfully doing business without a certificate of registration), or anyone else engaged in, or conducting transactions relating to, the business of viatical settlements. (f) The department shall seek information made confidential by sec.3.l0014 of this title (relating to Confidentiality) only through use of subpoenas issued pursuant to either Article 1.10D or 1.19-1, Insurance Code. Confidential information obtained by the department pursuant to such subpoenas shall remain confidential pursuant to the terms of either sec.5 of Article 1.10D, or subsection (1)(d) of Article 1.19-1. (g) Articles 1.33A and 1.33B, Insurance Code, apply to enforcement actions brought pursuant to this section. (h) Pursuant to Article 1.09-1, Insurance Code, the Attorney General shall represent the department and the commissioner in matters appealed to, or brought in, any state or federal court. sec.3.10017. Procedure for Approval or Other Determination by the Department and Commissioner. Whenever an approval or other determination by the department is required by this subchapter, the approval or other determination shall be made by the deputy commissioner of the Life/Health Group, or the deputy commissioner's designee. Whenever an approval or other determination by the commissioner is required by this subchapter, the initial approval or other determination shall be made by the deputy commissioner of the Life/Health Group, or the deputy commissioner's designee. sec.3.10018. Adoption by Department of Forms for Application and Reporting. Form VIAT-CO.APP (Figure 1, containing the format for Application for Registration as a Viatical Settlement Company including the application, Service of Process, and Irrevocable Consent to Jurisdiction); Form VIAT-BR.APP (Figure 2, containing the format for Application for Registration as a Viatical Settlement Broker, including the application, Service of Process, and Irrevocable Consent to Jurisdiction); Form VIAT-CO.RPT (Figure 3, containing the format for Viatical Settlement Company Report); and Form VIAT-BR.RPT (Figure 4, containing the format for Viatical Settlement Broker Report) shall be utilized when applying for registration and filing reports adopted in this subchapter. Each is reproduced in detail in this section. Persons may obtain the forms by making a request to: Texas Department of Insurance, Publication Department, MC 108-5A, P.O. Box 149104, Austin, Texas 78714-9104. FIGURE 1: 28 TAC sec.3.10018 FIGURE 2: 28 TAC sec.3.10018 FIGURE 3: 28 TAC sec.3.10018 FIGURE 4: 28 TAC sec.3.10018 The department may provide diskettes containing the application or reporting forms upon which an applicant or registrant would enter the data required by these sections or may otherwise facilitate the receipt of information by the department in a computer compatible manner. 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 February 5, 1996. TRD-9601517 Alicia M. Fechtel General Counsel and Chief Clerk Texas Department of Insurance Effective date: February 26, 1996 Proposal publication date: November 24, 1995 For further information, please call: (512) 463-6327 TITLE 30. ENVIRONMENTAL QUALITY Part I. Texas Natural Resource Conservation Commission Chapter 305. Consolidated Permits The Texas Natural Resource Conservation Commission (commission or TNRCC) adopts amendments to sec.sec.305.51, 305.69, and 305.122, concerning consolidated permits. Section 305.69 is adopted with changes to the proposed text as published in the October 31, 1995, issue of the Texas Register (20 TexReg 8968), as corrected in the December 1, 1995, issue of the Texas Register (20 TexReg 10226). Sections 305.51 and 305.122 are adopted without changes to the proposed text as published in the October 31, 1995, issue of the Texas Register (20 TexReg 8968), and will not be republished. The amendments address changes to the federal hazardous waste regulations made effective between July 1, 1991, and June 30, 1993, and include a change to the federal regulations promulgated on January 31, 1991. The amendments are adopted strictly for the purpose of ensuring that state rules are equivalent to the federal regulations after which they are patterned. By establishing equivalency with certain federal hazardous waste regulations, the State of Texas will be able to retain authorization to operate aspects of the federal hazardous waste program in lieu of the United States Environmental Protection Agency (EPA). The resultant benefit will be a reduced cost to participants in the hazardous waste regulatory program because state hazardous waste program procedures will not need to be duplicated with the federal agency. The rule amendments substantially advance the stated purpose by adopting the aforementioned federal regulations by reference or by introducing language intended to ensure that state rules are equivalent to the corresponding federal regulations. This rule does not constitute a taking under the Private Real Property Rights Preservation Act because it falls within the mandatory federal law exception. Comment was received from the Texas Chemical Council, generally supporting the proposal with a suggestion concerning sec.305.69(i), concerning solid waste permit modification at the request of the permittee. The commenter noted that the federal regulation under 40 Code of Federal Regulations, sec.270.42, Appendix I, Section B.1.b., contains an entry that should have been included in the corresponding state rule. It is the permit modification to incorporate changes associated with F039 (multisource leachate) sampling or analysis methods, as a Class 11 modification, and was promulgated by the EPA on January 31, 1991, at 56 FedReg 3864. The commission agrees that it is appropriate to adopt this regulation, and it is shown under sec.305.69(i), Appendix I, B.1.b. Consequently, proposed sec.305.69(i), Appendix I, B.1.b. and c. have been renumbered as B.1.c. and d., respectively. Subchapter C. Application for Permit 30 TAC sec.305.51 The amendment is adopted pursuant to the Texas Water Code, sec.5.103 and sec.5.105 (Vernon 1988), which authorizes the TNRCC to promulgate rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. The amendment is also adopted pursuant to the Texas Health and Safety Code, sec.361.017 and sec.361.024 (Vernon 1992), which further authorizes the TNRCC to promulgate rules necessary to manage industrial solid and municipal hazardous wastes. 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 February 5, 1996. TRD-9601509 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 239-4640 Subchapter D. Amendments, Modifications, Renewals, Transfers, Corrections, Revocation, and Suspension of Permits 30 TAC sec.305.69 The amendment is adopted pursuant to the Texas Water Code, sec.5.103 and sec.5.105 (Vernon 1988), which authorizes the Texas Natural Resource Conservation Commission (TNRCC) to promulgate rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. The amendment is also adopted pursuant to Texas Health and Safety Code sec.361.017 and sec.361.024 (Vernon 1992), which further authorizes the TNRCC to promulgate rules necessary to manage industrial solid and municipal hazardous wastes. sec.305.69. Solid Waste Permit Modification at the Request of the Permittee. (a)-(c) (No change.) (d) Class 3 modifications of solid waste permits. (1) for Class 3 modifications listed in Appendix I of this subchapter, the permittee must submit a modification request to the executive director that: (A)-(C) (No change.) (D) provides the applicable information in the form and manner specified in sec.sec.305.41-305.53 of this title (relating to Application for Permit), sec.sec.305.171-305.174 of this title (relating to Hazardous Waste Incinerator Permits), and sec.sec.305.181-305.184 of this title (relating to Permits for Land Treatment Demonstrations Using Field Tests or Laboratory Analyses), and sec.sec.305.571-305.573 (relating to Permits for Boilers and Industrial Furnaces Burning Hazardous Waste). (2)-(6) (No change.) (e) (No change.) (f) Temporary authorizations. (1)-(4) (No change.) (5) The commission shall approve or deny the temporary authorization as quickly as practicable. To issue a temporary authorization, the commission must find: (A) (No change.) (B) the temporary authorization is necessary to achieve one of the following objectives before action is likely to be taken on a modification request: (i) (No change.) (ii) to allow treatment or storage in tanks, containers, or containment buildings, of restricted wastes in accordance with 40 CFR, Part 268 or RCRA sec.3004; (iii)-(v) (No change.) (6) (No change.) (g) (No change.) (h) Newly regulated wastes and units. (1) The permittee is authorized to continue to manage wastes listed or identified as hazardous under 40 CFR, Part 261, or to continue to manage hazardous waste in units newly regulated as hazardous waste management units if: (A)-(C) (No change.) (D) the permittee also submits a complete Class 2 or 3 modification request within 180 days after the effective date of the final rule listing or identifying the waste or subjecting the unit to RCRA Subtitle C management standards; and (E) (No change.) (2) (No change.) (i) Appendix I. The following appendix will be used for the purposes of Subchapter D which relate to solid waste permit modification at the request of the permittee. Figure 1: 30 TAC sec.305.69(i) 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 February 5, 1996. TRD-9601508 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 239-4640 Subchapter F. Permit Characteristics and Conditions 30 TAC sec.305.122 The amendment is adopted under the Texas Water Code, sec.5.103 and sec.5. 105 (Vernon 1988), which provides the Texas Natural Resource Conservation Commission (TNRCC) the authority to promulgate rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state, and under the Texas Health and Safety Code, sec.361.017 and sec.361.024 (Vernon 1992), which further provides the TNRCC authority to promulgate rules necessary to manage industrial solid and municipal hazardous wastes. 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 February 5, 1996. TRD-9601507 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: October 31, 1995 For further information, please call: (512) 239-4640 Chapter 330. Municipal Solid Waste The Texas Natural Resource Conservation Commission (commission or TNRCC) adopts the repeal of sec.330.568, amendments to sec.sec.330.561-330.567, and new sec.330.568 and sec.330.569, concerning the development of regional and local solid waste management plans, and financial assistance to regional planning commissions and local governments. The amendments to sec. sec.330.562, 330.565, 330.566 and 330.567 and new sec.330.568 and 330.569 are adopted with changes to the proposed text as published in the October 10, 1995, issue of the Texas Register (20 TexReg 8310). The repeal and the amendments to sec. sec.330.561, 330.563 and 330.564 are adopted without changes and will not be republished. The adopted revisions update the regional and local planning requirements in the existing rules to include a requirement established by House Bill (HB) 2537, Regular Session, 73rd Legislature (1993) that regional and local solid waste management plans include an inventory of existing and closed landfills. The revisions also provide for a new grants program made possible by HB 3072, Regular Session, 74th Legislature (1995), which directs that half of the revenue collected from the state's municipal solid waste disposal fees be dedicated to local and regional solid waste projects consistent with regional plans approved by the commission and that those plans be updated and maintained. Additionally, the revisions update the rule language as a result of the transfer of the municipal solid waste program from the Texas Department of Health to the TNRCC, and as a result of changes in agency responsibilities and plan approval policies. The adopted revisions specify requirements for the preparation, coordination and approval of regional and local solid waste management plans and the provisions of a planning fund for providing financial assistance to prepare those plans. The new regional solid waste grants program includes provisions for allocating the dedicated funds to the state's 24 municipal solid waste planning regions through a formula developed by the TNRCC, with cooperation of various interested parties, in accordance with the direction set forth in the legislation. The commission has prepared a Takings Impact Assessment for these rules pursuant to Texas Government Code Annotated Section 2007.043. The following is a summary of that Assessment. The specific purpose of the rule is to implement the provision in House Bill (HB) 3072, 74th Legislature, that dedicates half of the municipal solid waste disposal fee revenue to local and regional projects which are consistent with approved regional plans, and also to incorporate the requirement of HB 2537, 73rd Legislature, that all regional and local solid waste management plans include an inventory of existing and closed landfills. The rules will substantially advance this specific purpose by incorporating all of the applicable provisions of the legislation. Additionally, other amendments were made to update the rule language as a result of the transfer of the municipal solid waste program from the Texas Department of Health to the TNRCC, and as a result of changes in agency responsibilities and plan approval policies. Promulgation and enforcement of these rules will not affect private real property because the actions that are required by the rules are directed at regional and local planning agencies and not toward private real property owners. The TNRCC received written comments from the National Solid Wastes Management Association-Sunbelt Region, and the City of Plainview. No persons provided verbal comments at the public hearing. The TNRCC received one comment concerning the new sec.330.563(a)(3)(O) and sec.330.563(b)(3)(L). These new sections add the requirement from HB 2537 (73rd Texas Legislature) that regional and local solid waste management plans include an inventory of municipal solid waste landfill units, including landfill units no longer in operation. The comment indicated that the responsibility for executing the landfill inventory should be outlined in the regulations. The TNRCC does not agree that additional explanation concerning responsibility for executing the inventories is needed in the regulation. The additional provisions add to an existing list of items that must be addressed in the regional and local plans, and the current language of the regulation outlines the responsibilities for preparing and adopting those plans. In addition, the new sec.330.563(a)(3)(O) includes a statement that the executive director of the TNRCC may conduct statewide inventories and provide those to the councils of governments to include in their regional plans to help satisfy this requirement. Further, sec.330.563(b)(3)(L) allows for the inventories prepared for the regional plans to be used to satisfy the requirement for an inventory to be included in a local plan. The TNRCC received one comment concerning changes to sec.330.566(b) and sec.330.567(b)(3)(D)(6). The change to the first section removes the time limitation of 90 days after submittal of a plan for the executive director to tentatively determine if the plan conforms to the rules and the time frame of 30 days within which a notice of deficiencies will be provided to the planning agency after tentative disapproval of a plan by the executive director. The change to the second section removes the requirement that the TNRCC shall approve or disapprove an application for financial assistance from the municipal solid waste management planning fund within 90 days of its receipt. The comment received expressed concern that the changes would eliminate the time limits placed on the TNRCC for review and response, while the rules retain response time limits for entities that must prepare the plans, such as in sec.330.566(e). The changes to sec.330.566(b) were proposed based on the experience gained in working with councils of governments over the last several years in developing regional plans. During that time frame, it was found that the review time periods did not really apply, since in many cases the review and communication of agency comments was an ongoing function with close communication between TNRCC staff and the regional planning agency. The time limits, which were not legislatively mandated, set a more rigid, regulatory approach to the process, which has been more interactive than was originally envisioned by the regulations. The TNRCC agrees, however, that some entities may have concerns with removing the time limits placed on the TNRCC in its review of the plans. Therefore, the TNRCC will retain the time limits in this section and in sec.330.567 for similar reasons. The TNRCC received one comment questioning the deletion of the sentence under sec.330.567(b)(2) that stated that the scope of work for the development of plans funded from the planning fund shall be mutually agreed upon by the TNRCC and the funding applicant. The TNRCC proposed deleting this sentence to avoid any confusion concerning the grant approval and award process. This provision is not required by statute, and it is inherent in the funding process that negotiation will take place on proposals submitted by an applicant for planning funds from the TNRCC. From experience with recent planning efforts, the TNRCC has found it advantageous to encourage more consistent, standardized approaches to developing these plans, while allowing for consideration of individual regional or local needs. Since, ultimately, the TNRCC must adopt these plans before they become effective, the TNRCC has final responsibility to ensure that the scope of work being funded will result in an acceptable plan. Therefore, the language is being deleted to avoid any confusion over the TNRCC's authority to finally approve or disapprove the specific planning activities to be funded. The TNRCC received one comment requesting that the funding allocation formula for the regional solid waste grant program referenced in the new sec.330.569(c) should be better defined, and that the formula should be published for public comment. The time frame available for establishing the formula, so that the grants program could go forward, did not allow for more extensive public review. However, the allocation formula was developed by the TNRCC with input from a number of representative groups, including the Texas Association of Regional Councils, the Texas Municipal League, the Texas Association of Counties, and the TNRCC's Municipal Solid Waste Management and Resource Recovery Advisory Council. The same time constraints precluded the TNRCC from considering including more specific detail on the formula in the rule changes. The TNRCC will further consider the need for more specific information to be included in future rule changes, but such consideration will need to take into account a need for flexibility in the formula to address changing conditions and needs. The TNRCC received one comment concerning the private industry considerations set forth in the new sec.330.569(d). The comment indicated that new sec.330.569(h) should state that the statutory prohibition against using these grant funds to compete with private industry applies to all grant recipients and pass-through grant recipients. The comment further requested that the rules state that failure to comply with this requirement is grounds for termination of the contract and/or the revocation of any unexpended or inappropriately expended funds. The TNRCC agrees with the intent of the comment, but has determined that the provisions of sec.330.569(d) adequately address those concerns. The current language applies to "all" projects or services funded under the grants program, so additional language in sec.330. 569(h) is not needed. Similarly, language concerning termination of the contract for failure to comply with the requirements is also not needed, since the provisions of the contracts between TNRCC and the councils of governments require compliance with these statutory requirements. For the purposes of clarification of the application of terms used in these rules relating to the agency, the definitions for "commission" and "commissioners" have been added and the definition for "executive director" has been revised to be consistent with the agency's procedural rules. Some minor changes in the rules have resulted from the application of those terms. Subchapter O. Regional and Local Solid Waste Management Planning and Financial Assistance General Provisions 30 TAC sec.sec.330.561-330.569 The amendments and new sections are adopted under the Texas Water Code, sec.5.103, which provides the TNRCC with the authority to adopt any rules necessary to carry out its powers and duties under the code and other laws of the State of Texas, and to establish and approve all general policy of the commission; and under the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act (the Conservation Act), Texas Health and Safety Code, sec.363.021, which gives the TNRCC the authority to adopt and promulgate rules to implement the Conservation Act. sec.330.562. Definitions of Terms and Abbreviations. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. CMSWLF-Closed municipal solid waste landfill. Commission-The Texas Natural Resource Conservation Commission (TNRCC). Commissioners-The three-member governing body of the Texas Natural Resource Conservation Commission. Executive director -The executive director of the commission, or any authorized individual designated by the executive director to act in his or her place. Planning fund-The municipal solid waste management planning fund created in the state treasury by the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act (V.T.C.A., Health and Safety Code, Chapter 363). Public agency-A city, county, district, or authority created and operating under the Texas Constitution, Article III, sec.52(b)(1) or (2), or Article XVI, sec.59, or a combination of two or more of these governmental entities acting under an interlocal agreement and having the authority under state laws to own and operate a solid waste management system. Regional or local solid waste management plan-A plan adopted by a planning region or local government under authority of the Municipal Solid Waste Management, Resource Recovery, and Conservation Act (V.T. C.A., Health and Safety Code, Chapter 363). Regional Planning Commission-A regional planning commission created under Chapter 391, Local Government Code. Regional solid waste grants program-The program established to utilize funds dedicated under the Health and Safety Code, Chapter 361, sec.361.014 for local and regional solid waste projects and to update and maintain regional solid waste management plans. State solid waste management plan-The municipal solid waste management plan for Texas. Variance-The granting of relief from the terms or conditions of a plan by the executive director. sec.330.565. Public Participation Requirements for Solid Waste Plans. (a) Advisory committee. An advisory committee shall be convened to provide input, review, and comment during development of regional and local plans. Committee members shall be appointed who represent a broad range of interests, including a representative of the TNRCC, public officials, private operators, citizen groups, and interested individuals. (b)-(d) (No change.) (e) Plan approval. Local and regional solid waste management plans shall be approved by the governing body of the responsible entity before being submitted to the TNRCC for approval. sec.330.566. Procedures for Regional and Local Plan Submission and Approval. (a) Prior to the submission of a plan, the plan shall be adopted by the regional planning commission or local government(s) pursuant to applicable administrative procedures. Local governments shall coordinate with the appropriate regional planning commission and ensure that a local plan is consistent with any regional solid waste management plan in effect for the region encompassing the jurisdiction of the local government, if a regional plan has been approved by the commissioners of the TNRCC . (b) Within 90 days after a regional or local plan has been submitted, the executive director will tentatively determine if the plan conforms to this subchapter and the state solid waste management plan. The executive director will communicate this determination to the agency which submitted the plan. If the plan is not in conformance, a notice of deficiencies will be provided to the planning agency within 30 days of the tentative disapproval. The executive director has authority to disapprove any plan which has deficiencies. Disapproved plans will not be considered by the commissioners until the executive director determines that deficiencies have been corrected, unless the applicant submits a request for appeal to the commissioners. In order for a plan to be considered under such circumstances, the appeal must be in writing and must be submitted to the commissioners within 30 days following the day the applicant receives notification of tentative plan disapproval by the executive director. (c) If the executive director tentatively determines a regional or local plan meets the requirements of this subchapter, is in conformance with the state solid waste management plan, and should be approved, the executive director will submit the plan to the commissioners, which, if they concur with the executive director's approval, shall approve a plan by adopting a rule in accordance with the Administrative Procedure Act, Texas Government Code, Chapter 2001. Commissioners' action on the plan will normally occur within 60 days of the tentative decision by the executive director to approve the plan, but the approval will not be effective until the plan has completed the rulemaking process specified by the Administrative Procedure Act, i.e., publication of the proposed action in the Texas Register , a 30-day public comment period, and publication of the final rule action in the Texas Register . If approved, the executive director will notify the planning agency of the commissioners' approval. In the event the plan is not approved, the commissioners will state the plan's deficiencies and the executive director will immediately notify the planning agency of the commissioners' decision and the plan's deficiencies. The plan may be resubmitted for approval if the executive director determines that deficiencies have been corrected. (d) If a regional or local solid waste management plan is adopted by rule of the commissioners , public and private solid waste management activities and state regulatory activities shall conform to the adopted regional or local solid waste management plan. The plan shall only remain in effect during the planning period defined in the plan. Under procedures and criteria of subsections (g) and (h) of this section, the executive director may grant a variance from an adopted regional or local solid waste management plan. (e) If a portion of a regional or local plan is determined by the executive director to no longer be in compliance with the state solid waste management plan or these sections, the executive director may request that the regional body or local government revise the plan. If such a revision is not submitted to the TNRCC within 180 days, the executive director may ask the commissioners to withdraw their approval of that portion of the plan. (f) A planning commission or local government may submit revisions or updates to an approved plan that reflect new information or changed conditions. Updates to an approved plan to provide for changes to data and information contained in the plan, which do not substantially change the scope or content of the goals and recommendations of the plan, may be incorporated into an approved plan upon approval by the executive director without further adoption procedures being required. Major revisions and amendments to an approved plan that substantially change the scope or content of the goals and recommendations of the plan shall be considered by the same procedures as original plan submission and approval. (g) Upon application, the executive director may grant a variance from an adopted regional or local solid waste management plan when: (1)-(4) (No change.) (h) If the executive director intends to grant a variance from the requirements of a plan, the executive director will offer the opportunity for a public hearing on the matter prior to the final decision. The hearing, if requested, will be advertised and conducted within the area affected by the plan. sec.330.567. Financial Assistance for Regional and Local Plans. (a) Authority. The municipal solid waste management planning fund is established by the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act (V.T.C.A., Health and Safety Code, Chapter 363) as a special fund in the state treasury. (b) Administration of the planning fund. (1) The executive director shall administer the financial assistance program and the planning fund under the direction of the commissioners. (2) An applicant for financial assistance from the planning fund shall agree to comply with the state solid waste management plan, the TNRCC's rules, and any other requirements adopted by the commissioners. (3) The executive director shall not authorize release of funds under an application for financial assistance until the applicant has furnished the executive director with a resolution adopted by the governing body of each public agency or planning region which is a party to the application certifying that: (A) the applicant will comply with the provisions of the financial assistance program and the requirements of the TNRCC; (B) the grant will only be used for the purposes for which it was provided; (C) regional or local solid waste management plans developed with state financial assistance will be adopted by the governing body as its policy; and (D) future municipal solid waste management activities will, to the extent reasonably feasible, conform to the regional or local solid waste management plan. (4)-(5) (No change.) (6) The executive director may approve an application consistent with the provisions of this section when the executive director finds state financial participation is in the public interest and when it is determined that both state and regional or local funding is sufficient to complete the agreed scope of services. The executive director shall approve or disapprove an application for financial assistance within 90 days of its receipt. (c) Applications. (1) Requests for state financial assistance shall be made on forms furnished by the TNRCC and shall include a work program and budget for a defined period in which the tasks described in the work program are to be completed. (2) The only applicant eligible to apply for regional planning financial assistance shall be the regional planning commission designated as responsible for the planning region for which a plan is considered. (3) The only applicants authorized to apply for local planning financial assistance are local governments or public agencies and designated regional planning commissions. Where the local plan is to cover a geographical area larger than the area of one city, then the application and any resulting contract shall be made by one of the cities, counties, or public agencies which has all or part of its jurisdiction within the area to be considered in the plan, and which is authorized by all public agencies with jurisdictions included in the area considered to act as their agent; or the designated regional planning commission which has jurisdiction over the geographical area to be considered in the plan. sec.330.568. Approved State, Regional, and Local Solid Waste Management Plans. (a) Purpose. This section identifies state, regional, and local solid waste management plans which have been approved by the commissioners. (b) State plan. The state solid waste management plan may be amended and updated from time to time as conditions warrant and as may be directed by state law. For the purposes of this subchapter, the current state plan is the latest plan, including any plan updates and amending materials, which has been issued by the TNRCC. (c) Plans approved. The current effective regional solid waste management plan for each region or local solid waste management plan for a local government is the latest plan, including plan amendments, which has been adopted by the commissioners. Copies of approved plans shall be kept on file and available for public review at the TNRCC library. Those plans, and any adopted amendments thereto, are hereby incorporated by reference into this subchapter. Updates to an approved regional or local plan which do not require official adoption by the commissioners, as specified under sec.330.566(f) of this title (relating to Procedures for Regional and Local Plan Submission and Approval), may be incorporated into an approved plan for informational purposes, as each update is approved by the executive director. Each plan's effectiveness applies only for the geographical area described in the plan and for the period designated in the plan. (d) Conflicting provisions. By adopting a regional or local plan, the commission has determined that the plan has been developed according to TNRCC rules and does not conflict with the state plan. If it should later be determined that provisions of an adopted plan do conflict with provisions of the state plan, then provisions of the state plan shall prevail. (e) Agency responsibilities. It shall be the responsibility of the regional planning commission to coordinate the implementation of regional policies and recommended actions in an approved regional plan and coordinate local planning efforts. It shall be the responsibility of affected local governments to implement the policies and recommended actions of adopted regional and local plans and to maintain policies and activities that do not conflict with provisions in current state, regional, and local solid waste management plans. sec.330.569. Regional Solid Waste Grants Program. (a) Authority. Funds are dedicated under the Health and Safety Code, sec.361.014, for the development and updating of regional and local solid waste management plans, and for implementing regional and local projects consistent with approved regional solid waste management plans and the state solid waste management plan. This regional solid waste grants program is separate from the financial assistance program outlined under sec.330.567 of this title (relating to Financial Assistance for Regional and Local Plans). (b) Administration of regional solid waste grants program. The executive director shall administer the regional solid waste grants program under the direction of the commissioners. (c) Funding allocation. Funds for local and regional projects under the regional solid waste grants program shall be allocated to municipal solid waste geographic planning regions according to a formula established by the TNRCC that takes into account population, area, solid waste fee generation, and public health needs. (d) Public/private cooperation. A project or service funded under the regional solid waste grant program must promote cooperation between public and private entities and may not be otherwise readily available or create a competitive advantage over a private industry that provides recycling or solid waste services. (e) Pass-through grants. The executive director may establish procedures to make grant funds available to authorized local entities through pass-through grants administered by each regional planning commission. (f) Applications. (1) Requests for state financial assistance provided directly by the TNRCC shall be made on forms furnished by the TNRCC. (2) Requests for financial assistance made available through pass-through grants administered by a regional planning commission shall be made on forms developed jointly by the TNRCC and the regional planning commission, and furnished by the regional planning commission. (g) Application procedures. Applicants for financial assistance from the TNRCC shall follow the procedures set forth in the application instructions and guidelines issued by the executive director. Applicants for pass-through grant assistance from a regional planning commission shall follow the procedures set forth in the pass-through grant application instructions issued by the regional planning commission. (h) Grant contracts. Grants shall be provided through contractual agreement between the TNRCC and the grant recipient. If a regional planning commission provides financial assistance to local entities through a pass-through grant arrangement, the regional planning commission shall enter into an appropriate contractual agreement with the local grant recipient. The contractual agreement between the regional planning commission and the local grant recipient shall adhere to all applicable provisions of the main grant contract between the regional planning commission and the TNRCC. 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 February 5, 1996. TRD-9601515 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: October 10, 1995 For further information, please call: (512) 239-4640 30 TAC sec.330.568 The repeal is adopted under the Texas Water Code, sec.5.103, which provides the Texas Natural Resource Conservation Commission (TNRCC) with the authority to adopt any rules necessary to carry out its powers and duties under the code and other laws of the State of Texas, and to establish and approve all general policy of the commission; and under the Comprehensive Municipal Solid Waste Management, Resource Recovery, and Conservation Act (the Conservation Act), Texas Health and Safety Code, sec.363.021, which gives the TNRCC the authority to adopt and promulgate rules to implement the Conservation 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 authority. Issued in Austin, Texas, on February 5, 1996. TRD-9601516 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: October 10, 1995 For further information, please call: (512) 239-4640 Chapter 335. Industrial Solid Waste and Municipal Hazardous Waste The Texas Natural Resource Conservation Commission (commission or TNRCC) adopts amendments to sec.sec.335.1, 335.29, 335.69, 335.112, 335.118, 335.124, 335.125, 335.152, 335.168-335.170, 335.173-335.175, 335.222, and 335.224, concerning industrial solid waste and municipal hazardous waste. Sections 335. 69, 335.112, and 335.118 are adopted with changes to the proposed text as published in the November 3, 1995, issue of the Texas Register (20 TexReg 9136). Sections 335.1, 335.29, 335.124, 335.125, 335.152, 335.168, 335. 169, 335.170, 335.173, 335.174, 335.175, 335.222, and 335.224 are adopted without changes and will not be republished. The purpose of the amendments is to address changes to the federal hazardous waste regulations made effective between July 1, 1991, and June 30, 1993. The amendments include provisions for storage and treatment containment buildings, including a hazardous waste permit exemption for these units. The amendments also include numerous corrections and technical amendments to existing program elements, such as the burning of hazardous waste in boilers and industrial furnaces, the disposal of hazardous waste in surface impoundment and landfill units, and certain restrictions on the disposal of hazardous waste. By establishing equivalency with certain federal hazardous waste regulations, the State of Texas will be able to retain authorization to operate aspects of the federal hazardous waste program in lieu of the United States Environmental Protection Agency (EPA). The resultant benefit will be a reduced cost to participants in the hazardous waste regulatory program because state hazardous waste program procedures will not need to be duplicated with the federal agency. The rule amendments substantially advance the stated purpose by adopting the aforementioned federal regulations by reference or by introducing language intended to ensure that state rules are equivalent to the corresponding federal regulations. This rule does not constitute a taking under the Private Real Property Rights Preservation Act because it falls within the mandatory federal law exception. Comments were received from the Texas Chemical Council, generally supporting the proposals with several suggestions concerning the adoption of state rules reflecting additional, more recent federal regulations, along with typographical corrections. The commenter suggested that the state adopt certain of the federal regulations promulgated on August 31, 1993, at 58 Federal Register 46040. While the commission appreciates the commenter's sentiment concerning updating the state rules to reflect more recent changes, the above-referenced federal regulations were not proposed to be adopted in this current package. Consequently, these federal regulations are not reflected in the current adoption, but it should be noted that the commission plans to include them in an upcoming proposal. The commenter also suggested that the state adopt certain of the federal interim status regulations relating to landfills promulgated on November 18, 1992, at 57 Federal Register 54452. The standards in question are under 40 Code of Federal Regulations (CFR) sec.265.314(c) and sec.265.314(f), and concern sorbents used to treat free liquids to be disposed of in landfills. The commission respectfully declines to implement the commenter's suggestion in this area. As noted in the proposal preamble, the state rules have, since 1985, been more stringent than federal regulations regarding the use of sorbents to treat free liquids destined for placement in hazardous waste landfills. See 30 TAC sec.335.125. These stringencies are due to a concern for desorption of the free liquids in the landfill environment and the potential adverse impact of those free liquids on ground water. These stringencies are not changed by these adopted amendments. Finally, the commenter offered suggestions for two typographical corrections. First, under sec.335.69(a)(1)(D), the citation to 40 CFR sec.261. 1101 should be corrected to sec.265.1101. The commission agrees. Second, under sec.335.118(b), there appears to be an error in the sentence where the following proposed wording appears: "...contained in 40 Code of Federal Regulations, sec.264.1102." The commission agrees. The rule is adopted as follows: "The executive director's decision must assure that the approved closure plan is consistent with 40 Code of Federal Regulations sec.sec.265.111 through 265.115, and the applicable closure requirements contained in this chapter for specific waste management methods, and contained in 40 CFR sec.264. 1102. A copy of this modified plan with a detailed statement of reasons for the modifications must be mailed to the owner or operator." Another typographical correction has been made under sec.335.112(a) by the deletion of the redundant reference to 55 FedReg 22685. Subchapter A. Industrial Solid Waste and Municipal Hazardous Waste Management in General 30 TAC sec.335.1, sec.335.29 The amendments are adopted pursuant to the Texas Water Code, sec.5.103 and sec.5.105 (Vernon 1988), which authorizes the TNRCC to promulgate rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. These amendments are also adopted pursuant to the Texas Health and Safety Code, sec.361.017 and sec.361.024 (Vernon 1992), which further authorizes the TNRCC to promulgate rules necessary to manage industrial solid and municipal hazardous wastes. The amended sections are adopted under the Texas Water Code, sec.sec.5.103, 5. 105, and 26.011, which provides the commission with authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The sections are also adopted under the Texas Health and Safety Code, Texas Solid Waste Disposal Act, sec.361.017 and sec.361. 024, which provides the commission the authority to regulate industrial solid wastes and hazardous municipal wastes and to adopt and promulgate rules consistent with the general intent and purposes of the 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 authority. Issued in Austin, Texas, on February 5, 1996. TRD-9601514 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 239-4640 Subchapter C. Standards Applicable to Generators of Hazardous Waste 30 TAC sec.335.69 The amendment is adopted under the Texas Water Code, sec.5.103 and sec.26. 011, which provides the commission with authority to adopt any rules necessary to carry out its powers, duties, and policies and to protect water quality in the state. The sections are also adopted under the Texas Solid Waste Disposal Act, sec.361.017, which provides the commission the authority to regulate industrial solid wastes and hazardous municipal wastes and all other powers necessary or convenient to carry out its responsibilities. sec.335.69. Accumulation Time. (a) Generators that comply with the requirements of sec.335.69(a)(1) are exempt from all requirements adopted by reference in sec.335.112(a)(6) and (7) of this title (relating to Standards), except 40 Code of Federal Regulations (CFR) sec.265.111 and sec.265.114. Except as provided in subsections (f)-(h) of this section, a generator may accumulate hazardous waste on-site for 90 days without a permit or interim status provided that: (1) the waste is placed: (A)-(B) (No change.) (C) on drip pads and the generator complies with sec.335.112(a)(18) of this title (relating to drip pads) and maintains the following records at the facility: a description of procedures that will be followed to ensure that all wastes are removed from the drip pad and associated collection system at least once every 90 days; and documentation of each waste removal, including the quantity of waste removed from the drip pad and the sump or collection system and the date and time of removal, or (D) the waste is placed in containment buildings and the generator complies with subpart DD of 40 CFR, Part 265, has placed its professional engineer certification that the building complies with the design standards specified in 40 CFR sec.265.1101 in the facility's operating record prior to operation of the unit. The owner or operator shall maintain the following records at the facility: (i) a written description of procedures to ensure that each waste volume remains in the unit for no more than 90 days, a written description of the waste generation and management practices for the facility showing that they are consistent with respecting the 90-day limit, and documentation that the procedures are complied with; or (ii) documentation that the unit is emptied at least once every 90 days. (2)-(4) (No change.) (b)-(i) (No change.) This agency hereby certifies that the rule as adopted has been reviewed by legal counsel and found to be a valid exercise of the agency's authority. Issued in Austin, Texas, on February 5, 1996. TRD-9601513 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 239-4640 Subchapter E. Interim Standards for Owners and Operators of Hazardous Waste Storage, Processing, or Disposal Facilities 30 TAC sec.sec.335.112, 335.118, 335.124, 335.125 The amendments are adopted pursuant to sec.5.103 and sec.5.105 of the Texas Water Code (Vernon Supplement 1991), which authorizes the Texas Natural Resource Conservation Commission (TNRCC) to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. These amended sections are also proposed pursuant to the Texas Solid Waste Disposal Act, (the Act), Texas Health and Safety Code Annotated., Chapter 361 (Vernon Supplement 1992), sec.361.017 and sec.361.024, which further authorizes the TNRCC to promulgate rules necessary for accomplishing the purposes of the Act, including the control of all aspects of the management of industrial solid and municipal hazardous wastes. sec.335.112. Standards. (a) The following regulations contained in 40 Code of Federal Regulations (CFR), Part 265 (including all appendices to Part 265) (except as otherwise specified herein), are adopted by reference as amended and adopted in the CFR through June 1, 1990, at 55 FedReg 22685 and as further amended as indicated in each paragraph of this section: (1) Subpart B-General Facility Standards (as amended through November 18, 1992, at 57 FedReg 54452); (2)-(3) (No change.) (4) Subpart E-Manifest System, Recordkeeping and Reporting (as amended through January 29, 1992, at 57 FedReg 3492), except 40 CFR sec.sec.265.71, 265. 72, 265.75, 265.76, and 265.77; (5) Subpart F-Groundwater Monitoring (as amended through December 23, 1991, at 56 FedReg 66369), except 40 CFR sec.265.90 and sec.265.94; (6) Subpart G-Closure and Post-Closure (as amended through August 18, 1992, at 57 FedReg 37194); except 40 CFR sec.265.112 (d)(3) and (4) and sec.265. 118(e) and (f); (7) Subpart H-Financial Requirements (as amended through September 16, 1992, at 57 FedReg 42832); except 40 CFR sec.265.142(a)(2); provided that the corporate guarantee for closure or for post-closure care, described in 40 CFR sec.265.143(e)(10) or sec.265.145(e)(11), respectively, may be provided only by a direct or higher-tier parent corporation of the owner or operator; (8)-(9) (No change.) (10) Subpart K-Surface Impoundments (as amended through August 18, 1992, at 57 FedReg 37194-37282); (11) Subpart L-Waste Piles (as amended through January 29, 1992, at 57 FedReg 3493), except 40 CFR sec.265.253; (12) (No change.) (13) Subpart N-Landfills (as amended through July 10, 1992, at 57 FedReg 30658), except 40 CFR sec.265.302, sec.265.314, and sec.265.315; (14)-(18) (No change.) (19) Subpart AA-Air Emission Standards for Process Vents (as amended through April 26, 1991, at 56 FedReg 19290); (20) Subpart BB-Air Emission Standards for Equipment Leaks (as amended through April 26, 1991, at 56 FedReg 19290); and (21) Subpart DD-Containment Buildings (as amended through August 18, 1992, at 57 FedReg 37194). (b) The regulations of the United States Environmental Protection Agency (EPA) that are adopted by reference in this section are adopted subject to the following changes: (1) The term "regional administrator" is changed to the "executive director" of the Texas Natural Resource Conservation Commission or to the commission, consistent with the organization of the commission as set out in the Texas Water Code, Chapter 5, Subchapter B; (2) The term "treatment" is changed to "processing;" (3) References the Resource Conservation and Recovery Act, to sec.3008(h) are changed to the Texas Solid Waste Disposal Act, Texas Health & Safety Code Annotated (Vernon Pamphlet 1993), sec.361.303 (relating to Corrective Action); (4) References to 40 CFR sec.sec.260.10, 264.90, 264.101, 270.41, or 270. 42, are changed to sec.335.1 of this title (relating to Definitions), sec.335. 156 of this title (relating to Applicability of Groundwater Monitoring and Response), sec.335.167 of this title (relating to Corrective Action for Solid Waste Management Units), sec.305.62 of this title (relating to Amendment), or sec.305.69 of this title (relating to Solid Waste Permit Modification at the Request of the Permittee), respectively; (5) References to 40 CFR, Part 264, Subpart F, are changed to sec.335. 156 of this title (relating to Applicability of Groundwater Monitoring and Response), sec.335.157 of this title (relating to Required Programs), sec.335. 158 of this title (relating to Groundwater Protection Standard), sec.335.159 of this title (relating to Hazardous Constituents), sec.335.160 of this title (relating to Concentration Limits), sec.335.161 of this title (relating to Point of Compliance), sec.335.162 of this title (relating to Compliance Period), sec.335.163 of this title (relating to General Groundwater Monitoring Requirements), sec.335.164 of this title (relating to Detection Monitoring Program), sec.335.165 of this title (relating to Compliance Monitoring Program), sec.335.166 of this title (relating to Corrective Action Program), and sec.335. 167 of this title (relating to Corrective Action for Solid Waste Management Units); (6) References to 40 CFR, Part 265, Subpart F, are changed to include sec.335.116 of this title (relating Applicability of Groundwater Monitoring Requirements) and sec.335.117 of this title (relating to Recordkeeping and Reporting), in addition to the reference to 40 CFR, Part 265, Subpart F, except sec.265.90 and sec.265.94; and (7) References to the EPA are changed to the Texas Natural Resource Conservation Commission. (c) A copy of 40 CFR, Part 265 is available for inspection at the library of the Texas Natural Resource Conservation Commission, located on the first floor of Building A at 12100 Park 35 Circle, Austin, Texas. sec.335.118. Closure Plan; Submission and Approval of Plan. (a) Except as provided in this section, the owner or operator must submit his closure plan to the executive director in accordance with the procedures outlined in 40 Code of Federal Regulations (CFR) sec.265.112. The owner or operator must submit his closure plan to the executive director no later than 15 days after: (1)-(2) (No change.) (b) The executive director will provide the owner or operator and the public, through newspaper notice, the opportunity to submit written comments on the plan and request modifications of the plan within 30 days of the date of the notice. The owner or operator is responsible for the cost of publication. The executive director may, in response to a request or at his own discretion, hold a public hearing whenever such a hearing might clarify one or more issues concerning a closure plan. The executive director will give public notice of the hearing at least 30 days before it occurs. (Public notice of the hearing may be given at the same time as notice of the opportunity for the public to submit written comments, and the two notices may be combined.) The executive director will approve, modify, or disapprove the plan within 90 days of receipt. If the executive director does not approve the plan, he shall provide the owner or operator with a detailed written statement of reasons for the refusal and the owner or operator must modify the plan or submit a new plan within 30 days after receiving such written statement. The executive director will approve or modify this plan in writing within 60 days. If the executive director modifies the plan, this modified plan becomes the approved closure plan. The executive director's decision must assure that the approved closure plan is consistent with 40 CFR sec.sec.265.111 through 265.115, and the applicable closure requirements contained in this chapter for specific waste management methods, and contained in 40 CFR sec.264.1102. A copy of this modified plan with a detailed statement of reasons for the modifications must be mailed to the owner or operator. 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 February 5, 1996. TRD-9601512 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 239-4640 Subchapter F. Permitting Standards for Owners and Operators of Hazardous Waste Storage, Processing, or Disposal Facilities 30 TAC sec.sec.335.152, 335.168-335.170, 335.173-335.175 The amendments are adopted pursuant to sec.5.103 and sec.5.105 of the Texas Water Code (Vernon Supplement 1991), which authorizes the Texas Natural Resource Conservation Commission (TNRCC) to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. These amended sections are also adopted pursuant to the Texas Solid Waste Disposal Act (the Act), Texas Health and Safety Code Annotated, Chapter 361 (Vernon Supplement 1992), sec.361.017 and sec.361.024, which further authorizes the TNRCC to promulgate rules necessary for accomplishing the purposes of the Act, including the control of all aspects of the management of industrial solid and municipal hazardous wastes. 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 February 5, 1996. TRD-9601511 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 239-4640 Subchapter H. Standards for the Management of Specific Wastes and Specific Types of Facilities Hazardous Waste Burned for Energy Recovery 30 TAC sec.335.222, sec.335.224 The amendments are adopted pursuant to sec.5.103 and sec.5.105 of the Texas Water Code (Vernon Supplement 1991), which authorizes the Texas Natural Resource Conservation Commission (TNRCC) to adopt any rules necessary to carry out the powers and duties under the provisions of the Texas Water Code and other laws of this state. These amended sections are also adopted pursuant to the Texas Solid Waste Disposal Act (the Act), Texas Health and Safety Code Annotated, Chapter 361 (Vernon Supplement 1992), sec.361.017 and sec.361.024, which further authorizes the TNRCC to promulgate rules necessary for accomplishing the purposes of the Act, including the control of all aspects of the management of industrial solid and municipal hazardous wastes. 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 February 5, 1996. TRD-9601510 Kevin McCalla Director, Legal Division Texas Natural Resource Conservation Commission Effective date: February 26, 1996 Proposal publication date: November 3, 1995 For further information, please call: (512) 239-4640