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 7. BANKING AND SECURITIES
PART II. Texas Department of Banking
CHAPTER 25.Prepaid Funeral Contracts
SUBCHAPTER B.Regulation of Licenses
7 TAC sec.25.25
The Banking Department of Texas (the "department") adopts new sec.25.25, 
concerning the conversion of prepaid funeral contracts from trust funded 
benefits to insurance funded benefits, as provided for under Texas Civil 
Statutes, Article 548b (the Act), sec.1A. New sec.25.25 is adopted with 
nonsubstantive changes to the proposal which appeared in the November 14, 1995, 
issue of the Texas Register (20 TexReg 9351), and is republished in full. 
The department adopts new sec.25.25 in order to more clearly outline and refine 
the basic requirements for an application for conversion of prepaid funeral 
contracts from trust funded benefits to insurance funded benefits under the Act, 
sec.1A. As adopted, new sec.25.25 defines the standards for approval of the 
conversion application and the required documentation that must accompany an 
application for conversion, as well as information relevant to requesting a 
hearing on an application prior to final denial by the department. 
Standardization of conversion procedures will enable the examination and 
conversion processes to flow more efficiently and effectively and better 
safeguard the rights and interests of the individual prepaid funeral contract 
purchasers as required by the Act. As a consequence, adoption of the new section 
should enhance the orderly administration of the Act and ensure that the 
purposes of the Act, as they relate to the conversion of prepaid funeral 
contracts from trust funded benefits to insurance funded benefits, are 
substantially fulfilled. 
The department received five sets of written comments, none of which expressly 
supported or opposed adoption of the section as a whole. The department also 
received a request for hearing that did not meet the statutory requirements of 
Government Code, sec.2001.029(b). The department therefore is not required to 
hold a hearing. However, the department's view is that hearings should be held 
regarding proposed rules whenever necessary and useful to understanding public 
concerns. In this case, more than one hearing has already been held to receive 
public input on prior proposed versions of sec.25.25. Further, the request for 
hearing received during this comment period does not raise issues that have not 
been raised previously or which the department has not fully considered. As a 
consequence, no public policy purpose would be served in setting this proposal 
for yet another hearing. 
The following comments resulted in changes to the proposed new section: 
1. The Texas Department of Insurance (TDI) requested that the term "cash 
surrender value" be defined in sec.25.25(b)(2) to clarify that "future premiums" 
are "future gross premiums." The department has redefined the term for clarity. 
2. TDI also noted that the deduction of a front-end premium load as authorized 
by proposed sec.25.25(b)(4) (adopted as sec.25.25 (b)(5) of this section) is not 
consistent with the requirement that the cash value and the death benefit return 
the gross premiums paid. As a consequence, the department has rewritten the 
definition of "cash surrender value" and added a definition for "death benefit." 
However, the department does not believe it can mandate rear-end or front-end 
loads as long as the insurance policy provides for the required cash surrender 
and death benefit values. 
3. With respect to sec.25.25(d)(2)(D), TDI commented that, under a trust funded 
prepaid funeral contract, the death benefit is the principal paid into the trust 
together with all interest earned. As TDI points out, sec.25.25(d)(2)(D) as 
proposed does not provide this same benefit in a conversion to insurance funding 
because the annuity may limit the death benefit to the greater of the cash 
surrender value or the sum of the premiums paid. Under certain circumstances, 
this limitation can result in no growth to the fund for a period of years. At 
TDI's suggestion, the department has defined "death benefit" in sec.25.25(b)(3) 
to be the accumulation value, including interest. This addition will protect the 
purchaser through requiring the provider to retain a sufficient death benefit to 
pay for the purchaser's funeral in all cases, protect the solvency of the 
provider, and satisfy the explicit requirement of the Act, sec.1A(a), that the 
rights and interests of the purchaser be safeguarded to "substantially the same 
or greater degree" as they would be under trust-funding. 
4. Another commenter objected to the definition of "post-conversion permit 
holder" in sec.25.25(b) because it specifies that such permit holder, rather 
than the funeral home, is responsible for delivery of the funeral services and 
merchandise. As a result of this comment, the department has clarified this 
definition to indicate that the post-conversion permit holder must merely verify 
delivery before processing payment to a funeral provider and that the funeral 
provider remains bound to deliver the goods and services specified in the 
contract. 
5. Several commenters from the industry pointed out that, if portability does 
not exist under the original contract, the original seller or its successor 
permit holder may cancel a prepaid funeral contract if the purchaser changes 
funeral homes. The department has changed sec.25.25(d)(2)(D) to accurately 
describe portability with respect to payment of the death benefit. 
6. These same commenters objected to the requirement in sec.25.25(b)(2)(K) that 
the permit holder remit to the purchaser the "entire" cash surrender value of 
the purchaser's annuity contract in the event of cancellations. Another 
commenter also noted that the requirement that the cash surrender value "never 
be less than the amount of principal transferred at conversion plus all future 
premiums received" does not address the retainage provision of the Act, 
sec.5(a)(1). As a consequence, the department has modified its definition of 
"cash surrender value" in sec.25.25(b)(2) to provide for the cancellation 
provisions allowed under the trust funded contract. 
7. One commenter suggested that, for "clarity and consistency" with the Act, the 
reference in the proposed sec.5.25(a) to an "arrangement" should be deleted. The 
department agrees with this suggestion and has deleted this word. 
8. The commenter also noted that the word "and" at the conclusion of 
sec.25.25(c)(3)(L) is superfluous. This word has been deleted at this location 
and placed at the end of sec.25.25(c)(3)(K) where it properly belongs. 
In addition to changes to the proposed new section that resulted from comments 
the department received, the department also made changes to this section for 
clarification and for consistency. 
The proposed new section also received certain comments which, after thorough 
consideration, the department rejected without making the requested changes: 
1. TDI stated that it has no authority to exempt insurance policies funding
prepaid funeral contracts from its statutorily-required approval and has 
requested that reference to such exemptions be deleted from sec.25.25(c)(3)(E). 
The department agrees with TDI's position that all such policies must be 
approved without any exemption; however, the department's rule merely allows for 
insurance laws to provide for exemptions of policy approval in this area. The 
department's provision for exemption has no legal impact on TDI's legal 
authority or regulation of industry and does not require the department to 
interpret statutes and rules that are not under its jurisdiction. 
2. Several commenters argue that it is inappropriate for the department to 
impose a guaranteed growth rate in sec.25.25(d)(2)(E) for insurance policies 
funding prepaid funeral contracts. The department disagrees and has retained 
this provision. The department has the duty to ensure that funding will exist in 
at least the same amount as the trust would have provided to cover the costs of 
a funeral purchased under a prepaid funeral contract. Growth of at least 2.0% 
annually is essential in order to guarantee growth sufficient for delivery of 
prepaid funeral services and merchandise. This subsection as adopted has 
clarified the calculation of the 3.0% requirement. 
3. One commenter requested that the seven-year period set out in 
sec.25.25(d)(2)(E) be reduced if a company has not issued similar insurance 
policies for that length of time. The department declines to reduce this period: 
for the protection of the contract purchaser, the insurer must be able to prove 
a death benefit growth rate of 3.0% for the required period or commit to a 
guaranteed growth rate of at least 2.0%. 
4. The commenter also requested language in the new section that would permit 
conversion of irrevocable trust funded contracts to insurance funded contracts 
that are not revocable. The conversion of a trust funded contract to insurance 
funding would not affect irrevocability. Therefore, it is not necessary to 
include such a provision in the adopted section. 
5. Finally, commenter stated that the requirement in sec.25.25(d)(2)(D) that the 
death benefit increase in the "full amount of each payment received" does not 
adequately address the retainage provision of the Act, sec.5(a)(1). The 
department rejected this comment because TDI, the majority of industry, and the 
department believe handling the death benefit as set out in this subsection will 
be less difficult to monitor and verify than it would be if the retainage 
calculation is included. 
6. A commenter asked for the new section to allow life insurance to fund trust 
conversions. Previously, the department included life insurance in the 
definition of "insurance policy." TDI thereafter made the department aware that 
life insurance is an inappropriate vehicle for conversions from trust funded to 
insurance funded prepaid funeral benefits. The department therefore declines to 
permit funding of trust conversions with life insurance. 
7. A commenter also requested that the new section provide for trustee ownership 
of insurance policies. The department rejects this suggestion. The appropriate 
jurisdiction for mandating trustee ownership of insurance policies resides with 
TDI. 
8. A commenter asked that the new section include a provision allowing for 
decreasing term insurance on the unpaid contract balance. The department 
declines to add such a provision insofar as the death benefit must grow with 
each payment. As a consequence, deductions for other types of insurance from the 
premium paid must be disallowed.
The new section is adopted under Texas Civil Statutes, Article 548b, sec.2, 
which authorize the department to prescribe reasonable rules and regulations 
concerning all matters incidental to the enforcement and orderly administration 
of Article 548b.

sec.25.25.Conversion From Trust to Insurance Funded Benefits.
(a) Purpose. Existing prepaid funeral contracts that utilize trust funded 
prepaid funeral benefits may be converted to insurance funded prepaid funeral 
benefits pursuant to the Act, sec.1A(d). Application for conversion must be made 
on forms acceptable to the department that meet the requirements of the Act and 
this section. 
(b) Definitions. The words and terms used in this section shall be defined 
according to Texas Civil Statutes, Article 548b, sec.1(b) (the Act), 
sec.25.23(a) of this title (relating to Application Fees) and sec.25.24(a) of 
this title (relating to Examination Costs and Assessment Fees), unless otherwise 
defined herein or unless the context clearly indicates otherwise. 
(1) Applicant-A permit holder under the Act who files an application with the 
department to convert its trust funded prepaid funeral benefits under existing 
contracts to insurance funded prepaid funeral benefits. 
(2) Cash surrender value-The net amount due the policy owner from the insurer 
upon surrender of an insurance policy which will never be less than the 
cancellation benefit under the Act had the contract remained trust funded. 
(3) Death Benefit-The total of all contract principal payments collected and 
earnings accumulated that are transferred at conversion, together with all 
future gross premiums paid and all accumulated interest earned annually on 
accumulated interest thereon. Interest must be compounded annually and 
calculated on gross premiums paid. The death benefit can never be less than the 
death benefit prior to conversion. 
(4) Insurance policy-An annuity contract relating to an insurance conversion 
application. 
(5) Load-Any commission, allowance, surrender charge or other compensation, 
expense load, premium expense, administrative charge or expense, policy fees, or 
other fee or expense paid to a Texas Department of Insurance licensed agent 
associated with or occurring by reason of the sale, issuance, lapse, surrender, 
or redemption of an insurance policy in connection with the conversion of any 
trust funded prepaid funeral contract to insurance funded benefits. 
(6) Post-conversion permit holder-The permit holder who holds and administers 
the prepaid funeral contracts after conversion and assumes responsibility for 
receiving the proceeds of the insurance policy upon maturity of a contract and 
processing payment to the funeral provider after verifying that the funeral 
service and merchandise under the prepaid funeral contract have been delivered. 
(7) Required reserves-The reserve liabilities for all outstanding insurance 
contracts valued or calculated pursuant to actuarial standards and statutory 
accounting standards not inconsistent with the Texas Insurance Code. 
(8) TDI-The Texas Department of Insurance. 
(c) Applications. 
(1) When applying for permission to convert trust funded benefits under existing 
prepaid funeral contracts to insurance funded benefits, an applicant must, at a 
minimum: 
(A) hold a valid permit issued by the department under the Act; 
(B) be in good standing with the department; 
(C) submit a completed conversion application to the department; and 
(D) as of its most recent examination by the department, not have been found to 
be in violation of any applicable laws or regulations relating to the Act or the 
Texas Insurance Code or to have any other deficiencies of any significance that 
have not been remedied or corrected to the satisfaction of the department. 
(2) The department may, if it considers it necessary to safeguard the interests 
of the prepaid funeral contract purchasers, conduct an examination of the 
applicant within 45 days of the date the application is accepted by the 
department for filing. 
(3) Each application for conversion must include: 
(A) a copy of a letter to the applicant from an insurance company authorized to 
do business in Texas setting out the insurance company's agreement to issue 
insurance policies to convert the prepaid funeral contracts from trust funded 
benefits to insurance funded benefits; 
(B) a copy of the written commitment to the commissioner containing the 
agreement between or among the insurance company, the applicant, and the post-
conversion permit holder regarding the transfer, receipt, and application of the 
trust funds upon conversion, which commitment must: 
(i) include the full name of the agent or agents who will be receiving any load 
and their respective TDI license numbers; and 
(ii) require that a copy of each insurance policy issued be furnished to the 
owner of the insurance policy and that a copy be made available to the 
respective prepaid funeral contract purchasers upon request, in the event they 
are not the owners of the policies; 
(C) a pre-conversion summary of the individual prepaid funeral contracts, which 
must include, at a minimum, the following information (as of a date within 30 
days of the date of the application), as well as aggregated totals for each 
category of information, if appropriate: 
(i) purchaser's name and, if available, date of birth; 
(ii) date of execution of the prepaid funeral contract; 
(iii) face amount; 
(iv) amount paid in and amount left owing; 
(v) accumulated earnings; 
(vi) amount due the prepaid funeral contract purchaser upon cancellation and the 
amount due the applicant upon death of the prepaid funeral contract beneficiary, 
assuming death or cancellation were to occur on or about the date of the 
application; and 
(vii) amount retained by the applicant under the Act, sec.5(a)(1); 
(D) a post-conversion summary of the individual prepaid funeral contracts, which 
must include, at a minimum, the following information (as of the same date as 
the pre-conversion summary), as well as aggregated totals for each category of 
information, if appropriate: 
(i) annuitant's name; 
(ii) original prepaid funeral contract amount; 
(iii) amount paid in; 
(iv) amount applied to the purchase of the insurance policy; 
(v) initial cash surrender value and initial death benefit under the insurance 
policy; and 
(vi) amount retained by the applicant under the Act, sec.5(a)(1); 
(E) a copy of the insurance policy approved by TDI showing the approval stamp of 
TDI, or evidence that the policy is deemed to have been approved or exempt from 
approval; 
(F) a copy of the proposed negative response notification letter to the prepaid 
funeral contract purchasers from the applicant containing a statement explaining 
the purchaser has 60 days to file a written request with the department to have 
the contract converted back to trust funded benefits; 
(G) unless otherwise waived by the commissioner upon a showing of good cause, 
current year-to-date financial statements for the post-conversion permit holder 
and insurance company (dated no more than 6 months prior to the date of the 
application) and an actuarial certification certifying that the reserves to be 
held by the insurance company with respect to the conversion will be adequate to 
pay claims as they become due; 
(H) a copy of the insurance company's most recent actuarial certification, dated 
no more than one year prior to the date of application; 
(I) a copy of the proposed notification letter from the insurance company to the 
prepaid funeral contract purchasers regarding the conversion; 
(J) a statement defining the insurance policy load, including the percentage or 
dollar amount of the load, the time at which it is to be imposed, and how the 
load will be distributed; 
(K) a copy of the form of assignment, if any, to be used in assigning insurance 
policy rights or proceeds to the post-conversion permit holder; and 
(L) the conversion application fee prescribed in sec.25.23 of this title 
(relating to Application Fees). 
(d) Standards for approval of application. 
(1) An application for conversion will be approved by the commissioner if, in 
the commissioner's opinion, the rights and interests of the prepaid funeral 
contract purchasers under the insurance funded benefits arrangement will be 
safeguarded to at least the same degree as provided under the trust funded 
benefits arrangement. An application may be approved without the necessity of a 
hearing. 
(2) In order for insurance funded benefits under an application for conversion 
to be considered to safeguard the rights and interests of the prepaid funeral 
contract purchasers to at least the same degree as the trust funded benefits, 
the insurance benefits must comply with this subsection. 
(A) Unless otherwise permitted by the commissioner upon a showing of good cause, 
the insurance funded benefits arrangement must apply to all of the applicant's 
trust funded prepaid funeral contract purchasers, as of the date of the 
application. 
(B) The transfer of the trust funds to the insurance company must include the 
full sum required to be deposited as trust principal by the applicant pursuant 
to the Act under the trust funded prepaid funeral contracts proposed for 
conversion, plus all net earnings accumulated with respect thereto, as of the 
transfer date. No load may be deducted from the trust funds transferred pursuant 
to the conversion application. 
(C) No provision in the insurance policy may allow for contesting coverage, 
limit death benefits in the case of suicide, refer to a physical examination, or 
otherwise operate as an exclusion, limitation, or condition, other than 
requiring submission of proof of death or surrender of the policy at the time 
the prepaid funeral contract is funded, matures, or cancels, as the case may be. 
(D) The death benefit under the insurance policy may be paid to a funeral 
provider that honors the prepaid funeral contract conversion other than the 
applicant if the conversion agreement between the applicant and the post-
conversion permit holder permits such substitution. The purchaser, however, may 
require performance by the applicant, in which case this provision is 
inapplicable. 
(E) The insurance company must demonstrate that, in the previous seven years, 
the average death benefit growth under the same or substantially similar 
insurance policies issued by the insurance company to fund prepaid funeral 
contracts has been at least 3.0% accumulated per annum based on gross premiums 
paid. If the insurance company cannot so demonstrate, then the insurance policy 
must provide for guaranteed growth of the death benefit of no less than 2.0% per 
annum compounded annually on gross premiums paid beginning in the first year of 
the policy. 
(F) The post-conversion permit holder is responsible for payment of all death 
and cancellation claims in accordance with the provisions of the Act. 
(G) The post-conversion permit holder must have a current valid permit issued by 
the department under the Act and must be in good standing with the department. 
(H) The post-conversion permit holder must have been examined by the department 
within the 24-month period immediately preceding the date of the application and 
not have been found to be in violation of any applicable laws or regulations 
relating to the Act or the Texas Insurance Code or to have any other 
deficiencies of any significance which have not been remedied or corrected to 
the satisfaction of the department. If the post-conversion permit holder has not 
been examined by the department within such time period, the department may, if 
it considers it necessary, conduct an examination of the post-conversion permit 
holder within 45 days of the date the application is accepted for filing. 
(I) The insurance company must be a member of the Texas Life, Accident, Health, 
and Hospital Service Insurance Guaranty Association. 
(J) Any insurance policy issued on any individual must be for an amount not less 
than the amount of principal and interest transferred for that individual to the 
insurance company, and any supplemental insurance policy issued to cover the 
unfunded portion of the contract must have a face amount that is at least as 
great as the unfunded principal balance. No credit or reduction may be made for 
interest earned or accrued on the paid-in principal balance. 
(K) The insurance policy must provide each prepaid funeral contract purchaser 
with a cash surrender value or cancellation benefit that is at least the same as 
the cancellation benefit provided for under the trust funded benefits 
arrangement for the duration of the prepaid funeral contract. If a prepaid 
funeral contract is canceled at the initiative of the purchaser after the 60-day 
initial conversion cancellation period, the permit-holder must remit the entire 
cash surrender value of the purchaser's annuity contract directly to the 
purchaser. In addition, the insurance company is responsible for maintaining 
adequate reserves for cancellations. 
(3) The applicant must demonstrate compliance with the Act, sec.5B, for the 
previous year, and may not convert prepaid funeral contracts that are presumed 
abandoned under the Act, sec.5B. Any prepaid funeral contracts presumed to have 
been abandoned and the funds attributable to such contracts must be reported and 
delivered to the Texas State Treasurer in accordance with Texas Property Code, 
Chapter 74. 
(e) Post-conversion summary. The post-conversion permit holder must submit to 
the department, within 90 days of the date of transfer of the trust funds as 
authorized by the commissioner's order, a post-conversion summary of the 
individual prepaid funeral contracts as of the conversion date, which must 
include, at a minimum, the following information, as well as aggregated totals 
for each category of information, if appropriate: 
(1) insured's name; 
(2) insured's policy number; 
(3) the original prepaid funeral contract amount; 
(4) amount paid in; 
(5) unpaid balance of the prepaid funeral contract; 
(6) amount retained by the applicant under the Act, sec.5(a)(1); 
(7) amount applied to the purchase of the insurance policy; and 
(8) initial cash surrender value and initial death benefit under the insurance 
policy. 
(f) Records. The applicant shall relinquish to the post-conversion permit holder 
the individual prepaid funeral contract ledgers reflecting the amount paid and 
the amount left owing on the prepaid funeral contract, if any. The post-
conversion permit holder shall be responsible for maintaining such ledgers to 
reflect the principal balance of the converted contracts as well as any 
outstanding balances. 
(g) Time requirements. Within 90 days of the execution of the conversion order, 
the post-conversion permit holder must submit a notarized statement to the 
department attesting that the insurance policies have been issued and funded on 
behalf of the contract purchasers listed in the original post-conversion summary 
included in the conversion application and that all notices required under 
subsection (c)(3)(I) of this section have been given. Within 120 days of the 
execution of the conversion order, all requirements under this section for 
completion of a conversion must be met; if they are not, the conversion order is 
void without further action of the department. 
(h) Hearings. The commissioner may order a hearing on an application. A hearing, 
if ordered, shall be conducted pursuant to the department's rules governing 
hearings. The applicant shall have the burden to demonstrate the existence of 
all factors necessary to entitle the applicant to convert to insurance funded 
benefits from trust funded benefits by a preponderance of the evidence.
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 28, 1996.
TRD-9602776
Everette D. Jobe
General Counsel
Texas Department of Banking
Effective date: March 20, 1996
Proposal publication date: November 14, 1995
For further information, please call: (512) 475-1300

TITLE 10. COMMUNITY DEVELOPMENT
PART V. Texas Department of Commerce
CHAPTER 187.Job Training Partnership Act Rules
Editor's Note: Effective March 1, 1996, the Texas Workforce Commission will 
replace the Texas Department of Commerce as the administrative entity for the 
Job Training Partnership Act (JTPA)program in Texas.
Pursuant to 1 TAC sect&91.23(e), the JTPA rules located in 10 TAC Chapter 187 
are being transferred to 40 TAC Chapter 805. A table, which lists the old and 
new section numbers, is being published in this issue of the Texas Register in 
the table and graphics section.
Figure: 10 TAC Chapter 187
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 March 1, 1996.

TITLE 16. ECONOMIC REGULATION
PART II. Public Utility Commission of Texas
CHAPTER 23.Substantive Rules
Customer Service and Protection
16 TAC sec.23.54
The Public Utility Commission of Texas adopts an amendment to sec.23.54, 
relating to Private Pay Telephone Providers, with changes to the proposed text 
published in the September 19, 1995, issue of the Texas Register 20 TexReg 
7444). The amendment is required to conform the existing rule to the mandates of 
the Public Utility Regulatory Act of 1995 (PURA) sec.3.2625. The amendment is 
also adopted in consideration of PURA sec.3.213, which requires the commission 
to review its rules affecting rural and small incumbent local exchange 
companies. 
In this rule references to "local exchange carrier" are changed to "dominant 
certificated telecommunications utility" ("DCTU") to better reflect the 
commission's jurisdiction. The amendment to sec.23.54 broadens the applicability 
of this rule by incorporating the statute's expansive definition of "provider of 
pay telephone service;" and requires providers of pay telephone service who do 
not possess a certificate of convenience and necessity to register with the 
commission. The rule also makes informational posting requirements directly 
applicable to all providers of pay telephone service and expands its application 
to a DCTU providing its own pay telephone service. Further, the rule establishes 
limits on the charges for local pay telephone calls and restates various 
statutory provisions, including the requirements for a provider of pay telephone 
service to impose a set use fee for "1-800"-type calls. Additionally, the rule 
prohibits charges for local directory assistance from a pay telephone and limits 
the amount that may be charged by a provider of pay telephone service  (other 
than an incumbent local exchange company) for credit or calling card or 
operator-assisted intrastate long distance calls.
The rule also removes, under limited conditions, the prohibition against 
providing pay telephone service behind a Private Branch Exchange; removes the 
rate cap exemption from pay telephones in confinement facilities; and allows the 
limited use of non-dial extensions associated with pay telephones. Finally, the 
rule responds to the concerns of rural and small incumbent local exchange 
companies by eliminating for all DCTUs the rule's cost study requirement, and 
increasing to ten the number of special assembly arrangements authorized before 
a DCTU must tariff its provision of pay telephone service.  
Comments concerning the proposed changes to the rule were received from fourteen 
individuals or organizations: AT & T, Consumers Union, Southwestern Bell 
Telephone  (SWBT), Texas Citizens United For Rehabilitation of Errants (Texas 
Cure), Joint Comments of GTE Southwest, Inc. (GTE) and Contel of Texas, Inc. 
(CONTEL), Texas Statewide Telephone Cooperative, Inc. (TSTCI), Texas Association 
of Long Distance Telephone Companies (TEXALTEL), Texas Pay-phone Association 
(TPA), Office of Public Utility Counsel (OPC), MCI Telecommunications 
Corporation (MCI), Texas Telephone Association (TTA), Texas Council on Family 
Violence, State Senator Rodney Ellis, and the Texas Department of Protective and 
Regulatory Services. The following individuals or organizations submitted 
comments after the published 30 day comment period: State Representative 
Sylvester Turner, State Representative Elliott Naishtat, and State 
Representative Curtis L. Seidlits, Jr. Not all individuals or organizations 
submitted comments on every issue.  
OPC and Texas Cure recommend that pay telephones in confinement facilities be 
subject to the operator services rate caps. In general, these commenters state 
the families of inmates are paying for calls (through collect calls) and should 
be afforded the same consumer price protections as other citizens of Texas. 
Consumers Union states that consumer protection issues should not be denied to 
anyone regardless of their circumstances, and therefore recommends that the 
commission delete the exceptions made for confinement facilities.
AT & T states that the costs to provide inmate collect calls are higher because 
of special monitoring and controls associated with inmate calls and therefore, 
the exemption on pay telephones in confinement facilities is justified.
The expenses mentioned by AT & T may contribute to the higher costs of providing 
this service in confinement facilities, however, the commission agrees with the 
comments of Texas Cure and OPC that pay telephones in confinement facilities 
should be subject to the caps so that all Texans will be able to take advantage 
of consumer protections offered by the rule. The rule is modified to reflect 
this change.  
TEXALTEL contends that the restriction against operating pay telephone service 
behind a Private Branch Exchange (PBX) presents a roadblock to the use of new 
technology, and that the concerns addressed at the time the original rule was 
written no longer exist. TEXALTEL states that this restriction is outdated and 
should be deleted. TPA states that the use of PBX or Centrex systems can reduce 
the cost of providing pay telephone services, and therefore, this restriction 
should be removed. AT & T states that the technological and public policy 
reasons that were justified when this rule was originally written no longer 
exist and therefore recommends that this restriction be deleted. AT & T further 
states that current technology (such as partitioning) allows the other 
requirements imposed by the rule, such as emergency calling and fraud 
protections, to be achieved behind a PBX or Centrex arrangement. The commission 
agrees with the comments and modifies the rule to remove the restriction against 
providing pay telephone service behind a PBX, provided that the access 
configuration will not be allowed if it prevents usage measurement, the 
operation of E-911, or the other access and fraud protection requirements stated 
in the rule.  
TSTCI states that some small Local Exchange Carriers' (SLECs) tariffs allow for 
non-dial extension telephones to be attached to semi-public telephones as long 
as they are in sight of the semi-public telephone, and therefore recommends that 
subsection (e)(4)(A)(iv) exclude extension lines offered in conjunction with 
tariffed semi-public pay telephone service. GTE/Contel comments that GTE's 
General Exchange Tariff currently allows the use of an extension telephone, as 
long as it is in view of the individual conversing at the semi-public telephone. 
GTE recommends that the rule be restated to clarify the difference between a 
public pay telephone and a semi-public telephone. The commission agrees with the 
comments and modifies the rule to allow extensions on pay telephones and to 
require signage on the pay telephone to indicate that an extension is attached 
to the phone line.
TSTCI recommends that the rule be revised to clearly allow telecommunications 
providers operating under a Certificate of Operating Authority (COA) or Service 
Provider Certificate of Operating Authority (SPCOA) to provide customer-owned 
pay telephone service (COPTS), with the provision that a SPCOA cannot resell to 
a different class of customer (for example, an SPCOA could not resell a 
residence or business line that it purchases from a LEC for the purposes of 
providing COPTS). TEXALTEL comments that any provider of COPTS should be 
registered. TPA recommends that the word "dominant" when used with "dominant 
certificated telecommunications utility" be eliminated throughout the rule.
MCI comments that the rule should apply to all local service providers, not just 
the ones deemed dominant, stating that the public interest requires that the 
rule also apply to new local service providers. AT & T, SWBT and TTA recommend 
that the rule be expanded to cover all local exchange carriers, including new 
entrants. TTA agrees with TSTCI's comments concerning the reselling of LEC's 
telephone service to the same class of customer; i.e., purchasing a residence or 
business line to resell as a COPTS should be prohibited. 
The commission is persuaded by the comments and finds that the rule should apply 
to all local service providers providing pay telephone service, and modifies the 
text to reflect this change.  
TTA recommends that the commission add language to the rule which ensures that 
callers using Telecommunications Relay Service (TRS) will not be assessed the 
"800" set use fee from pay telephones. SWBT recommends that local calls from pay 
telephones to the TRS be free of charge. The commission agrees with these 
comments because the Federal Communications Commission issued a Memorandum 
Opinion and Order, In the Matter of Telecommunications Relay Services, and the 
Americans with Disabilities Act of 1990, CC Docket No. 90-571 (August 25, 1995), 
requiring common carriers providing telephone voice transmission services, and 
TRS providers, to make local TRS payphone calls free of charge. Therefore, the 
commission has modified the text accordingly. On January 25, 1996, the Federal 
Communications Commission authorized the use of the "888" service access code 
for use as a toll-free access code in the same manner as the current "800" 
service access code. Because of this change in regulatory policy, the commission 
has amended the rule to include references to "1+888" calls in the portions of 
the rule that reference "1+800" calls.  
The Texas Department of Protective and Regulatory Services states that the set 
use fee imposed on callers of "800" numbers would deny runaway and homeless 
children access to crisis intervention services. The Texas Council on Family 
Violence expressed concern for the end users of the State's "800" crisis hot-
lines. The State's shelters pay significant fees for "800" phone lines to 
provide help in a time of crisis, yet the Council states that "imposing such a 
charge would, in effect, cut off the ability of many victims of family violence 
to reach the very services that could save their lives."  
While the commission is sympathetic to these issues, PURA sec. 3.2625 does not 
contain an exemption to the set use fee for calls to such numbers. A change in 
this provision of PURA would be required for the commission to direct the 
providers of pay phone service not to impose the set use fee on these types of 
"800" calls. Therefore, the commission makes no changes to the rule based on 
these comments.  
SWBT states that the costs of providing local pay telephone service are not 
recovered by the $.25 charge. SWBT recommends that the commission permit the 
providers to increase the charge to $.50 to allow providers of pay telephone 
service to be adequately compensated. TTA expresses concern that the cap 
conflicts with PURA sec.3.356, which categorizes pay telephone service in Basket 
III for LECs electing incentive regulation under Subtitle H and allows LECs to 
set prices for services in Basket III at any level above the service's LRIC. 
GTE/Contel recommends that an evidentiary hearing be held to determine the 
appropriate rate cap. GTE/Contel further states that the costs of equipment, 
installation, repair, maintenance, the collection and counting of coins, theft 
and vandalism have all risen, and that larger local calling areas have decreased 
the toll revenues generated from pay telephones. GTE/Contel suggests that in 
lieu of an evidentiary hearing, the rate should be capped at $.50. TPA 
recommends that the commission allow the rate to be capped at $.50. TPA states 
that the Legislature intended for the commission to use its ratemaking expertise 
to establish the appropriate charge. TPA states that the costs of providing the 
service has increased therefore the proposed rate cap of $.25 would not recover 
the costs.  
OPC supports the rate cap at $.25, stating that capping the local call rate at 
$.50 is anti-consumer, unreasonable, unsupported by available information, and 
contrary to legislative intent. Consumers Union states that pay telephones are 
the lifeline for many lower income Texans, who would be the ones most affected 
by a rate cap increased to $.50. Consumers Union also states that the proposed 
cap is in the public interest and supports the goal of universal 
telecommunications service. State Senator Rodney Ellis states that he sponsored 
the amendment to House Bill. 2128 which removed a proposed increase in pay phone 
rates. Senator Ellis states that the purpose of his amendment was to ensure that 
coin calls from pay telephones did not increase in price as the pay phone is 
only phone available to many Texans.  
In support of their positions related to the $.25 cap, SWBT, GTE/Contel and the 
TPA submitted cost studies in mid-December at the request of the commission 
Staff. SWBT's cost study examined the costs of providing public and semi-public 
local coin service in Texas for the 1996 to 1998 time period. The monthly costs 
include: the phone and booth, loop cost, coin line termination, local usage 
cost, coin collecting/counting, touch calling, commissions, directory costs, and 
maintenance.  
The commission finds that there are three main problems with the three studies 
filed in this project by SWBT, GTE and TPA. First, all of the costs of providing 
public pay telephone service are allocated to local service only. Second, the 
studies do not include or attribute any costs to intrastate toll, intraLATA 
toll, or operator services. And third, the studies only recognize the revenues 
produced by local calls. By not allocating costs and not  including the revenues 
from other services such as toll and operator services, the studies appear to 
ignore what may be the most profitable aspect of the pay telephone business. As 
a result, the cost studies as filed cannot be used to justify a rate increase.  
SWBT, GTE, and TPA all imply that if the pay telephone rate is not increased 
from $.25 then public interest pay telephones (in terms of location) or 
marginal/at risk pay telephones (in terms of profitability) may be removed, 
greatly reducing the number of pay telephones in the State of Texas. The 
commission recognizes the possibility that if the rate remains at $.25 some pay 
telephones may be lost. There are many pay telephone locations in Texas that 
would probably not be profitable regardless of the rate level approved by the 
commission.
If a problem develops in the future regarding the removal of pay telephones in 
locations considered to be in the public interest by the commission (such as in 
schools, hospitals, public parks, low income housing projects, etc.) then a 
proceeding could be considered at that time to address that problem. As noted 
hereafter, the commission will consider whether to formally address the issue of 
the definition and availability of "public interest" pay phones in a separate 
proceeding after it examines the impact of new federal telecommunications 
legislation upon this commission's jurisdiction with respect to pay telephones.
The commission agrees with the comments of OPC, Consumers Union, and Senator 
Ellis that affordable telecommunications service, in this case, affordable pay 
telephone service should be a priority. In many cases pay telephone service is 
the only means of accessing the telecommunications network for many Texans. The 
commission also agrees that the continued availability of pay telephone service 
is important, especially in less profitable public interest locations. The 
Legislature has directed the commission to protect and maintain the wide 
availability of high quality, interoperable, standard-based telecommunications 
services at affordable rates. PURA sec. 3.001. The Legislature has also directed 
the commission to protect the public interest in having adequate and efficient 
telecommunications service available to all citizens of the state at just, fair, 
and reasonable rates. PURA sec.3.051. The courts have recognized that, in 
fulfilling its regulatory function, the commission has the discretion to 
consider factors other than cost in establishing rates for utilities. As some of 
the commenters have noted, pay telephone service provides a significant 
contribution to universal service by enabling access to the telecommunications 
network by those who do not have telephones in their homes. The commission 
believes that it is necessary to retain affordable pay telephone rates in order 
to assure that adequate and efficient telecommunications services are available 
to the citizens of the state. The commission finds that retaining the rate cap 
at $.25 represents an appropriate balancing of the costs of the service and the 
universal service aspects of the service. Accordingly, the public interest is 
best served by retaining the proposed rate cap at $.25.  
The commission recognizes the need to monitor the number and location of pay 
telephones over time and to review the continued appropriateness of the rate 
cap. The commission will therefore establish a separate proceeding apart from 
this rulemaking in which the agency and interested parties will: (1) determine 
the impact of new federal telecommunications legislation upon the commission's 
jurisdiction and ability to set rates for pay telephones relative to the new 
responsibilities assigned to the Federal Communications Commission, (2) if the 
commission finds that it does have the continuing jurisdiction to do so, explore 
methodologies by which the rate cap could be changed for affected pay telephone 
providers, including exploration of the potential for collective ratemaking, 
negotiated rulemaking, or other alternatives, (3) study other ways in which 
COPTS providers can be made more competitive, such as reductions in the rates 
charged to COPTS providers, and (4) explore the nature and availability of pay 
telephones for the citizens of Texas and investigate ways to ensure their 
continuing availability.
Only one comment related to the Pay Telephone Registration form was filed in 
Project No. 14559. That comment was filed by the Texas Pay Telephone Association 
(TPA). TPA asserts that the purpose of the registration form is to provide basic 
information about a registrant, to request attestation of compliance with 
Sections 3.2625 and 3.305 of PURA, and to provide individual information to 
assist in compliance. The commission agrees with this comment.  
TPA goes on to state that it is their understanding that the filing of the 
registration form does not constitute an application to provide or continue 
service. The commission agrees with this comment.
TPA recommends that filings be required annually on a specific date and that all 
updates be filed on a specific date. TPA disagrees with proposed quarterly 
updates of pay telephone-specific information, stating that it would place an 
excessive burden on its members, and recommends that the updates be filed 
annually or every six months. The commission agrees that updates should be filed 
on a specific date, but disagrees with the elimination of quarterly updates. The 
updates shall be filed quarterly beginning on April 1, 1996, because the updates 
are necessary to adequately monitor compliance of pay telephones. This 
requirement should not place an excessive burden on pay telephone providers, 
because the commission is requiring the providers to report quarterly only on 
those phones with a change in status (providing the number and street address of 
any phone that is newly installed or removed or changes ownership within the 
quarter).  
TPA requests clarification as to the confidential status of information provided 
in response to item number 14 of the registration form. In requesting 
clarification, TPA notes that information submitted with the notation, 
"confidential material," should be treated as such unless and until the Attorney 
General issues an opinion to the contrary. The commission agrees with the TPA 
notation and takes no position on whether such information is confidential as a 
matter of law. TPA states, and the commission agrees, that the registration form 
is intended to request the street address and phone number of each pay 
telephone, not the name of the physical location in which it is placed. 
Therefore, the commission clarifies the registration form by requesting that the 
registrant "attach a complete list, by street address and phone number, of all 
pay telephones owned and/or operated by your company/corporation."  
TPA further requests that Item 5 be modified to request the address of the 
principal office of the provider for the "last 12 months," not the "last 24 
months." TPA also ask that Items 6 and 7 be modified to request the "business 
address" and "business phone number" of the corporation officers and general 
partners, not the "home address" and "home phone numbers." The commission agrees 
with the suggested modifications to Items 5, 6 and 7. 
The rule is adopted under PURA sec.1.101, which provides the Public Utility 
Commission of Texas with the authority to make and enforce rules reasonably 
required in the exercise of its powers and jurisdiction, and PURA sec.3.2625, 
which authorizes the commission to promulgate rules requiring registration of 
providers of pay telephone service that do not possess a certificate of 
convenience and necessity and to establish limits on the charges for various pay 
telephone calls. The rule is also adopted under PURA sec.3.213, which authorizes 
the commission to amend its rules affecting rural and small incumbent local 
exchange companies.  
The following statute is affected by this rule: The Public Utility Regulatory 
Act of 1995, sec.3.213 and sec.3.2625. 

sec.23.54.Pay Telephone Service. 
(a) Definitions. The following words and terms, when used in this section, shall 
have the following meanings unless the context clearly indicates otherwise: 
(1) "0-" call-A call made by the caller dialing the digit "0" and no other 
digits within five seconds. A "0-" call may be made after a digit (or digits) to 
access the local network is (are) dialed. 
(2) "0+" call-A call made by the caller dialing the digit "0" followed by the 
terminating telephone number. On some automated call equipment, a digit or 
digits may be dialed between the "0" and the terminating telephone number. 
(3) Automatic Number Identification (ANI)-The automatic transmission by the 
local switching system of the originating telephone number to an interexchange 
or other communications carrier or to the operator of a 911 system. 
(4) Call Aggregator-Any person or entity that owns or otherwise controls 
telephones intended to be utilized by the public. For the purposes of this 
definition, a person or entity controls a telephone if that person or entity has 
the authority to post notices and/or unblock access. 
(5) Customer-owned pay telephone service (COPTS)-A service offered by a 
certificated telecommunications utility which provides a two-way, or optionally, 
a one-way originating-only business access line composed of the serving central 
office line equipment, all outside plant facilities needed to connect the 
serving central office with the customer premises, and the network interface. 
(6) Dominant certificated telecommunication utility (DCTU)-As defined in 
Substantive Rule 23.3, relating to Definitions. 
(7) End User Choice-A system that allows the automatic routing of interexchange, 
operator-assisted calls to the billed party's chosen carrier without the use of 
access codes. 
(8) Operator Service-Any service using live operator or automated operator 
functions for the handling of telephone service, such as toll calling via 
collect, third number billing, and calling card services. The transmission of 
"1-800 and 1-888" numbers, where the called party has arranged to be billed, is 
not operator service. 
(9) Operator Service Provider (OSP)-Any person or entity that provides operator 
services by using either live or automated operator functions. When more than 
one entity is involved in processing an operator service call, the party setting 
the rates shall be considered to be the OSP. However, subscribers to customer-
owned pay telephone service shall not be deemed to be OSPs. 
(10) Originating Line Screening (OLS)-A two digit code passed by the local 
switching system with the ANI at the beginning of a call that provides 
information about the originating line. 
(11) Pay Telephone Service (PTS)-A telecommunications service utilizing any 
coin, coinless, credit card reader, or cordless instrument that is accessible by 
members of the general public, or business patrons, employees, and/or visitors 
of the premise's owner or lessee where pay telephone service is installed, 
provided that the end user pays for local or toll calls from such instrument on 
a per call basis. For purposes of this section, coinless telephones provided in 
guest rooms by a hotel/motel are not pay telephones. A telephone that is 
primarily used by business patrons, employees, and/or visitors of the premise's 
owner is not a pay telephone if: 
(A) the primary use of such telephone is for local calls or toll-free "1-800" or 
"1-888" calls; 
(B) all local calls and "1-800" and "1-888" type calls from such telephone are 
free to the end user; and 
(C) the telephone is not accessible by members of the general public. 
(12) Provider of Pay Telephone Service-A subscriber to COPTS, an incumbent local 
exchange company providing pay telephone service, and any other entity providing 
PTS. 
(13) Rate Information-All charges ultimately charged to the PTS provider, 
including any surcharges, fees, and any other form of compensation charged by 
the PTS provider on behalf of the call aggregator. 
(b) Registration. 
(1) All PTS providers not holding a certificate of convenience and necessity 
must register with the commission, using commission-prescribed forms, in order 
to do business in the state of Texas. Registration requires disclosure of the 
physical location of each of the registrant's pay telephones, and such location 
information must be updated, only on those phones with a change in status, by 
the registrant each calendar quarter, pursuant to the schedule set forth in 
Substantive Rule 23.11, relating to General Reports. The commission shall 
provide each registrant with proof of registration within 30 days of filing. 
(2) A certificated telecommunications utility shall not provide COPTS to a 
person required to be registered under this subsection, unless that person 
provides a commission-supplied proof of registration.
(c) Available upon request. Upon formal request for service by any prospective 
provider of COPTS, a DCTU is required to file a tariff providing for 
interconnection of customer-owned pay telephones, except as otherwise provided 
in subsection (q) of this section. 
(d) Initial filing requirements. Unless otherwise provided in this section, when 
a DCTU makes its initial filing to offer COPTS the application must include the 
proposed tariff, a surrogate cost study based on the traffic-sensitive and non-
traffic-sensitive costs of providing interconnection to the dominant carrier 
network, and supporting explanation. 
(e) Tariff requirements for pay telephone service. The requirements set forth in 
this subsection must be included in any tariff filed by a DCTU for the DCTU to 
offer pay telephone service, and in any tariff filed by such utility to offer 
COPTS. 
(1) Requirements before call is completed. If the PTS provider uses automated 
call completion technology to complete operator service calls, the provider of 
PTS must: 
(A) audibly and distinctly identify itself to the caller upon answering; 
(B) audibly and distinctly identify itself to the billed party, if the billed 
party is different from the caller; 
(C) provide a mechanism for the caller to obtain rate information, without 
charge, 24 hours a day, seven days a week; and 
(D) permit the caller or billed party to terminate the call at no charge prior 
to completion of the call by the PTS provider. 
(2) 911 calls, "0-" calls, and end user choice. 
(A) The PTS provider must allow 911 calls to be outpulsed directly to the Public 
Service Answering Point at no charge and without requiring a coin or credit 
card. 
(B) Where End User Choice, as defined in subsection (a) of this section, is not 
available, the PTS provider must allow "0-" calls, and must directly route, 
without charge to the calling party, all "0-" calls to an OSP that provides 
access to emergency services that meet the technical standards set forth in 
sec.23.55(g)(2)(A)-(F) of this title (relating to Operator Services). 
(C) When and where available, use of End User Choice, as defined in subsection 
(a) of this section, is required. 
(D) The requirements of this paragraph do not apply to pay telephones accessible 
to inmates of confinement facilities. 
(3) Access. 
(A) The PTS provider must: 
(i) provide access to operator services, which access must be available 24 hours 
a day, seven days a week, at no charge and without requiring a coin or credit 
card; 
(ii) provide access to directory assistance, which access must be available 24 
hours a day, seven days a week, at no charge and without requiring a coin or 
credit card; and 
(iii) provide access to the operator of a local exchange company that meets the 
requirements enumerated in sec.23.55(k)(3) and that serves the area from which 
the call is made, at no charge and without requiring a coin or credit card, 
either: 
(I) by directly routing all "0-" calls to such local exchange company operator, 
without charge to the caller; or 
(II) by transfer or redirection of the call by an OSP in accordance with the 
provisions of sec.23.55(i)(1)(A)(ii)(I)-(III). 
(B) The PTS provider must also allow access to other telecommunications 
utilities unless otherwise provided in clause (iii) of this subparagraph.
(i) Access to interexchange carriers by "950-XXXX" and "1-800" or "1-888" 
numbers must not be blocked. 
(ii) Access to interexchange carriers by "10XXX+0"  (whether "10XXX+0+" or 
"10XXX+0-") dialing must not be blocked if the end office serving the 
originating line has OLS capability. 
(iii) To prevent fraudulent use of the pay telephone, the access requirement is 
explicitly waived under the following conditions without prior application to 
the commission: 
(I) Access to interexchange carriers by "10XXX+0"  (whether "10XXX+0+" or 
"10XXX+0-") dialing may be blocked, if the end office serving the originating 
line does not have OLS screening capability. 
(II) Access to interexchange carriers by "10XXX+1" dialing may be blocked. 
(C) The requirements of this paragraph do not apply to pay telephones accessible 
to inmates of confinement facilities. 
(4) Other. 
(A) The PTS provider must: 
(i) ensure that end users can place all local and toll calls, except direct-
dialed international calls, from the pay telephone, including, but not limited 
to, operator-assisted international calls, collect calls, third number billed 
calls, and calling card calls; 
(ii) be responsible for the payment of charges for all local and toll messages, 
including, but not limited to, non-local directory assistance charges, except as 
provided in subsection (j) of this section; 
(iii) comply with all applicable federal, state and local laws and regulations 
including those concerning the use of pay telephones by disabled and/or hearing- 
or speech-impaired persons; 
(iv) not attach extension telephones to pay telephones, unless the pay telephone 
displays a notice that legibly and conspicuously states in capital letters, 
"YOUR CONVERSATION MAY BE OVERHEARD BECAUSE AN EXTENSION TELEPHONE IS ATTACHED 
TO THIS PHONE LINE." 
(v) not impose a time limit on local calls. 
(vi) the requirements of subparagraph (A)(i) and (v) of this paragraph do not 
apply to pay telephones accessible to inmates of confinement facilities. 
(B) If the PTS provider uses automated call completion technology to complete 
operator service calls, and if validation information is available for calls 
that the PTS provider (or a third-party billing and collection agent operating 
on behalf of the PTS provider) will bill through a certificated 
telecommunications utility, the PTS is required to validate the call and is 
allowed to submit the call for billing only if the call was validated.
(C) PTS may be connected to, from, or through a customer-provided 
telecommunications switching system, or local exchange carrier-provided central 
office switching system, provided that the PTS provider meets all requirements 
of this rule. The PTS provider must ensure that access to E-911, 911 and/or 0-is 
not blocked and must comply with all legislative and rule requirements regarding 
the operation of E-911 and 911. This access configuration is not allowed if it 
prevents usage measurement, by the local exchange carrier, of a local exchange 
carrier-provided COPTS access line. For purposes of this paragraph, local 
exchange carrier is defined as any entity holding either a Certificate of 
Convenience and Necessity, Certificate of Operating Authority, or Service 
Provider Certificate of Operating Authority. 
(f) Posting requirements for pay telephones. 
(1) The PTS provider must attach to each instrument a card that provides: 
(A) instructions in English and Spanish for accessing emergency service subject 
to the conditions contained in clauses (i) and (ii) of this subparagraph: 
(i) where 911 emergency service is available, the caller must be instructed to 
dial 911 and the PTS provider must allow 911 calls to be outpulsed directly to 
the Public Service Answering Point at no charge and without requiring a coin or 
credit card; or 
(ii) where 911 is not available, the caller must be instructed to dial "0" and 
dialing "0" must, at no charge and without requiring a coin or credit card, 
directly connect the caller with an OSP that is in compliance with the technical 
standards set forth in sec.23.55(g)(2)(A)-(F); 
(B) instructions for use, including specifically instructions for completion of 
local and toll calls, access to operator services, access to directory 
assistance, obtaining refunds, obtaining repair service, registering complaints 
at a designated toll-free telephone number, reporting out-of-service conditions, 
and using one-way calling (if the instrument is so equipped); and 
(C) notice stating the name, address, and 10 digit telephone number for the pay 
telephone owner or agent providing the set, and providing the name and toll-free 
telephone number of the owner or agent responsible for refunds and repairs; and 
(D) if a set use fee is charged, a notice that legibly and conspicuously states 
in capital letters: "THIS PAY TELEPHONE PROVIDER CHARGES (an amount up to $.25) 
FOR "1-800" CALLS, EXCEPT FOR "1-800" AND "1-888" ACCESS CALLS TO LONG DISTANCE 
CARRIERS", as provided in subsection (h)(1)(E) of this section. The notice shall 
include the cent symbol, as opposed to the dollar sign. 
(E) if an extension has been attached, a notice that legibly and conspicuously 
states in capital letters: "YOUR CONVERSATION MAY BE OVERHEARD BECAUSE AN 
EXTENSION IS ATTACHED TO THIS PHONE LINE." 
(2) If the PTS provider uses automated call completion technology to complete 
operator service calls, the PTS provider must also attach to each instrument a 
card that provides: 
(A) the name of the PTS, indicating that the PTS provider is the provider of 
operator services; 
(B) a statement that rate information is available, 24 hours a day, seven days a 
week at no charge; 
(C) instructions for obtaining rate information; 
(D) instructions for accessing the dominant carrier operator; and 
(E) a notice that states, "You may use another long distance carrier if that 
carrier serves this area. Follow your carrier's instructions, or contact the 
(insert name of certificated telecommunications utility) operator for 
assistance." 
(3) If the PTS provider subscribes to the services of an OSP that is required to 
comply with sec.23.55, the PTS provider remains liable for compliance with this 
paragraph, but may coordinate with the OSP so that information to be provided at 
the pay telephone set is not duplicated. If the PTS provider uses automated call 
completion technology to complete some operator service calls and subscribes to 
the services of an OSP that is required to comply with sec.23.55, the PTS 
provider must ensure that the information provided at the pay telephone set 
clearly informs the caller about which information applies to which operator 
service calls. 
(4) The requirements of this subsection do not apply to pay telephones 
accessible to inmates of confinement facilities. 
(5) If a pay telephone cannot receive incoming calls, the PTS provider shall 
place in a conspicuous location on the pay telephone a notice, in letters one-
quarter inch high, stating, "THIS TELEPHONE CANNOT RECEIVE TELEPHONE CALLS." 
Furthermore, the PTS provider shall not display the number of the pay telephone 
on any such telephone that does not receive incoming calls. 
(g) Charges. 
(1) A PTS provider must: 
(A) not impose on pay phone end users any charge for local directory assistance 
calls or calls made under Chapter 771 or 772 of the Texas Health and Safety 
Code; 
(B) not impose a rate or charge for a coin sent-paid call within the local 
exchange company's toll-free calling area that exceeds $.25, including those 
calls which are made toll-free through an Extended Area Service or Extended 
Local Calling proceeding, except this subparagraph does not apply to local 
operator service calls, as defined in subsection (a) of this section; 
(C) not impose a charge for "950-XXXX" calls, "10XXX+0", or "1-800" or "1-888"-
type calls to nonpresubscribed interexchange carriers (for example "1-800-
COLLECT" , "1-800-CALLATT", or "1-800-877-8000"); 
(D) not impose a charge for local calls from pay telephones to the 
Telecommunications Relay Service (TRS); 
(E) for local calls which are collect, operator-assisted or paid by credit card 
or calling card, not impose a charge which exceeds the highest applicable rate 
for such calls of any of the four largest interexchange carriers operating in 
this state; and 
(F) for credit card, calling card, or live or automated operator-handled toll 
calls, not charge a rate or total charge that exceeds the authorized rates and 
charges published, in the eight newspapers having the largest circulation in 
this state, on March 18, 1995, as set forth in subparagraph (G) of this 
paragraph. The requirements of this clause do not apply to incumbent local 
exchange companies offering pay telephone service. 
(G) Rate Caps For Intrastate Long Distance And Operator-Assisted Local Calls At 
Texas Pay Phones:  Mileage 1st Min. Add'l Min.  0-10 .2975 .2625  11-22 .3150 
.2975  23-55 .3325 .3150  56-124 .3675 .3500  125-292 .4025 .3850  293-Over 
.4200 .4025  Operator Service Charges:  Customer-Dialed Calling Card Station 
$2.50  Operator-Dialed Station $3.75  Person To Person $4.50  Long Distance 
Access Fee $1.00.
(2) The requirements of paragraph (1) (A) through (D) of this subsection do not 
apply to pay telephones accessible to inmates of confinement facilities. 
(h) Use fee for "1-800" and "1-888"-type calls. A PTS provider may impose a set 
use fee not exceeding $.25 at the point at which the call is initiated for each 
"1-800" or "1-888"-type call made from a pay telephone, provided that: 
(1) the pay telephone is owned by a local exchange company or is registered with 
the commission and certified to be in compliance with commission rules regarding 
PTS provision. A PTS shall register its pay telephones and certify their 
compliance through the registration process referenced in subsection (b) of this 
section; 
(2) the imposition of the use fee is not inconsistent with federal law; 
(3) the fee is not imposed for any local call, 911 call, local directory 
assistance call, or Telecommunications Relay Service (TRS). Long distance TRS 
calls charged to calling card or prepaid debit cards must be provided at rates 
which do not exceed those that would apply to a similar non-TRS call made using 
coin sent-paid service. 
(4) the fee is not imposed for a call that is covered by the Telephone Operator 
Consumer Services Improvement Act of 1990 (47 United States Code. Section 226) 
(for example, a call placed to the end user's long distance carrier of choice); 
and 
(5) the PTS provider causes to be posted on each pay telephone instrument, in 
plain sight of the user and in a manner consistent with existing commission 
requirements for posting information, the fact that the surcharge will apply to 
those calls, as required by subsection (f)(1)(D) of this section. 
(i) Applications for modification of information to be provided at the pay 
telephone set and for waivers of the requirement for access. 
(1) The commission may approve applications for modification of the requirements 
contained in subsection (f)(2) and (3) of this section upon showing of good 
cause by the PTS provider. The commission shall process applications for 
modification using the criteria and procedures set forth in sec.23.55(d)(4). 
(2) The commission may approve waivers to the access requirements of subsection 
(e)(3)(B) of this section to prevent fraudulent use of telephone services or for 
other good cause. Applications for waiver may be filed by the provider of pay 
telephone service. The commission shall process such applications for waiver 
using the criteria and procedures set forth in sec.23.55(i)(3)(B).
(j) Fraud protection. 
(1) Notwithstanding the provision of sec.23.55(i)(1)(C)(ii) that would otherwise 
require notice to interexchange carriers, an OSP must not bill the PTS provider 
for charges for any call billed to a pay telephone line where the call 
originated at that pay telephone by use of "10XXX+0", "10XXX+01", "950-XXXX", or 
"1-800" or "1-888" access codes, or where the call(s) originated at that pay 
telephone and otherwise reached an operator position, if the originating 
telephone line was subscribed to outgoing call screening and the call was placed 
after the effective due date of the outgoing call screening service order. 
(2) An OSP or PTS provider that uses automated call completion technology to 
complete operator service calls must not bill charges for any collect or third 
number billed call to a PTS provider if the pay telephone line to which the call 
was billed was subscribed to incoming call screening and the call was placed 
after the effective due date of the incoming call screening service order. 
(3) Any calls billed through a certificated telecommunications utility in 
violation of paragraphs (1) and (2) of this subsection must be removed from the 
PTS provider's bill by the certificated telecommunications utility upon 
identification and verification that the violation occurred. If it is determined 
that, at the time of the violation, the appropriate incoming or outgoing call 
screening was available to the OSP or PTS provider that uses automated call 
completion technology to complete operator service calls at the time of the 
call, the certificated telecommunications utility may return the charges for 
said call to the OSP or PTS provider as unbillable.
(4) Any calls billed directly by an OSP or PTS provider that uses automated call 
completion technology to complete operator service calls in violation of 
paragraph (1) or (2) of this subsection must be removed from the PTS provider's 
bill by the OSP or PTS provider upon identification. The OSP or PTS provider 
using automated call completion technology to complete operator service calls 
may request an investigation of such a call by the certificated 
telecommunications utility serving the pay telephone to which the call was 
billed. If the CTU determines that the appropriate incoming or outgoing call 
screening was not available to the OSP or PTS provider using automated call 
completion technology to complete operator service calls at the time of the 
call, the OSP or PTS provider may bill the charges for said call to the relevant 
certificated telecommunications utility. 
(k) Dominant certificated telecommunications utility responsibilities.
(1) A listing in the local telephone directory, for each pay telephone, must be 
provided to any provider of pay telephone service on request.
(2) Access for a subscriber of COPTS must be available in all exchanges. 
(3) Incoming and outgoing call screening must be provided where facilities are 
available. 
(4) Regardless of whether call screening is available, the certificated 
telecommunications utility will not bill any call, including, but not limited 
to, third number billed, collect, "0+" or "0-" calls, to a number which has been 
clearly identified to the certificated telecommunications utility operator at 
the time of the call attempt as a pay telephone. The certificated 
telecommunications utility will not be responsible for refunds or adjustments of 
charges for calls placed through non-certificated telecommunications utilities 
carrier operators, except as provided in subsection (j) of this section. 
(5) The certificated telecommunications utility shall not initiate a maintenance 
service call or take any other action in response to a trouble report on a 
customer-owned pay telephone until such time as requested by the pay telephone 
owner or its agent. The pay telephone owner must keep the certificated 
telecommunications utility advised of the identity of the pay telephone owner or 
agent authorized to request a maintenance service call. 
(6) Certificated telecommunications utility-provided directory assistance 
service must be provided at no charge to all PTS providers. However, a 
certificated telecommunications utility is not required to provide such service 
to pay telephones accessible to inmates of confinement facilities.
(7) The CTU must provide to a PTS provider using automated call completion 
technology to complete operator service calls the same services and information 
that the CTU provides to interexchange carriers in sec.23.55(j)(1) and (2), on 
the same prices, terms, and conditions that any interexchange carrier receives 
from the CTU. 
(8) DCTUs must file tariffs to offer direct dialed international call blocking  
("011+" and "10XXX+011+") as facilities become available.
(l) Enforcement of tariff requirements. If a COPTS subscriber is in violation of 
a tariff provision, the DCTU must notify the COPTS subscriber of the violation 
in writing. Such notice must refer to the specific tariff provisions being 
violated. The notice must state that the COPTS subscriber is subject to 
disconnection by the DCTU of the instrument(s) in violation of the tariff unless 
the COPTS subscriber corrects the violation and notifies the DCTU in writing, 
within 20 days of receipt of the notice of the violation, that the violation has 
been corrected. The DCTU may disconnect the instrument(s) that are in violation 
of the tariff on or after the 20th day after receipt of the notice by the COPTS 
subscriber, if the COPTS subscriber did not notify the DCTU in writing within 20 
days of receipt of the notice that the violation was corrected. However, if the 
COPTS subscriber has filed a complaint with the commission regarding the 
disconnection and has provided the DCTU with a copy of the complaint that 
indicates that the complaint has been filed with the commission's complaint 
office within 20 days of receipt of the notice of a violation from the DCTU, the 
DCTU may not disconnect the instrument(s) pending resolution of the complaint by 
the commission. 
(m) Violation of regulations. The commission may order disconnection of service 
for up to one year for repeat violations of commission rules. A PTS provider who 
violates commission rules is also subject to administrative penalties, civil 
penalties, and injunctive relief under Subtitle I of the Public Utility 
Regulatory Act of 1995. 
(n) Rate structure. DCTU rates for COPTS must be designed on a flat access line 
and a local message usage rate basis. Multi-element measured rates are 
prohibited. In areas without measuring capabilities, the DCTU may use a flat 
rate usage surrogate instead of a per call message rate. Measurement 
capabilities are defined as the capability in place to measure and bill pay 
telephone usage without incurring unreasonable expense. 
(o) Average schedule DCTUs. Rates for COPTS provided by an average schedule DCTU 
must be based on the average customer-owned pay telephone rates of four 
similarly-situated DCTUs. 
(p) Tracking Reports. A certificated telecommunications utility shall begin 
reporting the number of pay telephones in service after the 50th pay telephone 
access line has received service. Cooperatives and certificated 
telecommunication utilities with less than 31,000 access lines are exempt from 
filing pay telephone tracking reports. Tracking reports must be filed with the 
commission on a quarterly basis. This report must be filed in the Central 
Records Office of the commission, and a copy must be delivered to the 
Commission's Director of Industry Analysis. This report must include the 
following: 
(1) the number of customer-owned pay telephones installed and the number of 
local exchange carrier provided pay telephones installed; and
(2) the number of customer-owned pay telephones and local exchange carrier 
provided pay telephones displaced; 
(q) Special assembly tariffs. A DCTU with less than 50 pay telephone lines may 
provide COPTS pursuant to existing special assembly tariffs; however, in no 
event may a DCTU provide COPTS to more than ten special assembly arrangements. 
Special assembly rates must be computed in accordance with this section. DCTUs 
that provide COPTS pursuant to special assembly tariffs must enter into a 
written agreement with the COPTS subscriber that requires the subscriber to 
perform all functions and obligations specified in subsection (e) of this 
section. 
(r) Compliance. All DCTUs must file revised tariffs in compliance with this 
section within 45 days of the effective date of this section, or of any 
amendments thereto. 
(s) Severability. If any provision of this section or the application thereof to 
any person or circumstances is held invalid, such invalidity shall not affect 
other provisions or applications of this section that can be given effect 
without the invalid provision or application. It is the intent of the commission 
that the provisions of this section are severable. 
This agency hereby certifies that the adoption has been reviewed by legal 
counsel and found to be a valid exercise of the agency's authority.
Issued in Austin, Texas, on February 26, 1996.
TRD-9602699
Paula Mueller
Secretary of the Commission
Public Utility Commission of Texas
Effective date: March 18, 1996
Proposal publication date: September 19, 1995
For further information, please call: (512) 458-0100

TITLE 19. EDUCATION
PART I. Texas Higher Education Coordinating Board
CHAPTER 21.Student Services
SUBCHAPTER HH.Exemption Program for Texas National Guard/ROTC
Students
19 TAC sec.sec.21.1052-21.1069
The Texas Higher Education Coordinating Board adopts new sec.sec.21.1052-
21.1069, concerning Exemption Program For Texas National Guard/ROTC Students, 
with changes to the proposed text as published in the November 24, 1995, issue 
of the Texas Register (20 TexReg 9795).
The rules are being adopted to implement House Bill 1792, sec.8 passed by the 
74th Legislature. The rules will provide scholarships for 150 eligible students 
each year. The scholarships will cover the cost of tuition, fees and room and 
board for the first two years. 
Comments were received from the advisory committee the agency has been working 
with. The comments were neither for or against the proposed changes but rather 
about clarifying the rules so they could be administered easier. The agency 
agreed with the comments and some additional changes were made. 
The amendments are adopted under Texas Education Code, sec.54.212, which 
provides the Texas Higher Education Coordinating Board with the authority to 
adopt rules concerning Exemption Program For Texas National Guard/ROTC Students. 

sec.21.1052.Purpose.
The purpose of the program is to provide the state additional well-trained 
commissioned officers for the Texas Air and Army National Guard. 

sec.21.1053.Administration. 
The Texas Higher Education Coordinating Board shall administer funds 
appropriated to reimburse institutions for the exemptions and shall assist in 
the administration of the program. 

sec.21.1054.Delegation of Powers and Duties. 
The board delegates to the Commissioner of Higher Education the powers, duties 
and functions authorized by the Texas Education Code, Subchapter D, sec.54.212, 
as provided in this subchapter. 

sec.21.1055.Definitions. 
The following words and terms, when used in this subchapter, shall have the 
following meanings, unless the context clearly indicates otherwise.
Adjutant General-The Adjutant General's Office to which the Texas Air and Army 
National Guard report.
Board-The Texas Higher Education Coordinating Board.
Chief Executive Officer-The President of a participating ROTC institution. 
Commissioner-The commissioner of higher education, the chief executive officer 
of the board. 
Financial need-The cost of attendance at an eligible institution less the 
expected family contribution and any gift aid for which the student is eligible. 
The cost of attendance and family contribution are to be determined in 
accordance with board guidelines. The cost of attendance includes tuition, fees, 
books and supplies and living expenses.
Full-time Student-An individual enrolled for the equivalent of at least 12 
semester credit hours each semester, including military science courses. 
Minority-A student whose ethnic or racial group is Black (Non-Hispanic), 
Hispanic, American Indian or Alaskan Native, or Asian or Pacific Islander. 
Program Officer-The Texas National Air and Army National Guard/ROTC Exemption 
Program Officer designated by an eligible institution to represent the board for 
the program on that campus. 
Resident-A bona fide resident of the State of Texas as determined by the board 
and reflected in Chapter 21, Subchapter B, of board rules. Nonresident students 
eligible to pay resident tuition rates are excluded from this program. 
Room and Board Exemption-An exemption from the payment of an eligible 
institution's fees and charges for lodging and board as described in 
sec.21.1062(b) of this title (relating to Award Amounts).
ROTC-The Reserve Officers Training Corps for the Texas Air National Guard and 
the Texas Army National Guard. 
ROTC Institution-An institution of higher education, as defined by the Texas 
Education Code, sec.61.003 that maintains a Reserve Officers' Training Corps 
(ROTC).
Tuition and Fee Exemption-An exemption from the payment of all of an eligible 
institution's dues, fees, and enrollment charges, including correspondence 
courses, general property deposit fees, and student services fees. This does not 
include fees or charges for clothing, books or supplies.

sec.21.1056.Agreement with Adjutant General's Office. 
The board shall enter into an agreement with the Adjutant General's Office 
regarding the two agencies' relative responsibilities for the exemption program. 
The agreement shall include provisions regarding: 
(1) the appointment of Texas Air or Army National Guardsmen to the institutions' 
selection committees; 
(2) dissemination of program information through the use of National Guard 
recruiting offices; 
(3) the collection of payments made by students failing to complete the 
contractual obligations of the program; 
(4) projected staffing requirements for the Texas Air and Army National Guard; 
(5) tracking of students/participating Air and Army National Guardsmen through 
the period of their exemption program contract; and 
(6) development of rules and procedures governing probations or waivers of 
repayment requirements of the program authorized under the subchapter for 
participants who are in the service phase of program participation. 

sec.21.1057.Selection Committee. 
(a) Membership. Each eligible institution shall create a three-member selection 
committee. Two members of the committee are to be nominated by the institution's 
Chief Executive Officer and shall include a military or aerospace science 
faculty member. A commissioned officer of the Texas Air or Army National Guard 
shall be appointed to each committee by the adjutant general. Final membership 
of the committees shall be designated by the commissioner. 
(b) Duties. The selection committee shall: 
(1) review applications and conduct interviews of students who have applied for 
the exemption and determine which students qualify to receive the exemption, 
taking the following criteria into consideration: 
(A) individual qualifications, with emphasis on the leadership, communication, 
and organizational abilities and skills required of commissioned officers; 
(B) the financial need of the applicant; 
(C) the state's ethnic, racial and gender diversity; and 
(D) projected staffing requirements for the Texas Air and Army National Guard. 
(2) determine whether an extension of the two-year lodging and board exemption 
or four-year tuition and fee exemption should be granted for periods of active 
military duty required of the student, 
(3) determine whether probation or a waiver of repayment requirements of the 
program will be granted a student who has failed to meet program performance 
standards, and 
(4) determine whether an exemption recipient who loses his/her exempt status may 
serve the remainder of his/her contractual obligation as an enlisted member of 
the Texas Air or Army National Guard, subject to being accepted into and 
maintaining membership in the Texas Air or Army National Guard in the same 
manner as any other person. 

sec.21.1058.Eligible Institution. 
(a) An eligible institution is a public institution of higher education as 
defined in the Texas Education Code, sec.61.003, which maintains a Reserve 
Officers' Training Corps (ROTC). 
(b) The chief executive officer of an eligible institution which chooses to 
participate in the exemption program shall designate a Texas Air or Army 
National Guard/ROTC Exemption Program Officer. Unless otherwise specified by the 
chief executive officer of the institution, the Professor of Military Science of 
the institution shall be the board's on-campus agent to certify all 
institutional activities with respect to this program. 

sec.21.1059.Eligible Student. 
An eligible student is an undergraduate student who meets the following 
requirements: 
(1) is admitted to the institution's Reserve Officers' Training Corps program or 
is a participant in such a program; if the student is attending another public 
institution of higher education which provides for cross enrollment in the ROTC 
institution's ROTC program, the student may be considered for selection. 
(2) becomes a member of the Texas Army National Guard or the Texas Air National 
Guard and maintains satisfactory performance as prescribed by the Adjutant 
General's department as a member in good standing during the term of the 
student's contractual obligation; 
(3) possesses and maintains from the date of enrollment through completion of 
the degree program the academic and personal conduct standards established by 
each ROTC institution; 
(4) maintains full-time enrollment status; 
(5) enters into a contract with the State of Texas to accept a commission in the 
Texas Air or Army National Guard as a second lieutenant on graduation from the 
ROTC institution and serve no less than four years as a commissioned officer; 
(6) no later than the beginning of the third year of ROTC, requests and enters 
into a Guaranteed Reserve Forces Duty contract from their institution's ROTC 
department; 
(7) passes the physical examination and police records background check required 
for becoming a commissioned officer in the Texas Air or Army National Guard; and 
(8) has been accepted for admission to the participating ROTC institution. 

sec.21.1060.Dissemination of Information. 
The board shall provide for the distribution of information about the program to 
eligible institutions and coordinate activities with the adjutant general's 
office in the distribution of information to high schools. 

sec.21.1061.Sources of Funding. 
Expenditures in the program shall not exceed the amount appropriated by the 
State of Texas for that purpose. 

sec.21.1062.Award Amounts. 
(a) Tuition and fee exemption amounts. Selected recipients may receive an 
exemption for the amount of their actual tuition and fee charges at their 
institution for up to four years while enrolled as undergraduates. If the 
student's program of study extends to a fifth year, the exemption will not be 
extended to that additional year. 
(b) Room and board exemption amounts. Selected recipients may receive an 
exemption for an amount equal to their actual dormitory room and board expenses 
for their first two years at the institution. If the student is not living in 
campus housing, but the institution does have such housing, the amount to be 
awarded as a room and board exemption is the average charged for a student in 
that institution's campus housing. If the institution does not have campus 
housing, the exemption may equal the average room and board allowance reported 
to the board by public universities for that year for students who are receiving 
some type of financial assistance. 
(c) Exemptions and reimbursements to students. If student selection is completed 
prior to the payment of tuition and fees or room and board for a particular 
term, the institution is to exempt the selected students from the payment of the 
appropriate charges. If selection is completed after the payment of such 
charges, the institutions shall reimburse students for the appropriate amounts 
as indicated in subsections (a) and (b) of this section.
(d) Reimbursements for institutions. Each term, after selected students have 
enrolled at their institutions, the institutions may send the board, on a form 
provided by the board, a request for reimbursement for the exempted charges. The 
board, as soon as possible, will issue checks to the institutions for the 
indicated amounts. 
sec.21.1063.Allocation of Exemptions Among Institutions. 
(a) The maximum number of new exemptions which can be awarded statewide each 
year is 150. Each participating ROTC institution shall be allocated exemptions 
for at least two new students each academic year. The maximum number of exempt 
students for each ROTC institution will be determined by the percentage of the 
institution's Army and Air Force Reserve Officers' Training Corps enrollment in 
relation to statewide Army and Air Force Reserve Officers' Training Reserve 
Officers' Training Corps enrollment. The total number of enrolled students 
receiving exemptions through the program at any one time shall not exceed 600. 
(b) Percentages shall be calculated during the fall semester of every odd-
numbered year. 
(c) Institutions will have until October 15 of each year to inform the board of 
their selection of exemption recipients. If they fail to have their full 
allotment awarded as of that date, the board will reallocate the unused slots to 
other eligible institutions which have used their full allotments. 

sec.21.1064.Partial Awards.
An institution's selection committee may re-award the unused portion of an 
exemption left when an exemption recipient drops out of the program. However, 
the student selected to fill the unfinished exemption must meet the following 
criteria: 
(1) must have originally applied for an exemption in the same year as the 
student who dropped out of the program applied; i.e., was an alternate for that 
year. 
(2) meet the eligible student requirements as outlined in sec.21.1059 of this 
title (relating to Eligible Student); 
(3) agree to meet the same contractual obligations as students receiving the 
exemptions as entering freshmen; i.e., four years' service as a commissioned 
officer in the Texas Air or Army National Guard, or full repayment of the value 
of the exemptions extended, plus interest, if he/she fails to complete the 
requirements of the contract. 

sec.21.1065.The Application Process. 
(a) To apply for an exemption, the student must complete the full application 
packet for the Texas Air or Army National Guard/ROTC Exemption Program and 
submit it to the program officer at the ROTC institution he/she plans to attend. 
(b) The selection committee at the institution will review all applications and 
rank applicants according to a set of criteria developed by the board and the 
adjutant general's office. 
(c) Top candidates will be asked to sit for at least one interview, to be 
conducted using a set of questions developed by the board and the adjutant 
general's office. 
(d) After the interviews, top ranking candidates will be required to take the 
physical examination and submit to the police records background check required 
for commissioning officers. 
(e) The selection committee will finalize its decisions and notify the board of 
its selections by no later than October 15. 

sec.21.1066.The Texas Air or Army National Guard/ROTC Exemption Program 
Contract. 
Each participating student must enter into a contract with the State of Texas. 
In the contract: 
(1) the student must agree to: 
(A) be admitted to his/her institution's Reserve Officers' Training Corps 
program or be a participant in such a program. 
(B) become a member of the Texas Army National Guard or the Texas Air National 
Guard and maintain satisfactory performance as prescribed by the adjutant 
general's department as a member in good standing during the term of the my 
contractual obligation. 
(C) maintain from the date of first exemption under this program through 
completion of his/her degree, the academic and personal conduct standards 
established by the institution. 
(D) maintain full-time enrollment (12 credit hours per term, including military 
and aerospace science courses) or to immediately notify the commanding officer 
of his/her ROTC unit should he or she drop below the required level of 
enrollment. 
(E) immediately upon graduation from the ROTC institution, accept a commission 
in the Texas Air or Army National Guard as a second lieutenant and serve no less 
than four years as a commissioned officer. 
(F) repay to the state the amount of tuition, fees and other charges for which 
he/she received an exemption and which he/she has not yet repaid through 
service, plus interest as determined by the board, should the student fail to 
maintain exempt status or fail to accept a commission in the Texas Air or Army 
National Guard, or otherwise fail to meet the obligations of the contract, 
(G) understand that under circumstances requiring repayment, the full amount of 
his/her obligation is to be repaid by no later than the fifth anniversary of the 
date of the circumstances which required him/her to make repayment. 
(2) the institution must agree to: 
(A) provide the students selected for exemptions through this program a 
statement of the adjutant general's criteria for maintaining satisfactory 
performance as a member in good standing during the term of the student's 
contractual obligation, 
(B) provide the students selected for exemptions through this program a 
statement of the institution's required academic and personal conduct standards, 
(C) if reimbursement funding is provided by the state, award exemptions for the 
actual tuition and fees paid by the selected student at this institution for up 
to four years while the student meets the program's requirements. Should the 
student be called into active military service during his/her enrollment at this 
institution, the four year time frame may be extended at the institution's 
selection committee's discretion. 
(D) if reimbursement funding is provided by the state, award exemptions for room 
and board as indicated in sec.21.1062(b) of this title (relating to Award 
Amounts) to eligible students enrolled in their first two years at the ROTC 
institution. 

sec.21.1067.Noncompliance. 
(a) If the student/participating Air or Army National Guardsman fails to fulfill 
any obligation outlined in the exemption program contract, he or she shall be in 
noncompliance with the contract and will be required to repay any remaining 
portion of the his/her contractual obligation to the state unless the student 
has been granted probationary status by his/her institution's selection 
committee or the participating Air or Army National Guardsman is granted 
probationary status by the Adjutant General's office. Such repayment 
requirements will be outlined in the promissory note signed by the student upon 
receipt of an exemption under this program. 
(b) If an exemption recipient, after graduation and commission as a Texas Air or 
Army National Guard officer, is called into active duty, the time served in 
active duty may be counted against his/her four-year contractual service 
obligation to the State of Texas. 
(c) If an exemption recipient, after graduation, accepts a commission in a 
National Guard unit which is not a Texas Air or Army National Guard unit, the 
student will be obligated to repay the State of Texas for the funds awarded 
him/her through the Exemption Program for Texas Air and Army National Guard/ROTC 
Students. 
(d) If a graduate of the exemption program chooses to enter active duty service 
rather than serve in the Texas Air or Army National Guard, the exemption 
recipient will be obligated to repay the State of Texas for the funds awarded 
him/her through the Exemption Program for Texas Air and Army National Guard/ROTC 
Students. 

sec.21.1068.Probation for Participating Students. 
(a) If an exemption recipient fails to meet the performance standards of the 
program, he/she may apply to his/her institution's selection committee to be 
placed on probationary status. Such status shall not last for more than one 
term. 
(b) If the student raises his/her performance during the probationary period to 
meet program standards, full eligibility for the exemption program may be 
reestablished. 
(c) If the student fails to meet program standards by the end of the 
probationary period, the student will be considered to be in noncompliance and 
the repayment provisions outlined in sec.21.1067 of this title (relating to 
Noncompliance) will apply. 
(d) No exemption recipient may be granted probation more than twice during 
his/her enrollment period. 

sec.21.1069.Reporting Requirements. 
(a) In the fall of each odd-numbered year, each participating ROTC institution 
will be required to send census date (12th class day) enrollment statistics for 
its ROTC program to the board. 
(b) By October 15 of each year, the institution is to notify the board of its 
selections. If selections have not been made by this date, the unused exemptions 
will be reallocated by the board to other eligible institutions. 
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 27, 1996.
TRD-9602779
James McWhorter
Assistant Commissioner for Administration
Texas Higher Education Coordinating Board
Effective date: March 20, 1996
Proposal publication date: November 24, 1995
For further information, please call: (512) 483-6160

PART II. Texas Education Agency
CHAPTER 175.Proprietary Schools and Veterans Education
Editor's Note: Effective March 1, 1996, the Texas Workforce Commission will 
replace the Texas Education Agency as the administrative entity over the 
Proprietary Schools Program.
Pursuant to 1 TAC sec.91.23(e), the Proprietary Schools rules located in 19 TAC 
Chapter 175 are being transferred to 40 TAC Chapter 807. A table, which lists 
the old and new section numbers, is being published in this issue of the Texas 
Register in the table and graphics section.
Figure: 19 TAC Chapter 175
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 March 1, 1996.

PART VII. Texas Board of Examiners in the Fitting and Dispensing of Hearing Aids
CHAPTER 141.Definitions and Procedures
The State Committee of Examiners in the Fitting and Dispensing of Hearing 
Instruments (committee) with the approval of the Texas Board of Health (Board) 
adopts the repeal of sec.sec.141.1-141.13, 141.15, 141.17-141.22, 141.24, 
141.26-141.31, and 141.35-141.38; and new sec.sec.141.1-141.18, concerning 
fitting and dispensing of hearing instruments. New sec.sec.141.5, 141.8, 141.9, 
141.11, 141.13, 141.14, 141.16 and 141.18 are adopted with changes to the 
proposed text as published in the November 3, 1995, issues of the Texas Register 
(20 TexReg 9113). The repealed sections and new sec.sec.141.1-141.4, 141.6, 
141.7, 141.10, 141.12, 141.15 and 141.17 are adopted without change and 
therefore will not be republished.
The repealed sections and the rules promulgated by the Texas Board of Examiners 
in the Fitting and Dispensing of Hearing Aids, which was abolished by Acts 1993, 
73rd Legislature, Chapter 441, sec.29, effective September 1993. The new 
sections establish regulations for the State Committee of Examiners in the 
Fitting and Dispensing of hearing Instruments for the regulation and licensure 
of licensed fitters and dispensers of hearing aids as required by Texas Civil 
Statutes, Article 4566-1.04. 
These sections define terms commonly used in the profession, set the standards 
for licensure as a fitter and dispenser of hearing instruments, establish 
procedures for application, examination, licensure, continuing education, 
complaint submittal, and to provide procedures for denial, revocation or 
suspension of a license certificate. These sections also define what an 
individual must do to become licensed as a fitter and dispenser of hearing 
instruments. 
Comments concerning the proposed rules were received in writing and at a public 
hearing held in Austin in the month of December, 1995. The committee addressed 
each of these comments at it meeting on December 15, 1995. Following are the 
comments and the committees responses. 
Comment: Concerning sec.141.5(2), a commenter suggested clarifying the wording 
of the display of the certificate. 
Response: The committee agrees and has included the commenters suggestion in the 
rules. 
Comment: Concerning sec.141.8(a)(9), a commenter requested that the word "shall" 
be changed to "may." 
Response: The committee disagrees because only the 150-hour practicum has to be 
under direct supervision. 
Comment: Concerning sec.141.8(a), a commenter asked the committee to repeat the 
language of sec.141.8(b)(10) and (11) and change the reference of "apprentice 
permit holder" to "temporary permit holder," since the language applies to both 
temporary training permits and apprentice permits. 
Response: The committee agrees and has added the wording. 
Comment: Concerning sec.141.8(b)(7), a commenter wanted the committee to add 
language on sound level measurement under paragraph (7)(N). 
Response: The committee agrees and has added this language in new subparagraph 
(O). 
Comment: Concerning sec.141.8(c)(5), a commenter suggested deleting this 
language regarding a permit holder may not pay licensee providing supervision of 
the permit holder for the supervised experience. 
Response: The committee agrees and has deleted the paragraph, not covered in the 
law. 
Comment: Concerning sec.141.8(c)(1), a commenter suggested deleting this 
language regarding "the full professional responsibility for the fitting and 
dispensing of hearing instruments and related activities of a permit holder 
shall rest with the permit holder's supervisor." 
Response: The committee agrees and has deleted the paragraph, not covered in the 
law. 
Comment: Concerning sec.141.9, a commenter suggested that a new subsection (e) 
be added to read, "an individual who is exempt from the Act pursuant to Texas 
Civil Statutes, Article 4566-1.19 is not required to file a bond under this 
section." 
Response: The committee agrees since it cannot regulate individuals not licensed 
under the Act. The committee has added new subsection (e) to that section as 
suggested. 
Comment: Concerning sec.141.11, comments were received requesting that the 
surety bond issue be clarified. 
Response: The committee has added a new subsection (e) to sec.141.11 to clarify 
the issue. 
Comment: Concerning sec.141.11(a)(2), a commenter asked if the committee has the 
authority to make judgements in cases. 
Response: The committee's response is that, judgements are a court of law.
Comment: Concerning sec.141.16(a)(1), a commenter asked about compliance with 
other state and federal regulations. 
Response: The committee cannot regulate manufacturers and must adhere to FDA 
regulations. 
Comment: Concerning sec.141.16(c)(11), a commenter suggested changes to the 
wording, "A follow-up appointment within 30 days after the hearing instrument 
fitting shall be part of the contract." 
Response: The committee agrees and has reworded this paragraph as suggested.
Comment: Concerning sec.141.16(b)(11), commenter suggested changing the word 
"consumer" to "client" throughout the rules. 
Response: The committee agrees and has changed the wording throughout the rules. 
Comment: A commenter requested the committee to define the words "maintains" and 
"operates." 
Response: The committee referred the commenter to sec.141.2, definition of, 
"Ownership of dispensing practice." 
Comment: A commenter requested that the committee define "other acceptable 
verification techniques." 
Response: The committee's definition is, "includes but is not limited to mean 
real ear measurement, tympanometry and noise reducing earphones." 
Comment: The committee received several comments on the statute. 
Response: The committee elected not to respond to the comments regarding the 
statute. The comment period was only for the proposed rules. 
Comment: Concerning sec.141.16(c)(5), a commenter suggested changing the wording 
on the length of time. 
Response: The committee agrees and has changed the wording as suggested.
Comment: Concerning sec.141.16(c), a commenter asked if it is reasonable to 
expect the license holders to determine an earbone gap at 500, 1000, 2000 Hz of 
15 dB or greater if testing is conducted in noise at 50dBA? 
Response: The committee referred the commenter to sec.141.16(c)(5). 
Comment: Concerning sec.141.16(d), a commenter requested the deletion of 
paragraph (2), regarding the written contract for services. 
Response: The committee agrees and deleted this language. 
Comment: Concerning sec.141.16(e)(1)(A), a commenter requested changing the 
language "consumer's case history" to "pertinent case history." 
Response: The committee agrees and changed language. 
Comment: Concerning sec.141.16(e)(2), a commenter asked to delete the language, 
"hearing test results." 
Response: The committee agrees and deleted the language as requested. 
Comment: Concerning sec.141.16(g), a commenter questioned why audiometer testing 
is not conducted in a stationary acoustical enclosure. 
Response: The committee answered this question by referring the commenter to 
sec.141.16(g)(2)(A)-(C). 
Comment: Concerning sec.141.16(g)(4)(C), Figure 1, staff noted that a 
typographical error was made to the photoslick in the proposed version. The 
third column should read "1000 octave band interval", not 100. 
Response: The committee corrected this error in the adopted rule. 
In addition to the changes made as a result of comments, minor editorial changes 
were also made for clarification purposes. 
Comments were received from the Texas Hearing Aid Association and the State 
Board of Examiners for Speech-Language Pathology and Audiology. The commenters 
were generally in favor of the rules; however, they raised questions, offered 
comments for clarification concerns, and made recommendations concerning 
specific provisions in the rules. 

sec.sec.141.1-141.13, 141.15, 141.17-141.22, 141.24, 141.26-141.31, 141.35-
141.38
The repeals are adopted under Texas Civil Statutes, Article 4566, sec.4, which 
require the State Committee of Examiners in the Fitting and Dispensing of 
Hearing Instruments to adopt rules, with the approval of the Texas Department of 
Health, that are reasonably necessary for the proper performance of its duties 
under this Act.
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602767
Susan K. Steeg
General Counsel
Texas Board of Examiners in the Fitting and Dispensing of Hearing Aids
Effective date: March 19, 1996
Proposal publication date: November 3, 1995
For further information, please call: (512) 458-7236

22 TAC sec.sec.141.1-141.18
The new sections are adopted under Texas Civil Statutes, Article 4566, sec.4, 
which require the State Committee of Examiners in the Fitting and Dispensing of 
Hearing Instruments to adopt rules, with the approval of the Texas Department of 
Health, that are reasonably necessary for the proper performance of its duties 
under this Act.

sec.141.5.Client Information.
A licensee shall: 
(1) inform each client of the name, address, and telephone number of the 
committee office for the purpose of reporting violations of Texas Civil 
Statutes, Articles 4566-1.01 et seq (Act), or this chapter on: 
(A) each written contract for services; and 
(B) a sign prominently displayed in the primary place of business; 
(2) display the license certificate and current renewal card issued by the 
committee and prominently displayed in the primary place of business; 
(3) not display a license certificate or current renewal card issued by the 
committee which has been reproduced or is expired, suspended, or revoked; and 
(4) not make any alterations on a license certificate or renewal card issued by 
the committee.

sec.141.8.Issuance of Permits.
(a) Temporary training permit. 
(1) The training period begins on the date of the issuance of the temporary 
permit. 
(2) The committee shall issue a temporary training permit to an applicant who: 
(A) has filed an application form and temporary training permit fee; and 
(B) has met all of the academic requirements for licensure. 
(3) The temporary training must be done under the supervision of an individual 
who holds a valid license, from the committee, to fit and dispense hearing 
instruments in the State of Texas. 
(4) A person shall obtain a temporary training permit prior to person receiving 
supervision. 
(5) A temporary training permit holder shall maintain a temporary training 
permit during his or her supervised practicum experience. 
(6) The supervising fitter and dispenser of hearing instruments must submit a 
written notification of termination of supervision to the committee and the 
temporary training permit holder within ten days of cessation of supervision. 
The committee notification of termination of supervision shall include: 
(A) the name, temporary training permit number, and signature of the supervisor, 
and the name and license number of the supervisee; 
(B) a statement that supervision has terminated; 
(C) the reason for termination; 
(D) the date of termination of supervision; and 
(E) a statement indicating whether the supervisor and the temporary training 
permit holder has complied with the requirements of Texas Civil Statutes, 
Articles 4566-101 et seq (Act), and this chapter. 
(7) The temporary training permit holder shall apply to the committee for 
transfer of supervision within 60 days of notification of termination to the 
committee. One extension of 60 days of the transfer of the supervision 
requirements may be granted upon written request to the committee by the 
temporary training permit holder. 
(8) A temporary training permit holder shall be required to have at least 150 
hours of directly supervised practicum that shall include the following: 
(A) 25 contact hours of pure tone air conduction, bone conduction, and speech 
audiometry with both recorded and live voice with 15 of the required hours being 
with actual clients; 
(B) 25 client hours of hearing instrument evaluation including field 
measurements with recorded and live voice; 
(C) 20 contact hours of instrument fittings with actual consumers; 
(D) ten contact hours of earmold orientation types, uses, and terminology; 
(E) five contact hours of earmold impressions and otoscopic examinations of the 
ear; 
(F) 15 contact hours of troubleshooting of defective hearing instruments; 
(G) 20 contact hours of case history with actual consumers; 
(H) ten contact hours of the laws governing the licensing of persons fitting and 
dispensing hearing instruments and Federal Food and Drug Administration and 
Federal Trade Commission regulations relating to the fitting and dispensing of 
hearing instruments; and 
(I) 20 hours of supplemental work in one or more of the areas described in 
subparagraphs (A)-(H) of this paragraph. 
(9) On completion of the 150 hours of directly supervised practicum under 
paragraph (8) of this subsection a temporary training permit holder shall 
complete the permit holder's training under the indirect supervision of the 
permit holder's supervisor. 
(10) The dated and notarized signature of the supervisor or supervisors who can 
formally attest to the temporary permit holder's supervised experience. 
(11) The supervised experience forms must be completed by the temporary permit 
holder and the supervisor or supervisors and contain: 
(A) the name of the temporary permit holder; 
(B) the name, address, and licensure status of the temporary permit holder's 
supervisor and supervisors; 
(C) the name and address of the business or organization where the temporary 
permit holder practices; 
(D) the inclusive dates of the supervised experience; 
(E) the supervisor's notarized signature; and 
(F) the temporary permit holder's notarized signature. 
(b) Apprentice permit. 
(1) A temporary training permit holder who has taken all parts of the 
examination given by the committee and has passed all parts of the examination 
with a score of 70% or greater shall be issued an apprentice permit to fit and 
dispense hearing instruments. An apprentice permit remains valid for one year 
unless it is extended by the committee for an additional period not to exceed 
six months. 
(2) The committee shall issue an apprentice permit to an applicant who: 
(A) has filed an application form and apprentice permit fee; and 
(B) has taken and passed all parts of the examination with a score of 70% or 
greater. 
(3) The supervisor shall periodically conduct a formal evaluation of the 
applicant's progress in the development of professional skills. 
(4) A supervisor of an apprentice permit holder is responsible for services to 
the client that may be performed by the apprentice permit holder. The supervisor 
must ensure that all services provided are in compliance with the Act and this 
chapter. 
(5) The apprenticeship must be done under the supervision of an individual who 
holds a valid license, from the committee, to fit and dispense hearing 
instruments in the State of Texas. 
(6) Prior to the issuance of an apprentice permit, the supervisor's affidavit 
form must be filed with the committee office. 
(7) The apprentice permit holder shall complete 18 hours of classroom continuing 
education in one or more of the following approved subjects: 
(A) basic physics of sound; 
(B) structure and function of hearing instruments; 
(C) fitting of hearing instruments; 
(D) pure tone audiometry, including air conduction testing and bone conduction 
testing; 
(E) live voice and recorded voice speech audiometry; 
(F) masking when indicated for air conduction, bone conduction, and speech; 
(G) recording and evaluation of audiogram and speech audiometry to determine the 
candidacy for hearing instruments; 
(H) selection and adaption of hearing instruments, testing of hearing 
instruments, and verification of aided hearing instrument performance; 
(I) taking of earmold impressions; 
(J) verification of hearing instrument fitting and functional gain measurements 
using a calibrated system; 
(K) anatomy and physiology of the ear; 
(L) counseling and aural rehabilitation of an individual with a hearing 
impairment for the purpose of fitting and dispensing hearing instruments; 
(M) use of an otoscope for the visual observation of the entire ear canal; 
(N) laws, rules, and regulations of this state and the United States; and 
(O) the proper procedures for sound level measurements. 
(8) The supervisor must submit written notification of cessation of supervision 
to the committee and the apprentice permit holder within ten days of cessation 
of supervision. Notification of termination of supervision shall include: 
(A) the name and permit number of the apprentice, and the signature of the 
supervisor; 
(B) a statement that supervision has been terminated; 
(C) the reason for termination; 
(D) the date of termination of supervision; and 
(E) a statement indicating whether the supervisor and the apprentice permit 
holder have complied with the requirements of the Act and this chapter. 
(9) The apprentice permit holder shall apply for transfer of supervision within 
60 days of notification of termination to the committee. Upon the apprentice 
permit holder's written request to the committee, one extension of 60 days of 
the transfer of supervision requirement may be granted. 
(10) The dated and notarized signature of the supervisor or supervisors who can 
formally attest to the apprentice permit holder's supervised experience. 
(11) The supervised experience forms must be completed by the apprentice permit 
holder and the supervisor or supervisors and contain: 
(A) the name of the apprentice permit holder; 
(B) the name, address, and licensure status of the apprentice permit holder's 
supervisor or supervisors; 
(C) the name and address of the business or organization where the apprentice 
permit holder practices; 
(D) the inclusive dates of the supervised experience; 
(E) the supervisor's notarized signature; and 
(F) the apprentice permit holder's notarized signature. 
(c) Other conditions for supervised experience for temporary training permit or 
apprentice permit. 
(1) A supervisor may not supervise more than two permit holders of any type at 
one time. 
(2) A supervisor may delegate training activities to another supervisor or 
licensees for the supervision of a temporary training permit holder. The 
supervisor shall be responsible for the day-to-day supervision of a trainee. The 
supervisor shall also be ultimately responsible for services provided to a 
client by the temporary training permit holder. A supervisor shall not delegate 
the responsibility of supervision.

sec.141.9.Issuance of Licenses. 
(a) Application form. The committee will send a licensure form to each applicant 
who has satisfactorily fulfilled all requirements for licensure. The applicant 
must complete the form and return it to the committee office with the licensure 
fee. 
(b) License certificate. Upon receiving the licensure form and fee, the 
committee shall issue to the licensee, a license certificate which indicates the 
licensee's name and license number. 
(1) Regular licenses shall be signed by the committee members and be affixed 
with the seal of the committee. 
(2) Temporary training permits and apprentice permits shall be signed by the 
committee president and executive director. 
(3) Any license certificate or renewal card issued by the committee remains the 
property of the committee and must be surrendered to the committee on demand. 
(c) Replacement card. The committee will replace a lost, damaged, or destroyed 
license certificate or renewal card upon a written request from the licensee and 
payment for a duplicate document. Requests must include a notarized statement 
detailing the loss or destruction of the licensee's original license or card or 
be accompanied by the damaged certificate or card. 
(d) Duplicate card. Upon the written request and payment of a duplicate document 
fee by a licensee, the committee will provide a licensee with a duplicate 
certificate for a second place of practice which is designated in a licensee's 
file.

sec.141.11.Filing of a Bond.
(a) A sole proprietor, partnership, corporation, or other legal entity engaged 
in the fitting and dispensing of hearing instruments shall file a bond or a 
surety in lieu of a bond in the amount of $10,000 with the committee conditioned 
on the promise to pay all: 
(1) taxes and contributions due to the state and political subdivisions of the 
state by the sole proprietor, partnership, corporation, or other legal entity; 
and 
(2) judgements that the sole proprietor, partnership, corporation, or other 
legal entity may be required to pay for negligently or improperly dispensed 
hearing instruments or for breaching a contract relating to the dispensing of 
hearing instruments. 
(b) A sole proprietor, partnership, corporation, or other legal entity subject 
to subsection (a) of this section may file with the committee a cash deposit or 
other negotiable security acceptable to the committee in the amount required in 
subsection (a) of this section in lieu of a bond. 
(c) The bond for a licensee must be received on or before the date of issuance 
of the license. 
(d) The bond for a non-licensed entity engaged in the fitting and dispensing of 
hearing instruments must be received within 180 days of the effective date of 
these rules, or prior to the initiation of the fitting and dispensing of hearing 
instruments following such 180 day time limit. 
(e) An individual who is exempt from the Act pursuant to Texas Civil Statutes, 
Article 4566-1.19 is not required to file a bond under this section.

sec.141.13.Renewal of License. 
(a) General. 
(1) A regular license must be renewed annually. 
(2) A person who holds a regular license must have fulfilled any continuing 
education requirements prescribed by the committee in sec.141.14 of this title 
(relating to Continuing Education Requirements) in order to renew a license. 
(3) Each person who holds a regular license is responsible for renewing the 
license and shall not be excused from paying late renewal fees or renewal 
penalty fees. 
(4) The committee shall deny the renewal of the license of a licensee who is in 
violation of Texas Civil Statutes, Articles 4566-1.01 et seq (Act) or this 
chapter at the time of application for renewal. 
(5) A person whose license has expired shall return his or her license 
certificate to the committee. 
(6) A persons whose license has expired shall not practice the fitting and 
dispensing of hearing instruments. 
(7) The deadlines established for renewals, late renewals, and license renewal 
penalty fees in this section are based on the postmarked date of the 
documentation submitted by the licensee if legible and on the date stamped at 
the Texas Department of Health if the postmark is not legible. 
(8) The committee shall deny renewal upon any findings relating to defaults on 
guaranteed students loans as required by the Education Code, sec.57.491. 
(b) Staggered renewals. The committee shall use a staggered system for license 
renewals. 
(1) The renewal date of a license shall be the last day of the licensee's birth 
month. 
(2) Licensure fees will be prorated if the licensee's initial renewal date is 
determined by the committee to have occurred less than 12 months after the 
original date of licensure. 
(3) Prorated fees may be rounded off to the nearest dollar. 
(c) License renewal. 
(1) At least 45 days prior to the expiration of a regular license, the committee 
will send notice to a licensee that includes: 
(A) the expiration date of the license; 
(B) a schedule of the renewal and late fees; and 
(C) the number of hours needed to complete any continuing education 
requirements. 
(2) A license renewal form shall be furnished to licensees eligible for renewal. 
The form shall require the licensee to provide: 
(A) current addresses; 
(B) telephone numbers; and 
(C) information regarding continuing education that has been completed. 
(3) The committee shall not renew a license until it receives the: 
(A) completed license renewal form; 
(B) renewal fee and any late fees; 
(C) required documents detailed in this section; and 
(D) the documentation showing that the licensee has complied with applicable 
continuing education requirements. 
(4) The committee shall issue a renewal certificate to a licensee who has met 
all the requirements for renewal. The licensee must display the renewal 
certificate in association with the license. 
(5) The license of a person who made a timely and sufficient request for renewal 
of his or her license does not expire until the application for renewal is 
finally determined by the committee; or in case the application is denied or the 
terms of the new license limited, until the last day for seeking review of the 
committee's order or a later date fixed by order of a reviewing court. 
(6) A license that is not revoked or suspended as a result of a formal hearing 
shall be renewed provided that all other requirements are met. 
(7) In the case of delay in the license renewal process because of a formal 
hearing, late fees and penalty fees shall not apply. 
(8) Each license to fit and dispense hearing instruments shall be issued for the 
term of one year and shall, unless suspended or revoked, be renewed annually on 
payment of the renewal fee and compliance with this section by the licensee. 
(9) A licensee may renew an unexpired license by meeting the requirements of 
this section and by paying the required renewal fee to the committee before the 
expiration date of the license. 
(10) If a person's license has been expired for not more than 90 days, the 
person may renew the license by paying the required renewal fee and a fee that 
is one-half of the examination fee for the license to the committee. 
(11) If a person's license has been expired for more than 90 days but less than 
two years, the person may renew the license by paying all unpaid renewal fees 
and a fee that is equal to the examination for the license to the committee. 
(12) If a person's license has been expired for two years or more, the person 
may not renew the license. The person may obtain a new license by submitting to 
re-examination and complying with the requirements and procedures for obtaining 
an original license set out in this chapter. 
(13) Before a license can be renewed, the committee shall require certification 
that all testing equipment, both portable and stationary, used by the licensee 
has been calibrated within one year prior to the renewal date. 
(14) Before a license can be renewed, a licensee must demonstrate compliance 
with the requirements of continuing education established by the committee under 
the Act in sec.141.14. 
(15) Fitting and dispensing a hearing instrument without a current license as 
provided by this subsection shall be subject to the same penalties as fitting 
and dispensing a hearing instrument without a license. 
(16) Before a license can be renewed, the licensee must submit a copy of the 
written contract for services employed by the licensee.

sec.141.14.Continuing Education Requirements. 
(a) Purpose. The purpose of this section is to establish the continuing 
education requirements which a licensee must complete every year for the renewal 
of a regular license. These requirements are intended to maintain and improve 
the quality of professional services in fitting and dispensing of hearing 
instruments provided to the public and to keep the licensee knowledgeable of 
current research, techniques and practices, and to provide other resources which 
will improve skill and competence in the fitting and dispensing of hearing 
instruments. 
(b) General requirements. The committee shall require that a fitter and 
dispenser licensed under Texas Civil Statutes, Articles 4566-1.01 et seq (Act) 
and this chapter, complete 20 clock-hours of continuing education each year. For 
purposes of this section: 
(1) each year runs concurrently with the effective date of a license issued 
under the Act and this chapter; 
(2) a clock hour shall be 60 minutes of attendance; and 
(3) no more than five clock hours of the 20 clock-hours required may be obtained 
from a course sponsored by a manufacturer. 
(c) Exemption by examination. A licensee may take the state examination given by 
the committee or its designee, upon written request to the committee. A licensee 
who pays the examination fee and passes the examination shall be exempt from the 
continuing education requirement for the year that the test is taken. 
(d) Credit hours for publications. A licensee may be credited with continuing 
education credit hours for a published book or article written by the licensee 
that contributes to the licensee's professional competence. 
(1) No more than five credit hours for preparation of a publication may be 
claimed by a licensed holder in an annual reporting period. 
(2) The continuing education subcommittee may grant credit hours based on the 
degree that the published book or article advanced knowledge regarding the 
fitting and dispensing of hearing instruments. 
(e) Non compliance. A licensee who has not complied with the continuing 
education requirements of this section may not be issued a renewal license 
unless the licensee: 
(1) has served in the regular armed forces of the United Stated during any part 
of the 12 months before the annual reporting date; 
(2) submits proof from an attending physician that the licensee suffered a 
serious disabling illness or physical disability that prevented compliance with 
the requirements of this section during the 12 months before the annual 
reporting date; or 
(3) was licensed for the first time during the 12 months before the annual 
reporting date. 
(f) Attendance. A licensee shall provide written proof of attendance and 
completion of an approved course on a form prescribed by the committee. 
(g) Renewal period for continuing education. Continuing education requirements 
for renewal shall begin on the first day of a licensee's renewal year and end on 
the last day of the licensee's renewal year. 
(h) Course categories. Continuing education shall be acceptable if the education 
falls in one or more the following categories: 
(1) participation in those sections of programs (e.g., institutes, seminars, 
workshops, and conferences) which are designed to increase professional 
knowledge related to the practice of fitting and dispensing of hearing 
instrument and are conducted by persons qualified within their respective 
professions by appropriate state license or certification where state licensure 
or certification exists, or in states outside of Texas where licensure or 
certification does not exist by completion of a degree in audiology or a related 
field and certification by their respective professional associations if such 
certification exists; 
(2) completion of academic courses at an accredited institution in areas 
supporting development of skills and competence in the fitting and dispensing of 
hearing instruments; and 
(3) participation or teaching in programs directly related to the fitting and 
dispensing of hearing instruments (e.g., institutes, seminars, workshops, or 
conferences) which are approved or offered by an accredited college or 
university. 
(i) Requests for credit. Individuals and organizations may initiate requests for 
committee approval and hour credit of specific programs for continuing education 
credit at least 30 days prior to the first scheduled presentation. 
(1) Each licensee is responsible for providing the information necessary for the 
committee to make a determination of the applicability of the program to the 
continuing education requirements. 
(2) Sponsors may initiate their own requests and when approval is obtained, 
shall announce, prior to the commencement of the continuing education activity, 
the number of hours approved and the content of the continuing education 
activity as submitted and pre-approved by the committee. When approval is 
requested by a sponsor, the sponsor shall provide each participate with written 
documentation of participation which shall set forth that participant's name, 
the number of approved continuing education hours, the title and date(s) of the 
program as approved by the committee, and the signature of the sponsor. 
(j) Evaluation of continuing education programs. Each continuing education 
program submitted by a licensee or approved sponsor will be evaluated on the 
basis of the following criteria: 
(1) relevance of the subject matter to increase or support the development of 
skills and competence in the fitting and dispensing of hearing instruments or in 
areas of studies or disciplines related to fitting and dispensing of hearing 
instruments; 
(2) objectives of specific information and skills to be learned; 
(3) subject matter, educational methods, materials, and facilities utilized, 
including the frequency and duration of sessions, and the adequacy to implement 
learner objectives; and 
(4) sponsorship and leadership of program including: 
(A) the name of the sponsoring individual(s) or organization(s); 
(B) program leaders, if different from sponsor(s); and 
(C) contact person if different from the preceding. 
(k) Academic requirements. Completion of academic work shall be in accordance 
with subsection (j) of this section. Official transcripts from accredited school 
showing completion of hours in appropriate areas for which the licensee received 
at least a passing grade is required. 
(l) Approved credit. The committee shall credit continuing education experience 
as follows. 
(1) Parts of programs which meet the criteria of this section shall be credited 
on a one-for-one basis with one clock-hour of credit for each clock-hour spent 
in the continuing education activity. 
(2) Teaching in programs which meet the committee's criteria as set out in this 
section shall be credited on the basis of one clock-hour of credit for one 
clock-hour taught plus two clock-hour credits for preparation for each hour 
taught. No more than ten of the 20 hours of required continuing education can be 
credited under this option, and credit may be granted for the same presentation 
or program not more than twice during any continuing education period. The 
remaining hours of continuing education required in each renewal period must be 
obtained under another of the available options in accordance with paragraphs 
(1) or (3) of this subsection. 
(3) Completion of academic work at an institution which meets the accreditation 
standards acceptable to the committee shall be credited on the basis of 15 
clock-hours of credit for each semester hour, ten clock-hours of credit for each 
quarter hour completed and for which a passing grade was received as evidenced 
on an official transcript. 
(m) Reporting. The requirements for reporting continuing education shall be as 
follows. 
(1) A licensee may submit the required report at renewal time. Continuing 
education must be reported and approved prior to renewal at the end of the 
renewal period. Each licensee is responsible for ensuring that the committee 
receives timely notice of the licensee's completion of continuing education 
activities. 
(2) Each report must be accompanied by appropriate documentation of the 
continuing education claimed on the report as follows: 
(A) for a program attended, signed certification by a program leader or 
instructor of the licensee's participation in the program by certificate, letter 
or letterhead of the sponsoring agency, or official continuing education 
validation form of the sponsoring agency; 
(B) for teaching or consultation in approved programs, a letter on the 
sponsoring agency's letterhead giving the name of the program, location, dates, 
and subjects taught and indicating total clock-hours credited; 
(C) for completion of work from accredited schools, an official transcript 
showing course credit with at least a passing grade; or 
(D) for official verification of a course at a regionally accredited academic 
institution, a letter from the dean of the academic institution or professor 
which includes the actual number of clock-hours attended. 
(n) Disapproved credit. The committee will not give continuing education credit 
to any licensee for: 
(1) education incidental to the regular professional activities of a licensee 
such as knowledge gained through experience or research; 
(2) organization activity such as serving on committees or councils or as an 
officer in a professional organization; and 
(3) any program which does not fit the types of acceptable continuing education 
in this section. 
(o) Mandatory continuing education. The mandatory five of the 20 required 
continuing education hours will be conveyed in the committee newsletter and 
renewal packet.

sec.141.16.Conditions of Sale. 
(a) Compliance with other state and federal regulations. A licensee or permit 
holder under Texas Civil Statutes, Articles 4566-1.01 et seq (Act) shall: 
(1) adhere to the Federal Food and Drug Administration regulations in accordance 
with 21 Code of Federal Regulations (CFR), sec.801.420 and sec.801.421; 
(2) receive a written statement before selling a hearing instrument that is 
signed by a physician or surgeon duly licensed by the Texas State Board of 
Medical Examiners, who specializes in diseases of the ear and states that the 
client's hearing loss has been medically evaluated during the preceding six-
month period and that the client is age 18 or older, the licensee may inform the 
client that the medical evaluation requirement may be waived as long as the 
licensee: 
(A) informs the client that the exercise of the waiver is not in the client's 
best health interest; 
(B) does not encourage the client to waive the medical evaluation; and 
(C) gives the client an opportunity to sign a statement that says: "I have been 
advised by (licensee's or permit holder's name) that the Food and Drug 
Administration has determined that my best health interest would be served it I 
had a medical evaluation by a licensed physician (preferably a physician or 
surgeon who specializes in diseases of the ear) before purchasing one or more 
hearing instruments. I do not wish to receive a medical evaluation before 
purchasing a hearing instrument"; 
(3) not sell a hearing instrument to a person under 18 years of age unless the 
prospective user, parent, guardian has presented to the licensee or permit 
holder a written statement signed by a licensed physician specializing in 
diseases of the ear that states that the client's hearing loss has been 
medically evaluated and the client may be considered a candidate for a hearing 
instrument. The evaluation must have taken place within the preceding six 
months; and 
(4) advise clients who appear to have any of the following otologic (hearing) 
conditions to consult promptly with a physician: 
(A) visible, congenital or traumatic deformity of the ear; 
(B) history of active drainage from the ear within the previous 90 days; 
(C) history of sudden or rapidly progressive hearing loss within the previous 90 
days; 
(D) acute or chronic dizziness; 
(E) unilateral hearing loss of sudden or recent onset within the previous 90 
days; 
(F) audiometric air-bone gap equal to or greater than 15 decibels at 500 hertz 
(Hz), 1,000 Hz, and 2,000 Hz; 
(G) visible evidence of significant cerumen accumulation or a foreign body in 
the ear canal; and 
(H) pain or discomfort in the ear. 
(b) Guidelines for a 30-day trial period. 
(1) It is the intent of this section that all clients be informed of a 30-day 
trial period by written contract for services and all charges associated with 
such trail period be included in this written contract for services, which shall 
include the name, address, and telephone number of the State Committee of 
Examiners in the Fitting and Dispensing of Hearing Instruments. 
(2) Any client of one or more hearing instruments shall be entitled to a refund 
of the purchase price advanced by the client for the hearing instrument(s), less 
the agreed-upon amount associated with the trial period, upon return of the 
instrument(s), in good working order, to the licensee within the 30-day trial 
period ending 30 days from the date of delivery. Should the order be canceled by 
the client prior to the delivery of the hearing instrument(s), the licensee may 
retain the agreed-upon charges and fees as specified in the written contract for 
services. The client shall receive the refund due no later than the 30th day 
after the date on which the client cancels the order or returns the hearing 
instrument(s), in good working order, to the licensee. 
(c) Written contract for services to client-client protection. Upon the sale of 
any hearing instrument(s), the licensee or permit holder shall provide the 
client with a signed, written contract for services containing the following: 
(1) the date of sale; 
(2) the make and model of the hearing instrument(s); 
(3) the name, address, and telephone number of the principal place of business 
of the licensee; 
(4) a statement that the hearing instrument is new, used, or reconditioned; 
(5) the length of time and other terms of the guarantee and by whom the hearing 
instrument is guaranteed; 
(6) a copy of the written forms (relating to waiver forms); 
(7) a statement on or attached to the written contract for services, in no 
smaller than ten-point bold type, as follows: "The client has been advised at 
the outset of his relationship with the undersigned fitter and dispenser of 
hearing instruments that any examination or representation made by a licensed 
fitter and dispenser of hearing instruments in connection with the fitting and 
selling of the hearing instrument(s) is not an examination, diagnosis or 
prescription by a person duly licensed and qualified as a physician or surgeon 
authorized to practice medicine in the State of Texas and, therefore, must not 
be regarded as medical opinion or advice"; 
(8) a statement on the face of the written contract for services, in no smaller 
than ten-point bold type, as follows: "If you have a complaint against a 
licensed fitter and dispenser of hearing instruments, you may contact the State 
Committee of Examiners in the Fitting and Dispensing of Hearing Instruments, 
1100 West 49th Street, Austin, Texas 78756-3183, 1-800-942-5540"; 
(9) the licensee's or permit holder's printed name, signature and license or 
permit number; 
(10) the supervisory arrangement reflected on a written contract for services by 
signature of both the permit holder and licensee with both the permit holder's 
license number and the licensee's license number; and 
(11) a follow-up appointment within 30 days after the hearing instrument fitting 
shall be part of the contract. 
(d) Terms of sale. 
(1) There shall be a full and complete disclosure of the cost of financing the 
purchase of hearing instruments. 
(2) If the initial price of the hearing instrument(s) furnished is reduced by 
trade-in allowance or discount, the written contract for services shall 
conspicuously state: 
(A) the initial price of the aid before trade-in allowance or discount; 
(B) the amount of the trade-in allowance or discount; and 
(C) the final price to the consumer. 
(e) Record keeping. 
(1) It is the licensee's responsibility to keep records on every client to whom 
the licensee renders service in connection with the fitting and dispensing of 
hearing instruments. Such records shall be preserved for at least five years 
after the fitting and dispensing of the hearing instrument(s) to the client. If 
other hearing instruments are subsequently fitted and dispensed to that client, 
cumulative records must be maintained for at least five years after the latest 
fitting and dispensing of the hearing instrument(s) to that client. The records 
must be available for the committee's inspection and will include but not be 
limited to the following: 
(A) pertinent case history; 
(B) source of referral and appropriate documents; 
(C) medical evaluation or waiver of evaluation; 
(D) copies of writing contracts for services and receipts executed in connection 
with the fitting and dispensing of each hearing instrument provided; 
(E) a complete record of hearing tests, and services provided, including follow-
up appointment within the 30-day trial period; and 
(F) all correspondence specifically related to services provided to the client 
or the hearing instrument(s) fitted and dispensed to the client. 
(2) A complete record of tests shall be available for the client. 
(f) Audiometers and audiometric testing devices. 
(1) Audiometers and audiometric testing devices shall meet
the current standards of the American National Standards Institute or as 
otherwise specified by the Texas Department of Health (department). 
(2) Current audiometer or audiometric testing device calibration records shall 
be maintained with each audiometer or audiometric testing device. Audiometer or 
audiometric testing device calibration records and data shall be maintained for 
inspection by the department for a period of three years. 
(g) Audiometric testing not conducted in a stationary acoustical enclosure. 
(1) A notation shall be made on the hearing test if testing was done in a 
stationary acoustical enclosure. 
(2) Ambient noise level of location of audiometric testing, if not done in a 
stationary acoustical enclosure, shall include a notation on the hearing test of 
the following items: 
(A) type(s) of equipment used to determine ambient noise level; 
(B) model and serial number of equipment used to determine ambient noise level; 
and 
(C) date of last calibration of equipment used to determine ambient noise level. 
(3) If audiometric testing is not conducted in a stationary acoustic enclosure 
the test environment shall have a dBA equivalent maximum allowable ambient noise 
level of 50 dBA. 
(4) A stationary acoustical enclosure includes, but is not limited to, an 
audiometric test room. 
(A) An audiometric test room is any enclosed space in which a listener is 
located for the purpose of testing hearing. An audiometric test room may also be 
known as: 
(i) an audiometric test area; 
(ii) a hearing test space; or 
(iii) a hearing test room. 
(B) An example of an audiometric test room would be a prefabricated room known 
as: 
(i) an audiometric test booth; 
(ii) a suite; or 
(iii) a sound treated room. 
(C) The primary and necessary requirement of an audiometric test room is to 
ensure that the maximum permissible ambient noise levels established by the 
American National Standards Institute do not exceed the levels for an 
audiometric test room for ears covered 250-8000 Hz. The levels are as follows:
Figure 1: 25 TAC sec.141.16(g)(4)(C)

sec.141.18.Formal Hearings.
(a) Purpose. This section covers the formal hearing procedures and practices 
that will be used by the State Committee of Examiners in the Fitting and 
Dispensing of Hearing Instruments, or appropriate subcommittee thereof in the 
handling of denials, suspensions, probations, and revocations of a license or 
permit, reprimands of a licensee or permit holder, and requirements of 
additional continuing education for a licensee or permit holder; and implements 
the contested case provisions of the Administrative Procedure Act (APA), 
Government Code, Chapter 2001, and this section. 
(1) The committee or appropriate subcommittee on its own motion or on request 
from a licensee, permit holder or applicant may initiate a formal hearing. A 
formal hearing and all related proceedings shall be conducted in accordance with 
the provisions of the APA, and this section. 
(2) If the licensee, permit holder or applicant fails to appear or be 
represented at the scheduled hearing, the person is deemed to be in agreement 
with the allegations and proposed action and to have waived the right to a 
hearing. Appropriate disciplinary action may be taken by the committee. 
(b) Recording the hearing. The hearing examiner will keep either a stenographic 
or other taped record of the hearing proceeding. In the event an independent 
contract court reporter is utilized in the making of the record of the 
proceedings, the committee shall bear the cost of the per diem or other 
appearance fee for the reporter. Any party desiring a written transcript of the 
proceedings shall contract directly with such court reporter and be responsible 
for payment of same pursuant to the authority of the APA. In those cases when a 
tape recording of the formal hearing is made, the hearing examiner shall make 
such recording available to any party requesting permission to hear or, with 
appropriate protective measures, allow such recording to be duplicated. Upon 
appeal of any final order of the committee necessitating the forwarding of the 
record to a court of law, the committee may assess the cost of the transcript to 
the appealing party. 
(c) Action after the hearing. 
(1) Reopening of hearing for new evidence. 
(A) The committee upon recommendation of the hearing examiner may reopen a 
hearing where new evidence is offered which was unobtainable or unavailable at 
the time of the hearing. The committee may refer the matter to the hearing 
examiner to accept the new evidence and alter his or her proposal for decision 
as necessary. 
(B) The committee will reopen a hearing to include such new evidence as part of 
the record if the committee deems such evidence necessary for a proper and fair 
determination of the case. The reopened hearing will be limited to only such new 
evidence. 
(C) Notice and procedural requirements will be the same as for the original 
hearing. 
(2) Pleading after close. At any time after the record has been closed in a 
contested case, and prior to the administrative decision becoming final in such 
case, all briefs, exceptions, written objections, motions (including motion for 
rehearing), replies to the foregoing, and all other written documents shall be 
filed with the executive director. The party filing such instrument shall 
provide copies of the same to all other parties of record by first-class United 
States mail or personal services and certify, in writing thereon, the names and 
addresses of the parties to whom copies have been furnished, as well as the date 
and manner of service. 
(3) Final orders or decisions. 
(A) The final order or decision will rendered by the committee. The committee 
may refuse to issue or renew a license, suspend, or revoke a license or permit; 
or may probate disciplinary action, or may issue a reprimand to a licensee or 
permit holder as it deems appropriate and lawful. A decision of the committee 
may include any requirement to be imposed upon the licensee or applicant which 
is related to the individual's practice as a licensee and is deemed by the 
committee to be appropriate and lawful. 
(B) All final orders or decisions shall be in writing and shall set forth the 
findings of fact and conclusions required by law. 
(C) All final orders shall be signed by the president of the committee; 
(D) A copy of all final orders and decisions shall be timely provided to all 
parties as required by law. 
(4) Motion for rehearing. A motion for rehearing shall be governed directly by 
the APA, Government Code, Chapter 2001, and shall be addressed directly to the 
committee and filed with the executive director. 
(5) Appeals. All appeals from final committee orders or decisions shall be 
governed by the APA, the Government Code, Chapter 2001; and communications 
regarding any appeal shall be to the executive director of the committee.
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602766
Susan K. Steeg
General Counsel
Texas Board of Examiners in the Fitting and Dispensing of Heairng Aids
Effective date: March 19, 1996
Proposal publication date: November 3, 1995
For further information, please call: (512) 458-7236

CHAPTER 143.Consumer Information and Compliants
22 TAC sec.143.1
The State Committee of Examiners in the Fitting and Dispensing of Hearing 
Instruments (committee) with the approval of the Texas Board of Health (board) 
adopts the repeal of sec.143.1, concerning consumer information and complaints 
guidelines for a 30-day trial period, without changes to the proposed text as 
published in the November 3, 1995, issue of the Texas Register (20 TexReg 9127). 
The repeal removes obsolete language. 
No comments were received regarding adoption of the repeal. 
The repeal is adopted under Texas Civil Statutes, Article 4566-1.04, which 
require the State Committee of Examiners in the Fitting and Dispensing of 
Hearing Instruments to adopt rules, with the approval of the Texas Board of 
Health, that are reasonably necessary for the proper performance of its duties 
under the Act.
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602768
Susan K. Steeg
General Counsel
Texas Board of Examiners in the Fitting and Dispensing of Hearing Aids Effective 
date: March 19, 1996
Proposal publication date: November 3, 1995
For further information, please call: (512) 458-7236

CHAPTER 145.Continuing Education
22 TAC sec.145.1
The State Committee of Examiners in the Fitting and Dispensing of Hearing 
Instruments (committee) with the approval of the Texas Board of Health (board) 
adopts the repeal of sec.145.1, concerning general requirements for continuing 
education for licensed fitters and dispensers of hearings aids, without changes 
to the proposed text as published in the November 3, 1995, issue of the Texas 
Register (20 TexReg 9127). 
The repeal removes obsolete language. 
No comments were received regarding adoption of the repeal. 
The repeal is adopted under Texas Civil Statutes, Article 4566-1.04, which 
require the State Committee of Examiners in the Fitting and Dispensing of 
Hearing Instruments to adopt rules, with the approval of the Texas Board of 
Health, that are reasonably necessary for the proper performance of its duties 
under the Act.
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602769
Susan K. Steeg
General Counsel
Texas Board of Examiners in the Fitting and Dispensing of Hearing Aids
Effective date: March 19, 1996
Proposal publication date: November 3, 1995
For further information, please call: (512) 458-7236

TITLE 25. HEALTH SERVICES
PART I. Texas Department of Health
CHAPTER 229. Food and Drug
The Texas Department of Health (department) adopts amendments to 
sec.sec.229.431-229.436 and sec.sec.229.439-229.441, and the repeal of existing 
sec.229.438, concerning the licensure of device distributors and manufacturers, 
without changes to the proposed text as published in the December 19, 1995, 
issue of the Texas Register (20 TexReg 10879).
House Bill 2550, 74th Texas Legislature, 1995, amended Health and Safety Code, 
Chapter 431, by repealing licensure requirements for wholesale device 
distributors located outside the State of Texas. Additionally, the definition 
for "wholesale distribution" was deleted and new definitions for "distributor" 
and "manufacturer" were adopted. 
The amendments and repeal will update and clarify the sections for device 
distributors and manufacturers and bring the sections into conformance with the 
statutory amendments passed during the 74th Texas Legislature. Those persons in 
the State of Texas who hold valid wholesale device distributor licenses that 
were issued prior to the effective date of these amendments will not be required 
to obtain new device distributor or manufacturer licenses until the expiration 
of those wholesale device distributor licenses. 
No comments were received regarding adoption of the amendments and repeal.

Licensure of Device Distributors and Manufacturers
25 TAC sec.sec.229.431-229.436, 229.439-229.441 
The amendments are adopted under Health and Safety Code, sec.431.241, which 
provides the department with authority to adopt necessary regulations pursuant 
to the enforcement of this Chapter; and 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.
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602764
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: March 19, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 458-7236

25 TAC sec.229.438
The repeal is adopted under Health and Safety Code, sec.431.241, which provides 
the department with authority to adopt necessary regulations pursuant to the 
enforcement of this Chapter; and 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.  
This agency hereby certifies that the adoption 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 27, 1996.
TRD-9602765
Susan K. Steeg
General Counsel
Texas Department of Health
Effective date: March 19, 1996
Proposal publication date: December 19, 1995
For further information, please call: (512) 458-7236

TITLE 30. ENVIRONMENTAL QUALITY
PART I. Texas Natural Resource Conservation Commission
CHAPTER 101.General Rules
30 TAC sec.101.1, sec.115.10
Editor's Note: The Texas Natural Resource Conservation Commission adopted under 
Chapters 101 and 115 sec.101.1 and sec.115.10, effective March 7, 1996, in the 
February 27, 1996, issue of the Texas Register (21 TexReg 1544). These adopted 
rules contained slicks which were inadvertently omitted from the 27th issue.
The slicks are being published in the tables and graphics section of this issue.

sec.101.1. Definitions.
Figure 1: 30 TAC sec.101.1
Figure 2: 30 TAC sec.101.1

sec.115.10. Definitions
Figure 1: 30 TAC sec.115.10
Figure 2: 30 TAC sec.115.10
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 March 1, 1996.

TITLE 34. PUBLIC FINANCE
PART I. Comptroller of Public Accounts
CHAPTER 9. Property Tax Administration 
SUBCHAPTER C. Appraisal District Administration
34 TAC sec.9.401
The Comptroller of Public Accounts adopts an amendment to sec.9.401, concerning 
exemption applications for charitable organizations, without changes to the 
proposed text as published in the December 12, 1995, issue of the Texas Register 
(20 TexReg 10574).
The rule deals with the designation of performing arts as a charitable activity 
exempt from property taxes. This amendment is required by an amendment to Tax 
Code, sec.11.18 (Senate Bill 428, 74th Legislature, 1995). 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under Tax Code, sec.11.43(f), which requires the 
comptroller to prescribe the contents and form for each kind of property tax 
exemption. 
The amendment implements the Tax Code, sec.11.18, 74th Legislature, 1995, 
effective January 1, 1996. 
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 26, 1996.
TRD-9602673
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.402
The Comptroller of Public Accounts adopts an amendment to sec.9.402, concerning 
special use application forms, without changes to the proposed text as published 
in the December 12, 1995, issue of the Texas Register (20 TexReg 10575). 
The amendment provides an amended application form for qualifying land for 
agricultural use. The amendment will implement recently adopted amendments to 
the Tax Code (House Bill 1358, 74th Legislature, 1995) which define wildlife 
management as an agricultural use of land under the Tax Code, Chapter 23,
Subsection D. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.23.54, which requires the 
comptroller to prescribe the contents and application form for the appraisal of 
agricultural land. 
The amendment implements the Tax Code, sec.23.51. 
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 26, 1996.
TRD-9602674
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.403
The Comptroller of Public Accounts adopts an amendment to sec.9.403, concerning 
miscellaneous exemptions, without changes to the proposed text as published in 
the December 12, 1995, issue of the Texas Register (20 TexReg 10575). 
The amendment changes the miscellaneous exemption form to add space to apply for 
a specific cemetery property exemption and to add space to apply for an 
exemption for medical center property. The amendment also changes the 
application for historic sites to add space to apply for the historic site 
exemption for archaeological sites. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.11.43(f), which requires the 
comptroller to prescribe the contents and form for each kind of property tax 
exemption. 
The amendment implements the Tax Code, sec.sec.11.17, 11.23(j), 11.24, and 
11.43(c). 
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 26, 1996.
TRD-9602675
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.406
The Comptroller of Public Accounts adopts an amendment to sec.9.406, concerning 
exemption applications for charitable organizations improving property for low-
income housing, without changes to the proposed text as published in the 
December 12, 1995, issue of the Texas Register (20 TexReg 10576). 
The amendment clarifies the annual requirement to file an exemption form with 
the chief appraiser in order to claim a low-incoming housing exemption from 
taxation. A charitable organization improving property for low-income housing 
must file this exemption form each year. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.11.43(f), which requires the 
comptroller to prescribe the contents and form for each kind of property tax 
exemption. 
The amendment implements the Tax Code, sec.11.181 and sec.11.43. 
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 26, 1996.
TRD-9602676
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

SUBCHAPTER H.Tax Record Requirements 
34 TAC sec.9.3011
The Comptroller of Public Accounts adopts an amendment to sec.9.3011, concerning 
absolute exemption lists, without changes to the proposed text as published in 
the December 12, 1995, issue of the Texas Register (20 TexReg 10577). 
The amendment deals with the requirement that an appraisal district maintain 
lists of property exempt from taxation under the terms of the Tax Code. New 
sec.11.145 and sec.11.146 (House Bill 366, 74th Legislature, 1995), exempt 
income-producing tangible personal property used to produce income and mineral 
interests having a value of less than $500. The amendment excepts this property 
from the absolute exemption list requirement. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.5.03, which requires the 
comptroller to prescribe rules establishing minimum standards for the 
administration of the property tax system. 
The amendment implements the Tax Code, sec.11.145 and sec.11.146.
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 26, 1996.
TRD-9602668
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.3019
The Comptroller of Public Accounts adopts an amendment to sec.9.3019, concerning 
exemption applications for religious organizations, without changes to the 
proposed text as published in the December 12, 1995, issue of the Texas Register 
(20 TexReg 10577).
The amendment deals with the tax exempt status of property owned by a religious 
organization when that property is undergoing specific planning processes for 
the construction of improvements to be used by the religious organization.
This rule implements the amendments to the Tax Code, sec.11.20 (House Bill 2613, 
74th Legislature, 1995). The new tax exemption is based upon whether the 
property in question is undergoing preliminary physical preparations which will 
lead to the construction of improvements on the property. 
No comments were received regarding adoption of the amendment. 
This amendment is adopted under the Tax Code, sec.11.43(f), which requires the 
comptroller to prescribe the contents and form for each type of property tax 
exemption. 
The amendment implements the Tax Code, sec.11.20. 
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 26, 1996.
TRD-9602669
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.3034
The Comptroller of Public Accounts adopts an amendment to sec.9.3034, concerning 
notice of exemption application requirements, without changes to the proposed 
text as published in the December 12, 1995, issue of the Texas Register (20 
TexReg 10578).
The amendment deals with the exemption of low-income housing owned by a 
charitable organization. The charitable organization must file its Tax Code, 
sec.11.181, exemption application for its low-income housing on an annual basis 
under the Tax Code, sec.11.43. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.11.43(f), which requires the 
comptroller to prescribe the contents and form for each type of property tax 
exemption. 
The amendment implements the Tax Code, sec.11.43 and sec.11.181.
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 26, 1996.
TRD-9602670
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.3058
The Comptroller of Public Accounts adopts the repeal of sec.9.3058, concerning 
record of movement of mobile homes, without changes to the proposed text as 
published in the December 12, 1995, issue of the Texas Register (20 TexReg 
10578). 
The repeal of this section is necessary because House Bill 785, 74th 
Legislature, 1995, repealed Tax Code, Chapter 21, Subchapter B, which deals with 
the requirement to retain a record of the movement of a mobile home (unit of 
manufactured housing). 
No comments were received regarding adoption of the repeal. 
The repeal is adopted under the Tax Code, sec.5.03, which provides the 
comptroller with the authority to adopt rules establishing minimum standards for 
the administration of appraisal districts. 
The repeal implements Acts 1995, 74th Legislature, page 4868, Chapter 978, 
effective September 1, 1995 (Tax Code, Subchapter B, Chapter 21 (repealed)). 
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 26, 1996.
TRD-9602671
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.3060
The Comptroller of Public Accounts adopts new sec.9.3060, concerning installment 
payment of taxes on property located within a disaster area, without changes to 
the proposed text as published in the December 12, 1995, issue of the Texas 
Register (20 TexReg 10579). 
This new section is promulgated under the terms of the Tax Code, new sec.31.032 
(House Bill 2197, 74th Legislature, 1995). 
No comments were received regarding adoption of the new section. 
The new section is adopted under the Tax Code, sec.31.032, which requires the 
comptroller to prescribe rules to implement the installment payment of taxes for 
property located in a disaster area. 
The new section implements the Tax Code, sec.31.032. 
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 26, 1996.
TRD-9602672
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

SUBCHAPTER I.Validation Procedures
34 TAC sec.sec.9.4003, 9.4004, 9.4006, 9.4007
The Comptroller of Public Accounts adopts the repeal of sec.sec.9.4003, 9.4004, 
9.4006, and 9.4007, concerning the formulas for interstate allocations and 
intrastate apportionment used in the central appraisal of transportation 
business intangible property, the nature of good cause required to extend the 
reporting deadline for the central appraisal of transportation of business 
intangible property, transportation business intangibles property information 
reports, and evidence of value for central appraisal of transportation business 
intangible property, without changes to the proposed text as published in the 
December 12, 1995, issue of the Texas Register (20 TexReg 10579). 
The repeal of these sections is necessary because House Bill 203, 73rd 
Legislature, 1993, repealed Tax Code, Chapter 24, Subchapter A, which dealt with 
the appraisal of transportation business intangibles (repeal effective January 
1, 1994). 
No comments were received regarding adoption of the repeals. 
The repeals are adopted under the Tax Code, sec.5.03, which provides the 
comptroller with the authority to adopt rules establishing minimum standards for 
the administration of appraisal districts. 
The repeals implement Acts 1993, 73rd Legislature, page 32, Chapter 6, sec.32, 
effective January 1, 1994 (Property Tax Code, Subchapter A, Chapter 24 
(repealed)). 
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 26, 1996.
TRD-9602677
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

34 TAC sec.9.4027
The Comptroller of Public Accounts adopts an amendment to sec.9.4027, concerning 
the appraisal of special inventory, with changes to the proposed text as 
published in the December 12, 1995, issue of the Texas Register (20 TexReg 
10580). 
The change consists of a reference change to the Tax Code. 
The amendment deals with a dealer's inventories maintained by vessel and 
outboard motor dealers under the terms of the Tax Code, new sec.23.12D and 
sec.23.12E (House Bill 1358, 74th Legislature, 1995). This amended rule will 
provide that a vessel or outboard motor dealer's inventories are treated in the 
same manner as a motor vehicle dealer's inventories. 
No comments were received regarding adoption of the amendment. 
The amendment is adopted under the Tax Code, sec.5.03, which requires the 
comptroller to prescribe rules for the administration of the property tax 
system. 
The amendment implements the Tax Code, sec.23.12D and sec.23.12E.

sec.9.4027.Appraisal of Special and Vessel and Outboard Motor Inventories.
The term "most recent" describing "aggregate tax rate" contained in the 
definition of "unit property tax value factor" in the Tax Code, sec.23.122(a)(1) 
and sec.23.12E(a)(1), means the tax rate for the tax year preceding the year in 
which the motor vehicle and/or vessel and outboard motor are sold.
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 26, 1996.
TRD-9602678
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: March 18, 1996
Proposal publication date: December 12, 1995
For further information, please call: (512) 463-4028

TITLE 40. SOCIAL SERVICES AND ASSISTANCE
PART XX. Texas Workforce Commission
CHAPTER 805.Job Training Partnership Act Rules
Editor's Note: Effective March 1, 1996, the Texas Workforce Commission will 
replace the Texas Department of Commerce as the administrative entity for the 
Job Training Partnership Act (JTPA)program in Texas.
Pursuant to 1 TAC sect&91.23(e), the JTPA rules located in 10 TAC Chapter 187 
are being transferred to 40 TAC Chapter 805. A table, which lists the old and 
new section numbers, is being published in this issue of the Texas Register in 
the table and graphics section.
Figure: 40 TAC Chapter 805
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 March 1, 1996.

CHAPTER 807.Proprietary Schools and Veterans Education
Editor's Note: Effective March 1, 1996, the Texas Workforce Commission will 
replace the Texas Education Agency as the administrative entity over the 
Proprietary Schools Program.
Pursuant to 1 TAC sec.91.23(e), the Proprietary Schools rules located in 19 TAC 
Chapter 175 are being transferred to 40 TAC Chapter 807. A table, which lists 
the old and new section numbers, is being published in this issue of the Texas 
Register in the table and graphics section.
Figure: 40 TAC Chapter 807
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 March 1, 1996.