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 VII. State Securities Board CHAPTER 115.Dealers and Salesmen 7 TAC sec.115.4 The State Securities Board adopts an amendment to sec.115.4(g), concerning evidences of registration, without changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5662). Sole proprietors who are required to register in certain dual capacities may request relief from payment of the full fee required by The Securities Act by filing a request with the Securities Commissioner. The amendment clarifies that the fee reduction request procedures, available to certain agents registered in dual capacities, also include similarly situated sole proprietors. A new Form 133.36, used by an applicant to request the reduction in registration fees, is being simultaneously adopted. No comments were received regarding adoption of the amendment. The amendment is adopted under Texas Civil Statutes, Article 581, sec.42.B. Section 42.B provides the Board with the authority to adopt rules reducing fees for persons required to register in two or more capacities. 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 October 7, 1996. TRD-9614671 Denise Voigt Crawford Securities Commissioner State Securities Board Effective date: October 29, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 305-8300 CHAPTER 133.Forms 7 TAC sec.sec.133.8, 133.9, 133.18 The State Securities Board adopts the repeal of three forms, sec.133.8, a power of attorney form, sec.133.9, a corporate resolution for power of attorney form, and sec.133.18, a power of attorney form, without changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5663). Repeal of these existing forms allows for the simultaneous adoption of a new, revised sec.133.8, power of attorney form. Three forms containing similar information are replaced by a single, comprehensive form. No comments were received regarding adoption of the repeals. The repeals are adopted under Texas Civil Statutes, Article 581, sec.28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of The Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. 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 October 7, 1996. TRD-9614672 Denise Voigt Crawford Securities Commissioner State Securities Board Effective date: October 29, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 305-8300 7 TAC sec.133.8 The State Securities Board adopts new sec.133.8, a power of attorney form, without changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5663). The new form replaces existing Form 133.8 Power of Attorney (for a corporation), Form 133.18 Power of Attorney (for an individual), and Form 133.9 Corporate Resolution for Power of Attorney, which are being simultaneously repealed. The new form may be used by both individuals and various types of entities, including new types of business structures. The new form also eliminates archaic language and provides an instruction sheet. No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 581, sec.28-1. Section 28-1 provides the Board with the authority to adopt rules and regulations necessary to carry out and implement the provisions of The Securities Act, including rules and regulations governing registration statements and applications; defining terms; classifying securities, persons, and matters within its jurisdiction; and prescribing different requirements for different classes. 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 October 7, 1996. TRD-9614676 Denise Voigt Crawford Securities Commissioner State Securities Board Effective date: October 29, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 305-8300 7 TAC sec.133.36 The State Securities Board adopts the repeal of sec.133.36, the request for multiple capacity status form, without changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5664). Repeal of the existing form will allow for the simultaneous adoption of a new, revised form. The repeal eliminates an outdated form. No comments were received regarding adoption of the repeal. The repeal is adopted under Texas Civil Statutes, Article 581, sec.42.B. Section 42.B provides the Board with the authority to adopt rules reducing fees for persons required to register in two or more capacities. 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 October 7, 1996. TRD-9614674 Denise Voigt Crawford Securities Commissioner State Securities Board Effective date: October 29, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 305-8300 The State Securities Board adopts new sec.133.36, a request for reduced fees for certain persons registered in multiple capacities form, without changes to the proposed text as published in the June 21, 1996, issue of the Texas Register (21 TexReg 5664). This new form corresponds with an amendment to sec.115.4(g), which is being simultaneously adopted. The new form replaces an existing form, which is being simultaneously repealed, and reflects the revised provisions of sec.115.4(g). No comments were received regarding adoption of the new rule. The new rule is adopted under Texas Civil Statutes, Article 581, sec.42.B. Section 42.B provides the Board with the authority to adopt rules reducing fees for persons required to register in two or more capacities. 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 October 7, 1996. TRD-9614675 Denise Voigt Crawford Securities Commissioner State Securities Board Effective date: October 29, 1996 Proposal publication date: June 21, 1996 For further information, please call: (512) 305-8300 TITLE 22. EXAMINING BOARDS PART XII. Board of Vocational Nurse Examiners CHAPTER 240. Peer Review and Reporting 22 TAC sec.240.13 The Board of Vocational Nurse Examiners adopts the repeal of sec.240.13, relative to Vocational Nurse Peer Review, without changes to the proposed text as published in the April 12, 1996, issue of the Texas Register (21 TexReg 3113). The rule is being repealed in order to adopt a new sec.240.13 which is entitled Minimum Procedural Standards During Peer Review. No comments were received regarding the repeal of this rule. Marjorie A. Bronk, Executive Director, has determined that for the first five year period the rules are in effect, there will be no fiscal implication for state or local government as a result of enforcing or administering the rules. The repeal is adopted under Texas Civil Statutes, Article 4528c, sec.5(f), which provides the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. This agency hereby certifies that the repeal has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on October 3, 1996. TRD-9614576 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: October 24, 1996 Proposal publication date: April 12, 1996 For further information, please call: (512) 305-8100 22 TAC sec.240.13 The Board of Vocational Nurse Examiners adopts new sec.240.13, relative to Minimum Procedural Standards During Peer Review, without changes to the proposed text as published in the April 12, 1996, issue of the Texas Register (21 TexReg 3113). During the 74th Legislative Session, House Bill 883 was passed which added vocational nurses to the Nursing Practice Act under Article 4525b, Peer Review. The language indicates that whenever peer review involves RNs and LVNs, the peer review committee shall include LVNs as members. Peer review was enacted as a part of the Nursing Practice Act in 1987 and institutions implemented peer review for both RNs and LVNs, although LVNs were not specified in the statute. This resulted in a lack of immunity from suit when peer review committees handled LVNs. The amendment will cure the immunity problem so that committees who handle both RNs and LVNs can be free from suit/liability. A written comment was received from the Texas Nurses Association. The commenter suggested that the Board did not have the authority to adopt the amendment. A public hearing was held on September 16, 1996. No one appeared at the hearing to give testimony or make comments. The Board and the Attorney General representative for the Board disagreed with the comment on the grounds that the Vocational Nurse Act gives the Board the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. The amendment is adopted under Texas Civil Statutes, Article 4528c, sec.5(f), which provides the Board of Vocational Nurse Examiners with the authority to make such rules and regulations as may be necessary to carry in effect the purposes of the law. 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 October 3, 1996. TRD-9614457 Marjorie A. Bronk, R.N. Executive Director Board of Vocational Nurse Examiners Effective date: October 24, 1996 Proposal publication date: April 12, 1996 For further information, please call: (512) 305-8100 PART XXV. Structural Pest Control Board CHAPTER 595. Compliance and Enforcement 22 TAC sec.sec.595.6, 595.7, 595.14, 595.15 The Structural Pest Control Board adopts amendments to sec.sec.595.6, 595.7, 595.14 and 595.15, without changes to the proposed text as published in the July 19, 1996, issue of the Texas Register (21 TexReg 6761). The amendments change agency required documents to reflect the new address and telephone numbers of the agency. The function of the amendments requires new addresses and telephone numbers on all Board documents. No comments were received regarding adoption of the amendments. The amendments are adopted under Article 135b-6, which provides the Structural Pest Control Board with the authority to license and regulate persons who provide structural pest control services. 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 September 3, 1996. TRD-9614436 Benny M. Mathis, Jr. Executive Director Structural Pest Control Board Effective date: July 19, 1996 Proposal publication date: September 3, 1996 For further information, please call: (512) 451-7200 PART XXIII. Texas Real Estate Commission CHAPTER 535. Provisions of the Real Estate License Act Suspension and Revocation of Licensure 22 TAC sec.535.154 The Texas Real Estate Commission adopts an amendment to sec.535.154, concerning misleading advertising by real estate licensees, without changes to the proposed text as published in the August 27, 1996, issue of the Texas Register (21 TexReg 8076). The amendment is necessary to clarify the requirement contained in Texas Civil Statutes, Article 6573a, sec.15(a)(6)(P), that licensees include in their advertisements language identifying themselves as a real estate broker or agent. Beginning January 1, 1997, the section will require the statutory identification to be clear and conspicuous in signs which are likely to attract the attention of motorists and pedestrians, such as a sign placed along a street to advertise real estate located elsewhere. The language chosen by the licensee to provide the statutory identification of the licensee as a broker or agent will not comply with the proposed amendment if the print or type is too small to be read easily from the sidewalk or street. Although licensees may display the required language in other ways, the section provides that language at least as large as the largest telephone number in the sign will be considered in compliance. Two comments were received concerning the proposed amendment. One comment suggested that the proposed text should use the term "salesman" instead of "agent", or use "real estate licensee" in place of "real estate broker or agent". The commission determined that the statutory terms "broker or agent" should be used in the section for consistency. Another comment opposed requiring the statutory identification to be in at least the same size as the largest telephone number, suggesting that print at least half or two-thirds the size of the largest telephone number should be sufficient. The comment also expressed concern about the expense of reprinting signs to comply with the section. Since the proposal does not require the print to be in a specific size, but instead requires the print to be clear and conspicuous and easily readable by a motorist or pedestrian, the section would not necessarily require any signs to be reprinted, and the commission declined to modify the proposal as suggested. The amendment is adopted under Texas Civil Statutes, Article 6573a, sec.5(h), which authorize the Texas Real Estate Commission to make and enforce all rules and regulations necessary for the performance of its duties. This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's authority to adopt. Issued in Austin, Texas on October 7, 1996. TRD-9614491 Mark A. Moseley General Counsel Texas Real Estate Commission Effective date: January 1, 1997 Proposal publication date: August 27, 1996 For further information, please call: (512) 465-3900 PART XXXI. Texas State Board of Examiners of Dietitians CHAPTER 711.Dietitians 22 TAC sec.sec.711.2, 711.5, 711.16, 711.17, 711.21 The Texas State Board of Examiners of Dietitians (board) adopts amendments to sec.sec.711.2, 711.5, 711.16, 711.17, and new sec.711.21, concerning the regulation of licensed dietitians and provisional licensed dietitians without changes to the proposed text as published in the May 24, 1996, issue of the Texas Register (21 TexReg 4514). Specifically, the sections cover the board's operation; experience requirements for examination; clarification of continuing education requirements; and inactive status. The new section adds procedures for suspension of a license for failure to pay child support. The sections, as amended, update existing sections relating to the regulation of dietitians. Specifically, in sec.711.2(s)(2)(F) the examination fee was deleted because the board does not collect the examination fee. This change accurately reflects the longstanding fee and examination process provided by the Commission on Dietetic Registration of the American Dietetic Association or its designee. Section 711.2(s)(2)(H) adds a new fee for reinstatement of a license suspended for failure to pay child support. Section 711.5(d)(4)(E) is amended to correct references to subsections. Section 711.5(d)(E)(iv) is amended to address the percentage of time of a preplanned professional experience program in community nutrition to be spent in the area of clinical dietitics. Section 711.16(c)(1) and (3) is amended to simplify the procedures for inactive license status. Section 711.17(g)(7) and 711.17(i)(1) is amended to clarify continuing education requirements. Section 711.21 is a new section added to establish procedures for suspension and reinstatement of a license for failure to pay child support under the Family Code, Chapter 232 as added by Acts 1995, 74th Legislature, Chapter 751, sec.85 (House Bill 433). No comments were received regarding adoption of the amendments and new rule. The amendments and new section are adopted under the Licensed Dietitian Act, Texas Civil Statutes, Article 4512h, sec.6, which provides the Texas State Board of Examiners of Dietitians with the authority to adopt rules concerning the regulation and licensure of dietitians; sec.8 relating to rules on fees; and sec.12 relating to rules on inactive status. 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 October 3, 1996. TRD-9614475 Maxine Freeman Chair Texas State Board of Examiners of Dietitians Effective date: October 25, 1996 Proposal publication date: May 24, 1996 For further information, please call: (512) 458-7236 TITLE 25. HEALTH SERVICES PART II. Texas Department of Mental Health and Mental Retardation CHAPTER 401. System Administration SUBCHAPTER D. Contracts Management for Community-Based Services 25 TAC sec.sec.401.341-401.355 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.401.341-401.355 of Chapter 401, Subchapter D, concerning contracts management for community-based services. Sections 401.342, 401.343, 401.345- 401.347, and 401.349-401.355 are adopted with changes to the proposed text as published in the July 30, 1996, issue of the Texas Register (21 TexReg 7207- 7214). Sections 401.341, 401.344, and 401.348 are adopted without changes. The repeal of sec.sec.401.381-401.386 of Chapter 401, Subchapter E, concerning contracts management, which the new sections would replace, is contemporaneously adopted in this issue of the Texas Register. The new subchapter governs the administration of all community-based services contracts which are funded in whole or in part by the Texas Department of Mental Health and Mental Retardation. Language in sec.401.342(c) was modified to allow reference to other types of contracts. The term "and" was included in the definition of "designated provider" to clarify that a designated provider could deliver both mental retardation services and mental health services. The definition of "facility" was modified to mean only state hospitals, state schools, and state centers. The definition of "start-up costs" was deleted because the term is no longer used in the subchapter. Language was modified in sec.401.345(d) to allow advance payments by the state authority and local authorities to their contractors/subcontractors under certain conditions. A new subsection (e) was added to sec.401.345 allowing the state authority and local authorities to include fiscal incentives and sanctions in their contracts, as permitted by law. The phrase "for local authorities" was deleted from the title of sec.401.346. The section was reorganized and provisions relating to fiscal responsibility were separated into those for local authorities and those for all contractors/subcontractors. The language regarding start-up funds was deleted and new language added that provides guidelines for a contracting entity when it executes a contract involving advance payments. The language regarding equipment and furniture was modified for clarity and consistency. The phrase referring to an entity not operated by a facility was deleted in sec.401.347(a) to be consistent with the current organizational structure of the department. Language in sec.401.347(b) was modified to reflect the department's organizational structure and for consistency with state statute. The term "sanctions" was added to sec.401.349(c) to allow a local authority to take actions permitted by state statute. The title of a department rule referenced in sec.401.350(a)(13) and (14) was updated. A subsection was added to sec.401.350 requiring contracts to be consistent with the model contracts contained in the type-name="italic">TXMHMR Contract Manual Section 401.351 has been renumbered to allow for the addition of an introductory statement. The term "less than" has been changed to "greater than" in the criteria for using the request for proposal (RFP) method in sec.401.351. The word "approximate" was added to allow for the RFP to state the approximate number of persons to be served and the word "applicable" was added to allow for the proposal to provide evidence of compliance with only the TDMHMR community standards applicable to the contract. Language has been added clarifying that, when evaluating proposals, the contracting entity shall consider all relevant information included in the contracting entity's RFP. The reference to the Texas Health and Safety Code, sec.534.055, was deleted from sec.401.352 because it did not contain information relevant to the section. The language in sec.401.353 was reorganized for clarity. Advocacy organizations was added to the distribution section. Public comment was received from The Texas Council of Community MHMR Centers, Inc., Austin; EduCare, Austin; B & W Development Centers, Inc., Graham; Rock House, Stephenville; Parent Association for the Retarded of Texas, Austin; and Tarrant County MHMR Services, Fort Worth. One commenter requested language in sec.401.345(a) be changed to indicate that contracting for services is an alternative, rather than the preferred alternative, to the direct provision of government services. Another commenter recommended requiring the state authority and local authorities to contract for services when contracting obtains the same or high quality of services at a lower cost than possible through governmental provision. The department responds that the proposed language is consistent with the Texas Health and Safety Code, sec.533.035, which requires local authorities to consider, among other things, ultimate cost-benefit in determining whether to become a provider of a service or to contract that service to another organization. A commenter suggested modifying the language in sec.401.345(d) clarifying that community centers are governmental entities. The department responds that modifying language in sec.401.345(d), which allows advance payments by the state authority and local authorities to their contractors/subcontractors under certain circumstances, makes the commenter's suggested change unnecessary. The same commenter requested that sec.401.346(a)(4) be deleted because requiring repayment of start-up funds reduces the revenue available for services. The department responds that the language regarding start-up funds was deleted and new language added that provided guidelines for a contracting entity when it executes a contract involving advance payments. The commenter requested that the language contained in sec.401.346(f) be included in sec.401.350 because the requirement applies to the private sector as well. The commenter also suggested changing language in sec.401.346(f)(1)(B) from "by a designated provider and/or other governmental entities" to "by a governmental or private non-profit entity." The department responds that the section has been modified and reorganized for clarification which addresses the commenter's concerns. The commenter suggested changing language in sec.401.347(b) from "If a performance contract cannot be executed with a community center" to "If the department cannot identify and contract with a community center in that service area." The department responds changing the language as requested by the commenter. The same commenter suggested adding an introductory statement to sec.401.351. The department responds by adding an introductory statement as suggested. The commenter recommended adding a subsection to sec.401.351 addressing open provider enrollment. The commenter explained that open provider enrollment allows for consumer choice by permitting any qualified provider who meets minimum service delivery standards/certification to enroll at any time (an ongoing list) without requiring the local authority to make a commitment for specific client numbers or dollar amounts to the provider. The department responds that it does not have statutory authority to address open provider enrollment as a procurement method. The department notes that the evaluation of the pilot projects as authorized by the Texas Health and Safety Code, sec.533.0355, may result in legislative changes which would allow open provider enrollment in the future. The commenter requested adding a section that outlines a dispute resolution procedure per state statute (Texas Health and Safety Code, sec.534.055). The commenter also stated that language addressing sanctions needs to be better "dove-tailed" with the performance contract. The department responds that state statute requires a dispute resolution procedure be included in the contract, not the rule. Regarding sanctions, the department has added language to sec.401.349(c) addressing the commenter's concern. The same commenter suggested adding a section which would list the restrictions imposed by Medicaid regulations on the subcontracting of department Medicaid funds (e.g., mental health rehabilitative services). The commenter also requested adding language identifying any services/funds that a local authority may not subcontract for/with. The department responds that this subchapter does not apply to Medicaid contracts and any restrictions imposed by Medicaid would be contained in the rules governing the Medicaid program (Chapter 409 of this title) and in federal Medicaid regulations. In the rule as adopted, the department has not identified any services/funds that a local authority may not subcontract for/with. The commenter's final observation was that the public benefit statement seemed unrelated to the most significant purposes of the rule. The department responds that the proposed provisions are not substantially different than the provisions contained in the rules which are currently in effect. The main difference is the separation of contractual issues regarding community-based services and campus- based services. Another commenter expressed concern that the proposed language limits the provision of start-up funds to local authorities. The commenter stated that if TDMHMR is truly trying to level the playing field and remove conflict of interest then it should either provide start-up funds to both the local authority (who is also providing services) and to the contractor, or to neither. The department responds that the language regarding start-up funds was deleted and new language added that provides guidelines for a contracting entity when it executes a contract involving advance payments to a contractor/subcontractor. The commenter questioned why the proposal did not contain language addressing matching funds and cited the requirement in the current rule for local authorities to certify to the state that it had sufficient local revenues to meet the requirements for matching funds that exceeded state certified matching funds. The commenter asked if the local match requirement is addressed elsewhere. The department responds the language referred to by the commenter relates to the Medicaid program and this subchapter does not apply to Medicaid contracts. Local match requirements are addressed in the performance contract and in rules governing community MHMR centers (Chapter 401, Subchapter G of this title). The same commenter recommended that the language in sec.401.349 be strengthened to clarify that the local authority has the responsibility to justify its need to be a service provider and, if it does decide to provide services, that it has the responsibility to prove that it could not find a provider with equally high or higher quality and lower costs. Another commenter stated that it is a conflict of interest for local authorities to also be providers and recommended that the department choose whether it wants local authorities to be authorities or providers. A third commenter stated that as long as local authorities are competitors for services, then it is impossible for them to objectively consider whether or not to become a provider of services. The department responds that the language used in the rule originates in state statute (Texas Health and Safety Code, sec.533.035). Guidelines are provided within the statute which are to be used in determining whether to be an authority or a provider. Two commenters expressed confusion regarding the determination for using the request for proposal (RFP) and sole source contract procurement methods: both were applicable where funds were less than $1,000. The department responds that the language in the RFP subsection contained an error. The RFP method is typically applicable to those situations where funds are greater than $1,000. The error has been corrected. The same commenter stated that the 10-day timeframe for notification of potential bidders in the RFP method is too short and suggested changing it to 30 days. The department responds that the 10-day timeframe is only the minimum. This allows the contracting entity flexibility in awarding a contract within short time constraints that would not otherwise qualify as an emergency. Two commenters objected to the requirement contained in sec.401.350(a)(12), stating that no business would open its financial or other records for inspection by a competitor. One of the commenters stated that if a local authority was a provider of services, then allowing it unrestricted access to a competitor's books and records creates a conflict of interest and gives it an unfair advantage. Another commenter stated that only records pertaining to consumers or services provided under the contract be included. The department responds the final phrase in the paragraph clarifies that the unrestricted access refers to the financial and programmatic activities and services associated with the contract/subcontract. The same commenters objected to the language in sec.401.350(b) which made a contractor's policy for protecting and accounting for a consumer's funds subject to the contracting entity's approval. The commenters stated that if the policy was in accordance with generally accepted accounting principles (as required by the rule) then it should not be subject to the contracting entity's approval as well. The department responds that the proper accounting of funds (i.e., using generally approved accounting principles) does not necessarily ensure the protection of the funds. Since the contracting entity is ultimately responsible for the protection and accounting of a consumer's funds, it should have the authority to approve a subcontractor's policy which governs such action. The two commenters stated that the request for proposal (RFP) method of awarding contracts cannot ensure choice for consumers. The commenters added that any contract which is funded in whole or part with Medicaid funds must have a provision for open provider enrollment and that the department needs to request a waiver from the Health Care Financing Administration. The department responds that sec.401.342(b)(2) states the subchapter does not apply to Medicaid contracts. The commenter expressed concern that the language in sec.401.351(a)(3)(G) allowed too much latitude for a local authority to abuse power in the awarding of contracts. The commenter stated that unsuccessful offerors and the public should be allowed full access to all of the information regarding the award of a contract and that the contracting entity should be required to provide specific reasons as to why the proposal selected was awarded over each other unsuccessful proposal. Another commenter stated that unsuccessful offerors should be allowed to receive information concerning why a specific proposal was awarded. The department responds that any person may submit an open records request asking for all information regarding to the award of a contract and the information must be provided unless it is included as an exception in the Open Records Act. Requiring the contracting entity to provide specific reasons as to why the awarded proposal was selected over each other unsuccessful proposal would be extremely burdensome and costly, especially in those situations in which other unsuccessful offerors have not requested such information. Since an unsuccessful offeror is entitled to receive information concerning why its proposal was not accepted and a copy of the successful proposal after its selection, the department believes adequate information is available. Another commenter questioned if the definition of "financial or other interest" prevented employees of a community center from serving on boards of organizations which purchase property and then lease it back to the center. The department responds that the definition prevents such activity. Regarding start-up funds, the commenter stated it was illogical to allow the creation of another layer of bureaucracy at the local level and then to provide it with start-up funds. The commenter stated that if the department was interested in creating a local entity to become the authority then it should solicit proposals from anyone interested in becoming a local authority. The commenter suggested that the RFP state that start- up costs are part of the interested party's expenses. The commenter noted that sec.401.347 already allows the department the option to contract with entities that are not community centers. The department responds that state statute (Texas Health and Safety Code, sec.534.054(b)) requires the department to give preference to community centers when identifying a local authority. Regarding start-up funds, the language was deleted and new language added that provided guidelines for a contracting entity when it executes a contract involving advance payments to a contractor/subcontractor. One commenter suggested language in sec.401.351(a)(2)(A) be revised to state, "The contracting entity must give notice to all known potential providers in the authority's local service area." The commenter suggested that the term "known" be defined as any qualified provider in the local authority's local service area. The department responds that requiring a contracting entity to know of every qualified provider in its area at all times is unrealistic. The department believes that the proposed language is adequate to give notice of intent to contract for services. Regarding sec.401.351(a)(2)(B)(vi), the same commenter suggested adding "and selection of proposals, including the names of all contractor's staff or personnel who will be involved in the procurement process." The department responds that stating the criteria for evaluating proposals is sufficient information for potential offerors. Including names of individuals involved in the procurement process is irrelevant while encouraging undue and illegal influence over the process. Another commenter expressed concern regarding the effect the definition of "financial or other interest" would have on who may be appointed to advisory committees, stating that even though a private provider who serves on an advisory committee may not be impacted financially, decisions made by the committee may impact the private provider's business in other ways. The department responds that the definition refers to those persons and their family members who initiate or approve contracts. Members of an advisory committee should only advise and not be in a position to initiate or approve contracts. The commenter stated that sec.401.345(a) relegates community center providers to being the provider of last resort. The commenter also stated that the Texas Health and Safety Code, sec.533.0355, was supposed to level the field, not tilt it in favor of private providers. The department responds that sec.401.345(a) states contracting is the preferred alternative under certain circumstances. It should not be interpreted as relegating governmental entities to the provider of last resort. The department notes that sec.533.0355 of the Texas Health and Safety Code governs pilot projects, which are not addressed in this rule. Regarding limiting advance payments to community centers or governmental entities in sec.401.345(d), the same commenter expressed concern that this requirement would make it impossible to set case rates or pay capitation rates. The department responds that the language in sec.401.345(d) has been modified to allow advance payments by the state authority and local authorities to their contractors/subcontractors under certain conditions. Regarding the restriction of providing start-up funds to subcontractors, the commenter questioned if a local authority could build a service within itself (not assist a provider with developing the service for the authority), but then have the service operated by a provider. The department responds that the language regarding start-up funds was deleted and new language added that provided guidelines for a contracting entity when it executes a contract involving advance payments to a contractor/subcontractor. Regarding the repayment of start-up funds in sec.401.346(a)(4), the commenter asked if this requirement included funds designated for a pilot program. The department responds that funds designated for a pilot program are not considered start-up funds. The commenter stated that sec.401.346(f)(1)(B) was unclear and asked if the local authority could give spin-off providers all the property and equipment or must it be sold/rented to them. The commenter stated that either way affects the level playing field. The department responds that the language contained in sec.401.346(f) has been modified and reorganized for clarification. The same commenter stated that sec.401.345(a) and sec.401.349(a)(2) were contradictory. The department responds that sec.401.349(a) and (a)(2) require the local authority to consider public input, ultimate cost-benefit, and client care issues to ensure consumer choice and the best use of public money in determining whether to become a provider of a service or to subcontract that service to another organization. If the local authority finds that a contractor is able to provide the same or higher quality service at a cost lower than possible through governmental provision (sec.401.345(a)) then it would be the best use of public money to contract that service. The commenter stated that sec.401.350(a)(3) should also include "veteran status" as protected from discrimination. The department responds that a veteran is not constitutionally protected from discrimination. However, in certain situations a person with "veteran status" is given preference (e.g., hiring for employment). Regarding sec.401.350(c)(2), the same commenter requested a definition of "contractor/subcontractor," asking if it meant the owner/officers/directors/CEO or anyone who is employed by the contractor/subcontractor. The department responds that the Texas Family Code, sec.231.006, requires certification from the contractor/subcontractor's sole proprietor and each partner, shareholder, or owner with an ownership of at least 25% of the business entity. Regarding sec.401.351(a)(2)(A)(ii), the commenter suggested adding "approximate" when referring to the number of persons to be served by a contract. The department responds by adding the language suggested by the commenter. Regarding sec.401.351(a)(2)(C)(ii), the commenter stated that requiring potential contractors to provide evidence that they currently meet all TDMHMR's community standards is unreasonable. The commenter stated that the requirement would limit bidders to persons who are already providing services and not all of the standards are applicable to every service. The department responds that sec.401.351(a)(2)(C)(ii) allows for the offeror to submit only its credentials for providing the community-based service, including applicable certifications and licenses. Evidence of compliance with the TDMHMR's community standards may be provided instead of, or in addition to, the credentials. Regarding the commenter's concern that not all of the standards are applicable to every service, the department has added language clarifying standards which are applicable to the contract. The commenter stated that sec.401.351(a)(2)(E) does not guarantee that any proprietary information included in a proposal remains confidential after the award. The department responds that, although proprietary information is included as an exception in the Texas Open Records Act, it cannot guarantee its confidentiality in every situation. If the contracting entity believes certain information contained in a proposal to be proprietary, then it has a responsibility to request an opinion from the attorney general and act accordingly. Another commenter questioned why the rules do not apply to Medicaid contracts. The department responds that the rules governing contracts for the Medicaid program are contained in Chapter 409 of this title. The same commenter requested deleting the definition of "persons with a mental disability." The commenter stated that all past and current department documents use the term "individual" instead. The commenter also stated that the term "mental disability" was too generic and meant nothing. The department responds that several current department rules use the term "persons with a mental disability" rather than "individual." Because the term "mental disability" could be interpreted broadly, the department has defined the term for use in this subchapter. A commenter objected to the definition of "priority population" because it was not consistent with the strategic plan and state law. The commenter also stated that priority population meant those who are most in need and stated there was no need to use the term in rule. The department responds that, although the definition is not the exact language used in the strategic plan and state law, it is consistent with its intent. The department agrees with the commenter that priority population means those persons most in need; however, the language relating to priority population in the performance contract provides guidance to the local authority on how to determine who those persons are. The department cannot purchase services for an indefinite number of persons using a finite number of dollars. Regarding sec.401.345(c), the same commenter recommended imposing fines and penalties if the authority must recover improper payments. The department responds that any prescribed fines and penalties would be included in each contract. Regarding the "Guidelines for Annual Financial and Compliance Audits of Community MHMR Centers (Seventeenth Revision)" in sec.401.346(d), the same commenter asked how the organization could comment when it does not know what the modification would be. The department responds that the commenter's question is unclear. The department notes that language in the preamble stated, "The Guidelines for Annual Financial and Compliance Audits of Community MHMR Centers (Seventeenth Revision),' would be adopted by reference. Copies are available by contacting TDMHMR, Office of Policy Development, P.O. Box 12668, Austin, TX 78711-2668. The guidelines include procedures required by state and federal statute as well as procedures required by the department. Comment will be accepted on all of the guidelines; however, the portions of the guidelines for which the department has discretion in modifying in response to public comment are indicated with an asterisk." Regarding sec.401.349(a), the commenter recommended requiring input from consumers and/or family and ensuring family choice in addition to consumer choice. The department responds that the language in this subsection is taken verbatim from state statute (Texas Health and Safety Code, sec.533.035(c)). The department notes that the provision requiring public input includes input from consumers and their families. Regarding family choice in addition to consumer choice, when appropriate, the family's choice should always be considered. Regarding sec.401.351(a)(3)(C), the same commenter suggested requiring the contracting entity to consider "consumer and/or family choice" as well as "training and quality of staff." The department responds that adding consideration of "consumer and/or family choice" would be inappropriate for the Request for Proposal (RFP) method because the RFP method is used when the provision of service does not reference any particular person with a mental disability. Considering "consumer and/or family choice" would be very appropriate in awarding a contract using the sole source method. Regarding consideration of "training and quality of staff," the department notes that the elements to be considered are mandated by state statute (Texas Health and Safety Code, sec.534.055(f)). Although the list of elements to be considered is not all inclusive, the contracting entity may consider other information. Language has been added clarifying that the contracting entity shall consider all relevant information included in the contracting entity's RFP. The commenter asked if state statute required renewal of contracts to meet the same criteria as the initial award. The department responds that the renewal criteria is not the same as for initial award. The commenter requested that advocacy organizations be included in the distribution section. The department responds by adding advocacy organizations. The new sections are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.401.342. Application. (a) This subchapter applies to the Texas Department of Mental Health and Mental Retardation (TDMHMR) as the state authority for mental health and mental retardation services; to local authorities; to state facilities contracting for community-based services; to designated providers; and to subcontractors: (b) This subchapter does not apply to: (1) grants awarded pursuant to the Texas Health and Safety Code, Chapter 535, (i.e., TDMHMR In-Home and Family Support Program); and (2) contracts between TDMHMR and providers for Medicaid services. (c) Local authorities that are also state-operated community MHMR services must refer to Chapter 401, Subchapter E of this title (relating to Contracts Management) for rules governing other contracts, such as contracts for consultant, professional services, and support services. sec.401.343. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Acceptable proposal - A proposal that has been prepared and submitted according to the timeframes, procedures, and format specified in the procurement package, which indicates the offeror can meet the minimum requirements specified in the procurement package, and is made by an offeror who is legally eligible to receive state and/or federal funds. Community-based services - Mental health and/or mental retardation services provided in the community that are designated in the performance contract, performance memorandum, subcontracts, designated provider contract, or community-based residential or nonresidential mental health and mental retardation services. Community center - A community mental health and/or mental retardation center established pursuant to the Texas Health and Safety Code, Chapter 534, Subchapter A. Contract - Any written document (or series of documents) that obligates a party to pay money to a person or organization in exchange for services from that person or organization or that obligates a party to provide services in exchange for money. Contracting entity - The entity that disburses the funds for services pursuant to a contract/subcontract. This may be the state authority or a local authority. Contractor - An entity that provides services for funds pursuant to a contract. Designated provider - Pursuant to the Texas Health and Safety Code, sec.534.054, a service provider with whom TDMHMR contracts for the delivery of a specific community-based mental health and/or mental retardation service in a specified local service area of the state. The term does not include a local authority. Emergency - A state of imminent peril to the health, safety, or welfare of employees, persons served, or the general public. Facility - Any state hospital, state school, or state center. Financial or other interest - The condition that exists when an employee or officer of TDMHMR or a local authority who initiates or approves contracts has or intends employment with a contractor/subcontractor; paid consultation with a contractor/subcontractor; membership on a contractor/subcontractor's board of directors; or ownership of stock, partnership, or other substantial interest in a contractor/subcontractor, as defined in Local Government Code, sec.171.002. The term also applies to the condition that exists when a person related within the second degree of consanguinity or affinity (as described in sec.401.353 of this title (relating to Exhibits) as Exhibit A) to such an employee or officer participates in such activities. Fund accounting - Method of accounting that tracks expenditures by strategy and source of funds and allows an accurate comparison of total revenues and total expenditures by fund source. Historically underutilized business (HUB) - A for-profit corporation, sole proprietorship, partnership, or joint venture in which at least 51% of all classes of the shares of stock or other equitable securities are owned by one or more persons who have been historically underutilized (socially disadvantaged) because of their identification as members of the following groups: Black American, Hispanic American, Asian Pacific American, Native American, and Women. These persons must have a proportionate interest and demonstrate active participation in the control, operation, and management of the business. Local authority - An entity to which the Texas Board of Mental Health and Mental Retardation delegates its authority and responsibility within a specified region for the planning, policy development, coordination, resource development and allocation, and for supervising and ensuring the provision of mental health services to persons with mental illness and/or mental retardation services to persons with mental retardation in one or more local service areas pursuant to a performance contract. Local service area - A geographic area composed of one or more Texas counties delimiting the population which may receive services from a local authority. Offeror - An entity that submits to a contracting entity a proposal to be considered for a contract. Performance contract - The contract between the state authority and a local authority in which the state authority agrees to pay the local authority a specified sum for ensuring the provision of specified mental health and/or mental retardation services in a local service area. The term includes a performance memorandum. Persons with a mental disability - Persons with mental illness, mental retardation, or a related condition, or a pervasive developmental disorder, and persons younger than four years of age who are eligible for Early Childhood Intervention services. Priority population - Groups of persons with a mental disability identified in the performance contract for whom the state authority purchases mental health and/or mental retardation services. Procurement package - The request for proposals and any other associated documentation that serves to describe the requirements of the contract. Proposal - Documents prepared by an offeror in response to a procurement package. State authority - The Texas Department of Mental Health and Mental Retardation (TDMHMR). Subcontractor - An entity that provides services for funds pursuant to a contract with a local authority. Term - The period of time during which a contract is in effect and which is identified by starting and ending dates. TDMHMR - The Texas Department of Mental Health and Mental Retardation. Treatment plan - The systematic, organized compilation of information relevant to the services provided to an individual admitted for services provided using funds received from or through TDMHMR. sec.401.345. Authority Accountability. (a) Procurement by government agencies must be conducted so as to obtain the most effective use of public monies. Contracting is the preferred alternative to direct provision of government services when contracting obtains the same or higher quality of services at a lower cost than possible through governmental provision. The state authority regulates all procurements for community-based services using TDMHMR funds to promote maximum free and open competition whenever feasible. (b) The state or local authority may terminate a contract immediately or remove persons served when the life, health, welfare, or safety of persons served is endangered or could be endangered either directly or through the contractor/subcontractor's willful or negligent discharge of duties under the contract, including failure to deliver services in accordance with the terms and conditions of the contract, or if the state or local authority has reason to believe that the contractor/subcontractor has engaged in the misuse of state or federal funds, fraud, or illegal acts. (c) The state or local authority may recover improper payments when it is verified that its contractor/subcontractor has been overpaid because of improper billing or accounting practices or failure to comply with the contract terms, and repayment will be claimed, at the proportional rate of payment, for such services. The determination of impropriety is based on federal, state, and local laws and rules; state or local authority procedures; contract provisions; or statistical data on program use compiled from paid claims and other sources of data. (d) The state authority and local authorities may make advance payments to a contractor/subcontractor if: (1) the payments meet a public purpose; (2) sufficient controls are in place to ensure accomplishment of the public purpose; and (3) the payments are in exchange for services or other consideration of equal value. (e) The state authority and local authorities may include fiscal incentives and sanctions in their contracts, as permitted by law. sec.401.346. Fiscal Requirements. (a) Fiscal requirements for local authorities. (1) Local authorities must use fund accounting as required in the performance contract. (2) In accordance with Texas Health and Safety Code, sec.534.035, periodic program reviews and management audits will be conducted in sufficient quantity and type to provide reasonable assurance that adequate and appropriate fiscal controls exist in local authorities. (3) Pursuant to the Texas Health and Safety Code, sec.534.068, local authorities, with the exception of state-operated community MHMR services, must annually submit to TDMHMR copies of financial and compliance audits in accordance with the "Guidelines for Annual Financial and Compliance Audits of Community MHMR Centers (Seventeenth Revision)," which is herein adopted by reference and available by contacting TDMHMR, Office of Management Audit, P.O. Box 12668, Austin, Texas 78711-2668. (4) At the end of each contract term, the local authority must return to the state authority any state or federal funds received from or through TDMHMR which have not been encumbered. (b) Fiscal requirements for all contractors/subcontractors. (1) A contracting entity that chooses to make advance payments to its contractor/subcontractor must execute a contract with that contractor/subcontractor that ensures compliance with sec.401.345(d) of this title (relating to Authority Accountability) and which: (A) states the specific purposes for which the payments will be used; (B) identifies the proper ownership of any capital property and equipment purchased with the payments; (C) states that the contractor/subcontractor will receive any required licensure, accreditation, and/or certification to provide the contracted services within a specific timeframe; and (D) states an obligation of the contractor/subcontractor to perform services or functions in accordance with identified performance expectations. (2) Equipment and furniture are defined as nonconsumable property having a value of at least $500 and a useful life of more than one year. Equipment and furniture purchased under a specific community-based service contract budget are subject to an equitable claim by state and federal government as follows: (A) Control of equipment and furniture. A control system must be maintained by the contractor/subcontractor to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. The control system must indicate the source of funds (state, federal, other) used in the purchase of the equipment and furniture. (B) Disposition of equipment and furniture. (i) Equipment and furniture purchased with TDMHMR funds by a governmental entity belong to the governmental entity. (ii) Equipment and furniture purchased with TDMHMR funds by a private non-profit entity belong to the state authority and cannot be disposed without approval from the state authority. (iii) Disposition of equipment and furniture purchased with federal funds must be made according to the provision of federal OMB A-102, A-87, and any other applicable federal regulations. sec.401.347. Procurement of Performance Contracts. (a) The state authority shall identify an entity to serve as the local authority for each service area and enter into a performance contract with it. In identifying a local authority for a service area, the state authority shall give preference to a community center located in that service area and will attempt to execute a performance contract with that community center. (b) If the state authority cannot identify and contract with a community center in a service area, the state authority shall designate a state-operated community services as the local authority for that service area or will execute a performance contract with another agency, entity, or organization to be the local authority for that service area. sec.401.349. Contracts by a Local Authority. (a) The local authority shall consider public input, ultimate cost-benefit, and client care issues to ensure consumer choice and the best use of public money in: (1) assembling a network of service providers; and (2) determining whether to become a provider of a service or to subcontract that service to another organization. (b) Contracts between a local authority and a subcontractor providing specific community-based services must be consistent with the local authority's performance contract. (c) A local authority may take the same remedy actions and sanctions with its subcontractors as are available to the state authority as defined in the local authority's performance contract. sec.401.350. Provisions for All Contracts. (a) All contracts governed by this subchapter must contain, but are not limited to, provisions stating: (1) the beginning and ending date of the contract; (2) the method of payment and maximum amount payable under the contract; (3) that no person will be excluded from participation in, denied the benefits of, or discriminated against, in any program or activity funded by the contract on the grounds of race, color, national origin, religion, sex, age, disability, or political affiliation; (4) that all records pertinent to the contract, including appropriate treatment plans, will be retained by the contractor/subcontractor for a period of five years; (5) that all client-identifying information will be maintained by the contractor/subcontractor as confidential, in accordance with applicable law and TDMHMR rules; (6) that the contractor/subcontractor is not held in abeyance or barred from the award of a federal or state contract at the time of executing the contract; (7) that any allegation of abuse, neglect, or exploitation of persons served under the contract will be reported in accordance with applicable law, including TDMHMR rules, rules of the Texas Department of Protective and Regulatory Services, and rules of the Texas Department of Health; (8) that AIDS/HIV workplace guidelines, similar to those adopted by TDMHMR, and AIDS/HIV confidentiality guidelines, consistent with state and federal law, will be adopted and implemented by the contractor/subcontractor; (9) that if, as a result of a change to a TDMHMR rule, state or federal law, or community standard, the contractual obligations of the contractor/subcontractor are materially changed or a significant financial burden is placed on the contractor/subcontractor, the parties may renegotiate in good faith to amend the contract; (10) that the contractor/subcontractor will comply with relevant TDMHMR rules and community standards, certifications, accreditations, and licenses, as specified in the contract; (11) that services will be provided in accordance with the treatment plans of persons served; (12) that pursuant to Texas Health and Safety Code, sec.534.060, the contracting entity and its representatives, including independent financial auditors, shall have unrestricted access to all facilities, records, data, and other information under the control of the contracting entity or its contractors/subcontractors as necessary to enable the contracting entity to audit, monitor, and review all financial and programmatic activities and services associated with the contract/subcontract; (13) that the contractor/subcontractor shall provide sufficient information to the contracting entity to enable the contracting entity to receive criminal history record information on the contractor/subcontractor's applicants or employees, pursuant to the Texas Health and Safety Code, sec.533.007 and Chapter 250, the Texas Government Code, sec.411.115, and Chapter 404, Subchapter H of this title (relating to Criminal History Clearances) and (14) that if an applicant or employee of the contractor/subcontractor has a criminal history relevant to his or her employment as described in Chapter 404, Subchapter H of this title (relating to Criminal History Clearances), then the contractor/subcontractor will take appropriate action with respect to the applicant or employee, including terminating or removing the employee from direct contact with persons with a mental disability served by the contractor/subcontractor. (b) Contracts which require the contractor/subcontractor to assume responsibility for the funds of persons with a mental disability must contain provisions which require the contractor/subcontractor to have and abide by a written policy for protecting and accounting for such funds in accordance with generally accepted accounting principles and is subject to approval by the contracting entity. (c) All contracts with the exception of the performance contract must include, but are not limited to: (1) a statement that if a contract is for the provision of residential services in a family home, then the home will be used only to house disabled persons and may not be used as a restitution center, a home for substance abusers, or a halfway house. For purposes of this paragraph, "family home" and "disabled persons" are defined as in the Community Homes for Disabled Persons Location Act, Texas Human Resources Code, Chapter 123; and (2) a certification that the contractor/subcontractor or offeror is not more than 30 days delinquent in child support payments and eligible to receive payments from state funds as required by the Texas Family Code, sec.231.006. (d) All contracts with the exception of the performance contract must be consistent with the model contracts contained in the TXMHMR Contracts Manual. sec.401.351. Methods of Procurement. The state authority and all local authorities shall procure community-based services to be provided by another organization through one of the methods described in this section. (1) Request for Proposal (RFP). A contract may be procured using the request for proposal method in accordance with this subsection. (A) Determination of method. A contract must be procured through the RFP method unless a determination is made that the sole source method is permissible under this section. The RFP method is typically applicable to those situations where funds of greater than $1000 are available to the contracting entity for the provision of a service without reference to a particular person with a mental disability. (B) Solicitation. (i) The contracting entity must make a reasonable effort to give notice of the intent to contract for services to each potential provider in the authority's local service area. An RFP must be published in a local newspaper or professional association newsletter, or solicited through announcements by direct mail to all known providers by the contracting entity at least 10 days, but not more than 60 days, prior to the due date of submission of proposals. An RFP must contain, but is not limited to, the following information: (I) the community-based service to be purchased; (II) the approximate number of persons with a mental disability to be served pursuant to the contract; (III) the geographic area to be served pursuant to the contract; (IV) applicable funding limitations; (V) method of payment; (VI) the contract term; (VII) any limitations on who may submit a proposal and any limitations in the services; (VIII) the procedure for requesting a procurement package; and (IX) the date by which proposals must be submitted. (ii) A contracting entity must provide a procurement package to each entity that requests one. No requirement that restricts competition by unreasonably eliminating or limiting participation in the procurement process may be included in the procurement package. A procurement package must contain: (I) a detailed description of the community-based services to be purchased, including all information included in the RFP; (II) a detailed description of information to be included in a proposal; (III) instructions for the submission of questions concerning the procurement by potential offerors; (IV) instructions for the submission of proposals; (V) requirements that a potential offeror must fulfill to participate in the procurement process, including assurances that: (-a-) the offeror has made no attempt nor will make any attempt to induce any person or firm to submit or not submit a proposal; (-b-) the offeror has arrived at the proposal independently without consultation, communication, or agreement for the purposes of restricting competition; (-c-) the offeror and its officers or employees have no relationship now or will have no relationship during the contract period that interferes with fair competition or that is a financial or other conflict of interest, real or apparent; and (-d-) no member of the offeror's staff or governing authority has participated in the development of specific criteria for award of the contract, nor will participate in the selection of the proposal to be awarded the contract. (VI) the criteria for evaluation of proposals. (iii) A proposal must include, but is not limited to, the following information: (I) the offeror's name, address, telephone number, and type of legal entity; (II) the offeror's credentials for providing the community-based service, including applicable certifications, licenses, and/or evidence of compliance with applicable TDMHMR community standards; (III) information concerning the factors set forth in subparagraph (C)(iii) of this paragraph. (iv) Changes to a procurement package may be made by the contracting entity prior to the date designated for submission of proposals, provided all offerors that have obtained a procurement package are notified of the change and are provided fair opportunity to respond. (v) Except as provided in the Texas Open Records Act, Texas Government Code, Chapter 552, all information submitted in a proposal is confidential until a contract has been awarded. (vi) Any amendments to a proposal must be made by the offeror in writing and must be received prior to the submission date for proposals. (vii) The contracting entity must document all transactions concerning contracts. (viii) The contracting entity may validate any information in a proposal by using outside sources or materials. (C) Award. (i) For a proposal to be considered for award, the offeror must follow all instructions and meet all requirements specified in the procurement package. (ii) Clarification or confirmation of information submitted in a proposal may be obtained if such information is necessary to complete the award process; however, no offeror may be given information which would give that offeror an unfair competitive advantage. (iii) The award of a contract is made by determining the lowest and best proposal. The determination shall include consideration of any relevant information included in the RFP, including: (I) price; (II) the ability of the offeror to perform the contract and to provide the required services; (III) whether the offeror can perform the contract or provide the services within the period required, without delay or interference; (IV) the offeror's history of compliance with the laws relating to its business operations and the affected services and whether it is currently in compliance; (V) whether the offeror's financial resources are sufficient to perform the contract and to provide the services; (VI) whether necessary or desirable support and ancillary services are available to the offeror; (VII) the character, responsibility, integrity, reputation, and experience of the offeror; (VIII) the quality of the facilities and equipment available to or proposed by the offeror; (IX) the ability of the offeror to provide continuity of services; and (X) the ability of the offeror to meet all applicable written policies, principles, and regulations. (iv) Negotiation may be conducted either to complete the procurement process or to complete an evaluation of an acceptable proposal. When only one proposal has a reasonable chance of being awarded, contract staff and the potential contractor/subcontractor will negotiate the contract requirements as necessary to complete the procurement process. When more than one acceptable proposal is received, negotiation is used to further evaluate competitive proposals and to select one or more for award. In this situation, no potential contractor/subcontractor is given information that will give the contractor/subcontractor a competitive advantage over the other potential contractors/subcontractors. (v) An RFP may be canceled without award for any reason or for no reason. (vi) Each offeror who submits an acceptable proposal but is not awarded a contract is entitled to timely notification in writing that the proposal is no longer being considered. (vii) Upon written request, an unsuccessful offeror is entitled to receive information concerning why its proposal was not accepted. (2) Sole source. A contract may be procured using the sole source method in accordance with this section. (A) Determination of method. The sole source method is typically applicable in those situations where funds are available for the provision of services and certain conditions exist which indicate that the RFP method is not appropriate. (i) A contract may be procured using the sole source method, only if: (I) it is documented that only one source can or will provide the needed services; (II) the contract is with another governmental entity; (III) there exists an emergency situation in which a delay may result in harm to person(s) with a mental disability who is to receive the community-based service; (IV) the contract is for less than $1,000 for a one-year period; or (V) no acceptable proposal was received through a substantially similar RFP within the previous 12 months. (ii) A contract procured using the sole source method pursuant to clause (i)(III) of this subparagraph, may be for a term of only six months or for the balance of the fiscal year, whichever is greater. (iii) A contract procured using the sole source method pursuant to clause (i)(IV) of this subparagraph may not be divided in order to qualify for the sole source method. (iv) The contracting entity must justify and document awarding a sole source contract. Documentation must accurately and concisely substantiate the necessity for a sole source contract on the basis of one or more of the reasons listed in clause (i) of this subparagraph. (B) Award. The procedure for awarding contracts using the sole source method is established by the contracting entity. sec.401.352. Renewal of All Contracts. All contracts governed by this subchapter are renewed in accordance with the Texas Health and Safety Code, sec.534.065. sec.401.353. Exhibits. Exhibit A - Nepotism - Civil Law: Degrees of Relationship, referenced in this subchapter, is available from the Texas Department of Mental Health and Mental Retardation, P.O. Box 12668, Austin, Texas 78711-2668. sec.401.354. References. The following laws and rules are referenced in this subchapter: (1) Chapter 404, Subchapter H of this title (relating to Criminal History Clearances); (2) Local Government Code, sec.171.002; (3) Texas Family Code, sec.231.006; (4) Uniform Grant and Contract Management Act of 1981, as amended, Texas Government Code, Chapter 783; (5) Uniform Grant and Contract Management Standards for State Agencies, Governor's Office of Budget and Planning; (6) Texas Government Code, Subchapter A, sec.sec.2254.001 et seq; Subchapter B, sec.sec.2254.021 et seq; sec.411.115; and Chapter 572, Subchapter C; (7) Texas Health and Safety Code, Title 7, Chapters 532, 533, 534, 535, and 551; (8) Texas Human Resources Code, Chapter 123; and (9) Texas Open Records Act. sec.401.355. Distribution. This subchapter shall be distributed to: (1) members of the Texas Board of Mental Health and Mental Retardation; (2) executive and program staff of Central Office; (3) chairpersons, board of trustees or governing body, and chief executive officers, all local authorities and designated providers; (4) all TDMHMR facilities; and (5) advocacy organizations. 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 October 4, 1996. TRD-9614527 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: July 30, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER E.Contracts Management 25 TAC sec.sec.401.381-401.386 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.401.381-401.386 of Chapter 401, Subchapter E, concerning contracts management, without changes to the proposal as published in the July 30, 1996, issue of the Texas Register (21 TexReg 7214). New sections which would replace these are contemporaneously adopted in this issue of the Texas Register. The repeal allows for the adoption of a new subchapter. No public comment was received on the proposed repeals. The repeals are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. 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 October 4, 1996. TRD-9614528 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: July 30, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER I.Certification of Community Residential Programs 25 TAC sec.sec.401.553-401.559, 401.561, 401.562, 401.564, 401.565 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts amendments to sec.sec.401.553-401.559, 401.561, 401.562, 401.564, and 401.565 of Chapter 401, Subchapter I, concerning certification of community residential programs. Sections 401.553, 401.555, 401.556, 401.559, 401.561, and 401.565 are adopted with changes to the proposed text as published in the August 6, 1996, issue of the Texas Register (21 TexReg 7327). Sections 401.554, 401.557, 401.558, 401.562, and 401.564 are adopted without changes and will not be republished. The amendments permit foster group homes licensed by the Texas Department of Protective and Regulatory Services (TDPRS) to be granted alternative certification; the existing rule references only foster family homes for children. The existing rule references the Texas Department of Human Resources as the licensing agency for foster homes; the reference is revised to reflect that licensing authority now rests with TDPRS. Language has been added in sec.401.562(d) clarifying that enforcement action will be taken when a residential provider subject to certification refuses to comply with the subchapter. New subsection (e) of the same section was added which describes how a waiver may be granted in exceptional cases. The amendments also update language to reflect recent organizational changes within the department. In sec.401.553, a section number referenced in the definition of "alternative certification status" has been corrected. Also, within that section, the term "state operated community-based MHMR services division" has been corrected to read "state operated community MHMR services (SOCS);" the term has been corrected within the definition of "mental retardation authority," as well. In sec.401.555(1), the title of 1988 TDMHMR Community Standards for Individuals with Mental Retardation has been changed to be consistent with the title as used in the reference section. A technical correction has been made to a reference within the paragraph, as well. To reflect the chronological sequence of actions, a sentence from sec.401.556(1) has been reordered to create a new paragraph (3), with a subsequent reordering of the remaining paragraphs. A technical correction has been made to a reference in paragraph (2) and a grammatical error in paragraph (4) has been corrected by inserting the phrase "the Certification Section will" for "it shall." In sec.401.559, the phrase "TXMHMR Commissioner or his/her designee" has been deleted; it should have been deleted upon proposal. In sec.401.561, the term "requisite" has been deleted in subsection (b). In subsection (e) of that same section, language has been modified to clarify that residents, parents of minor residents, and guardians are to receive notice when the program fails to obtain or maintain certification. Advocates and advocacy organizations have been added to the distribution list in sec.401.565. No public hearing was requested or held concerning the proposal. Written comments were received from the Parent Association for the Retarded of Texas. The commenter stated that too much of the existing rule language was designated as "no change," making the proposal difficult to read, adding that as a result it was difficult to understand how the procedures described in the rule were intended to work. The commenter specifically questioned the use of the "no change" designation in sec.401.557(1)(A)-(E) and asked what was being stipulated in the passage. The department responds that use of the "no change" designation is permitted by the Texas Register for those blocks of text for which amendments are not proposed. However, the department evaluates on a case-by-case basis whether the full text of rules proposed for amendment should be included in the review copies which it distributes to concerned members of the public. Concerning sec.401.557(1), the department explains that no amendments were proposed to subparagraphs (A)-(E). Including the missing language would not have aided readers in understanding the intent of the amendments which were proposed in sec.401.557(1). The department will continue to evaluate on a case-by-case basis whether the full text of rules proposed for amendment should be included in the review copies which it distributes to concerned members of the public. Concerning the same passage, the commenter questioned what the department means by "substantial compliance" with applicable standards, and stated that amending the language as proposed would lower the quality of care and safeguards for residents in certified programs. The department responds that the definition of "substantial compliance" was not printed in either the review copies or in the Texas Register because no amendments were proposed to the definition which appears sec.401.553. The definition reads: "Ninety percent compliance with each standard." The department disagrees that the amendments lower the quality of care and safeguards for residents in certified programs; instead, the amendments are intended to acknowledge the department's adoption of the Quality Assurance and Improvement System (QAIS) described in recently adopted new rules in Chapter 408, Subchapter C, governing Quality Assurance and Improvement System (QAIS) for Mental Retardation Services and Supports. QAIS is based on the Outcome Based Performance Measures of The Accreditation Council which are used by public and private programs throughout the country to ensure that the rights, safety, health, and well-being of persons receiving services in those programs are protected. The amendments to this proposal include references to the QAIS rule in sec.401.555 and sec.401.564. The commenter noted that several exhibits are mentioned repeatedly throughout the rule and asked that they be attached. The commenter questioned whether the subchapter contains an exhibit section and asked why it was not printed. The department responds that no changes were proposed to either the exhibits or to sec.401.563 which lists the exhibits. Therefore, the exhibits were not distributed for public comment. The exhibits will be attached to copies of this newly amended policy when it is distributed, just as they are to copies of the current policy distributed from the department's Central Office. Concerning sec.401.556, the commenter stated that seven days does not come close to being an adequate timeframe to receive, process, and check out business records, and to conduct a site visit. The safety and well-being of prospective residents must be the department's first priority, not getting the program open, the commenter stated, questioning what would happen if a backlog of programs waiting for certification developed. The commenter suggested that the time period be increased to at least 14 calendar days. The department declines to make the change and responds that seven days is an adequate amount of time for the Certification Section in the department's Central Office to complete this final step of a detailed and involved process. The mental retardation authorities are expected to complete site visits, inspection of business records, and all other activities necessary to ensure the safety and well-being of prospective program residents prior to submitting the application. The Certification Section has found this time period to be an adequate amount of time to review an application. The department further states that no backlog of applications exists in the Certification Section at this time nor has there ever been a backlog. Concerning sec.401.562(c), the commenter requested the inclusion of a requirement that documentation produced by regional monitors after visiting a certified program must be provided to director of quality assurance for the MRA or designated provider as well as to the Certification Section in Central Office. The department declines to include such requirement and explains that when regional monitors visit certified programs they already are making a report to the MRA, usually as part of a larger project. The provision as adopted requires that the portion of that larger report to the MRA which relates to the certified program be provided to the Certification Section. Concerning sec.401.562(e), the commenter expressed concern with the provision regarding 30- day waivers that might be granted to residential programs in exceptional circumstances, suggesting that the provision was too vague and that no more than two waivers for a single site should be permitted. The department responds that the provision was designed to accommodate those rare situations when an individual has been placed in an uncertified residential setting on respite basis, usually in an emergency. Respite placements are defined as lasting no longer than 30 days. Under those rare circumstances when an appropriate alternate placement cannot be found within the prescribed 30 days or even within two 30-day time periods, a waiver from certification may be granted to prevent multiple moves which might prove unnecessarily disturbing to the individual. Certification of a program under these circumstances would be temporary and would result in an unjustified expenditure of state resources. The department contends that adequate safeguards are in place through the MRAs to ensure the health and safety of individuals placed in uncertified programs on a waiver. The commenter suggested that the distribution section should specify exactly which management and program staff in Central Office are to receive copies of the amended subchapter, and also that advocacy groups be added as recipients. The department declines the first suggestion, noting that the Office of Policy Development maintains an up-to-date and comprehensive list of key management and program staff in Central Office who receive copies of all proposed and adopted rules. The second suggestion is accepted, and the department notes that the Office of Policy Development also maintains list of advocacy organizations and individuals who routinely receive copies of rules. The amendments are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority. sec.401.553. Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Applicant -- A person or organization that completes the application and application packet for certification. Alternative certification status -- The certification status which is accorded community residential programs operating under auspices of an MRA or directly by a designated provider which are certified, licensed, or accredited as designated in sec.401.558 of this title (relating to Alternative Certification Status). Certification officer -- The staff person designated by the mental retardation authority (MRA) to assist the department in the certification of community residential programs in the local service area. Certification section -- The section within the Office of Quality Management Texas Department of Mental Health and Mental Retardation, which is designated as the authority on the certification of community residential programs for individuals with mental retardation, and which reviews programs, determines compliance with certification requirements, and approves, denies, suspends, or revokes certification. Commissioner -- The commissioner of the Texas Department of Mental Health and Mental Retardation. Community center -- A community mental health and mental retardation center established under the Texas Health and Safety Code, Title 7, Chapter 534. Community residential program -- Any residence in the community providing supervision and habilitation services for one to 15 individuals with mental retardation and which is funded by the department. The term includes programs with overnight staff on the premises. Department -- The Texas Department of Mental Health and Mental Retardation. Designated provider -- As defined in the Texas Health and Safety Code, sec.534.054(c), a service provider with whom the department in its role as the state authority contracts for the delivery of a specific community-based mental retardation support or service in a specified local service area of the state if the local mental retardation authority for that service area is unable or unwilling to provide that service. The term does not include a local mental retardation authority. Designee -- The entity or entities designated by the department to perform the monitoring and evaluation requirements of this subchapter, which may be staff of the mental retardation authority serving the local service area. Exceptions process -- The process whereby the timeframe in completing the plan of improvement is extended. Extension process -- The process whereby the anniversary date is extended for a period of time, up to two months. Mental retardation authority (MRA) -- As defined in the Texas Health and Safety Code, sec.531.002, an entity to which the Texas Mental Health and Mental Retardation Board delegates its authority and responsibility within a specified region for planning, policy development, coordination, and resource development and allocation and for supervising and ensuring the provision of mental retardation services to individuals with mental retardation in one or more local service areas. An MRA can be either a community center or state operated community MHMR services (SOCS). Operator -- The agency, organization, or individual directly responsible for the overall management of a community residential program. Service provider -- A person who provides direct services to individuals in a residential setting. State operated community MHMR services (SOCS) -- Those entities which provide community-based mental health and/or mental retardation services and which are operated by the department. Formerly known as community-based service divisions of state facilities. Substantial compliance -- Ninety percent compliance with each standard. sec.401.555. Requirements for Certification. To be certified to provide community mental retardation residential services, the applicant must submit an application, referred to in sec.401.563 of this title (relating to Exhibits) as Exhibit A, and must be able to meet the basic requirements in the application packet referred to in sec.401.563 of this title (relating to Exhibits) as Exhibit B, and must demonstrate compliance with the following standards and rules: (1) applicable provisions of the 1988 TDMHMR Community Standards for Individuals with Mental Retardation, as amended, or certification, licensure, or accreditation as listed in sec.401.558(a) of this title (relating to Alternative Certification Status); (2) Chapter 402, Subchapter I of this title (relating to Movement of Individuals with Mental Retardation from Department Facilities); (3) Chapter 403, Subchapter K of this title (relating to Client-Identifying Information); (4) Chapter 710, Subchapter B, Title 40, (relating to Client Abuse and Neglect in Community Mental Health and Mental Retardation Centers), or Chapter 710, Subchapter A, Title 40, (relating to Abuse and Neglect of Persons Served by TXMHMR Facilities), as appropriate; (5) Chapter 405, Subchapter K of this title (relating to Deaths of Persons Served by TXMHMR Facilities or Community Mental Health and Mental Retardation Centers); (6) Chapter 405, Subchapter Y of this title (relating to Rights of Clients -- Mental Retardation Services); (7) Chapter 408, Subchapter C of this title (relating to Quality Assurance and Improvement System (QAIS) for Mental Retardation Services and Supports); (8) applicable provisions of the National Fire Protection Association's Life Safety Code; and (9) Texas Health and Safety Code, Subtitle D (Persons with Mental Retardation Act). sec.401.556. Initial Application Process and Provisional Certification. Initial application process. All correspondence with reference to certification to operate a community residential program for individuals with mental retardation should be directed to the Certification Section, Office of Quality Management, Texas Department of Mental Health and Mental Retardation, P.O. Box 12668, Austin, Texas 78711. (1) All applicants for new community residential programs shall make application for certification using the forms referred to in sec.401.563 of this title (relating to Exhibits) as Exhibits A and B. Upon completing the requirements described on the provisional checklist, the applicant shall submit the fully completed application and provisional checklist materials to the certification officer of the MRA serving the local service area, who shall forward a copy of the materials to the Certification Section. Training for new providers regarding the certification process will be provided by the local MRA. (2) If the certification officer finds that the premises are suitable and the applicant is qualified (in keeping with requirements outlined in the "Provisional Checklist," which is referred to in sec.401.563 of this title (relating to Exhibits) as Exhibit B) to operate a community residential program in accordance with the requirements of this subchapter, the certification officer shall recommend provisional certification. A recommendation by the certification officer must include the signature endorsement of the director of quality assurance of the MRA or designated provider that the program meets provisional certification requirements. The application, supplementary materials, and endorsements shall be forwarded to the Certification Section. (3) Application should be submitted to the Certification Section at the earliest time feasible, but in no case later than seven calendar days prior to the date on which the program is to begin serving individuals with mental retardation. (4) The application and supplementary materials shall be reviewed by the Certification Section. If provisional certification is granted, the Certification Section will issue to the applicant a letter granting provisional certification for a period not to exceed nine months. A copy of the letter shall be sent to the certification officer and the director of quality assurance for the MRA or designated provider. (5) If provisional certification is not granted, the Certification Section shall send the applicant a letter stating the reason(s) that the application has been denied. A copy of the letter shall be sent to the certification officer and the director of quality assurance for the MRA or designated provider. (6) During the nine-month period of provisional certification, the Certification Section shall make on-site visit(s) to the premises to determine whether full certification should be granted. sec.401.559. Certification Renewal. (a) Following initial certification, the applicant must apply for renewal of certification annually at least 60 calendar days prior to the anniversary date of certification or as directed by the Certification Section. (b) To renew certification, each applicant shall submit a current application, referred to in sec.401.563 of this title (relating to Exhibits) as Exhibit A, and the items as described on the "Renewal Checklist," referred to in sec.401.563 of this title (relating to Exhibits) as Exhibit C. The renewal application must include the signature endorsement of the certification officer and the quality assurance director of the MRA or designated provider. (c) Following receipt of updated information, the Certification Section will make an on-site visit in order to determine whether certification shall be renewed. (1) If the Certification Section determines that the community residential program substantially complies with the requirements for certification, the Certification Section shall recertify the program for a period not to exceed one year. A letter of recertification and a new certificate shall be sent to the applicant, and copies to the certification officer and the director of quality assurance for the MRA or designated provider. (2) If the Certification Section determines that the community residential program does not substantially comply with requirements for certification, the Certification Section shall notify the applicant by letter return receipt requested of the reasons that certification has not been renewed. A copy of the letter shall be sent to the certification officer and the director of quality assurance for the MRA or designated provider, in order for these parties to determine a course of action. (d) In exceptional cases, as defined by the Certification Section, the commissioner of TXMHMR or his/her designee may grant an extension to the previous certification, not to exceed two months after the anniversary date of certification. (e) Also, in special cases, as defined by the Certification Section, the commissioner or designee may grant an exception to the current plan of improvement period, not to exceed 30 days. When an exception of time is requested, the Certification Section of must approve final corrections and (re)certification. Any program that requests an exception and eventually becomes (re)certified, may receive an on-site follow-up visit on the plan of improvement within six months of the program's anniversary date, or if a new program, within six months of the first on-site visit. (1) When warranted, additional exceptions of 30 days each may be requested. (2) Each additional exception must be submitted and approved separately. sec.401.561. Denial, Suspension, and Revocation of Certification. (a) The department shall have the authority to immediately deny, suspend, or revoke the certification of a community residential program if the department finds that the program: (1) violates or continues to violate applicable laws, rules, or standards; or (2) operates the program in a way that is harmful to the health, safety, care, or rights of one or more individuals. (b) When denial, suspension, or revocation of a certification occurs because a program does not substantially comply with each of the applicable standards and rules as described in sec.401.555 of this title (relating to Requirements for Certification), a plan of improvement shall be submitted for approval to the Certification Section and deficiencies corrected within 30 days of the date on the letter accompanying finalized deficiencies, unless an exception has been granted. Review by the Certification Section or designee, including on-site inspection, as appropriate, will occur in order to determine compliance with the plan of improvement. (c) In the event that a program that has alternative certification loses the certification, licensure, or accreditation on which the alternative certification is based, an application for certification will be submitted unless the MRA or designated provider is otherwise directed by the Division of Long Term Supports and Services in the department's Central Office and the alternate plan is approved by the Certification Section. (d) The denial, suspension, or revocation of a certification maintained pursuant to a contract for services may be appealed following the procedures described in Chapter 403, Subchapter O of this title (relating to Administrative Hearings of the Department in Contested Cases). (e) The MRA or designated provider shall notify the residents, parents of minor residents, or guardians of residents if all approved plans of improvement have failed to bring the program into compliance and, as a result, the program fails to obtain or maintain certification. sec.401.565. Distribution. (a) This subchapter shall be distributed to: (1) the members of the Texas Mental Health and Mental Retardation Board; (2) the medical director; (3) management and program staff in Central Office; (4) executive directors and board of trustees chairs of community centers; (5) executive directors, state operated community MHMR services divisions; (6) interested advocates and advocacy organizations; and (7) any individual who requests a copy. (b) The executive director is responsible for distributing this subchapter to community residential program providers required to meet certification in the local service area. 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 October 4, 1996. TRD-9614529 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 206-4516 CHAPTER 403. Other Agencies and the Public SUBCHAPTER K. Client-Identifying Information 25 TAC sec.sec.403.291-403.300, 403.302, 403.305-403.308 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts amendments to sec.sec.403.291-403.300, 403.302, and 403.305-403.308 of Chapter 403, Subchapter K, concerning client-identifying information. Sections 403.292, 403.293, 403.297, 403.305, and 403.308 are adopted with changes to the proposed text as published in the July 5, 1996, issue of the Texas Register (21 TexReg 6194-6199). Sections 403.291, 403.294-403.296, 403.298-403.300, 403.302, 403.306, and 403.307 are adopted without changes and will not be republished. The amendments implement provisions of House Bill 2162, and Senate Bills 81, 149, 667, and 1485 (74th Legislature). House Bill 2162 allows for the disclosure of confidential client-identifying information for the purpose of providing continuity-of-care for offenders with mental impairments. Senate Bills 81 and 1485 allow for the disclosure of confidential client-identifying information to child fatality review teams. Senate Bill 149 allows for the disclosure of client-identifying information for the purposes of providing rehabilitative services to sex offenders. Senate Bill 667 allows for the disclosure of client- identifying information if a client's physical or mental condition is relevant to the execution of a will or if the information is relevant to a proceeding brought by the client against a physician. The terms "and/or chemical dependency services" and "contract provider" were added to several sections for consistency with the application of the rules. Language was added to the definition of "legally authorized representative" for clarification. The term "TXMHMR" was changed to "TDMHMR." In sec.403.297(f) the term "offenders" was changed to "convicted felons" for consistency with the memorandum of understanding that TDMHMR has with the Texas Department of Criminal Justice as required by the Texas Health and Safety Code, sec.614.013. Advocacy organizations was added to the distribution section. Public comment was received from Tarrant County MHMR Services, Fort Worth; Denton County MHMR Center, Denton; and a private citizen. One commenter questioned if the information referenced in sec.403.295(g) and (h) would be released with or without consent. The commenter requested clarification as to the type of situation to which the subsection would apply. The department responds that the subsection tracks the Texas Health and Safety Code, sec.576.005(b) and (c), which allows the treating physician to release certain information without the client's consent; however, the client may prevent the release of the information if the client provides contrary written instructions to the treating physician. Regarding clarification as to the type of situation to which this subsection would apply, although it is expected that the statute would rarely be used, each treating physician must decide for him/herself what information is "in the best interest of a client" to release to a law enforcement officer or the client's legally authorized representative. One commenter recommended deleting language from Exhibit B regarding the release of liability. The department agrees and has deleted the language. Another commenter suggested changing the term "incompetent" to "incapacitated" and "TXMHMR" to "TDMHMR." The department responds that the term "incompetent" is used in statute. Regarding changing TXMHMR to TDMHMR, the term has been changed as suggested. The same commenter suggested adding language to the definition of "legally authorized representative" to clarify surrogate decision-making committee or surrogate decision-maker. The department responds by adding the statutory cite. The commenter requested deleting the language "or person reasonably believed by the client to so be" from the definition of "professional." The department responds that the language is contained in state statute. Regarding sec.403.295(g) and (h), the same commenter questioned why the subsection did not address if the client is adjudicated incapacitated by a court and has a legally authorized representative. The department responds that the reference is to when the treating physician wants to release information, not the client. The commenter questioned the use of client-identifying information without consent for research purposes as stated in sec.403.297(c)(3). The commenter cited a research study in which confidentiality was a concern. The department responds that the language is in accordance with the Texas Health and Safety Code, sec.611.004(a)(3). Additionally, by referencing department rules governing research, confidentiality is required. Regarding sec.403.297(c)(6), the same commenter questioned whether records created by persons other than state hospital or state school employees could be released without consent. The department responds that no client-identifying information generated by persons other than state hospital and state school employees may be released to persons participating in an official legislative inquiry without consent. The commenter suggested adding language to sec.403.297(d)(3) requiring documentation of advisement prior to the release of the information. The department responds that it is implied. Regarding sec.403.303(h), the commenter questioned if the reasonable fee was for access to the record or for copies of the record. The department responds that the reasonable fee is for both access and copies. See the Texas Health and Safety Code, sec.611.008(b). Regarding sec.403.303(j), the commenter requested adding "or legally authorized representative" after the term "attorney." The department agrees with the commenter, but is unable to make the change as requested because the section was not proposed. The Administrative Procedures Act prohibits modifications to rules without proposal in the Texas Register. The language will be proposed for amendment when the department next revises the rule. The commenter requested that advocacy organizations be included in the distribution. The department agrees and has added the language. Regarding the language in Exhibit A which states "Under the regulations, a facility may (but is not required to) allow a client to inspect and copy his or her record," a commenter questioned what law permitted this. The department responds that the language is in accordance with 42 Code of Federal Regulations Part 2. The amendments are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.403.292.Application. This subchapter applies to all facilities of the Texas Department of Mental Health and Mental Retardation, to state-operated community services, to community mental health and mental retardation centers, and to providers that contract with the department, state-operated community services, or community mental health and mental retardation centers to provide community-based mental health and mental retardation services and/or chemical dependency services. sec.403.293.Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. Adult - A person: (A) who is 18 years of age or older; or (B) who is under 18 but: (i) is or has been legally married; or (ii) whose disabilities of minority have been legally removed. Center - A community mental health and mental retardation center established pursuant to the Texas Health and Safety Code, Title 7, Chapter 534. Chief executive officer or CEO - The superintendent/director of a state facility, the director of a state-operated community services, or the executive director of a center or contract provider. Client - A person who, voluntarily or involuntarily, is seeking, receiving, or who has received mental health, mental retardation, or chemical dependency services from the department or center. Client-identifying information - The name, address, social security number, or any information by which the identity of a client can be determined either directly or by reference to other publicly available information. The term includes, but is not limited to, a client's medical record, graphs, or charts; statements made by the client, either orally or in writing, while receiving services; photographs, videotapes, etc.; and any acknowledgment that a person is or has been a client of the facility, state-operated community services, center, or contract provider. The term does not include a client-identifying number assigned by a facility. The statutes, regulations, and rules requiring that client-identifying information be kept confidential apply regardless of the means or methods utilized for the storage and retrieval of such information. Competent - A term used to describe a person who has the ability to comprehend the effect and consequences of giving an authorization for disclosure of client- identifying information and who has not been adjudicated incompetent by a court, or for whom an order of restoration has been executed and recorded subsequent to the client's having been adjudicated incompetent. Contract provider - An individual, entity, or organization that contracts with the department, state-operated community services, or community mental health and mental retardation center to provide community-based mental health and mental retardation services and/or chemical dependency services. Department - The Texas Department of Mental Health and Mental Retardation (TXMHMR). Facility - All state hospitals, state schools, or state centers, and their respective day care centers, and clinics, and the central office of the Texas Department of Mental Health and Mental Retardation. Incompetent - A term used to describe a person: (A) who has been adjudicated incompetent by a court and for whom no subsequent order of restoration has been executed or recorded; or (B) who does not, in fact, have the ability to comprehend the effect or consequences of giving an authorization for disclosure of client-identifying information. Legal counsel - At a facility or state-operated community services, staff of the department's legal services office; at a center or contract provider, the attorney(s) in its service. Legally authorized representative - A legally authorized representative means: (A) a parent or legal guardian if the client is a minor, or a legal guardian if the client has been adjudicated incompetent to manage the client's personal affairs; (B) an agent of the patient authorized under a durable power of attorney for health care; (C) an attorney ad litem appointed for the client; (D) a parent, spouse, adult child, or personal representative (executor or administrator of the client's estate) if the client is deceased; or (E) surrogate decision-making committee or surrogate decision-maker, as appropriate, pursuant to the Texas Health and Safety Code, Chapter 597, Subchapter C. Minor - A person who is not an adult. Specifically, a minor is a person under 18 and: (A) who is not and never has been legally married; and (B) whose disabilities of minority have not been legally removed. Professional - A person authorized to practice medicine in any state or nation, or a person licensed or certified by the State of Texas in the determination, diagnosis, evaluation, or treatment of any mental or emotional condition or disorder, or a person reasonably believed by the client to so be. Qualified service organization - An individual, partnership, corporation, governmental agency, or any other legal entity which: (A) provides services for chemical dependency programs, such as data processing, bill collecting, dosage preparation, laboratory analyses, or legal, medical, accounting, or other professional services, or services to prevent or treat child abuse or neglect, including training on nutrition and child care and individual and group therapy; and (B) has entered into a written agreement with a program under which that entity: (i) acknowledges that in receiving, storing, processing, or otherwise dealing with any client records from the programs, it is fully bound by these regulations, and (ii) if necessary, will resist in judicial proceedings any efforts to obtain access to client records except as permitted by state and federal law and these regulations. State-operated community services (SOCS) - State-operated organizations responsible for ensuring the provision of community-based MHMR services in communities throughout the state which do not receive such services through a locally operated community MHMR center. These organizations were formerly community services divisions of state facilities. sec.403.297. When Consent for Disclosure is not Required: Clients Receiving Mental Health or Mental Retardation Services. (a) When consent has been previously given. Consent for disclosure of client- identifying information is not required if consent to disclose the information has previously been given by the legally authorized person and the duration of the consent has not expired, provided the information to be disclosed is identical to that for which consent was given, and disclosure is to the same person or entity for the same purpose as set out in the consent. (b) When required by certain judicial and administrative proceedings. Client- identifying information may be disclosed without the consent of the client or the client's legally authorized representative in: (1) a judicial or administrative proceeding brought by the client or the client's legally authorized representative against a professional, including malpractice proceedings; (2) a license revocation proceeding in which the client is a complaining witness and in which disclosure is relevant to the claim or defense of a professional; (3) a judicial or administrative proceeding in which the client waives his or her right in writing to the privilege of confidentiality of information or when the client's legally authorized representative, acting on the client's behalf, submits a written waiver to the confidentiality privilege; (4) a judicial or administrative proceeding to substantiate and collect on a claim for mental or emotional health services rendered to the client; (5) a judicial proceeding if the judge finds that the client, after having been informed that communications would not be privileged, has made communications to a professional in the course of a court-order examination, except that those communications may be disclosed only with respect to issues involving the client's mental or emotional health; (6) a judicial proceeding affecting the parent-child relationship; (7) any criminal proceeding subject to a subpoena issued by the court; (8) a judicial or administrative proceeding regarding the abuse or neglect, or the cause of abuse or neglect, of a resident of an institution, as defined by the Texas Health and Safety Code, Chapter 242; (9) a judicial proceeding relating to a will, if the client's physical or mental condition is relevant to the execution of the will; (10) an involuntary commitment proceeding for court-ordered treatment or for a probable cause hearing under Chapters 462, 574, or 593 of the Texas Health and Safety Code; and (11) a judicial or administrative proceeding where the court or agency has issued an order or subpoena. (c) When required in other than court proceedings. Client-identifying information may be disclosed without the consent of the client or the person authorized to consent for the client, as follows: (1) to government agencies when authorized by law (for example, to the Texas Department of Protective and Regulatory Services in cases of client/child abuse); (2) to medical or law enforcement personnel if the professional determines that there is a probability of imminent physical injury by the client to the client or others or there is a probability of immediate mental or emotional injury to the client; (3) to qualified personnel for audit or research purposes when such research is being conducted in accord with department rules; (4) to persons involved in the collection of fees for mental or emotional health services to clients; (5) to other professionals under the direction of the treating professional who are participating in the diagnosis, evaluation, and treatment of the client; (6) to persons participating in an official legislative inquiry regarding state hospitals or state schools except that no client-identifying information shall be released without proper consent (this exception only applies to records created by employees of the state hospitals or state schools); (7) to medical personnel to the extent necessary to meet a bona fide medical emergency; (8) to personnel legally authorized to conduct investigations concerning complaints of abuse or denial of rights of clients; (9) to Advocacy, Incorporated, in the investigation of a complaint by or on behalf of a client who does not have a legal guardian or who is a ward of the state. Excepted from this disclosure without consent are records subject to attorney-client privilege, e.g., records of an investigation conducted at the request of a departmental attorney in preparation for potential litigation; (10) to an employee or agent of the treating professional who requires the mental health care information to provide mental health care services or in complying with statutory, licensing, or accreditation requirements, if the professional has taken appropriate action to ensure that the employee or agent: (A) will not use or disclose the information for any other purposes; and (B) will take appropriate steps to protect the information; and (11) to satisfy a request for medical records of a deceased or incompetent person pursuant to sec.4.01(e), Medical Liability and Insurance Improvement Act of Texas, Texas Civil Statutes, Article 4590i. (d) When between components of the TDMHMR service system, including department facilities, state-operated community services (SOCS), community centers, and contract providers. Client-identifying information may be disclosed without the consent of the client or the person legally authorized to consent for the client between components of the TDMHMR service system provided: (1) that the client and/or legal guardian has been informed that the records may be exchanged at the time of or prior to release; (2) that the client and/or legal guardian is informed of the purpose of the release, e.g., to facilitate continuing care for the client; and (3) that this advisement is documented in the client's record, dated, and signed by the client and/or legal guardian and staff. (e) When to attorney ad litem. Client records may be disclosed without the consent of the client or legal guardian to the attorney ad litem representing the client in legal process. (f) When used for continuity of care of convicted felons with mental impairments. Client-identifying information concerning the continuity of care for convicted felons with mental impairments may be disclosed if it furthers the purposes of the Texas Council on Offenders with Mental Impairments, Texas Health and Safety Code, Chapter 614. (g) When used by a child fatality review team. A deceased child's client- identifying information of may be disclosed to a member of a child fatality review team in accordance with the Texas Family Code, Chapter 264. sec.403.305. Deposition, Subpoenas, and Subpoenas Duces Tecum-Staff Compliance and Conduct. (a) If consent of the client or person legally authorized to give consent for the client has been given, then the facility/state- operated community services (SOCS)/center/contract provider may testify in court or by deposition or affidavit on matters relating to the client or make available records in reference to the client when asked to do so. (b) In civil proceedings, if consent has not been given by the client receiving mental health or mental retardation services or the authorized person, a subpoena and/or subpoena duces-tecum is sufficient to permit the release of records if the request is made for records pursuant to Texas Rule of Civil Evidence, Rule 510(d). Any of the judicial or administrative situations described in sec.403.297(b)(1)-(11) of this title (relating to When Consent for Disclosure is not Required: Clients Receiving Mental Health or Mental Retardation Services) would allow the release of client-identifying information if a subpoena was issued for that purpose. (c) In civil proceedings, every effort should be made by the facility/SOCS/center/contract provider to cooperate and work out an arrangement which is satisfactory to all concerned and which adequately protects the rights of the client. The facility/SOCS/center/contract provider should attempt to obtain the written consent of the client or person legally authorized to consent for the client if possible. If the facility/SOCS/center/contract provider is unable to work out a satisfactory arrangement, then legal counsel should be contacted immediately and its advice sought concerning the proper manner in which to proceed. (d) In criminal proceedings in which consent has not been given by the client or authorized person, a subpoena is sufficient to permit the release of records of a client who is receiving mental health or mental retardation services who is a defendant, victim, or witness. (e) In both civil and criminal proceedings for clients receiving chemical dependency services, records shall not be disclosed except in keeping with sec.403.298 of this title (relating to When Consent for Disclosure is not Required: Clients Receiving Chemical Dependency Services). (f) Whenever there is doubt as to the proper procedure to be followed in such matters, the subpoenaed party should immediately contact legal counsel. sec.403.306. Exhibits. The following exhibits referenced in this subchapter are available from the Texas Department of Mental Health and Mental Retardation, Office of Policy Development, P.O. Box 12668, Austin, Texas 78711-2668. (1) Exhibit A - Sample Notice Form: Confidentiality of Records of Clients Receiving Chemical Dependency Services; and (2) Exhibit B - Authorization and Consent for the Disclosure of Clinical Record Information (Form MHRS 9-13). sec.403.308. Distribution. (a) This subchapter shall be distributed to: (1) members of the Texas Board of Mental Health and Mental Retardation; (2) executive and program staff of Central Office; (3) CEOs of all TDMHMR facilities, state-operated community services (SOCS), and centers; and (4) advocacy organizations. (b) The CEO of each facility, SOCS, and center shall disseminate the information contained herein to all appropriate staff members. 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 October 4, 1996. TRD-9614520 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: July 5, 1996 For further information, please call: (512) 206-4516 CHAPTER 405. Client (Patient) Care SUBCHAPTER P. Drug Research Contracts 25 TAC sec.sec.405.381-405.388 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.405.381-405.388 of Chapter 405, Subchapter P, concerning drug research contracts, without changes to the proposal as published in the June 25, 1996, issue of the Texas Register (21 TexReg 5830). New sec.sec.405.401-405.411 and 405.414-405.417 of Chapter 405, Subchapter P, concerning research in department facilities, which replaces this subchapter are adopted contemporaneously in this issue of the Texas Register. The repeal allows for the adoption of new sections. No public comment was received on the proposed repeals. The repeals are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. 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 October 4, 1996. TRD-9614522 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: June 25, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER Q. Departmental Procedures for the Protection of Human Subjects Involved in Research 25 TAC sec.sec.405.401-405.411 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.405.401-405.411 of Chapter 405, Subchapter Q, concerning departmental procedures for the protection of human subjects involved in research, without changes to the proposal as published in the June 25, 1996, issue of the Texas Register (21 TexReg 5830-5831). The repeal allows for the adoption of new sections. No public comment was received on the proposed repeals. The repeals are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. 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 October 4, 1996. TRD-9614523 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: June 25, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER P. Research in Department Facilities 25 TAC sec.sec.405.401-405.411, 405.414-405.417 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.405.401-405.411 and 405.414-405.417 of Chapter 405, Subchapter P, concerning research in department facilities. Sections 405.403-405.405, 405.407, 405.409, and 405.415 are adopted with changes to the proposed text as published in the June 25, 1996, issue of the Texas Register (21 TexReg 5831-5837). Sections 405.401, 405.402, 405.406, 405.408, 405.410, 405.411, 405.414, 405.416, and 405.417 are adopted without changes and will not be republished. The repeal of existing Chapter 405, Subchapter P, concerning drug research contracts, Chapter 405, Subchapter Q, concerning department procedures for the protection of human subjects involved in research, and Chapter 405, Subchapter R, concerning general procedures for approval of research, which this subchapter replaces, are adopted contemporaneously in this issue of the Texas Register. The term "state-operated community services" was added to the definition of "facility." The definition of "Office of Research Administration (ORA)" was modified to be consistent with sec.405.414. Language was added to sec.405.404(h) clarifying the restriction of research involving placebos being conducted with involuntarily committed individuals. Language was also added clarifying the section of the rule which governed the use of placebos in research with voluntarily admitted human subjects. Language was added to sec.405.404(i) addressing washout periods and the term "voluntarily admitted" was deleted from the subsection. Subsections (b), (c), and (d) in sec.405.405 were reorganized for clarity. Language was added to sec.405.405(b)(3) clarifying that a facility's use of a university IRB means that the university IRB acts as the facility's designated IRB, being responsible for reviewing and approving all research proposed for that facility. Language was added to sec.405.405(h) requiring ORA approval of changes in a designated IRB's membership, policies, or procedures. The procedures contained in sec.405.407(a)(1) were modified for consistency with the procedures contained in sec.405.407(a)(2) and (3). The person(s) responsible for approval of research listed in sec.405.407(a)(4)(A) and (B) was changed to reflect the current organizational structure at the department's Central Office. Language was added to sec.405.407(b) clarifying that the medical director's review and approval is for research which involves placebos as the primary medication therapy. Language was added to sec.405.409(a)(4) describing the types of potential consequences should an individual's condition deteriorate while participating in research. The reference section was updated. Public comment was received from Advocacy, Inc., Austin; College of Pharmacy, The University of Texas, Austin; Parent Association for the Retarded of Texas, Austin; San Antonio Alliance for the Mentally Ill, San Antonio; and a private citizen. One commenter supported the prohibition of approaching individuals for participation in drug research when they are on an order of protective custody. The commenter also supported the restriction against research involving placebos with individuals who are involuntarily committed. The commenter requested language be added requiring (1) an independent consent auditor to review each person who has consented to participate in research by assessing the level of the person's impairment and assessing whether he or she is capable of providing and has provided informed consent; (2) that in cases where the consent auditor has a question as to whether the person has the capacity to give informed consent, the facility would be notified and required to file an application for an order compelling psychoactive medications pursuant to Texas Civil Statutes, Chapter 571, Texas Health and Safety Code; and (3) that if the court determines that the person lacks the capacity to make a decision regarding the administration of medication (i.e., the capacity to give informed consent) the facility will not involve the person in research. The department responds that sec.405.409(c) requires an IRB to determine that there are adequate procedures to ensure that each human subject understands the information provided before obtaining consent. The department notes that IRBs have the discretion of requiring consent auditors for certain research proposals. The same commenter requested that the rule be made applicable to community mental health and mental retardation centers stating that while the federal regulations provide a certain level of implied protection, that the department's rules more clearly ensure the integrity of the process for approving research. The department responds that the rules are primarily administrative (i.e., the creation and approval of a facility's designated IRB, creation of the Office of Research Administration, etc.). The process for approving research in the department's rules is the same process as in the federal regulations. Community MHMR centers conducting research must comply with the federal regulations as required by law and by the Mental Health Community Services Standards (Chapter 408, Subchapter B of this title). The commenter objected to the definition of "legally authorized representative" and requested that it be changed to consist of a parent or legal guardian if the individual is a minor, or a legal guardian if the individual has been adjudicated incompetent to manage his/her personal affairs. The commenter was unclear as to the meaning of "or other body authorized under applicable law." The department responds that the definition is contained in the federal regulations (45 CFR, sec.46.102(c)). The phrase "or other body authorized under applicable law" is intended to allow for the inclusion of others who are authorized by law (or who might be authorized by future legislation) to consent on behalf of a prospective subject to the subject's participation in research. The same commenter questioned why the rules neither prohibited nor condoned the use of a washout period and requested clarification. The commenter stated that in situations in which a washout period may be necessary, it is imperative that as part of the informed consent process, the individual is informed that this experimental design (washout period) may necessitate an extension in the individual's length of stay in the facility. Additionally, the individual should be informed that there may be some deterioration in his/her level of functioning which, in addition to any discomfort, may lead to the use of interventions such as restraint, seclusion, or the use of emergency medications. The department responds by addressing washout periods and including language in the informed consent process. The commenter suggested that the facility rights protection officer not be a member of an IRB as he/she is the entity through which the individual may register a complaint (sec.405.404(i)). The department responds that the facility rights protection officer is especially qualified to be a member of a facility's IRB because of his/her knowledge and experience of rights of persons receiving services. The department notes that an IRB is an impartial reviewer of research proposals whose function is to ensure the protection of human subjects. Its function is not to advocate for the research study. Often the IRB is the entity responsible for accepting complaints regarding the research studies it approves. The commenter recommended that the written policy for the communication of IRB deliberations, recommendations, and decisions to the facility CEO and the ORA be uniform across the state and across providers, particularly in a managed care system. The commenter stated that the department should not only be knowledgeable of these policies but approve a uniform policy which is included in the rule as an attachment. The department responds that permitting each IRB to establish its own policy allows for an IRB to operate in ways that are most effective and efficient for that IRB, based on the particular circumstances of the organization it represents. The uniformity comes with the ORA's approval of the IRB membership and its policy, which are consistent with federal regulations and these rules. Mandating one policy throughout the system would serve no purpose while unduly restricting research and working against the concept of local control. The commenter stated that while the authority of the commissioner to suspend or terminate research under certain circumstances provides safeguards, this action should occur proactively and not after harm has occurred. The department agrees with the commenter. The same commenter recommended that the department be informed of and approve all proposed research. The department responds that it would be informed of all proposed research that is approved by an IRB through the reporting mechanisms as described in sec.405.407. The department does not support the commenter's recommendation of a single division of the department being responsible for the approval of all proposed research for every facility. IRBs approved by the ORA would have members with the knowledge and expertise necessary to operate independently. The department notes that the federal regulations are written for the review and approval of research by an IRB at the local level. The commenter suggested language be added to sec.405.409(a)(4) describing the potential consequences if an individual's condition deteriorates while participating in research. The department responds by adding the suggested language. A commenter supported the rules with one important exception - - the prohibition of research involving placebos with individuals who are involuntarily committed. The commenter provided extensive information and reasons why this prohibition would not be in the best interest of the department or the persons it serves. The department responds that state and federal law require the department to provide safe and effective treatment to court- committed individuals. If such an individual consents to research involving placebos and receives a placebo, then the individual is not receiving treatment. The federal regulations state, "No informed consent, whether oral or written, may include any exculpatory language through which the subject or the representative is made to waive or appear to waive any of the subject's legal rights... ." Since a court-committed individual has the constitutional right to receive safe and effective treatment, asking the individual to waive that right (i.e., possibly receive a placebo rather than medication) is restricted. Another commenter questioned if "knowing consent" within the definition of "informed consent" was the same as having full comprehension of choice, risks, and consequences and requested adding "comprehension" of such areas to the definition. The department responds that knowing consent is the same as having full comprehension of choice, risks, and consequences. The department believes the language suggested by the commenter is unnecessary. The commenter questioned the absence of the definition of vulnerable population and its use in an earlier proposal. The commenter stated that individuals in state schools are a vulnerable population. The department responds that the term is no longer used because it considers all persons served as being potentially vulnerable and equally deserving of protection. A commenter requested including the phrase "protection of their rights" to the third sentence of sec.405.404(a). The commenter also wanted the rule to stress the protection of rights within sec.sec.405.406 and 405.409. The department responds that not only does the second sentence of sec.405.404(a) include such language, the beginning of the third sentence refers to the preservation of those rights that are constitutionally and legally guaranteed and protected. The protection of rights is stressed throughout the rules as evidenced in sec.sec.405.401(a)(1); 405.404(a) and (d); and 405.406(d) and (f). Regarding sec.405.405(b)(1) and (2), the same commenter stated that a consumer or family member of a consumer must have priority over an advocate for IRB membership. The department responds that an advocate would provide the same or similar perspective as a consumer or family member of a consumer; therefore, it is unnecessary to prioritize. The commenter stated that the Office of Research Administration (ORA) should not have overall approval for establishment or utilization of an IRB by a facility as the facility's designated IRB. The commenter expressed concern that the ORA would have too much control over the research process. The department responds that the ORA would not operate independently and would be overseen by TDMHMR administration. Furthermore, not only would its staff have the qualifications, knowledge, and experience necessary to carry out the responsibilities described in the rule, it also would rely on experts in the fields of research and research ethics for consultation. One commenter questioned the rationale of prohibiting persons involuntarily committed from participating in research involving placebos. The commenter stated that persons are encouraged and have the right to participate in their own treatment decisions and are considered competent enough to refuse medication, but they are not considered competent enough to agree to research involving placebos. The department responds that the prohibition is not an issue of competence. State and federal law require the department to provide safe and effective treatment to court- committed individuals. If such an individual consents to research involving placebos and receives a placebo, then the individual is not receiving treatment. The federal regulations state, "No informed consent, whether oral or written, may include any exculpatory language through which the subject or the representative is made to waive or appear to waive any of the subject's legal rights..." Since a court-committed individual has the constitutional right to receive safe and effective treatment, asking the individual to waive that right (i.e., possibly receive a placebo rather than medication) is restricted. One commenter stated that the proposed rule would cause the Clinical Research Unit at San Antonio State Hospital to close and requested that the department not take any action which would jeopardize the future of the Clinical Research Unit. The department responds that its overriding concern is with the safety and well-being of individual consumers, not programs or units. To the extent that the department can maintain its research programs within the parameters set by law and rule, and in keeping with quality care, it will do so. The new sections are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. sec.405.403. Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. Adverse effect - An undesirable and unintended, although not necessarily unexpected, result of therapy or other intervention (e.g., headache following spinal tap or intestinal bleeding with aspirin therapy). Assent - Affirmative agreement to participate in research. Mere failure to object should not, absent affirmative agreement, be construed as assent. Department - The Texas Department of Mental Health and Mental Retardation. Designated institutional review board (IRB) - The IRB, chosen by the facility and approved by the Office of Research Administration in accordance with this subchapter, which will review and approve all proposed research to be conducted at the facility. Designee - A staff member immediately available who is temporarily appointed to assume designated responsibilities of the facility chief executive officer. Facility - Any state hospital, state school, state center, state-operated community services, or any other entity which is now or hereafter made a part of the department. Facility rights officer - An employee appointed by the facility CEO to protect and advocate for the rights of persons receiving services from a facility. Human subject - A living individual about whom an investigator conducting research obtains data through intervention or interaction with the individual, or identifiable private information as defined in sec.46.102(f) (45 CFR 46), referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit A. Informed consent - The knowing consent of an individual or an individual's legally authorized representative, so situated as to be able to exercise free power of choice without undue inducement or any element of force, fraud, deceit, duress, or other form of constraint or coercion. The basic elements of information necessary for informed consent are outlined in sec.46.116 (45 CFR 46), referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit A. Institutional review board (IRB) - A board established in accordance with the provisions of sec.405.405 of this title (relating to Designated Institutional Review Board (IRB)) for the purpose of reviewing and approving research proposals. Investigation (of misconduct in science) - The formal examination and evaluation of all relevant facts to determine if misconduct in science has occurred. Legally authorized representative - An individual or judicial or other body authorized under applicable law to consent on behalf of a prospective subject to the subject's participation in the procedure(s) involved in the research. Misconduct in science - (A) The fabrication, falsification, plagiarism, deception, or other practices that seriously deviate from those that are commonly accepted within the scientific community for proposing, conducting, or reporting research; or (B) The material failure to comply with federal requirements that uniquely relate to the conduct of research. Office of Research Administration (ORA) - The office in the department's Central Office responsible for the duties described in sec.405.414 of this title (relating to Responsibilities of the Office of Research Administration (ORA)). Principal investigator - The person designated as responsible for conducting a research project. Research - A systematic investigation, including research development, testing and evaluation, designed to develop or contribute to generalizable knowledge. Activities which meet this definition constitute research for purposes of this subchapter, whether or not they are conducted or supported under a program which is considered research for other purposes. For example, some demonstration and service programs may include research activities. sec.405.404. General Principles. (a) Participation in research that can advance scientific knowledge of mental disorders is integral to the mission of the department. The department recognizes and accepts its obligation to protect the rights of human subjects involved in research. The department uses, as a minimum standard, the preservation of those rights that are constitutionally and legally guaranteed and protected, and adopts the policy that the guiding principle for all research involving human subjects is the safety, well-being, and dignity of the subject. (b) To ensure the protection of human subjects involved in research at its facilities, the department adopts by reference Title 45, Code of Federal Regulations, Part 46 (Protection of Human Subjects) revised June 18, 1991, referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit A, and relies on the provisions of this subchapter. (c) For ethical guidelines relating to the protection of human subjects involved in research at its facilities, the department adopts by reference "The Belmont Report: Ethical Principles and Guidelines for the Protection of Human Subjects of Research, Report of the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research" (April 18, 1979), referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit B. (d) The department recognizes and expresses a commitment to conducting research in a manner that is consistent with the best interests and protection of the personal rights of human subjects involved in the research. This includes conducting research in a manner that protects individuals from participating in research activities that conflict with individual treatment plans. (e) Individuals receiving mental health services under an order of protective custody pursuant to the Texas Health and Safety Code, Chapter 574, may not be approached about participation in an investigational drug research protocol prior to the entry of an order for temporary or extended mental health services. (f) No research involving human subjects may be conducted unless the risks to subjects are minimized and are reasonable in relation to the anticipated benefits. (g) No undue inducement or coercion may be used to encourage human subjects to participate in research. (h) No research which involves placebos as the primary medication therapy may be conducted with human subjects who are involuntarily committed. The use of placebos in research conducted with human subjects who are voluntarily admitted must be conducted in accordance with sec.405.407(b) of this title (relating to Additional Reviews Necessary Prior to Initiation of Research). (i) A research project may not employ an experimental design which extends the use of a placebo or washout period unreasonably or which deprives the human subject of reasonable relief, assuring the safety and comfort of the individual. (j) Unless otherwise provided for in this subchapter, research involving human subjects may not be undertaken unless: (1) the research has been reviewed and approved by an IRB as outlined in sec.405.406 of this title (relating to General Provisions for Approval and Overview of Research) and sec.405.407 of this title (relating to Additional Reviews Necessary Prior to Initiation of Research). (2) the facility CEO has agreed to have the research conducted at the facility; and (3) if required, the necessary assurance and certification has been submitted to the appropriate federal agency, (e.g., Health and Human Services, Food and Drug Administration) and the agency has indicated its approval. (k) A human subject involved in research or his/her legal guardian is entitled to file a complaint about alleged mistreatment or other concerns relating to the research with the facility's rights officer or with any other complaint mechanism in place. (l) All research undertaken at facilities is conducted with a fundamental commitment to high ethical standards regarding the conduct of scientific research. Any evidence of allegations of misconduct in science are reviewed and investigated promptly and thoroughly in accordance with 42 CFR Part 50, Subpart A, (Responsibility of PHS Awardee and Applicant Institutions for Dealing With and Reporting Possible Misconduct in Science), published in the August 8, 1989, issue of the Federal Register , which is adopted by reference and referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit C, and sec.405.411 of this title (relating to Investigation of Allegations of Misconduct in Science). sec.405.405. Designated Institutional Review Board (IRB). (a) Each facility electing to participate in research projects must establish or have a relationship with an IRB for the purpose of reviewing and approving research proposed to be conducted at that facility as outlined in sec.405.406 of this title (relating to General Provisions for Approval and Overview of Research). (b) A facility may elect to establish its own local IRB, use another facility's local IRB, use a university IRB, or use the Central IRB as its designated IRB. (1) Local IRB. The local IRB is established by the facility and operates under the direction of the facility. The establishment of a local IRB must be approved by the ORA as outlined in subsection (f) of this section. (2) Another facility's local IRB. A facility may elect to use the local IRB of another facility as its designated IRB if: (A) the facilities involved enter into a written agreement delineating the arrangement for such use; and (B) the ORA approves the arrangement. (3) University IRB. A facility may elect to use an IRB operated by a university as its designated IRB. The facility must provide documentation that the university has accepted IRB responsibility for reviewing research for the protection of human subjects participating in research conducted at the facility. The utilization of a university IRB must be approved by the ORA as outlined in subsection (f) of this section. (4) Central IRB. Facilities electing not to use a local IRB or a university IRB, and principal investigators conducting research under the auspices of Central Office may choose to use the Central IRB for review and approval of research. The ORA is responsible for ensuring that membership of the Central IRB is in accordance with sec.46.107 (45 CFR 46) (Exhibit A), and that it includes proper local representation from various regions of the state. (c) The membership of the IRB must be established in accordance with sec.46.107 (45 CFR 46), referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit A, concerning IRB membership, and must include persons knowledgeable about and experienced with populations served by the facility or facilities. Members shall be knowledgeable about applicable ethics, laws, and regulations which guide human subject research. (1) Local IRB. Membership of a facility's local IRB must include a consumer, family member of a consumer, or an advocate for a consumer of the type of services provided by the facility. (2) Central IRB. Membership of the Central IRB must include a consumer, family member of a consumer, or an advocate for a consumer of the type of services provided by the department. (d) The IRB must have written policies and procedures in place: (1) which address the: (A) functions and operations of the IRB as required by sec.46.103(b)(4)-(5) (45 CFR 46) (Exhibit A); and (B) reporting of adverse effects to the IRB; and (2) that are consistent with the department rules governing client care as listed in sec.405.415(3) of this title (relating to References). (e) For research involving multiple facilities, a facility's local IRB or CEO may request the Central IRB to act as the facility's designated IRB for that particular research project. (f) A facility seeking approval for the establishment of a local IRB or the utilization of a university IRB as its designated IRB shall submit information to the ORA outlining: (1) a list of the IRB members identified by name, earned degrees, representative capacity, identifications of experience such as board certifications, license, etc., sufficient to describe each member's chief anticipated contributions to IRB deliberations, and any employment or other relationship between each member and the institution; (2) written procedures for the functions and operation of the IRB as required by sec.46.103(b)(4)-(5) (45 CFR 46) (Exhibit A); and (3) written policy for the communication of IRB deliberations, recommendations, and decisions to the facility CEO and the ORA. (g) The ORA shall review the information and will approve, disapprove, or enter into negotiations to attain approval for the IRB as the facility's designated IRB. Written notice of approval or disapproval will be sent to the requesting facility. (h) Any change in a designated IRB's membership, policies, or procedures must be reported to and approved by the ORA. (i) The ORA may revoke approval of a designated IRB at any time the ORA determines the IRB fails to maintain standards in accordance with federal regulations and this subchapter. sec.405.407. Additional Reviews Necessary Prior to Initiation of Research. (a) In addition to review by the designated IRB as outlined in sec.405.406 of this title (relating to General Provisions for Approval and Overview of Research), each research proposal may require additional approvals prior to initiation. (1) Local IRB as the designated IRB. The research review and documentation processes for a local IRB, as described in sec.405.405(b)(1) and (2) of this title (relating to Designated Institutional Review Board (IRB)), are generally as follows: (A) the research proposal is reviewed by the local IRB and, if approved, forwarded to the CEO of the facility where the research is to be conducted; (B) the facility CEO is informed of the local IRB's approval or disapproval and recommendations, if any; (C) if the research proposal is approved by the local IRB, the facility CEO considers the local IRB's recommendations, if any, and either approves or disapproves the research proposal for implementation at the facility; and (D) if the research proposal is approved, the ORA is notified in writing of the CEO and IRB's approval including copies of the IRB's meeting minutes concerning the review of the proposal, the proposal itself, and the CEO and IRB's documentation of approval. (2) University IRB as the designated IRB. The research review and documentation processes for a facility using a university IRB are generally as follows: (A) the research proposal is screened by the facility CEO and, if determined appropriate for implementation at the facility, forwarded to the university IRB for review; (B) the research proposal is reviewed by the university IRB; (C) the facility CEO is informed of the university IRB's approval or disapproval and recommendations, if any; (D) if the research proposal is approved by the university IRB, the facility CEO considers the university IRB's recommendations, if any, and either approves or disapproves the research proposal for implementation at the facility; and (E) if the research proposal is approved, the ORA is notified in writing of the CEO and IRB's approval including copies of the IRB's meeting minutes concerning the review of the proposal, the proposal itself, and the CEO and IRB's documentation of approval. (3) Central IRB as the designated IRB. The research review and documentation processes for a facility using the Central IRB are generally as follows: (A) the research proposal is screened by the facility CEO and, if determined appropriate for implementation at the facility, forwarded to the Central IRB; (B) the research proposal is reviewed by the Central IRB; (C) the facility CEO is informed of the Central IRB's approval or disapproval and recommendations, if any; (D) if the research proposal is approved by the Central IRB, the facility CEO considers the Central IRB's recommendations, if any, and either approves or disapproves the research proposal for implementation at the facility; and (E) if the research proposal is approved, the ORA is notified in writing of the CEO and IRB's approval including copies of the IRB's meeting minutes concerning the review of the proposal, the proposal itself, and the CEO and IRB's documentation of approval. (4) Central IRB as a facility's designated IRB for research projects involving multiple facilities. When a facility's local IRB or CEO requests the Central IRB act as its designated IRB for research involving multiple facilities, pursuant to sec.405.405(e) of this title (relating to Designated Institutional Review Board (IRB)), then the research review and documentation processes are generally as follows: (A) the research proposal is reviewed and approved by: (i) each facility CEO; (ii) the Central IRB; and (iii) the appropriate Central Office director(s) (i.e., director of mental retardation facilities, director of mental health facilities, or director of state-operated community MHMR services) or designee; and (B) if the research proposal is approved by a facility CEO, the Central IRB, and the appropriate Central Office director(s) or designee, the ORA is notified in writing of the approval, including copies of the IRB's meeting minutes concerning the review of the proposal, the proposal itself, and all of the CEOs and the Central IRB's documentation of approval. (b) In addition to the required procedures described in subsection (a) of this section, any research proposal involving a placebo as the primary medication therapy must be reviewed and approved by the Central Office Medical Director. (c) The review process for proposed research may require additional steps as necessary, (e.g., in the event a proposal is initially rejected). sec.405.409. Requirements for Informed Consent. (a) If informed consent is required, the designated IRB's review of the proposed research must include verification that procedures for obtaining and documenting informed consent from human subjects meet the requirements in sec.46.116 and sec.46.117 (45 CFR 46), referenced in sec.405.416 of this title (relating to Exhibits) as Exhibit A. Additionally, informed consent must also address: (1) any extension of the subject's length of stay at the facility as a result of participation in the research; (2) if the research involves an investigational drug, the subject's ability to receive the drug(s) after the research protocol has concluded; and (3) whether the research protocol involves the use of a placebo and the likelihood of assignment to the placebo condition. (4) any risk of deterioration in the person's condition and the potential consequences for such deterioration (e.g., an extension in the length of stay, the use of interventions such as restraint, seclusion, or emergency medications). (b) If minors are the proposed human subjects, the designated IRB's review of the proposed research must include verification that procedures for obtaining informed consent from the parent or legally authorized representative and the minor's assent for participation meet the requirements in Subpart D, sec.46.408 (45 CFR 46) (Exhibit A). (c) The designated IRB's review of the proposed research must determine that there are adequate procedures to ensure that each subject understands the information provided before obtaining consent and if the subject cannot understand the information that there are provisions for obtaining informed consent from the subject's legally authorized representative. If consent is obtained from the subject's legally authorized representative there should also be procedures to attempt to obtain the subject's assent to participation. (d) The designated IRB's review of the proposed research must determine that there are safeguards to minimize the possibility of coercion or undue influence. The research proposal may be approved only if the possible advantages of the subject's participation in the research do not impair the subject's ability to weigh the risks of the research against the value of those advantages. Possible advantages within the limited choice environment of a facility may include enhancement of general living conditions, medical care, quality of food, or amenities; opportunity of earnings; or change in commitment status. sec.405.415. References. The following statutes and department rules are referenced in this subchapter: (1) Title 45, Code of Federal Regulations, Part 46 (Protection of Human Subjects) revised June 18, 1991; (2) Title 42, Code of Federal Regulations, Part 50, Subpart A, (Responsibility of PHS Awardee and Applicant Institutions for Dealing With and Reporting Possible Misconduct in Science); (3) department rules governing client care, which are: (A) Chapter 403, Subchapter K of this title (relating to Client-Identifying Information); (B) Chapter 404, Subchapter A of this title (relating to Abuse, Neglect, and Exploitation of Persons Served by TDMHMR Facilities); (C) Chapter 404, Subchapter E of this title (relating to Rights of Persons Receiving Mental Health Services); (D) Chapter 405, Subchapter F of this title (relating to Voluntary and Involuntary Behavioral Interventions in Mental Health Programs); (E) Chapter 405, Subchapter H of this title (relating to Behavior Management - Facilities Serving Persons with Mental Retardation); (F) Chapter 405, Subchapter I of this title (relating to Consent to Treatment with Psychotropic Medication); (G) Chapter 405, Subchapter Y of this title (relating to Clients Rights - Mental Retardation Services); and (H) Chapter 405, Subchapter FF of this title (relating to Consent to Treatment with Psychoactive Medication); and (4) Texas Health and Safety Code, Chapter 574. 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 October 4, 1996. TRD-9614521 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: June 25, 1996 For further information, please call: (512) 206-4516 SUBCHAPTER R. General Procedures for Approval of Research 25 TAC sec.sec.405.421-405.424, 405.426-405.430 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.405.421-405.424 and 405.426- 405.430 of Chapter 405, Subchapter R, concerning general procedures for approval of research, without changes to the proposal as published in the June 25, 1996, issue of the Texas Register (21 TexReg 5837). The repeal allows for the adoption of new sections. No public comment was received on the proposed repeals. The repeals are adopted under the Texas Health and Safety Code, Title 7, sec.532.015, which provides the Texas Board of Mental Health and Mental Retardation with rulemaking powers. 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 October 4, 1996. TRD-9614524 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: June 25, 1996 For further information, please call: (512) 206-4516 CHAPTER 407. Internal Facilities Management Public Records 25 TAC sec.sec.407.151-407.159 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts the repeal of sec.sec.407.151-407.159 of Chapter 407, concerning public records, without changes to proposed text as published in April 23, 1996, issue of the Texas Register (21 TexReg 3502). The sections are repealed to permit the adoption of new sections concerning the same matters. No comments were received concerning the repeals. The repeals are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority. 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 October 4, 1996. TRD-9614531 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: April 23, 1996 For further information, please call: (512) 206-4516 25 TAC sec.sec.407.151-407.161 The Texas Department of Mental Health and Mental Retardation (TDMHMR) adopts new sec.sec.407.151-407.161 of Chapter 407, concerning public records. Section 407.154 and sec.407.156 are adopted with changes to the proposed text as published in the August 6, 1996, issue of the Texas Register (21 TexReg 7331). Sections 407.151-407.153, 407.155, 407.157-407.161 are adopted without changes and will not be republished. The new sections enact revisions to the Texas Government Code, Chapter 552 (generally known as the Open Records Act although renamed the Public Information Act) made by the 74th Legislature and will permit the department to respond in a timely and efficient manner to written requests by the public for information as required by statute. The new sections are consistent with recently adopted new rules of the General Services Commission (GSC) which establish charges for copies of public information as provided under Texas Government Code, Chapter 552. The GSC adoption was published in the September 6, 1996, issue of the Texas Register (21 TexReg 8587). State agencies are required to follow the charges established by GSC. In sec.407.154(c), the word "the" replaces "such" in response to a commenter's concern that access to public information might unintentionally be restricted as a result. Revisions to sec.407.156 have been made to reflect changes made by GSC to its rule upon adoption. No public hearing was held concerning the proposal. Written comments were received from the parent of a state school resident and from Rock House Inc. of Stephenville, a provider of community-based residential services. A commenter questioned why community MHMR centers are not required to follow this rule and asked whether or not they are required to comply with the Open Records Act. The department responds that while community centers are required to comply with the Open Records Act, the department does not have the authority to require community centers to follow the department's rule. Community centers may follow the General Services Commission rule concerning charges; in fact, the department's rule is based upon the GSC rule. A commenter recommended that "the" should be used in place of "such" in sec.407.154(c) to avoid unintentionally restricting access to information. The department agrees and has made the change. A commenter suggested that the 20-day time period set forth in sec.407.157(f) seems to conflict with the 10-day time period required in sec.407.158(c). The department responds that both time periods are established in statute. The 20- day time period refers to requests which require programming or manipulation of data; it is mandated in sec.552.231 of the Open Records Act. The 10-day time period applies to requests for information which do not manipulation of data; it is mandated in sec.552.221(d) of the Open Records Act. A commenter requested that advocates and advocacy organizations be included in the distribution lists in sec.407.161. The department responds that advocates are included in subsection (c). The new sections are adopted under the Texas Health and Safety Code, sec.532.015, which provides the Texas Mental Health and Mental Retardation Board with broad rulemaking authority. sec.407.154. Availability of Public Information. (a) A person may request in writing to be allowed to inspect public information or to be supplied with copies of such information. The department shall make such information available unless the information is believed to be covered in an exception contained in Subchapter C of the Open Records Act. The procedures to be followed in processing such requests are detailed in Operating Instruction 407-7 concerning Open Records Requests. (b) If it appears that the information requested is covered by an exception contained in Subchapter C of the Open Records Act, or if there is any doubt on the issue, the written request shall be forwarded to the open records coordinator on the same day the request is received for appropriate action or advice. The information requested may not be disclosed for inspection nor may copies be provided until disclosure has been authorized by the open records coordinator. (c) If the open records coordinator believes that the information requested falls within one or more of the exceptions stated in Subchapter C of the Open Records Act, but there has been no previous decision by the attorney general's office that the information falls within one of the exceptions, the department, within 10 days after receipt of the written request, shall request an open records decision from the attorney general's office. sec.407.156. Charges for Providing Copies of Public Information. (a) General. The charges in this section are based on charges described in rules of the General Services Commission (GSC) at 1 TAC sec.sec.111.61-111.70 (relating to Costs of Copies of Open Records) and are intended to recover costs associated with providing copies of public information. The GSC charges are based on estimated average costs as reported by governmental bodies across the state. (b) Copy charge. (1) Standard paper copy. The charge for standard paper copies reproduced by an office machine copier or a computer printer is $.10 per page or part of a page. Each side that has a printed image is considered a page. (2) Non standard copy. The charges for nonstandard copies are: (A) diskette -- $1.00 each; (B) computer magnetic tape -- $11-13.50 each depending on width (see sec.407.159 of this title (relating to List of Charges)); (C) computer data cartridge -- $17.50-35 each, depending on series (see sec.407.159 of this title (relating to List of Charges)); (D) tape cartridge -- $38-45 each, depending on memory (see sec.407.159 of this title (relating to List of Charges)); (E) VHS video cassette -- $2.50 each; (F) audio cassette -- $1.00 each; (G) oversize paper copy (any size larger than 8 « by 14 inches) -- $.50 each; (H) Mylar -- $.85-$1.35/linear ft., depending on thickness (see sec.407.159 of this title (relating to List of Charges));. (I) Blueprint/blueline paper -- $.20/linear ft. (all widths). (3) The charges in this subsection are to cover the cost of materials onto which information is copied and do not reflect any additional charges that may be associated with a particular request. (c) Programming personnel. If a particular request requires the services of a programmer in order to execute an existing program or to create a new program so that requested information may be accessed and copied, a charge may be required for the programmer's time. (1) The hourly charge for a programmer is $26 an hour, including fringe benefits. (2) Only programming services may be charged at this hourly rate. Any time spent by a programmer performing services other than programming will be charged at the rate specified for personnel as described in subsection (d) of this section. (d) Other personnel charge. (1) The charge for other personnel costs incurred in processing a request for public information is $15 an hour, including fringe benefits. Where applicable, the other personnel charge may include the actual time spent to locate, compile. and reproduce requested information. (2) A personnel charge may not be billed in connection with complying with requests that are for 50 or fewer pages of standard paper records, unless the documents to be copied are located in: (A) more than one building; or (B) a remote storage facility. (3) Personnel time may not be recovered for any time spent by an attorney, legal assistant, or any other person who reviews the requested information: (A) to determine whether the department will raise any exceptions to disclosure of the requested information under Subchapter C of the Open Records Act; or (B) to research or prepare a request for an open records decision from the attorney general's office pursuant to Subchapter G of the Open Records Act. (4) When confidential information is mixed with public information in the same page, personnel time may be recovered for time spent to obliterate, blackout, or otherwise obscure confidential information in order to provide the copies requested. (e) Programming personnel. If a particular request requires a programmer to enter data in order to execute an existing program or to create a new program so that requested information may be accessed and copied, a charge may be required for the programmer's time. (1) The hourly charge for a programmer is $26 an hour, including fringe benefits. (2) Only programming services may be charged at this hourly rate. Any time spent by a programmer performing services other than programming will be charged at the rate specified for personnel as described in subsection (c) of this section. (f) Overhead charge. (1) Whenever a personnel charge, including a programming personnel charge, is applicable to a request, an overhead charge for direct and indirect costs may be added. This overhead charge covers such costs as depreciation of capital assets, rent, maintenance and repair, utilities, and administrative overhead. The charge will be made in accordance with the methodology described in paragraph (3) of this subsection. (2) Overhead may not be charged for requests for 50 pages or fewer of standard paper copies. (3) The overhead charge is computed at 20% of the charge made to cover personnel costs associated with a particular request. For example, if one hour of personnel time (programming, other personnel, or a combination of the two) is used for a particular request, the formula would be as follows: $26 x; .20 ± $5.20; $15 x; .20 ± $3.00; or $41 x; .20 ± $8.20. (g) Microfiche and microfilm charge. (1) If the information exists on microfiche or microfilm and the requestor prefers paper copies, the charge is $.10 per page for standard paper copies plus any applicable personnel and overhead charges for more than 50 copies. (2) If the requestor prefer copies in the microfiche or microfilm format, the charge is the actual cost of making the copy. If the reproduction must be made commercially due to lack of in-house capability to produce such a copy, the charge will equal the actual cost charged by the reproduction company. (h) Remote document retrieval charge. Due to limited on-site capacity of storage of documents, it is frequently necessary to store information that is not in current use at remote storage locations. To the extent that the retrieval of documents results in an actual charge to the department in order to comply with a request, then the department may recover the costs of such services. (i) Computer resource charge. (1) The computer resource charge is a utilization charge for computers based on the amortized cost of acquisition, lease, operation, and maintenance of computer resources, which might include, but is not limited to, some or all of the following: (A) central processing units (CPUs); (B) servers; (C) disk drives; (D) local area networks (LANs); (E) printers; (F) tape drives; (G) other peripheral devices; (H) communications devices; (I) software; and (J) system utilities. (2) These computer resource charges are not intended to substitute for cost recovery methodologies or charges made for purposes other than responding to open records requests. (3) The charges in this subsection are averages compiled by the GSC based on a survey of governmental bodies with a broad range of computer capabilities. Utilizing the following charges, the department shall determine which category of computer type most closely fits the one used to provide the requested information. (A) Mainframe -- $10 per minute. (B) Midsize -- $1.50 per minute. (C) Client/Server -- $2.20 per hour. (D) PC or LAN -- $1.00. (4) The charge made to recover the computer utilization cost is the actual time the computer takes to execute a particular program multiplied by the applicable rate. The CPU charge is not meant to apply to programming or printing time; rather, it is solely to recover costs associated with the actual time required by the computer to execute a program. This time, called CPU time, can be read directly from the CPU clock and most frequently will be a matter of seconds. If programming is required to comply with a particular request, the appropriate charge that may be recovered is set forth in subsection (d) of this section. No charge may be made for computer print-out time. For example, if a mainframe computer is used, and the processing time is 20 seconds, the charges would be as follows: $10 & divide; 3 (one third of a minute or 20 seconds) ± $3.33; or $10 & divide; 60 x; 20 ± $3.33. (j) Miscellaneous supplies. The actual cost of miscellaneous supplies, such as labels, boxes, and other supplies used to produce the requested information may be added to the total charge for the information. (k) Postal and shipping charges. The department may add any related postal or shipping expenses which are necessary to deliver the reproduced information to the requesting party. (l) Sales tax. Sales tax may not be added on charges for public information. 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 October 4, 1996. TRD-9614530 Ann Utley Chairman, Texas MHMR Board Texas Department of Mental Health and Mental Retardation Effective date: November 1, 1996 Proposal publication date: August 6, 1996 For further information, please call: (512) 206-4516 TITLE 28. INSURANCE PART I. Texas Department of Insurance CHAPTER 1.General Administration SUBCHAPTER A.Rules of Practice and Procedure General Procedural Provisions 28 TAC sec.sec.1.17, 1.19, 1.66, 1.67, 1.69, 1.70, 1.71, 1.72 The Commissioner of Insurance adopts the repeal of sec.sec.1.17, 1.19, 1.66, 1.67, 1.69, 1.70, 1.71, and 1.72, relating to rules of practice and procedure, without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7714). Section 1.23 of Acts 1993, 73rd Legislature, Chapter 685 (House Bill 1461) abolished the State Board of Insurance and transferred its authority to the Commissioner of Insurance. Repeal of the sections is necessary because the elimination of the State Board of Insurance has rendered procedural references to the board inappropriate. The public will benefit from the repeal because there will be less confusion about the structure of the Texas Department of Insurance and the entities within the Department to whom matters are directed. There will be more certainty about procedural rules. The public will also benefit from streamlined administration within the Department. Repeal of the sections eliminates rules of practice and procedure which are obsolete due to references to an entity which no longer exists, i.e. the State Board of Insurance. No comments were received regarding adoption of the repeals. The repeals are adopted pursuant to the Insurance Code, Articles 1.03A and 1.02, and the Government Code sec.sec.2001.004 et seq. Article 1.03A of the Insurance Code provides that the Commissioner of Insurance may adopt rules and regulations, which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by a statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirement of available procedures and to prescribe the procedures for adoption of rules by a state agency. Under Article 1.02 of the Insurance Code, a reference in the Insurance Code or other insurance law to the State Board of Insurance means the Commissioner of Insurance or the Texas Department of Insurance. 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 October 4, 1996. TRD-9614550 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER C.Maintenance Taxes and Fees 28 TAC sec.sec.1.401-1.405, The Commissioner of Insurance adopts the repeal of sec.sec.1.401-1405, relating to maintenance taxes and fees, without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7715). Repeal of the sections is necessary because the sections, which consist of rates for maintenance tax assessments on gross premiums for various lines of insurance for calendar years 1982 through 1986, are outdated and no longer serve any purpose. The public will benefit from the repeal because it eliminates unnecessary regulations no longer in use. Repeal of the sections eliminates regulations covering calendar years 1982 through 1986, which are no longer in use. No comments were received regarding adoption of the repeals. The repeals are adopted pursuant to the Insurance Code, Articles 1.03A, which provides that the Commissioner of Insurance may adopt rules and regulations, which must be for general and uniform application, for the conduct and execution of the duties and functions of the Texas Department of Insurance only as authorized by a statute, as well as Insurance Code, Articles 5.12, 5.24, 5.49, 5.68, 9.46, and 23.08, which authorize the assessment of maintenance taxes and fees for the various lines of insurance covered in the rules now repealed. 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 October 4, 1996. TRD-9614551 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 CHAPTER 5.Property and Casualty Insurance SUBCHAPTER A.Automobile Insurance Deviation Procedure 28 TAC sec.5.1 The Texas Department of Insurance adopts the repeal of sec.5.1, without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7715). Section 5.1 specifies rate deviation regulations for automobile insurance. The section is repealed because rate deviations are no longer applicable to this line of insurance. Article 5.03 established a promulgated rating system which specified that any insurer writing automobile policies in Texas was required to issue policies at the premium rates promulgated by the board. In 1991, Article 5.03 was amended to reflect that a new benchmark rating system, outlined in Subchapter M, would be used to regulate motor vehicle insurance rates instead of the system of promulgated rates with rate deviation filings. Article 5.101 was enacted to establish the benchmark rating system which supplanted the promulgated rating system in Article 5.03, including the provisions for rate deviation filings. The repeal of sec.5.1 is necessary because rate deviation filings have no function in the rate setting process and bear no relationship to the benchmark rating system which is currently used for motor vehicle rate regulation. The repeal of sec.5.1 will eliminate unnecessary regulation from this title of the Texas Administrative Code. No comments were received regarding adoption of the repeal. The repeal is adopted under the Insurance Code, Articles 5.03, 5.10 and 1.03A; and the Government Code sec.sec.2001.004 et seq. Article 5.03 authorizes the commissioner to administer this act by adopting rules and regulations to resolve any conflicts or ambiguities as may be necessary to accomplish the purposes of this act. Article 5.10 empowers the commissioner to make and enforce all such reasonable rules and regulations as are necessary to carry out the provisions of Subchapter A. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department as authorized by statute. The Government Code sec.sec.2001.004 et seq. (Administrative Procedures Code) authorizes and requires each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and to prescribe the procedure for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614537 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 Motor Vehicle Damage Claims, Coverage, Settlement and Disclosure Practices 28 TAC sec.5.501 The Texas Department of Insurance adopts the repeal of sec.5.501, relating to motor vehicle damage claim coverage, settlement and disclosure without changes to the proposed text as published in the Texas Register August 16, 1996, (21 TexReg 7716). The repeal is necessary because the department has been enjoined and restrained by court order from implementing, enforcing, or giving effect to the section. The department retains the authority to adopt rules under the Insurance Code, Article 5.07-1; however, to the extent that such rules are adopted, they will be new sections, not amendments to current sec.5.501. The repeal will result in full and adequate disclosure to all interested persons that any rules adopted and administered pursuant to the Insurance Code, Article 5.07-1 will be new sections, since the provisions of sec.5.501 as repealed are unenforceable. No comments were received regarding adoption of the repeal. Repeal of sec.5.501 is adopted pursuant to the Insurance Code, Articles 5.07-1 and 5.10. The Insurance Code, Article 5.07-1 provides for disclosure of consumer information and requires that any rules promulgated by the board for auto insurance policies which provide for any limitation relating to repair and replacement services resulting from automobile damage mandate particular consumer disclosures. Article 5.10 empowers the commissioner and department to make and enforce rules and regulations necessary to the administration of the Insurance Code, Chapter 5, Subchapter A. 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 October 4, 1996. TRD-9614555 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER G.Workers' Compensation Insurance The Texas Department of Insurance adopts the repeal of sec.sec.5.6001-5.6005, 5.6101-5.6105 and 5.6151-5.6158, concerning workers' compensation insurance without changes to the proposed text as published in the August 23, 1996, issue of the Texas Register (21 TexReg 7951). Sections 5.6001-5.6005, concern the qualifications and certification of field representatives for workers' compensation insurers. Sections 5.6101-5.6105, concern the standards for accident prevention facilities and services to be provided by workers' compensation insurers. Sections 5.6151-5.6158, concern standards under which a policyholder may be entitled to a premium discount on a workers' compensation policy. The repeals are necessary because the statutes on which these sections are based, the Insurance Code, Articles 5.76-1 and 5.55A, have been repealed and the duties thereunder have been transferred to the Texas Workers' Compensation Commission. Repeal of the sections result in the elimination of obsolete requirements. No comments were received regarding adoption of the repeals. Field Safety Representatives 28 TAC sec.sec.5.6001-5.6005 The repeals are adopted pursuant the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614538 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 Standards for Accident Prevention Services 28 TAC sec.sec.5.6101-5.6105 The repeals are adopted pursuant the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614539 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 Premium Discount Plan for Workers' Compensation Insurance 28 TAC sec.sec.5.6151-5.6158 The repeals are adopted pursuant the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614541 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 Workers' Compensation Insurance Rate Deviation Filing Rules 28 TAC sec.sec.5.6171-5.6183 The Texas Department of Insurance adopts the repeal of sec.sec.5.6171-5.6183, concerning workers' compensation insurance without changes to the proposed text published in the August 16, 1996, issue of the Texas Register (21 TexReg 7717). The repeals of sec.sec.5.6171-5.6183 is necessary because the statute on which these sections are based, the Insurance Code, Article 5.60(h), has been repealed. Repeal of sec.sec.5.6171-5.6183 results in the elimination of obsolete requirements. No comments were received regarding adoption of the repeals. The repeals are adopted under the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614540 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER G.Workers' Compensation Insurance The Texas Department of Insurance proposes the repeal of sec.sec.5.6201, 5.6202, and 5.6701, concerning workers' compensation insurance without changes to the proposed text as published in the August 23, 1996, issue of the Texas Register (21 TexReg 7952). Section 5.6201, concerns certifications of insurance company violations to the State Board of Insurance from the Industrial Accident Board. Section 5.6202, concerns compliance subsequent to certification by the Industrial Accident Board to the Commissioner. Section 5.6701, concerns the workers' compensation insurance bid procedure to determine the servicing companies for the Texas Workers' Compensation Insurance Facility. The repeal of sec.5.6201 and sec.5.6202 is necessary because the statutes on which these sections are based, Texas Civil Statutes, Article 8306, sec.18 and Article 8307, sec.5 have been repealed. The repeal of sec.5.6701 is necessary because the Insurance Code, Article 5.76-2, the statute on which this section is based, has been amended to state that workers' compensation insurance may not be written through the Texas Workers' Compensation Insurance Facility through the Employers' Rejected Risk Fund after January 1, 1994. Consequently, there is no longer the need for a bid procedure as provided for in sec.5.6701 to determine servicing companies for the Texas Workers' Compensation Insurance Facility. Repeal of sec.sec.5.6201, 5.6202 and 5.6701 results in the elimination of obsolete requirements. No comments were received regarding adoption of the repeals. Certifications of Insurance Company Violations to the State Board of Insurance from the Industrial Accident Board 28 TAC sec.5.6201, sec.5.6202 The repeals are adopted under the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614542 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 Workers' Compensation Insurance Subscriber Notices 28 TAC sec.5.6701 The repeal is adopted under the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004, et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614543 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 23, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER L.Reporting Requirements for Liability Insurance Under the Insurance Code Article 1.24A and Article 1.24B 28 TAC sec.5.9203 The Texas Department of Insurance adopts the repeal of sec.5.9203, concerning annual liability insurance supplemental report forms and instructions for use by liability insurers without changes to the proposed text published in the August 16, 1996, issue of the Texas Register (21 TexReg 7717). This repeal of sec.5.9203 is necessary because the Insurance Code, Article 1.24A, the statute on which this section is based, has been repealed. The report forms and instructions provided in this section are obsolete. Repeal of sec.5.9203 results in the elimination of obsolete report forms and instructions. No comments were received regarding adoption of the repeal. The repeal is adopted under the Insurance Code, Article 1.03A and the Government Code, sec.sec.2001.004 et seq. Article 1.03A provides that the Commissioner of Insurance may adopt rules and regulations to execute the duties and functions of the Texas Department of Insurance as authorized by statute. The Government Code, sec.sec.2001.004 et seq. (Administrative Procedure Act) authorize and require each state agency to adopt rules of practice setting forth the nature and requirements of available procedures and prescribe the manner for adoption of rules by a state administrative agency. 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 October 4, 1996. TRD-9614544 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 CHAPTER 7.Corporate and Financial Regulation SUBCHAPTER A.Examination and Corporate Custodian and Tax 28 TAC sec.sec.7.9, 7.13, 7.19, 7.51-7.57, 7.61, 7.62, 7.66-7.69,7.71-7.76 The Commissioner of Insurance adopts the repeal of sec.sec.7.9, 7.13, 7.19, 7.51-7.57, 7.61, 7.62, 7.66-7.69, and 7.71-7.76, without changes to the proposed text published in the August 16, 1996, issue of the Texas Register (21 TexReg 7718). Section 7.9 concerns the adoption by reference of the certificate of representation used in the examination of insurers. Section 7.13 concerns the reporting of mortgage loans pledged to secure an insurer's borrowings. Section 7.19 concerns the depreciation of real estate owned by an insurer. Section 7.51 - 7.57 concerns the adoption by reference of the forms and instructions for the calculation of insurance premium taxes and other fees owed by insurers. Sections 7.61, 7.62, 7.66 - 7.69 and 7.71 - 7.76 concern the adoption by reference of annual statement blanks, instructions, and other forms used by insurers and certain other entities regulated by the Texas Department of Insurance to report their financial condition and business operations and activities. The repeals are necessary to eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. The repeals will provide for more efficient regulation of insurers. The repeals will eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. No comments were received regarding adoption of the repeals. The repeals are adopted under the Insurance Code, Articles 1.11 and 1.19. The Insurance Code, Article 1.11 authorizes the commissioner to make changes in the forms of the annual statements required of insurance companies of any kind, as shall seem best adapted to elicit a true exhibit of their condition and methods of transacting business. Article 1.19 authorizes the commissioner or any commissioned examiner to examine any person within this state under oath relative to the affairs and conditions of any insurance company. 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 October 4, 1996. TRD-9614548 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER J.Examination Expenses and Assessments 28 TAC sec.sec.7.1001-7.1011 The Commissioner of Insurance adopts the repeal of sec.sec.7.1001 - 7.1011, concerning the method of calculation of examination expenses that domestic and foreign insurance companies pay to the Texas Department of Insurance based upon the rates of assessment set out therein for calendar years 1983, 1984, 1985, 1986, 1987, 1988, 1989, 1990, 1991, and 1993 without changes to the proposed text published in the August 16, 1996, issue of the Texas Register (21 TexReg 7719). The repeals are necessary to eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. The repeals will provide for more efficient regulation of insurers. The repeals will eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. No comments were received regarding adoption of the repeals. The repeals are adopted under the Insurance Code, Article 1.16. The Insurance Code, Article 1.16 authorizes the commissioner to certify that the examination expenses to be paid by corporations are in such an amount as to be just and reasonable. 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 October 4, 1996. TRD-9614553 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER B.Insurance Holding Company System Regulatory Act 28 TAC sec.sec.7.206, 7.207, 7.208 The Commissioner of Insurance adopts the repeal of sec.sec.7.206, 7.207 and 7.208, without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7719). Section 7.206, concerns a domestic insurer's acquisition or organization of a subsidiary as an investment. Section 7.207, concerns the requirements and standards for controlled insurers. Section 7.208, concerns the prohibitions respecting direct and indirect actions by a holding company or controlled person. The repeal of these sections is necessary to eliminate provisions which have become obsolete, unnecessary or redundant of other statutes or rules. The repeals are necessary to eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. The repeals will provide for more efficient regulation of insurers. The repeals will eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. No comments were received regarding adoption of the repeals. The repeals are adopted under the Insurance Code, Articles 21.49-1 sec.(11). The Insurance Code, Article 21.49-1 sec.(11) authorizes the commissioner to issue such rules, regulations, and orders as shall be consistent with and to carry out the provisions of this article (Article 21.49-1) and to govern the conduct of its business and proceedings hereunder. 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 October 4, 1996. TRD-9614552 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 CHAPTER 11.Health Maintenance Organizations SUBCHAPTER G.Advertising and Sales Material 28 TAC sec.11.601, sec.11.604 The Texas Department of Insurance adopts the repeal of sec.11.601, relating to items of information which are included in the term advertisement; and sec.11.604, relating to specific file maintenance and retention requirements of HMO advertisements by HMOs without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7720). Repeal of the sections is necessary because the provisions of the two sections are duplicative of parallel provisions in Chapter 21 of this title. The sections therefore are unnecessary and should be eliminated. The repeals will result in greater regulatory effectiveness and efficiency resulting from elimination of duplicative rules. No comments were received regarding adoption of the repeals. The repeals are adopted under Insurance Code, Article 20A.22, which authorizes the department to promulgate such reasonable rules and regulations as are necessary and proper to carry out the provisions of the Health Maintenance Organization 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 October 4, 1996. TRD-9614545 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 CHAPTER 21.Trade Practices SUBCHAPTER A.Unfair Competition and Unfair Practices of Insurers, and Misrepresentation of Policies 28 TAC sec.21.7 The Texas Department of Insurance adopts the repeal of sec.21.7, relating to the prohibition and declaration as unfair of certain practices in the setting or use of rates or rating manuals for property and casualty insurance without changes to the text published in the Texas Register August 16, 1996, (21 TexReg 7720). Repeal of the section is necessary for two reasons. First, sec.21.7 is unenforceable by the department, as a result of court injunction. Second, even in the absence of an injunction, repeal would be necessary because the standards, requirements and prohibitions set out in sec.21.7 were addressed by the 74th Legislature in two enactments, both of which have been codified and have been effective provisions of the Insurance Code for nearly one year. Specifically, the legislature enacted House Bill (HB)1367, which included, among other provisions, a new Insurance Code, Article 21.21-6, relating to unfair discrimination; and HB 668, which included, among other provisions, a new Insurance Code, Article 21.21-8, also relating to unfair discrimination. Article 21.21-6 prohibits any legal entity engaged in the business of insurance in Texas from refusing to insure or to continue to insure; limiting the amount, extent or kind of coverage available; or charging an individual a different rate for the same coverage because of race, color, religion or national origin. It also prohibits any legal entity engaged in the business of insurance in Texas from refusing to insure or to continue to insure; limiting the amount, extent or kind of coverage available; or charging an individual a different rate for the same coverage because of the age, gender, marital status, geographic location, disability or partial disability of the individual, except to the extent justified by sound underwriting or actuarial principles reasonably related to actual or anticipated loss experience. Article 21.21-8 prohibits any person from engaging in any unfair discrimination by making or permitting any unfair discrimination between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for any policy or contract of insurance or in the benefits which are payable under such policy or contract, or in any of the terms or conditions of such contract, or in any other manner whatever. Article 21.21-8 applies to any person engaged in the business of insurance, including all licensees of the department. It provides for a private cause of action in the event a person violates its prohibitions. Repeal of sec.21.7 will result in elimination of unenforceable regulatory provisions and will help facilitate implementation of legislative revisions of the Insurance Code aimed at elimination of unfair practices in the business of insurance; greater availability and affordability of insurance; and greater ability of individuals in Texas to obtain insurance at fair rates. No comments were received regarding adoption of the repeal. The repeal is adopted under Insurance Code, Articles 21.21, sec.13, which authorizes the Department to promulgate rules and regulations to accomplish the purposes of Insurance Code, Articles 21.20 and 21.21. 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 October 4, 1996. TRD-9614554 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER B.Insurance Advertising, Certain Trade Practices, and Solicitation 28 TAC sec.21.121 The Texas Department of Insurance adopts the repeal of sec.21.121, relating to the required filing of advertising and solicitation material for individual retirement annuity products without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7721). Repeal of the section is necessary because the regulatory value of the section has diminished over the years such that it is no longer essential to effective regulation. While requiring the filing of particular advertising material, the section does not require that such filing be made prior to use by issuers, nor is departmental approval of such material required in conjunction with its use. For these reasons, sec.21.121 provides extremely limited utility for compliance or enforcement purposes. It originally was adopted to serve a monitoring and surveillance purpose at a time when use of such products as individual retirement income vehicles was new. The value of that monitoring and surveillance function has diminished over the years, and the department has experienced few problems with materials filed and reviewed under the section. For these reasons, repeal of the section is proper. The repeal of sec.21.121 will enable the department to shift resources utilized in the review of such advertising and solicitation material to other areas of current regulatory need, and result in the overall streamlining of trade practices provisions, resulting in greater regulatory efficiency. No comments were received regarding adoption of the repeal. The repeal is adopted under Insurance Code, Articles 21.21, sec.13, which authorizes the Department to promulgate rules and regulations to accomplish the purposes of Insurance Code, Articles 21.20 and 21.21. 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 October 4, 1996. TRD-9614546 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER F.Life Insurance Surrender Value Comparison Index 28 TAC sec.sec.21.501-21.508 The Texas Department of Insurance adopts the repeal of sec.sec.21.501-21.508, relating to the standards for compliance involving life insurance solicitation, negotiation or procurement, and the availability of a uniformly prepared surrender value comparison index in order for prospective insureds to be able to make more informed decisions about possible purchase of life insurance products without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7722). The repeal of this subchapter is necessary because the current adoption of these sections, last amended in 1982, is confusing, complicated, difficult to use, and difficult for consumers to understand. It therefore does not serve the purpose for which it was intended. The subchapter was first adopted and later amended during a time when there was less diversity in the life insurance market. As a result, in today's market many life insurance products which are more actively marketed are not subject to the rules. In addition, the index disclosure itself is mandatory only in instances where a prospective policyholder requests it be provided. The qualifications and limitations on the information value of the index, which also must be disclosed to prospective insureds, make the rules confusing, complicated and difficult both to use and for consumers to understand. The repeals will result in the elimination of overly complicated, confusing, difficult to administer sections with limited consumer or regulatory utility. Moreover the repeal will contribute generally to a streamlining of the trade practices chapter by elimination of a subchapter, the limited usefulness of which makes it incapable of being vigorously enforced. No comments were received regarding adoption of the repeals. The repeals are adopted under Insurance Code, Articles 21.21, sec.13, which authorizes the Department to promulgate rules and regulations to accomplish the purposes of Insurance Code, Articles 21.20 and 21.21. 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 October 4, 1996. TRD-9614547 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 SUBCHAPTER G.Life Insurance Plans to College Students Which Involve the Use of Promissory Notes to Pay Premiums 28 TAC sec.sec.21.601-21.616 The Texas Department of Insurance adopts the repeal of sec.sec.21.601 - 21.616, relating to the standards of compliance for life insurance plans to college students which involve the use of promissory notes to pay premiums without changes to the proposed repeal of the section as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7722). Repeal of the subchapter is necessary because the current adoption of Subchapter G has only very limited regulatory utility for a number of reasons. The subject matter of the provisions set out in the subchapter is addressed in statute in the Insurance Code, Chapter 24, relating to the financing of insurance premiums; and in Revised Civil Statutes, Articles 5069-1.01 -- 5069-8.06, relating to consumer credit provisions. Moreover, some of the subject matter addressed in the subchapter is also addressed in other consumer protection sections of Title 28. The sections are directed mainly at one particular type of policy loan that has not been utilized as a marketing tool for many years now. For these reasons, repeal of Subchapter G is necessary and appropriate. The adopted repeals will result in the elimination of sections with limited regulatory utility, the subject matter of which is addressed elsewhere in statute and rule. Moreover, the repeal will contribute generally to a streamlining of the trade practices chapter, and by extension regulatory effectiveness. No comments were received regarding adoption of the repeals. The repeals are adopted under Insurance Code, Articles 21.21, sec.13, which authorizes the Department to promulgate rules and regulations to accomplish the purposes of Insurance Code, Articles 21.20 and 21.21. 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 October 4, 1996. TRD-9614556 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 CHAPTER 31.Liquidation SUBCHAPTER A.Certain Administrative Expenses 28 TAC sec.31.1, sec.31.2 The Commissioner of Insurance adopts the repeal of sec.31.1 and sec.31.2 without changes to the proposed text as published in the August 16, 1996, issue of the Texas Register (21 TexReg 7718). Section 31.1 concerns salaries and compensation for receivership allocated employees and all administrative expenses of the liquidation division. Section 31.2 concerns the accounting records kept by the liquidator. The repeals are necessary to eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. The repeals will provide for more efficient regulation of insurers. The repeals will eliminate obsolete or unnecessary provisions from Title 28, Insurance, of the Texas Administrative Code. No comments were received regarding adoption of the repeals. . The repeals are adopted under the Insurance Code, Articles 21.28 and 1.03A. The Insurance Code, Article 21.28 authorizes the commissioner to take charge of an insurer as receiver of that insurer when a court finds that a receiver should take charge. Article 1.03A authorizes the commissioner to adopt rules and regulations for the conduct and execution of the duties and functions of the department. 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 October 4, 1996. TRD-9614549 Robert Carter Assistant General Counsel Texas Department of Insurance Effective date: October 25, 1996 Proposal publication date: August 16, 1996 For further information, please call: (512) 463-6327 TITLE 34. PUBLIC FINANCE PART I. Comptroller of Public Accounts CHAPTER 3. Tax Administration SUBCHAPTER V. Franchise Tax 34 TAC sec.3.574 The Comptroller of Public Accounts adopts the repeal of sec.3.574, concerning $100 prepayment, without changes to the proposed text as published in the July 23, 1996, issue of the Texas Register (21 TexReg 6876). The rule is being repealed because the section of law that it interpreted (Tax Code, sec.171.155) has been repealed. No comments were received regarding adoption of the repeal. This repeal is adopted under the Tax Code, sec.111.002, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of the Tax Code, Title 2. The repeal implements the repeal of Tax Code, sec.171.155. This agency hereby certifies that the repeal has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on October 3, 1996. TRD-9614430 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: October 24, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 463-4028 CHAPTER 5. Funds Management (Fiscal Affairs) Claims Processing-Purchase Vouchers 34 TAC sec.5.52, sec.5.53 The Comptroller of Public Accounts adopts the repeals of sec.5.52 and sec.5.53, concerning requirements for all purchase vouchers and requirements for certain types of purchase vouchers, without changes to the proposed text as published in the August 27, 1996, issue of the Texas Register (21 TexReg 8087). The sections are being repealed because they are no longer necessary. No comments were received regarding adoption of the repeals. The repeals are adopted under the Government Code, sec.sec.403.011, 403.071, 403.078, 2101.035, and 2103.004. These statutes generally require a state agency to submit payment vouchers to the comptroller in the form and with the information required by the comptroller. The statutes also require the comptroller to audit those vouchers on a pre-payment or post-payment basis. Finally, the statutes authorize the comptroller to adopt rules for the effective operation of the uniform statewide accounting system. The repeals implement the Government Code, sec.sec.403.011, 403.071, 403.078, 2101.035, and 2103.004. This agency hereby certifies that the repeals have been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Issued in Austin, Texas, on October 4, 1996. TRD-9614479 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: October 25, 1996 Proposal publication date: August 27, 1996 For further information, please call: (512) 463-4028 34 TAC sec.5.56 The Comptroller of Public Accounts adopts the repeal of sec.5.56, concerning fiscal year determination procedures, without changes to the proposed text as published in the August 27, 1996, issue of the Texas Register (21 TexReg 8087). The section is being repealed so that a substantially revised section may be adopted. No comments were received regarding adoption of the repeal. The repeal is adopted under the Government Code, sec.2101.035, which authorizes the comptroller to adopt rules for the effective operation of the uniform statewide accounting system. The repeal implements the General Appropriations Act and the Government Code, sec.2101.035. 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 October 4, 1996. TRD-9614478 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: October 25, 1996 Proposal publication date: August 27, 1996 For further information, please call: (512) 463-4028 34 TAC sec.5.56 The Comptroller of Public Accounts adopts new sec.5.56, concerning appropriation year determination, to replace sec.5.56 that is being repealed, without changes to the proposed text as published in the August 27, 1996, issue of the Texas Register (21 TexReg 8087). The new section is necessary for the following reasons. First, the implementation of the uniform statewide accounting system (USAS) has changed the terminology used when determining the correct fiscal year to charge for a purchase. Instead of using the term "fiscal year" in this context, "appropriation year" is now used. The new section will reflect the current terminology. Second, the former section about fiscal year determination did not cover how to determine the correct appropriation year to charge when a state agency grants money to another agency or to a private person or entity. The new section will set forth the correct procedure. Third, the former section attempted to cover all the issues about when a contract is formed between a state agency and another entity. Because the legislature has greatly expanded the ways that state agencies may enter into contracts, the new section will not cover these issues. The determination of when a contract is formed has always depended on the basic principles of contract law. Therefore, the omission of information in the new section about these issues will not have any substantive effect. No comments were received regarding adoption of the new section. The new section is adopted under the Government Code, sec.2101.035, which authorizes the comptroller to adopt rules for the effective operation of the uniform statewide accounting system. The new section implements the General Appropriations Act and the Government Code, sec.2101.035. 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 October 4, 1996. TRD-9614480 Martin Cherry Chief, General Law Comptroller of Public Accounts Effective date: October 25, 1996 Proposal publication date: August 27, 1996 For further information, please call: (512) 463-4028 TITLE 37. PUBLIC SAFETY AND CORRECTIONS PART I. Texas Department of Public Safety CHAPTER 1.Organization and Administration Fees for Copies of Records 37 TAC sec.1.130 The Texas Department of Public Safety adopts new sec.1.130 concerning fingerprinting of individuals and authorizing a $10 fee for such service, without changes to the proposed text as published in the July 12, 1996, issue of the Texas Register (21 TexReg 6420). The justification for this section will be the availability of obtaining good quality fingerprints from law enforcement personnel. The new section authorizes the department to collect a $10 fee when preparing fingerprints for members of the public. Law enforcement agencies were authorized to collect a fee for this service under House Bill 3017, passed by the 74th Legislature, 1995. No comments were received regarding adoption of the new section. The new section is adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department. 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 September 16, 1996. TRD-9614465 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 12, 1996 For further information, please call: (512) 424-2890 CHAPTER 15.Drivers License Rules Application Requirements-Original, Renewal, Duplicate, Identification Certificates 37 TAC sec.sec.15.23, 15.25, 15.29 The Texas Department of Public Safety adopts amendments to sec.sec.15.23, 15.25, and 15.29, concerning Application Requirements - Original, Renewal, Duplicate, Identification Certificates, without changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7021). The justification for the amendments will be flexibility to applicants on how they prefer their name to appear on the driver's license or identification card, allows for the use of an alternate address, and clarifies which form is to be used by applicants under the age of 18. Amendment to sec.15.23 adds language to paragraph (1) and (2) indicating that three full names will be used where they exist unless the applicant does not wish to use her maiden name. Amendment to sec.15.25 formats existing language as subsection (a) and adds new subsection (b) promulgating the use of an alternate address. Amendment to sec.15.29 changes form DL-41A to DE-964. No comments were received regarding adoption of the amendments. The amendments are adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department. 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 September 16, 1996. TRD-9614466 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 424-2890 Application Requirements-Original, Renewal, Duplicate, Identification Certificates 37 TAC sec.15.45 The Texas Department of Public Safety adopts new sec.15.45, concerning the requirement of thumbprints on application for original, renewal, or duplicate driver's licenses and personal identification certificates, without changes to the proposed text as published in the July 23, 1996, issue of the Texas Register (21 TexReg 6877). The justification for this section will be increased security of the driver's license and personal identification documents. The new section states that thumbprints (or alternatively, index prints) are required on application for original, renewal, or duplicate driver's licenses and personal identification certificates. Currently, an applicant for an original license is statutorily required to provide a thumbprint. Senate Bill 1252, passed by the 74th Legislature, 1995, authorized the department to require applicants for renewal or duplicate driver's licenses or personal identification certificates to provide the same information as may be required on application for original driver's license. No comments were received regarding adoption of the new section. The new section is adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department. 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 September 16, 1996. TRD-9614467 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 23, 1996 For further information, please call: (512) 424-2890 Examination Requirements 37 TAC sec.15.55 The Texas Department of Public Safety adopts an amendment to sec.15.55 concerning examination requirements, without changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7023). The justification for this section will be a convenience to the public. The amendment adds new paragraph (2) and renumbers current paragraphs (2)-(5) as (3)-(6). The amendment further allows for the waiving of the skills test for minors provided they have completed the laboratory phase of driver education. In addition, Texas Driver Education Certificate (Form DL-41A) is changed to Motorcycle Operator Training Program Certificate of Completion (Form MSB-8). No comments were received regarding adoption of the amendment. The amendment is adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department. 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 September 16, 1996. TRD-9614468 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 424-2890 Driver Improvement 37 TAC sec.15.81, sec.15.83 The Texas Department of Public Safety adopts amendments to sec.15.81 and sec.15.83 concerning driver improvement action, without changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7024). The justification for the amendments will be enhanced traffic safety and improved service to the public by lessening the confusion of department personnel attempting to reconcile rules that don't exist. Amendment to sec.15.81 deletes paragraphs (13), (14), and (15), reformats current paragraphs (16) and (17) as (13) and (14) and adds new paragraph (15). Subsection (d) is deleted from sec.15.81 and subsection (e) is reformatted as subsection (d) relating to educational program suspensions. Amendment to sec.15.83 formats existing language as subsection (a) and adds subsections (b) through (e) clarifying driver license denials and reflecting the reference to Texas Transportation Code. No comments were received regarding adoption of the amendments. The amendments are adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department. 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 September 16, 1996. TRD-9614469 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 424-2890 CHAPTER 16.Commercial Driver's License Application Requirements and Examinations 37 TAC sec.sec.16.34, 16.35, 16.41, 16.46, 16.51, 16.55 The Texas Department of Public Safety adopts amendments to sec.sec.16.34, 16.35, 16.41, 16.46, 16.51, and new sec.16.55 concerning application requirements and examinations, without changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7025). The justification for the sections will be to reduce or prevent commercial motor vehicle accidents, fatalities, and injuries by permitting only qualified individuals to hold licenses to drive these vehicles and ensuring that applicants are properly tested and approved. Amendments to sec.16.34 and sec.16.35 add language stating that an applicant must be employed in an exempt status or legally operating a commercial motor vehicle in order to receive a waiver and are necessary in order for the department to be in compliance with federal regulations. Amendment to sec.16.41 clarifies what is a foreign jurisdiction for the purpose of issuing a non- resident CDL. Amendment to sec.16.46 adds new subsections (c) and (d) clarifying who can be granted a waiver from the skills tests and is necessary in order to be in compliance with federal regulations. Amendment to sec.16.51 allows the department to accept test results from third parties. New sec.16.55 defines what the CDL-40 form is and its use. No comments were received regarding adoption of the amendments and new section. The amendments and new section are adopted pursuant to Texas Transportation Code, Chapter 522.005 which provides the Texas Department of Public Safety with the authority to adopt rules necessary to carry out Texas Transportation Code, Chapter 522 and the Commercial Motor Vehicle Safety Act of 1986. 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 September 16, 1996. TRD-9614470 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 424-2890 CHAPTER 25.Safety Responsibility Regulations 37 TAC sec.25.4, sec.25.16 The Texas Department of Public Safety adopts amendments to sec.25.4 and sec.25.16 concerning safety responsibility regulations, without changes to the proposed text as published in the July 19, 1996, issue of the Texas Register (21 TexReg 6765). The justification for the sections will be to insure that any entity applying for self insurance has the ability to pay three claims arising from traffic accidents and still cover their normal monthly operating expense. Section 25.4(i) is amended to address the department's interpretation of the word "person" when applied to a person depositing cash or securities as proof of financial responsibility. Amendment to sec.25.16 formats existing language as subsection (a). Subsections (b), (c), and (d) are added as new language promulgating the requirements to become self-insured and to insure that the department is better able to determine the applicant's ability to meet their financial responsibilities under the guidelines of the Safety Responsibility Act. No comments were received regarding adoption of the amendments. The amendments are adopted under Texas Transportation Code, sec.601.021(1), which provides the Texas Department of Public Safety with the authority to promulgate rules and regulations to carry out the legislative intent of the Safety Responsibility 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 September 16, 1996. TRD-9614471 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 19, 1996 For further information, please call: (512) 424-2890 CHAPTER 31.Standards for an Approved Motorcycle Operator Training Course 37 TAC sec.sec.31.2, 31.3, 31.5 The Texas Department of Public Safety adopts amendments to sec.sec.31.2, 31.3, and 31.5, concerning standards for an approved motorcycle training course, without changes to the proposed text as published in the July 26, 1996, issue of the Texas Register (21 TexReg 7026). The justification for the amendments will be to ensure the public is aware of the correct motorcycle course completion certificate being issued and they are aware of the recodification of Texas Civil Statutes. Amendments to sec.31.2 and sec.31.3 note the recodification of Texas Civil Statutes to Texas Transportation Code and Texas Penal Code. Amendment to sec.31.5 changes form DL-41A to MSB-8. No comments were received regarding adoption of the amendments. The amendments are adopted pursuant to Texas Government Code, sec.411.006(4), which authorizes the director of the Department of Public Safety to adopt rules, subject to commission approval, considered necessary for the control of the department; and Texas Transportation Code, sec.662.009. 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 September 16, 1996. TRD-9614472 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 26, 1996 For further information, please call: (512) 424-2890 CHAPTER 32.Bicycle Safety and Education Program 37 TAC sec.sec.32.1-32.8 The Texas Department of Public Safety adopts new sec.sec.32.1-32.8 concerning Bicycle Safety and Education Program, without changes to the proposed text as published in the July 19, 1996, issue of the Texas Register (21 TexReg 6766). The justification for the sections will be the enhancement of bicycle safety behaviors by children and adults as a result of completing and teaching the SuperCyclist course. New sec.32.1 Definitions: provides definitions for certain terms used in the bicycle safety program licensing procedures. New sec.32.2 Bicycle Safety Curriculum: specifies required curriculum and materials necessary to provide a bicycle safety course. New sec.32.3 Bicycle Safety Course Provider: outlines qualifications for an applicant to be licensed as a course provider. New sec.32.4 Bicycle Safety Instructor: specifies administrative control of instructors by licensed providers. New sec.32.5 Notice and Hearing Requirements: notes opportunities for an administrative hearing when applicant is denied a license. New sec.32.6 Suspension: explains license suspension. New sec.32.7 Quality Assurance Visits: explains procedures by which provider sites may be evaluated. New sec.32.8 Notification of Legal Actions: notes requirements of providers to make notification of legal action. No comments were received regarding adoption of the new sections. The new sections are adopted under the authority of the Health and Safety Code, Chapter 758 which provides that a licensed provider may contract with instructors and may subsequently issue completion certificates to those students who successfully complete the course. 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 September 16, 1996. TRD-9614473 Dudley M. Thomas Director Texas Department of Public Safety Effective date: October 24, 1996 Proposal publication date: July 19, 1996 For further information, please call: (512) 424-2890 TITLE 40. SOCIAL SERVICES AND ASSISTANCE PART XX. Texas Workforce Commission CHAPTER 809. Child Care and Development 40 TAC sec.809.88 The Texas Workforce Commission adopts new sec.809.88, concerning Additional Transitional Child Care Eligibility Criteria, without changes to the proposed text as published in the July 19, 1996, issue of the Texas Register (21 TexReg 6774). The new section implements child care provisions of House Bill (H.B.) 1863, the Texas Welfare Reform legislation. Under current federal legislation, clients who lose eligibility for Aid to Families with Dependent Children (AFDC) due to earnings are entitled to 12 months of transitional child care if the care is needed to support the parent's employment. TWC addresses eligibility for these benefits in current sec.809.13. H.B. 1863 expands the transitional child care entitlement to cover clients who lose AFDC due to expiration of AFDC time limits. In addition, H.B. 1863 specifies that a client who is exempt from participation in the Job Opportunities and Basic Skills (JOBS) program because of the age of the youngest child or because the client must care for a child with disabilities will be entitled to an extra six months (for a total of 18 months) of transitional child care if the client volunteers for the JOBS program. New sec.809.88 addresses the specific criteria to be used to determine if clients have a need for the child care services. For clients who become entitled to transitional child care due to loss of time-limited AFDC benefits, the definition of need allows child care during a brief job search period and/or to support employment. These provisions of H.B. 1863 are included in a waiver of federal regulations recently approved by the Department of Health and Human Services. The 74th State Legislature passed H. B. 1863 which required significant changes in the state's welfare program. Article 3 of H. B. 1863 imposed a limit on the length of time clients are eligible to receive AFDC benefits. The Bill requires that after the time limits expires, the clients receive Transitional Child Care if they meet the eligibility criteria for Transitional Child Care services. This new child care rule addresses the addition of criteria for transitional eligibility due to the expiration of time limited benefits. Only one comment was received from the Child Care Management Services contractor in Dallas and it was positive. It supported the six month extension as especially important considering the mandate of H.B. 1863 for less preparation and training time and it also advised TWC to notify all eligible parents in a timely manner. The new section is adopted under Human Resource Code, Chapter 44.002, which provides the Texas Workforce Commission with the authority to adopt, amend, or rescind such rules as it deems necessary for the effective administration of child care programs which are fully or partially funded. 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 October 4, 1996. TRD-9614581 Esther L. Hajdar Director of Legal Services Texas Workforce Commission Effective date: October 28, 1996 Proposal publication date: July 19, 1996 For further information, please call: (512) 463-8812