PROPOSED RULES
Before an agency may permanently adopt a new or amended section or repeal an 
existing section, a proposal detailing the action must be published in the Texas 
Register at least 30 days before action is taken. The 30-day time period gives 
interested persons an opportunity to review and make oral or written comments on 
the section. Also, in the case of substantive action, a public hearing must be 
granted if requested by at least 25 persons, a governmental subdivision or 
agency, or an association having at least 25 members.
Symbology in proposed amendments. New language added to an existing section is 
indicated by the <nl> code. [Brackets] indicate deletion of existing material 
within a section.

TITLE 7. BANKING AND SECURITIES
PART I. Finance Commission of Texas
CHAPTER 1. Consumer Credit Commissioner
SUBCHAPTER A. Regulated Loan Licenses
General Provisions
7 TAC sec.sec.1.1, 1.3, 1.5, 1.6
The Finance Commission of Texas (the commission) proposes the repeal of 
sec.sec.1.1, 1.3, 1.5, and 1.6, part of the rules which implemented Chapter 3, 
Texas Civil Statutes, Article 5069-3.01 et seq. The sections which are proposed 
for repeal are now superfluous with the repeal of Chapter 3, Texas Civil 
Statutes, Article 5069-3.01 et seq. Moreover, they are being replaced by a new 
set of rules for Chapter 3A, a new chapter of the Credit Title which encompasses 
old Chapters 3 through 5. The new rules are in the process of being published 
for comment in the Texas Register.
Leslie Pettijohn, Consumer Credit Commissioner, has determined that for the 
first five-year period the repeal as proposed will be in effect, there will be 
no fiscal implications for state or local government as a result of 
administering or enforcing the repeal. 
Ms. Pettijohn also has determined that for each year of the first five-year 
period the repeal as proposed will be in effect, the public benefit anticipated 
as a result of the repeal is the removal of unenforceable regulations which will 
provide space for replacement rules. There is no anticipated economic cost to 
persons who are required to comply with the repeal as proposed. There will be no 
effect on small businesses.
Comments on the proposed repeal may be submitted in writing to Leslie Pettijohn, 
Consumer Credit Commissioner, 2601 North Lamar Boulevard, Austin, Texas 78705-
4207.
The repeal is proposed under Texas Civil Statutes, Article 5069-3A.901, which 
authorizes the Finance Commission to adopt rules to enforce new Chapter 3A. The 
repeal will not be adopted until the proposed replacement sections are adopted. 
The statutory provisions (as currently in effect) affected by the proposed 
repeal are Texas Civil Statutes, Articles 5069-3A.005, 5069-3A.101, 5069-3A.102, 
and 5069-3A.103. 
sec.1.1. Authority and Construction.
sec.1.3. Definitions.
sec.1.5. Responsibility for Acts of Employees and Agents.
sec.1.6. Employees and Agents: Knowledge of Laws and Regulations Required.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on December 31, 1997.
TRD-9717325
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 936-7600

7 TAC sec.sec.1.101-1.107
The Finance Commission of Texas (the commission) proposes new sec.sec.1.101 - 
1.107, concerning the purpose and scope of a new chapter of the rules to cover 
loans made under new Chapter 3A (Texas Civil Statutes, Article 5069-3A.101 et 
seq.), definitions to be used in this chapter, the responsibility of licensees 
for the acts of their agents, required knowledge of laws and regulations, 
attempted evasion of new Chapter 3A, multiple licenses, and loans by mail.
The new sections provide an introduction to a new set of rules for Chapter 3A, a 
new chapter of the Credit Code which encompasses the substance of old Chapters 3 
through 5. 
Leslie Pettijohn, Consumer Credit Commissioner, has determined that for the 
first five-year period the sections as proposed will be in effect there will be 
no fiscal implications for state or local government as a result of 
administering or enforcing the new sections. 
Ms. Pettijohn also has determined that for each year of the first five-year 
period the sections as proposed will be in effect the public benefit anticipated 
as a result of the adoption of the new rules is the clarification of the new 
statutory requirements set forth in Chapter 3A to aid the industry in 
compliance. No net economic cost will result to persons required to comply with 
the new sections. No difference will exist between the cost of compliance for 
small businesses and the cost of compliance for the largest businesses affected 
by the new sections. 
Comments on the proposed adoption of the new sections may be submitted in 
writing to Leslie Pettijohn, Consumer Credit Commissioner, 2601 North Lamar 
Boulevard, Austin, Texas 78705-4207. 
The new sections are proposed under Texas Civil Statutes, Article 5069-3A.901, 
which authorizes the Finance Commission to adopt rules to enforce new Chapter 
3A. 
Texas Civil Statutes, Articles 5069-3A.005, 5069-3A.101, 5069-3A.102, and 5069-
3A.103 are affected by the proposed new sections. 

sec.1.101. Purpose and Scope. 
(a) Purpose. The purpose of this chapter is to assist in the administration and 
enforcement of Chapter 3A of the Texas Civil Statutes, Article 5069 ("Article 
5069"). 
(b) Scope. 
(1) This chapter applies to all persons engaged in the business of making, 
transacting, or negotiating loans subject to Chapter 3A of Article 5069. As 
such, this chapter only applies to lenders and brokers in the business of 
making, transacting or negotiating loans that: 
(A) contract for, charge, or receive interest in excess of 10 percent per year; 
(B) are loans extended primarily for personal, family, or household use; and 
(C) are either unsecured or secured by a lien on real estate or personal 
property under a secondary mortgage loan. This includes term loans extended 
primarily for personal, family, or household purposes. 
(2) This also includes a loan broker who arranges, negotiates, or brokers loans 
for a lender that funds the loan. This chapter does not apply to any loans made 
under Chapters 1B-1H of Article 5069, including, for example, commercial and 
agricultural loans. 

sec.1.102. Definitions. 
Words and terms used in this chapter that are defined in Chapter 3A of Article 
5069 have the same meanings as defined in Chapter 3A. The following words and 
terms, when used in this chapter, shall have the following meanings, unless the 
context clearly indicates otherwise. Acquisition Charge An interest charge 
authorized for making the cash advance under authority of Article 3A.402 of 
Article 5069. 
Add-on interest - A method for calculating precomputed interest in which the 
borrower agrees to pay the total of payments, which includes both interest and 
principal, as opposed to agreeing to pay the principal plus interest as it 
accrues at a certain rate. Add-on interest is calculated at the outset of a loan 
on the cash advance for the full term, as if the principal did not decline over 
the course of the loan. For example, a $1,000 loan with 12 monthly installments 
and an add-on interest amount of 8 dollars per hundred per annum would have a 
total charge of interest of $80.00 and monthly payments of $90.00, yielding an 
annual percentage rate ("APR") of 14.45%.
Authorized Charge - Any charge authorized by applicable Texas law to be included 
in the credit transaction. 
Authorized Lender - A person who has obtained a license from the commissioner or 
a bank, savings bank, savings and loan association, or credit union doing 
business under the laws of this State or the United States. Banks chartered in 
other states insured by the Federal Deposit Insurance Corporation are included 
in this term. Separate entities that are subsidiaries or affiliates of licensees 
or authorized banks, savings banks, savings and loan associations, or credit 
unions are not authorized lenders unless they meet the required elements of the 
definition of an authorized lender in their own right. 
Commissioner - Consumer Credit Commissioner of the State of Texas. 
Date of Consummation - The date of closing or execution of a loan contract. 
Default Charge or Late Charge - The additional interest charge for late payment 
on a loan. 
Deferment Charge - The payment of an additional interest charge to defer the 
payment date of a scheduled payment on a contract. 
Dual Interest Coverage - Insurance that provides benefits to both the holder of 
a loan and the borrower in the event of a loss of the security covered by the 
policy. The policy contains a loss payable clause or endorsement that provides 
benefits that are payable at the discretion of the holder. Installment Account 
Handling Charge (IAHC) An interest charge authorized for making a loan under 
Article 5069-3A.402. 
Installment Loan - Any type of closed-end loan with multiple scheduled payments. 
Interest-bearing Loan - A loan in which the borrower agrees to pay the principal 
and interest that accrues at a certain periodic rate.
Interpretation Letter - A formal interpretation of Article 5069 and the Texas 
Finance Code made by the Commissioner and approved by the Finance Commission 
under Texas Finance Code sec.14.408. 
Licensee - Any person who has been issued a consumer loan license pursuant to 
Chapter 3A of Article 5069. Another name for a "consumer loan license" is 
"regulated loan license." 
Making a Loan - The act of making a loan is either the determination of the 
credit decision to provide the loan, or the act of funding the loan or 
transferring money from the lender to the borrower. A person whose name appears 
on the loan documents as the maker of the note is considered to have "made" the 
loan. 
Negotiating a Loan - The process of submitting and considering offers between a 
borrower and a lender with the objective of reaching agreement on the terms of a 
loan. The act of passing information between the parties can, by itself, be 
considered "negotiation" if it was part of the process of reaching agreement on 
the terms of a loan. "Negotiation" involves acts which take place before an 
agreement to lend or funding of a loan actually occurs. OCCC Office of Consumer 
Credit Commissioner of the State of Texas.
Precomputed Loan - A loan in which the borrower agrees to pay the total of 
payments that includes both principal and all anticipated interest through the 
full term of the loan. If a borrower prepays a precomputed loan, the borrower is 
entitled to a rebate of all unearned interest and unearned charges. 
Prepaid Interest - Interest paid separately in cash or by check before or at 
consummation in a transaction, or withheld from the proceeds of the credit at 
any time. Some common terms such as points, discounts, and origination fees have 
been used to identify this charge. 
Principal - The capital sum of the debt including any interest capitalized and 
added to the cash advance at the inception of the loan. This is the amount of 
money which is used, forborne, or detained and upon which interest is charged. 
The principal amount does not include any interest accrued after the inception 
of the loan, such as default charges. 
Pro Rata Method - A formula for determining the amount of unearned interest or 
other charges, such as insurance, to be refunded following prepayment or 
acceleration by applying the amounts to equal unit periods. This formula assumes 
that interest or other charges are earned in direct proportion to the time that 
a loan has been outstanding. 
Rebate - Refund of all or part of a precomputed charge or interest. 
Regulated Loan - Loan made under the authority of Article 5069-3A.101. 
Renewal or Refinance - A new loan contract that includes, in whole or in part, 
the net balance of one or more existing loan contracts.
Simple Annual Rate - The interest rate under the loan agreement expressed as a 
percentage rate per year employing the U.S. Rule method. Sum of the Monthly 
Balances or Sum of the Periodic Balances Method Another formula for determining 
the amount of unearned interest or other charges to be refunded. This is a 
variant of the Rule of 78. It provides that the fraction of the contract 
interest to be rebated at any given time in the loan term is the sum of the 
monthly loan balances for the months remaining in the originally scheduled loan 
term divided by the sum of the monthly balances for all of the months in the 
scheduled loan term. For example, for a 6-month loan of $600 which is scheduled 
to be repaid in $100 monthly installments, the rebate fraction after two months 
would be: 400 + 300 + 200 + 100 &divide; 600 + 500 + 400 + 300 + 200 + 100 = 
1000/2100 = 10/21 = 0.476 (rounded). For any loan which is paid off in equal 
installments, the sum of the balances method and the Rule of 78 will provide 
identical rebates. If, however, a loan schedule contains unequal payments and 
especially where the debt is retired by a final balloon payment, the rebates 
under the two formulas will be different. 
Term Loan - A loan made repayable in a single payment. 
Transacting a Loan - Any of the significant events associated with the lending 
process through funding, including the preparation, negotiation and execution of 
loan documents and the transfer of money by the lender to the borrower or to a 
third party on the borrower's behalf. This also includes the act of arranging a 
loan. 
United States Rule - Ruling of United States Supreme Court in Story v. 
Livingston, 38 U.S. (13 Pet.) 369, 371 (1839) that, in partial payments on a 
debt, each payment is applied first to interest and any remainder reduces the 
principal. Under this rule, accrued but unpaid interest cannot be added to the 
principal and interest cannot be compounded.

sec.1.103. Responsibility for Acts of Agents. 
A licensee is responsible for the acts and omissions of its officers, directors, 
employees, and agents in the conduct of the licensee's business.

sec.1.104. Knowledge of Laws and Regulations Required. 
Each officer, director, employee, and agent of a licensee shall have a working 
knowledge of Chapter 3A of Article 5069, its implementing regulations, and other 
pertinent state and federal statutes and regulations that apply to their 
business. 

sec.1.105. Attempted Evasion of Applicability of Chapter. 
A "device, subterfuge, or pretense to evade the application of this title," as 
used in Article 5069-3A.101(b), refers to any transaction: 
(1) that in form may appear on its face to be something other than a loan, but 
in substance meets the definition of a loan as defined in Article 5069-
1B.002(a)(10); and 
(2) in which more than 10% annual interest, in substance, is being contracted 
for, charged or received. 

sec.1.106. Multiple Licenses. 
(a) Definitions. The words "make," "negotiate," "arrange," and "collect" as used 
in Texas Civil Statutes, Article 5069-3A.102(b) are to be construed as follows. 
(1) Make. Loans are "made" by the office or offices where either the credit 
decision is made or the cash advance is disbursed. 
(2) Negotiate and Arrange. Loans are "negotiated" or "arranged" in the office or 
offices that received any information preliminary to a credit decision on a 
prospective borrower or received the executed application, agreement, or other 
necessary loan documentation. 
(3) Collect. Loans are "collected" in the office or offices from which attempts 
are made to collect past-due payments from the borrowers under a loan. The mere 
receipt and accounting of payments does not constitute "collection." 
(b) Application. Any office making, negotiating, arranging, or collecting loans 
must be licensed. For example, if a lender receives and reviews loan 
applications at one office, makes the loan decision at another office, funds the 
loan at a third and collects past-due payments from another, all of these 
offices must be licensed. On the other hand, an office that merely receives, 
records, accounts for, processes payments need not be licensed.

sec.1.107. Loans by Mail. 
(a) Definitions. The words "make," "negotiate," "arrange," and "collect" as used 
in Texas Civil Statutes, Article 5069-3A.103(b) are to be construed as follows. 
(1) Make. Loans by mail are "made" by the office or offices where either the 
credit decision is made or the cash advance is disbursed.
(2) Negotiate and Arrange. Loans by mail are "negotiated" or "arranged" in the 
office or offices that either provided the borrower a loan application, a loan 
agreement, or other document necessary to set up a loan transaction or received 
the executed application, agreement, or other necessary loan documentation. 
(3) Collect. Loans by mail are "collected" in the office or offices from which 
attempts are made to collect past-due payments from the borrowers under a loan. 
The mere receipt and accounting of payments does not constitute "collection." 
(b) Application. Any office, wherever located, making, negotiating, arranging, 
or collecting loans by mail must be licensed. For example, if a lender receives 
and reviews loan applications at one office, makes the loan decision at another 
office, funds the loan at a third and collects past-due payments from another, 
all of these offices involved in lending by mail must be licensed. On the other 
hand, an office that merely receives, records, accounts for, processes payments 
need not be licensed. 
(c) License not required. National banks and federally-chartered thrifts and 
credit unions, wherever located, and federally-insured state banks, state 
thrifts and state credit unions with offices located outside of Texas may make 
loans by mail to Texas without obtaining any license under Texas Civil Statutes 
Art. 5069-3A.101 et seq. from the OCCC and are considered to be an authorized 
lender.
(d) Internet Loans. For purposes of Texas Civil Statutes Art. 5069-3A.103(b), a 
loan made, negotiated, arranged or collected by or through the Internet is 
considered a "loan by mail." 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on December 31, 1997.
TRD-9717324
Leslie L. Pettijohn
Commissioner
Finance Commission of Texas
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 936-7600

TITLE 22. EXAMINING BOARDS
PART XVIII. Texas State Board of Podiatric Medical Examiners
CHAPTER 376. Violations and Penalties
22 TAC sec.376.1
The Texas State Board of Podiatric Medical Examiners proposes an amendment to 
sec.376.1, concerning Violations and Penalties. The amendments are being 
proposed to comply with Chapter 36, Subdivision D, sec.36.131 of the Human 
Resources Code regarding medicaid fraud. 
Allen M. Hymans, Executive Director, has determined that for each year of the 
first five years the sections are in effect there will be no fiscal implications 
as a result of enforcing or administering these sections. 
Mr. Hymans also has determined that for each year for the first five years the 
rule is in effect the public benefit anticipated as a result of enforcing the 
rule will be better control over podiatric physicians who commit medicaid fraud. 
Comments on or about the proposal may be submitted to Janie Alonzo, Staff 
Services Officer I, Texas State Board of Podiatric Medical Examiners, P.O. Box 
12216, Austin, Texas 78711- 2216. 
The amendment is proposed under Texas Civil Statutes, Article 4568(j), which 
provides the Texas State Board of Podiatric Medical Examiners with the authority 
to adopt all reasonable or necessary rules, regulations, and by-laws not 
inconsistent with the law regulating the practice of podiatric medicine, the 
laws of this state, or of the United States; to govern its proceedings and 
activities, the regulation of the practice of podiatric medicine, and the 
enforcement of the law regulating the practice of podiatric medicine. The 
proposed amendment implements Chapter 36, Subdivision D sec.36.131 of the Human 
Resources Code. 

sec.376.1. Penalties. 
<nl>(a)<ol> Any podiatric physician who violates any provision of these rules, 
or any provision of the Podiatric Medical Practice Act of Texas shall be, at the 
discretion of the Board, subject to the following penalties:
(1)-(7) (No change.) 
<nl>(b)<ol> The Board shall revoke a license by their authority to a podiatric 
physician (licensee) if that licensee has been convicted of a felony under 
Chapter 36, Subdivision D, sec.36.131 of the Human Resources Code, to wit: 
<nl>(1)<ol> a state jail felony if the value of any payment or monetary in-kind 
benefit provided under the Medicaid program, directly or indirectly, as a result 
of an unlawful act is $1,500 or more but less than $20,000; 
<nl>(2)<ol> a felony of the third degree if the value of any payment or monetary 
benefit provided under the Medicaid program, directly or indirectly, as a result 
of an unlawful act is $20,000 or more, but less than $100,000; 
<nl>(3)<ol> a felony of the second degree if the value of any payment or 
monetary or in-kind benefit provided under the Medicaid program, directly or 
indirectly, as a result of the unlawful act is $100,000 or more but less than 
$200,000; 
<nl>(4)<ol> a felony of the first degree if the value of the payment or monetary 
or in-kind benefit provided under the Medicaid program, directly or indirectly, 
as a result of the unlawful act is $200,000 or more. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on December 31, 1997.
TRD-9800032
Janie Alonzo
Staff Services Officer I
Texas State Board of Podiatric Medical Examiners
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 305-7000

CHAPTER 378. Continuing Education
22 TAC sec.378.1, sec.378.8
The Texas State Board of Podiatric Medical Examiners proposes an amendment to 
sec.378.1 and sec.378.8, concerning Continuing Education. The amendments are 
being proposed to change the due dates for continuing medical education to be 
submitted to the Board. 
Allen M. Hymans, Executive Director, has determined that for each year of the 
first five years the sections are in effect there will be no fiscal implications 
as a result of enforcing or administering these sections. 
Mr. Hymans also has determined that for each year for the first five years the 
rule is in effect the public benefit anticipated as a result of enforcing the 
rule will be more knowledgeable podiatric physicians. No additional cost is 
anticipated for the podiatric physicians or the public. 
Comments on or about the proposal may be submitted to Janie Alonzo, Staff 
Services Officer I, Texas State Board of Podiatric Medical Examiners, P.O. Box 
12216, Austin, Texas 78711- 2216. 
The amendments are proposed under Texas Civil Statutes, Article 4568(j), which 
provides the Texas State Board of Podiatric Medical Examiners with the authority 
to adopt all reasonable or necessary rules, regulations, and by-laws not 
inconsistent with the law regulating the practice of podiatric medicine, the 
laws of this state, or of the United States; to govern its proceedings and 
activities, the regulation of the practice of podiatric medicine, and the 
enforcement of the law regulating the practice of podiatric medicine. The 
proposed amendments implement the Podiatric Medical Practice Act, Article 
4571(c). 

sec.378.1. Continuing Education Required. 
(a) Each person licensed to practice podiatric medicine in the State of Texas is 
required to have <nl>30<ol> [15] hours of continuing education <nl>bi-
annually<ol> [annually] for the renewal of their license to practice podiatric 
medicine. <nl>Two hours<ol> [One hour] of the required <nl>30<ol> [15] hours of 
annual continuing education may be a course, class, seminar, or workshop in 
Ethics. 
(b) These hours of continuing education must be obtained in the <nl>24-month<ol> 
[12- month] period immediately preceding the <nl>years<ol> [year] for which the 
license is issued. <nl> The two-year period will begin on September 1 and end on 
August 31 two years later. The cme requirement will be either odd or even based 
on whether the original licensure was in an odd or even year.<ol> A licensee who 
completes more than the required <nl>30<ol> [15] hours during the preceding <nl> 
cme<ol> [licensing] period may carry forward a maximum of <nl> 10<ol> [five] 
hours for the next <nl>cme<ol> [license] period. Each licensee shall maintain 
records for <nl>four<ol> [three] years evidencing completion of the continuing 
education programs completed by the licensee. 
[(1) The year will begin annually on September 1 and will extend until August 31 
of the following year.] 
[(2)] Notice is hereby given that receipt for proof of completion of the 
required <nl>30<ol> [15] hours must be received by the State Board of Podiatric 
Medical Examiners no later than August 31, of the relevant <nl>2 year cme 
period<ol> [year]. Receipt of completion of such requirement after August 31 
date subjects the practitioners to the penalty fees for late license renewal as 
provided in sec.379.2 of this title (relating to Fees and License Renewal). 
(c) (No change.) 
(d) Continuing Education obtained as part of a disciplinary action is not 
acceptable credit towards the total of <nl>30<ol> [15] hours required <nl>bi-
annually<ol> [annually].

sec.378.8. Inactive License Status.
(a)-(b) (No change.) 
(c) A licensee may remain on inactive status for <nl>four <ol> [three] years. In 
order for a licensee to return to active status, the licensee must complete 15 
hours of continuing education per year of inactive status not to exceed 
<nl>four<ol> [three] years in addition to any outstanding hours of continuing 
education and pay the required renewal license fees prior to the expiration of 
the <nl>four<ol> [ three] years. If licensee does not return to active status 
prior to the expiration of three years, the license is delinquent and the 
licensee must pay a late renewal penalty in addition to the requirements for 
returning to active status. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on December 31, 1997.
TRD-9800033
Janie Alonzo
Staff Services Officer I
Texas State Board of Podiatric Medical Examiners
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 305-7000

CHAPTER 380. Hyperbaric Oxygen Guidelines
22 TAC sec.380.1
The Texas State Board of Podiatric Medical Examiners proposes an amendment to 
sec.380.1, concerning Hyperbaric Oxygen Guidelines. The amendments are being 
proposed to better clarify the procedures a podiatric physician must follow in 
order to be granted authority to use Hyperbaric Oxygen in his/her practice. 
Allen M. Hymans, Executive Director, has determined that for each year of the 
first five years the sections are in effect there will be no fiscal implications 
as a result of enforcing or administering these sections. 
Mr. Hymans also has determined that for each year for the first five years the 
rule is in effect the public benefit anticipated as a result of enforcing the 
rule will be more control over who utilizes Hyperbaric Oxygen. 
Comments on or about the proposal may be submitted to Janie Alonzo, Staff 
Services Officer I, Texas State Board of Podiatric Medical Examiners, P.O. Box 
12216, Austin, Texas 78711- 2216. 
The amendment is proposed under Texas Civil Statutes, Article 4568(j), which 
provides the Texas State Board of Podiatric Medical Examiners with the authority 
to adopt all reasonable or necessary rules, regulations, and by-laws not 
inconsistent with the law regulating the practice of podiatric medicine, the 
laws of this state, or of the United States; to govern its proceedings and 
activities, the regulation of the practice of podiatric medicine, and the 
enforcement of the law regulating the practice of podiatric medicine. No other 
code, statute or article are affected by this amendment. 

sec.380.1. Hyperbaric Oxygen Guidelines. 
A podiatric physician shall be recognized and permitted to supervise and 
administer hyperbaric oxygen <nl>following the published recommendations <ol> 
[under the guidelines] of the Undersea and Hyperbaric Medical Society, Inc. 
(UHMS) and within the credentials and bylaws of the hospital that operates the 
hyperbaric unit with the following stipulations: 
(1) (No change.) 
(2) The podiatric physician must, in addition, show that he has attended and 
successfully completed a course of hyperbaric training that is recognized by the 
Undersea and Hyperbaric Medical Society [and is certified by that training 
agency to be competent in the utilization of]. <nl>That person may only 
utilize<ol> hyperbaric oxygen in the treatment of the foot as recognized by the 
Podiatric Medical Practice Act, Texas Civil Statutes, Article 4567, et. seq. A 
person shall be regarded as practicing podiatric medicine within the meaning of 
this law and shall be deemed and construed to be a podiatric physician, who 
shall treat or offer to treat any disease or disorder, physical injury, or 
deformity, or ailment of the human foot by any system or method. 
(3) (No change.) 
(4) A copy of the <nl>published recommendations<ol> [guidelines] of the Undersea 
and Hyperbaric Medical Society, Inc., are available from the Texas State Board 
of Podiatric Medical Examiners, P.O. Box 12216, Austin, Texas 78711-2216. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on December 31, 1997.
TRD-9800031
Janie Alonzo
Staff Services Officer I
Texas State Board of Podiatric Medical Examiners
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 305-7000

TITLE 28. INSURANCE
PART I. Texas Department of Insurance
CHAPTER 5. Property and Casualty Insurance
SUBCHAPTER M. Filing Requirements
28 TAC sec.5.9301
The Texas Department of Insurance proposes an amendment to sec.5.9301, which 
concerns the policy form and endorsement filing requirements for insurers 
sharing primary, excess or layered insurance coverage on a single commercial 
risk or account on a pro rata basis. The amendment is necessary to conform this 
section to amendments to the Insurance Code, Article 5.13-2 enacted by Senate 
Bill 1499, 75th Texas Legislature, 1997. Commercial property insurers, general 
liability insurers, and commercial casualty insurers, pursuant to Article 5.13-
2, sec.8, Insurance Code, and commercial multi-peril insurers, pursuant to 
Article 5.81, Insurance Code, and sec.5.9101 of this title (relating to 
commercial multi-peril policies) are required to file, on an individual insurer 
basis, policy forms and endorsements for approval by the commissioner. This 
individual insurer filing procedure is required regardless of whether several 
insurers are insuring the same risk or account on a shared basis. The rule 
provides that policy forms and endorsements filed for approval and used for 
insuring a single commercial risk or account shared by two or more insurers must 
meet the applicable equivalent coverage requirements set forth in sec.5.9302 of 
the subchapter. Senate Bill 1499 amended subsection (e), section 8, of Article 
5.13-2 to delete the requirements that forms submitted by individual insurers 
for approval must provide coverage equivalent to that provided in the policy 
forms used for these lines of coverage and that an endorsement may not reduce 
coverage provided under the approved policy form. Since there is no longer an 
equivalent coverage requirement for individual insurer policy form filings and 
no longer a prohibition against filing endorsements that reduce coverage, 
sec.5.9301 must be amended to reflect these statutory changes. 
David Durden, deputy commissioner for property and casualty lines has determined 
that for the first five-year period the proposed amendment is in effect, there 
will be no fiscal implications for state or local government as a result of 
enforcing or administering the section and there will be no effect on local 
employment or the local economy. 
Mr. Durden has also determined that for each year of the first five years the 
proposed amendment is in effect, the public benefit anticipated as a result of 
administering the section will be that sec.5.9301 will be in accord with Article 
5.13-2. It is anticipated that the proposed amendment will increase competition 
in the commercial insurance marketplace as insurers provide a wider variety of 
products designed to meet the specific needs of insurance consumers. This 
proposed amendment will also simplify the form filing procedure for the insurers 
who make individual policy form and endorsement filings. It is further 
anticipated that the proposed amendment will give insurers greater flexibility 
to adapt their products or respond in a timely fashion to changes in the 
insurance marketplace. There is no anticipated adverse economic effect on large 
or small insurers who are required to comply with the proposed amendment. It is 
anticipated that there would be a benefit to both large and small insurers 
because with the elimination of the equivalent coverage requirement from policy 
forms and endorsement filings, insurers will be able to file the same forms in 
Texas that they file nationwide, thereby, reducing the insurers' cost of doing 
business in Texas. Although insurers may have some costs associated with making 
new filings, those additional costs may be offset by the fact that the insurers 
will not have to produce a Texas specific policy form or endorsement which is 
different from the other programs that the insurers write in other states. 
Comments on the proposal to be considered by the Department must be submitted 
within 30 days after publication of the proposed section in the Texas Register 
to Caroline Scott, General Counsel and Chief Clerk, Texas Department of 
Insurance, P. O. Box 149104, Mail Code 113-2A, Austin, Texas 78714-9104. An 
additional copy of the comment should be submitted to David Durden, Deputy 
Commissioner for Property and Casualty Lines, Texas Department of Insurance, P. 
O. Box 149104, Mail Code 104-5A, Austin, Texas 78714-9104. 
The amendment is proposed under the Insurance Code, Articles 5.13-2, 5.81, 5.98, 
and 1.03A; and the Government Code sec.sec.2001.004-2001.038. Article 5.13-2 
regulates the policy forms submitted by insurers for approval in general 
liability, commercial property, commercial casualty, and medical professional 
liability insurance. Article 5.81 authorizes the commissioner to approve forms 
for multi-peril policies of insurance and to adopt rules as in the best judgment 
of the commissioner are necessary and desirable to carry out the purposes and 
objectives of this article. Article 5.98 authorizes the commissioner to adopt 
reasonable rules and rates that are appropriate to accomplish the purposes of 
Chapter 5. Article 1.03A authorizes the commissioner to adopt rules and 
regulations, which must be for general and uniform regulation, for the conduct 
and execution of the duties and functions of the department only as authorized 
by a statute. The Government Code, sec.sec.2001.004-2001.038 (Administrative 
Procedure Act) authorize and require each state agency to adopt rules of 
practice stating the nature and requirements of available formal and informal 
procedures and prescribe the procedures for adoption of rules by a state 
administrative agency. 
The following articles of the Insurance Code are affected by this section: 
Insurance Code, Articles 5.13-2 and 5.81 

sec.5.9301. Commercial Risks Shared By Two Or More Insurers. 
(a)-(b) (No change.) 
(c) The policy forms and endorsements issued to provide coverage on a single 
commercial risk or account which is shared by two or more insurers must be filed 
and approved for the lead insurer. Other insurers sharing such coverage on a 
single commercial risk or account with the lead insurer must use the filed and 
approved policy forms and endorsements of the lead insurer. These approved 
policy forms and endorsements may be used by such other insurers sharing such 
coverage without making a separate filing to the <nl>Texas Department <ol> 
[State Board] of Insurance for approval. 
(d) (No change.) 
[(e) The policy forms and endorsements filed for approval and used for insuring 
a single commercial risk or account shared by two or more insurers must meet the 
applicable equivalent coverage requirements set forth in sec.5.9302 of this 
title (relating to Equivalent Coverage).] 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 5, 1998.
TRD-9800050
Caroline Scott
General Counsel and Chief Clerk
Texas Department of Insurance
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 463-6327

TITLE 31. NATURAL RESOURCES AND CONSERVATION
PART X. Texas Water Development Board
CHAPTER 371.Drinking Water State Revolving Fund
The Texas Water Development Board (board) proposes amendments to sec.sec.371.2, 
371.21 and 371.24 and new sec.371.25, concerning the Drinking Water State 
Revolving Fund. The amendments establish subsidy levels, provide financial 
assistance for consolidation, add new definitions, amend the disadvantaged 
community definition, amend the existing Criteria and Methods of Distribution 
section and add a new Criteria and Methods of Distribution section for the new 
disadvantaged community program. 
Section 371.2 was amended to add the definitions of community water system and 
consolidation. Section 371.21 was amended to exclude projects funded through the 
Disadvantaged Community Account from the criteria and methods for distribution 
of funds provided for in this section. The criteria and methods for the 
Disadvantaged Community Program are provided for in new sec.371.24(g). In 
sec.371.24(b)(2), the definition of disadvantaged community was amended by 
changing the adjusted median household income threshold from at least 25% below 
the state average to no more than 75% of the median state household income to be 
consistent with the thresholds used to calculate the amount of subsidy in 
sec.371.24(c).
Section 371.24(c) was amended to include the interest rates and the levels of 
subsidies that will be available through the Disadvantaged Community Program. 
Financial assistance will be in the form of loans with either low interest rates 
or no interest, and part of the principal may be forgiven. Interest rates and 
the amount of principal subject to forgiveness are based on the percentage of 
the service area's adjusted median household income to the median state 
household income, with greater subsidies going to areas with lower adjusted 
median household incomes. 
New subsection (g) was added to sec.371.24 to provide financial assistance for 
consolidations, to provide subsidy levels for consolidations and to define 
eligible costs. One level of subsidy is being provided for consolidations that 
are either acquisitions or retail service, and another level of subsidy is 
provided for wholesale service. The amount of subsidy for a consolidation is in 
addition to the amount of subsidy that the disadvantaged community is eligible 
for under sec.371.24(c). 
New sec.371.25 was added to provide that the board will annually determine the 
amount of capitalization grant funds to be reserved for the disadvantaged 
community program, the ranking of projects on the intended use plan, the method 
for drawing the funding line for the amount of available funds, and deadlines 
for submitting applications and receiving a commitment. 
Patricia Todd, Director of Accounting & Finance, has determined that for the 
first five year period the sections are in effect there will be no fiscal 
implications for state and local government as a result of enforcing or 
administering the sections. 
Ms. Todd also has determined that for each year of the first five years that the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be to provide low interest loans and/or loan subsidies to 
eligible applicants that are defined as disadvantaged communities. There will 
not be an effect on small businesses. There is no anticipated economic cost to 
persons who are required to comply with the amendments as proposed.
Comments on the proposed amendments and new section will be accepted for 30 days 
following publication and may be submitted to Lana Lutringer, (512) 463-7870, 
Texas Water Development Board, P.O. Box 13231, Austin, Texas, 78711-3231.

Introductory Provisions
31 TAC sec.371.2
The amendments are proposed under the authority of the Texas Water Code, 
sec.6.101 and sec.15.605 which provide the Texas Water Development Board with 
the authority to adopt rules necessary to carry out the powers and duties in the 
Water Code and other laws of the State. The statutory provisions affected by the 
amendments are Texas Water Code, Chapter 15, Subchapter J, and Chapter 17, 
Subchapter C.

sec.371.2.Definitions of Terms.
The following words and terms, when used in this chapter, shall have the 
following meanings, unless the context clearly indicates otherwise. Words 
defined in the Texas Water Code, Chapter 15 and not defined here shall have the 
meanings provided by Chapter 15. 
<nl> Community water system<ol><nl> - A public water system that: <ol>
<nl>(A)<ol> <nl> serves at least 15 service connections used by year-round 
residents of the area served by the system; or <ol>
<nl>(B)<ol> <nl> regularly serves at least 25 year-round residents. <ol>
<nl>Consolidation <ol><nl>- Any one of the following activities:<ol>
<nl>(A)<ol> <nl> a public water system acquiring another public water system; 
<ol>
<nl>(B)<ol> <nl> a public water system providing retail service to another 
public water system; or <ol>
<nl>(C)<ol> <nl> a public water system providing wholesale service, which may 
include operation of the system, to another public water system. <ol>
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt. 
Issued in Austin, Texas, on January 2, 1998.
TRD-9800047
Gail L. Allan
Administration and Northern Legal Services
Texas Water Development Board
Proposed date of adoption: February 19, 1998
For further information, please call: (512) 463-7981

Program Requirements
31 TAC sec.sec.371.21, 371.24, 371.25
The amendments and new section are proposed under the authority of the Texas 
Water Code, sec.6.101 and sec.15.605 which provide the Texas Water Development 
Board with the authority to adopt rules necessary to carry out the powers and 
duties in the Water Code and other laws of the State.
The statutory provisions affected by the amendments and new section are Texas 
Water Code, Chapter 15, Subchapter J, and Chapter 17, Subchapter C.

sec.371.21.Criteria and Methods for Distribution of Funds for Water System 
Improvements. 
(a) After the executive administrator determines the amount of funds available 
for water system improvements for a fiscal year and assigns all reserves, the 
remaining funds will be applied to the list of projects designated to receive 
funding in the intended use plan. The list will be divided into population 
classes of systems that serve fewer than 10,000 persons and systems that serve 
10,000 and over persons. Projects will be listed in priority ranking order with 
funds required and totaled by class. <nl>Except for projects for disadvantaged 
communities, projects<ol> [Projects] having either identical combined rating 
factor scores, or identical physical deficiency rating scores, or including 
rating scores of zero, will be listed in alphabetical order. Funds required by 
all projects with combined rating factors greater than zero in all classes shall 
then be totaled. A percentage of the total funds required by each class shall be 
computed based upon the ratio of funds required by all classes. The portion of 
the available funds will be assigned to the classes based on this computed 
percentage. However, to the extent eligible applicants are available, a minimum 
of 15% of the funds will be made available to small communities (systems serving 
10,000 or less). 
(b)-(f) (No change.) 
(g) If, after six months, the remaining funds are not committed, the executive 
administrator will return any incomplete applications. <nl> Except for funds for 
disadvantaged communities projects, any<ol> [Any] funds remaining that exceed 
the amount needed to fund complete applications will be made available for the 
next fiscal year. <nl>Funds for disadvantaged communities projects shall remain 
available for commitment in accordance with sec.371.25 of this title, (relating 
to Criteria and Methods for Distribution of Funds for Disadvantaged 
Communities).<ol> 
(h)-(j) (No change.)

sec.371.24. Disadvantaged Community Program through Loan Subsidies. 
(a) (No change.) 
(b) Definition of Disadvantaged Community. 
(1) (No change.) 
(2) Disadvantaged community means the service area of a public water system that 
has an adjusted median household income which is <nl> no more than 75% of the 
median state household income<ol> [at least 25% below the state average] for the 
most recent year for which statistics are available; and 
(A)-(B) (No change.) 
(3)-(8) (No change.) 
(c) <nl>Interest Rates and Subsidies. <ol>Notwithstanding the provisions of 
sec.371.52 of this title (relating to Lending Rates), the interest rates and the 
levels of subsidies under the disadvantaged community program will be determined 
by <nl>the provisions of this subsection. The loan amount that is subject to 
forgiveness will not be subject to an interest rate<ol> [a calculation of 
critical need and affordability factors <nl>(1)<ol> <nl> If the adjusted median 
household income for the service area is between 75% and 70% of the median state 
household income, the board's financial assistance shall be in the form of a 
loan with a 1.0% interest rate. <ol>
<nl>(2)<ol> <nl>If the adjusted median household income for the service area is 
less than or equal to 70% but greater than 60% of the median state household 
income, the board's financial assistance shall be in the form of a loan with a 
0.0% interest rate. <ol>
<nl>(3)<ol> <nl>If the adjusted median household income for the service area is 
less than or equal to 60% but greater than 50% of the median state household 
income, the board's financial assistance shall be in the form of a loan with a 
0.0% interest rate and 15% of the principal will be forgiven. <ol>
<nl>(4)<ol> <nl> If the adjusted median household income for the service area is 
less than or equal to 50% of the median state household income, the board's 
financial assistance shall be in the form of a loan with a 0.0% interest rate 
and 35% of the principal will be forgiven. <ol>
(d)-(f) (No change.) 
<nl>(g)<ol> <nl> Consolidations. <ol>
<nl>(1)<ol> <nl> Financial assistance for consolidations.<ol>
<nl>(A)<ol> <nl> If the applicant acquires another public water system or 
provides retail service to another public water system, 20% of the cost of the 
project is subject to forgiveness of principal. <ol>
<nl>(B)<ol> <nl> If the applicant provides wholesale service to another public 
water system, 15% of the cost of the project is subject to forgiveness of 
principal. <ol>
<nl>(C)<ol> <nl>The amount of principal that will be forgiven for the 
consolidation will be deducted from the cost of the project before calculating 
the amount of financial assistance for the remaining cost of the project 
pursuant to sec.371.24(c) of this title (relating to Interest Rates and 
Subsidies). <ol>
<nl>(2)<ol> <nl> Eligible costs. <ol>
<nl>(A)<ol> <nl> Any one or more of the following costs of consolidation are 
eligible for funding: <ol>
<nl>(i)<ol> <nl> system acquisitions; <ol>
<nl>(ii)<ol> <nl> the cost of plant upgrades or expansions specific to providing 
service to the disadvantaged community; <ol>
<nl>(iii)<ol> <nl> the cost of rehabilitating or replacing the distribution 
system of an existing water system to bring the system into compliance with 
drinking water regulations; <ol>
<nl>(iv)<ol> <nl> the provision of wholesale service; and <ol>
<nl>(v)<ol> <nl>master meters and upgrades needed to receive wholesale service 
from the consolidating system. <ol>
<nl>(B)<ol> <nl> Notwithstanding the provisions of sec.371.13(a)(4) of this 
title (relating to Projects Eligible for Assistance), purchase of existing 
capacity in the consolidating system are not eligible for funding through the 
Disadvantaged Community Account of the DWSRF.<ol>

sec.371.25.Criteria and Methods for Distribution of Funds for Disadvantaged 
Communities.
(a) The board will determine annually the amount of capitalization grant funds 
to be reserved for projects for disadvantaged communities and will include this 
information in the intended use plan, provided however that no more than 30% of 
any capitalization grant can be so reserved. 
(b) After the executive administrator determines the amount of funds available 
for disadvantaged communities projects from capitalization grant reserves, state 
match, or any other sources, the available funds will be applied to the list of 
systems that serve fewer than 10,000 persons and the list of systems that serve 
10,000 and over persons in accordance with sec.371.21(a) of this title (relating 
to Criteria and Methods for Distribution of Funds for Water System 
Improvements). All projects will be listed in priority ranking order as 
determined by sec.371.19 of this title (relating to Rating Process). 
Disadvantaged communities projects assigned identical rating scores will be 
listed in the order of their adjusted median annual household income (AMAHI), 
with those communities having the lower AMAHI being listed higher on the 
priority list than those having higher AMAHIs. In the event that one or more 
disadvantaged communities have rating scores identical to the rating scores of 
non-disadvantaged communities, the disadvantaged communities will be listed 
above the non-disadvantaged communities on the priority list. 
(c) After projects have been ranked, a funding line will be drawn on the 
priority lists according to the amount of available funds in accordance with 
sec.371.21(b) of this title (relating to Criteria and Methods for Distribution 
of Funds for Water System Improvements). After the funding line is drawn, the 
executive administrator shall notify in writing all potential applicants above 
the funding line of the availability of funds and will invite the submittal of 
applications. In order to receive funding, disadvantaged communities projects 
above the funding line must submit applications for assistance, as defined, 
within six months of the date of notification of the availability of funds. Upon 
receipt of an application for assistance, the executive administrator shall 
notify the applicant, in writing, that an application has been received. The 
executive administrator may request additional information regarding any 
portions of an application for funding from the disadvantaged community account 
after the six month period has expired without affecting the priority status of 
the application. Applicants for funding from the disadvantaged community account 
will be allowed 12 months after submittal of an application to receive a loan 
commitment. 
(d) Applicants for funding from the disadvantaged community account above the 
funding line which do not submit applications before the six month deadline will 
be moved to the bottom of the priority list in priority order. 
(e) If after six months, there are insufficient applications to obligate all of 
the funds set aside for disadvantaged communities, the executive administrator 
will return any incomplete applications and move all projects for which no 
applications or incomplete applications were submitted to the bottom of the 
priority list, where they will be placed in priority order. 
(f) Following the re-ranking of the priority list, a line will again be drawn 
not to exceed the amount of funds available, in accordance with the criteria of 
subsection (b) of this section. 
(g) Projects above the funding line shall be eligible for assistance. After the 
funding line is re-drawn, the executive administrator shall notify, in writing, 
all potential applicants for funding from the disadvantaged community account of 
the availability of funds and will invite the submittal of applications. 
Applicants for funding from the disadvantaged community account will be allowed 
12 months after submittal of an application to receive a loan commitment. 
(h) If, after six months, there are insufficient applications to obligate the 
remaining funds of the funds set aside for disadvantaged communities, the 
executive administrator will return any incomplete applications. Any funds 
remaining that exceed the amount needed to fund completed applications will be 
transferred from the fund for disadvantaged communities to the fund for large 
and small communities. 
(i) If, at any time during either six month period of availability of funds, a 
potential applicant above the funding line submits written notification that it 
does not intend to submit an application or if additional funds become available 
for assistance, the funding line may be moved down the priority list to 
accommodate the additional projects. The executive administrator will notify 
such additional potential applicants for funding from the disadvantaged 
community account in writing and will invite the submittal of applications. 
Potential applicants receiving such notice will be given 12 months to submit an 
application. 
(j) Should an applicant which has submitted an application in a timely manner be 
unable to receive a loan commitment within 12 months of the date on which the 
application was received, the applicant's project will be placed at the bottom 
of the priority list. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 2, 1998.
TRD-9800002
Gail L. Allan
Administration and Northern Legal Services
Texas Water Development Board
Proposed date of adoption: February 19, 1998
For further information, please call: (512) 463-7981

TITLE 40. SOCIAL SERVICES AND ASSISTANCE
PART XIX. Texas Department of Protective and Regulatory Services
CHAPTER 700.Child Protective Services
The Texas Department of Protective and Regulatory Services (TDPRS) proposes 
amendments to sec.700.316 and sec.700.2501, concerning eligibility requirements 
for Title IV-E, MAO, and state-paid foster care assistance, and general 
requirements for contracting with licensed residential child-care providers, in 
its Child Protective Services chapter. The purpose of the amendments is to make 
state policy consistent with new federal regulations regarding contracting with 
for-profit residential treatment centers. Federal law has changed to allow Title 
IV-E payments to for-profit institutions. 
Cindy Brown, Budget and Analysis Division Director, has determined that for the 
first five-year period the proposed sections will be in effect there will be no 
fiscal implications for state or local government as a result of enforcing or 
administering the sections. 
Ms. Brown also has determined that for each year of the first five years the 
sections are in effect the public benefit anticipated as a result of enforcing 
the sections will be adequate resources for children in TDPRS conservatorship. 
There will be no effect on small businesses. There is no anticipated economic 
cost to persons who are required to comply with the proposed sections. 
Questions about the content of the proposal may be directed to Margaret Monk at 
(512) 438-5326 in TDPRS's Child Protective Services department. Written comments 
on the proposal may be submitted to Supervisor, Rules and Handbooks Unit-056, 
Texas Department of Protective and Regulatory Services E-205, P.O. Box 149030, 
Austin, Texas 78714-9030, within 30 days of publication in the Texas Register. 

SUBCHAPTER C.Eligibility for Child Protective Services
40 TAC sec.700.316
The amendment is proposed under the Texas Family Code, Title 5, Chapters 261 and 
264, which authorizes the department to provide services to alleviate the 
effects of child abuse and neglect. In addition, the amendment is proposed under 
Public Law Number 96-272, Title I, which authorizes the department to administer 
foster-care and adoption assistance programs provided for under the Social 
Security Act, Title IV-E. 
The amendment is also proposed under the Human Resources Code (HRC), Chapter 40, 
which describes the services authorized to be provided by the Texas Department 
of Protective and Regulatory Services; and authorizes the department to enter 
into agreements with federal, state, or other public or private agencies or 
individuals to accomplish the purposes of the programs authorized by the HRC; 
and grants authority to contract to that Department. 
The amendment implements the HRC, Chapter 40, which authorizes the department to 
enter into agreements with federal, state, or other public or private agencies 
or individuals to accomplish the purposes of the programs authorized by the HRC 
and which authorizes the department to enter into contracts as necessary to 
perform any of its powers or duties. 

sec.700.316. Eligibility Requirements for Title IV-E, MAO, and State-Paid Foster 
Care Assistance.
The child must meet all of the following criteria to be eligible for Title IV-E, 
Medical Assistance Only (MAO), or state-paid foster care assistance.
(1)-(3) (No change.) 
(4) Placement. The child must be receiving care in Texas in a licensed, 
certified, or verified foster home or a licensed, private, nonprofit child-
caring institution approved for TDPRS foster-care assistance, except in the 
following circumstances. 
(A)-(C) (No change.) 
(D) <nl>If the child is placed in a licensed residential treatment center, the 
facility may be for profit. <ol>[The child qualifies for Level of Care (LOC) VI, 
and no nonprofit, residential child care facility that can meet the child's 
needs is available in the area in which the child must be placed. When no 
nonprofit facility is available for a LOC VI child, the child may receive care 
in a licensed, for-profit facility that provides LOC VI services. The facility 
must enter into an agreement with TDPRS to provide services to children in the 
department's conservatorship at the department's normal payment rates. A child 
placed in a for-profit facility at LOC VI may continue to receive care in the 
facility if his LOC changes, as long as] [(i) the child's needs are best served 
by his remaining in the facility, and] 
[(ii) the facility agrees to continue serving the child at the new LOC.] 
(5)-(8) (No change.) 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt. 
Issued in Austin, Texas, on January 2, 1998.
TRD-9800028
C. Ed Davis
Deputy Director, Legal Services
Texas Department of Protective and Regulatory Services
Proposed date of adoption: April 1, 1998
For further information, please call: (512) 438-3765

SUBCHAPTER Y.Contracting with Licensed Residential Child-Care
Providers
40 TAC sec.700.2501
The amendment is proposed under the Texas Family Code, Title 5, Chapters 261 and 
264, which authorizes the department to provide services to alleviate the 
effects of child abuse and neglect. In addition, the amendment is proposed under 
Public Law Number 96-272, Title I, which authorizes the department to administer 
foster-care and adoption assistance programs provided for under the Social 
Security Act, Title IV-E. 
The amendment is also proposed under the Human Resources Code (HRC), Chapter 40, 
which describes the services authorized to be provided by the Texas Department 
of Protective and Regulatory Services; and authorizes the department to enter 
into agreements with federal, state, or other public or private agencies or 
individuals to accomplish the purposes of the programs authorized by the HRC; 
and grants authority to contract to that Department. 
The amendment implements the HRC, Chapter 40, which authorizes the department to 
enter into agreements with federal, state, or other public or private agencies 
or individuals to accomplish the purposes of the programs authorized by the HRC 
and which authorizes the department to enter into contracts as necessary to 
perform any of its powers or duties.

sec.700.2501. General Requirements for Contracting with Licensed Residential 
Child-Care Providers.
(a) (No change.) 
(b) Organizational and licensing requirements. To enter into a contract with 
TDPRS to provide substitute care to children in TDPRS's managing 
conservatorship, a licensed residential child-care provider must meet the 
following organizational and licensing requirements: 
(1) Requirement for nonprofit status. The provider must be a legally 
incorporated nonprofit entity <nl>unless the entity is licensed as and 
contracting for services as a residential treatment center, in which case the 
entity may be a for-profit entity<ol>. [Exception: If a child requires level-06 
care at the time of placement as specified in sec.700.2307 of this title 
(relating to Definition of Level 06), TDPRS has the authority to place the child 
with a for-profit residential child-care provider that provides care at level 
06. If the child's level of care is subsequently reduced to level 05, the for-
profit provider may continue to care for the child, if doing so is in the 
child's best interest, until the child's functioning stabilizes and TDPRS can 
arrange a planned transfer to a nonprofit caregiver. The director of the Office 
of Protective Services for Families and Children (PSFC) must approve each 
contract with a for- profit provider.] 
(2)-(3) (No change.) 
(c)-(d) (No change.) 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 2, 1998.
TRD-9800027
C. Ed Davis
Deputy Director, Legal Services
Texas Department of Protective and Regulatory Services
Proposed date of adoption: April 1, 1998
For further information, please call: (512) 438-3765

PART XX. Texas Workforce Commission
CHAPTER 823.General Hearings
The Texas Workforce Commission (Commission) proposes new sec.sec.823.1-823.3, 
823.11-823.15, 823.31-823.34, and 823.41-823.44 concerning a general hearing 
process for the Commission. 
New Chapter 823, concerning General Hearings is proposed as the location of the 
new rules. 
The new rules will govern administrative programs of the Commission including 
but not limited to Child Care, Proprietary Schools and Welfare-to Work program 
hearings. This hearing process specifically does not apply to programs that are 
governed by hearing procedures provided for by statutes or rules promulgated 
under Texas Administrative Code, Title 40, Part XX, Chapters 805 (JTPA) and 815 
(Unemployment and Labor Law). The new rules set forth the hearing procedures to 
meet federal and state fair hearing requirements within the purview of the 
Commission as required by provisions such as 40 U.S.C. sec.602(a)(4) and 7 
U.S.C. sec.2020(e)(10) as currently worded and as may be amended.
New Subchapter A relating to General Provisions is proposed. 
New Subchapter B relating to Pre-hearing Procedure is proposed. 
New Subchapter C relating to Conduct of Hearing is proposed. 
New Subchapter D relating to Decision, Non-appearance, and Rehearing is 
proposed. 
New sec.823.1 sets forth the short title and purpose of Chapter 823.
New sec.823.2 sets forth the definitions that apply to Chapter 823. 
New sec.823.3 sets forth the information on rights of appeal regarding Chapter 
823. 
New sec.823.11 provides for the procedure for requesting a hearing 
New sec.823.12 provides for the procedure for setting of a hearing. 
New sec.823.13 sets out the procedure and grounds for a postponement.
New sec.823.14 sets out the procedure regarding evidence to be used at the 
hearings. 
New sec.823.15 sets out the grounds and procedures for hearing officer 
disqualification and withdrawal. 
New sec.823.31 provides for the general hearing procedure. 
New sec.823.32 sets out the procedures for continuance of a hearing.
New sec.823.33 sets out the procedures for withdrawal of an appeal. 
New sec.823.34 provides for a change in the determination. 
New sec.sec.823.41-823.43 detail the procedure regarding hearing decisions,
reopened decisions for non-appearance and rehearing decisions respectively.
New sec.823.44 sets out the provisions regarding finality of decisions.
Randy Townsend, Director of Finance, has determined that for the first five-year 
period the sections are in effect, there will be no foreseeable fiscal 
implications for state or local government as a result of enforcing or 
administering the new rules. Mr. Townsend estimates that there will be no 
foreseeable cost reductions to the state and to local governments, no 
foreseeable net effect in revenues as a result of enforcing and administering 
the rules, and no foreseeable implications relating to costs or revenues to the 
state or to governments. There is no anticipated economic costs to persons who 
are required to comply with the section as proposed and there will be no 
foreseeable effect on small businesses. 
Ferris Duhon, Acting Deputy Director of Legal Services, also has determined that 
for each year of the first five years the rules are in effect, the public 
benefit anticipated as a result of enforcing the rules will be that the public 
will have a more uniform, clear and concise hearing procedure. 
Official comments must be received by the Commission no later than February 16, 
1997. Comments on the proposal may be submitted to Ferris Duhon, Acting Deputy 
Director of Legal Services, at the Texas Workforce Commission Building, 101 East 
15th Street, Room 264, Austin, Texas 78778 (512) 463-2293. Comments may also be 
submitted via fax to (512) 463-1426 or e-mail to: ferris.duhon@twc.tx.state.us.

SUBCHAPTER A.General Provisions
40 TAC sec.sec.823.1-823.3
The new rules are proposed under Texas Labor Code, sec.301.061 and sec.302.002, 
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 Texas Workforce Commission programs; Texas Human Resources 
Code sec.sec.31.012, 31.0125, 44.002(a) and 44.035(d) which provide the Texas 
Workforce Commission with authority to adopt rules to carry out the respective 
chapters; and Texas Education Code, sec.132.023, which provides the Commission 
with the authority to adopt such rules necessary for carrying out Chapter 132. 
The proposed rules affect Texas Labor Code, Title 4, Subtitle B, Chapter 301, 
302 and 305; Texas Education Code, Chapter 132; and Texas Human Resources Code, 
Chapter 44.

sec.823.1. Short Title and Purpose.
(a) This chapter provides a hearing process to the extent authorized by federal 
and state law and rules administered by the Commission.
(b) This chapter shall not pertain to review of determinations regarding: 
(1) across-the-board reductions of services, benefits or assistance to a class 
of recipients; 
(2) matters governed by Texas Labor Code, Title 2, Subtitle B, Restrictions on 
Labor and Subtitle C, Wages; 
(3) matters governed by Texas Labor Code, Title 4, Subtitle A, Texas 
Unemployment Compensation Act; 
(4) all programs funded in all or in part with monies allocated under the Job 
Training Partnership Act, 29 U.S.C. 1501 et seq.; and 
(5) matters governed by hearing procedures otherwise provided for within 40 TAC 
Part XX, Texas Workforce Commission. 

sec.823.2. Definitions.
The following words and terms, when used in this chapter, have the following 
meanings, unless the context clearly indicates otherwise.
Appellant - The party or the party's authorized hearing representative who files 
an appeal from an appealable determination or decision. 
Commission - The Texas Workforce Commission.
Date of notice - The date of receipt of a determination or notice. Absent a 
signed, certified-mail, return receipt card, which shall be prima facie evidence 
of the date of receipt, there shall be a presumption that the determination or 
notice is received 5 (five) days after mailing of the determination or notice 
unless good cause exists for the hearing officer to determine otherwise.
Date of request of hearing - The date on which the appellant or the hearing 
representative filed a written notice of appeal with the contractor or 
Commission. If an appeal is mailed to the contractor or Commission, then the 
appeal is perfected as of the postmark date on the envelope containing the 
appeal request unless good cause exists for the hearing officer to determine 
otherwise. 
Hearing - A hearing is an informal, orderly, and readily available proceeding 
held before an impartial hearing officer. At the hearing, a party or hearing 
representative may present evidence to show that the determination should be 
reversed, affirmed or modified.
Hearing officer - A hearing officer is a Commission employee designated to 
conduct fair hearings and issue final administrative decisions.
Party - The person or entity with the right to participate in a hearing 
authorized in applicable statute or rule. 
Proprietary school appeal - An appeal pursuant to Texas Education Code, Chapter 
132, Subchapter D relating to Proprietary Schools. 

sec. 823.3. Information on Right of Appeal.
An issuer of a determination must inform the applicant or any person directly 
aggrieved by the determination of the right to a hearing. The notice must 
explain the procedure for an appeal, the person's right of appeal, and the right 
to be represented by others, including legal counsel.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 5, 1998.
TRD-9800060
J. Randel (Jerry) Hill
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 463-8812

SUBCHAPTER B.Pre-Hearing Procedure
40 TAC sec.sec.823.11-823.15
The new rules are proposed under Texas Labor Code, sec.301.061 and sec.302.002, 
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 Texas Workforce Commission programs; Texas Human Resources 
Code sec.sec.31.012, 31.0125, 44.002(a) and 44.035(d) which provide the Texas 
Workforce Commission with authority to adopt rules to carry out the respective 
chapters; and Texas Education Code, sec.132.023, which provides the Commission 
with the authority to adopt such rules necessary for carrying out Chapter 132.
The proposed rules affect Texas Labor Code, Title 4, Subtitle B, Chapter 301, 
302 and 305; Texas Education Code, Chapter 132; and Texas Human Resources Code, 
Chapter 44. 

sec.823.11. Request for Hearing.
(a) The party seeking review of a determination under this Chapter relating to 
General Hearings must request a hearing in writing within sixty days of the date 
of notice of the determination unless: 
(1) the appeal is a proprietary school appeal wherein a party seeking review 
must request a hearing in writing within fifteen days after receipt of notice of 
the determination, 
(2) or as otherwise provided in 40 TAC Part XX relating to the Texas Workforce 
Commission. 
(b) The request must be addressed as provided in the determination and state the 
nature of the determination, the name and identifying information of the 
requesting party, and a request that the determination be reviewed. The request 
should include an explanation of why the determination should be changed; 
however, this is not a jurisdictional requirement. 
(c) Parties needing special accommodations including the need for a bilingual or 
sign language interpreter or other accommodations should request such before the 
setting of the hearing, if possible, or as soon as practical.

sec.823.12. Setting of Hearing.
(a) After the Commission receives the request for hearing, the hearing officer 
will issue within thirty days a notice of hearing which sets the hearing for a 
reasonable time and place. In proprietary school appeals the hearing shall be 
held within thirty days from the receipt of the request for an appeal. 
(b) The notice of hearing must be in writing and include a statement of the 
time, place, and nature of the hearing; a statement of the legal authority under 
which the hearing is to be held; and a short and plain statement of the matters 
asserted and to be proved. 
(c) The notice of hearing must be sent to the requesting party at least ten days 
before the date of the hearing unless a shorter period is permitted by statute. 
(d) The hearing notice will also contain a statement of whether the hearing will 
be conducted by telephone or the location of the in-person hearing. 
(e) Hearings will be conducted by telephonic means, unless the appellant 
requests a hearing in person except in proprietary school appeals where hearings 
are conducted in person in Austin unless the parties agree to a telephonic 
hearing and/or a different location.

sec.823.13. Postponement.
The hearing officer may grant a postponement of a hearing for good cause at 
either party's request. Except in emergencies or unusual circumstances confirmed 
by a telephone call or other means, no postponements may be granted within two 
days of the scheduled hearing. 

sec.823.14. Evidence.
(a) Evidence Generally. The parties are not bound by technical rules of 
evidence. Evidence will be admitted and given probative effect if it possesses 
probative value and is relevant as determined by the hearing officer. 
(b) Exchange of Documentary Evidence. Any documentary evidence to be presented 
during the telephonic hearing shall be exchanged with the opposing side with a 
copy to the Commission in advance of the hearing. Any documentary evidence to be 
presented at an in-person hearing shall be exchanged at the hearing. A party has 
the right to review, upon request, any documentary materials submitted to or by 
the hearing officer. 
(c) Stipulations. The parties to an appeal, with the consent of the hearing 
officer, may stipulate in writing to the facts involved. The hearing officer may 
decide the appeal based on such stipulation or, in the hearing officer's 
discretion, may set the appeal for hearing and take such further evidence as is 
deemed necessary for determining the appeal. 
(d) Discovery. The hearing officer may order other forms of discovery deemed 
appropriate. 
(e) Experts and Evaluations. The hearing officer may order, at a party's request 
and expense, if relevant and useful, an independent expert or a professional 
evaluation from a source satisfactory to the parties and the Commission. 
(f) Ex parte communications. Private (ex parte) communications of information, 
whether oral or written, about the substantive issues of the appeal are allowed 
only if the substance is shared with all parties to the appeal by the party 
initiating the communication within a reasonable amount of time. 
(g) Confidential information. Statutorily confidential information shall be 
protected in accordance with state and federal law.

sec.823.15.Hearing Officer Disqualification and Withdrawal.
(a) Disqualification. A hearing officer is disqualified if the hearing officer 
directly participated in the determination under review. The hearing officer 
participated if the hearing officer: 
(1) reviewed either the file or a summary of it to assist in making the 
determination; or 
(2) has a personal interest in the outcome of the appeal decision. 
(b) Withdrawal. The hearing officer may withdraw from a hearing to avoid the 
appearance of impropriety or partiality. Upon withdrawal, the hearing officer 
refers the case to an alternate hearing officer who will be chosen by the 
hearing officer's supervisor. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 5, 1998.
TRD-9800061
J. Randel (Jerry) Hill
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 463-8812

SUBCHAPTER C.Conduct of Hearing
40 TAC sec.sec.823.31-823.34
The new rules are proposed under Texas Labor Code, sec.301.061 and sec.302.002, 
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 Texas Workforce Commission programs; Texas Human Resources 
Code sec.sec.31.012, 31.0125, 44.002(a) and 44.035(d) which provide the Texas 
Workforce Commission with authority to adopt rules to carry out the respective 
chapters; and Texas Education Code, sec.132.023 , which provides the Commission 
with the authority to adopt such rules necessary for carrying out Chapter 132. 
The proposed rules affect Texas Labor Code, Title 4, Subtitle B, Chapter 301, 
302 and 305; Texas Education Code, Chapter 132; and Texas Human Resources Code, 
Chapter 44.

sec.823.31. Hearing Procedure.
(a) General Procedure. All hearings shall be conducted informally and in such 
manner as to ascertain the substantial rights of the parties. The hearing 
officer may impartially assist the parties in effective presentation of evidence 
and arguments. All issues relevant to the appeal shall be considered and 
addressed. 
(1) Presentation of Evidence. When a party appears, the hearing officer shall 
place the parties and any witnesses under oath, examine such party and the 
party's witnesses, if any, and allow presentation of witnesses and other 
evidence by each party as may be pertinent. If during the proceeding, the 
hearing officer determines that an in-person hearing is necessary to present the 
evidence, a continuance shall be issued until such time as needed to set the in-
person hearing. 
(2) Cross-Examination. The parties, witnesses and evidence are subject to cross-
examination by the other party or the hearing officer. A party has the right to 
object to and confront evidence offered at hearing by the hearing officer or the 
other party. 
(3) Additional Evidence. The hearing officer, with or without notice to any of 
the parties, may request, receive and enter into the record such additional 
evidence as necessary for a full and fair hearing on the matter, provided that a 
party shall be given an opportunity to rebut such evidence if it is to be used 
against the party's interest. 
(b) Hearing Representative. Each party may authorize a hearing representative to 
assist in presenting the appeal of the party under this chapter relating to 
General Hearings. A hearing representative is any individual authorized by a 
party who assists the party in presenting their appeal. A legal counsel, 
relative, friend, or other spokesperson may serve as a hearing representative to 
the extent permitted by law. 
(c) Records. 
(1) The hearing shall be tape-recorded and the hearing record will include the 
audiotape of the proceeding and any relevant evidence relied on by the hearing 
officer in reaching the decision, including any electronic printouts. 
(A) A party may request a copy of the audiotaped hearing at no cost. 
(B) A party requesting a transcript of a proceeding must pay the cost of 
transcription. 
(2) The hearing record must be maintained as long as required by the federal or 
state law affecting the matter appealed. 

sec.823.32. Continuance of Hearing.
(a) A continuance of a hearing may be ordered at the discretion of the hearing 
officer if: 
(1) there is insufficient evidence upon which to make a decision;
(2) a party needs additional time to examine evidence presented at the hearing; 
(3) the hearing officer considers it necessary to consult a collateral source 
for information or testimony; 
(4) an in person hearing needs to be scheduled for proper presentation of the 
evidence; or 
(5) any other reason deemed appropriate by the hearing officer. 
(b) The hearing officer must advise the parties of the reason for the 
continuance and any additional information required. Any testimony taken by the 
hearing officer at the continuance of the hearing must be taken under oath and 
recorded. The parties will have an opportunity to rebut any additional evidence. 

sec.823.33. Withdrawal of Appeal.
(a) If a party requests a withdrawal of an appeal either during a hearing or in 
writing at any time before a final decision is issued, the hearing officer shall 
grant the request for withdrawal and issue an order of dismissal. The withdrawal 
shall be sent to Appeals Department, Texas Workforce Commission, 101 East 15th 
Street, Austin, Texas 78778-0001. 
(b) If the hearing officer believes the appellant was improperly induced or 
influenced to withdraw the appeal, prior to granting the withdrawal and 
dismissing the appeal, the hearing officer must advise the appellant to 
reconsider withdrawing the appeal. 
(c) If a party dies during the appeal process, the legal representative of the 
decedent's estate must pursue the appeal or the hearing officer may consider the 
appeal withdrawn. 

sec.823.34.Change in Determination.
The issuer of the determination may change the determination anytime before the 
hearing officer issues the decision. Despite the issuer changing the 
determination, the parties may proceed with the hearing.
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 5, 1998.
TRD-9800062
J. Randel (Jerry) Hill
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 463-8812

SUBCHAPTER D.Decisions, Non-appearances, and Rehearings
40 TAC sec.sec.823.41-823.44
The new rules are proposed under Texas Labor Code, sec.301.061 and sec.302.002, 
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 Texas Workforce Commission programs; Texas Human Resources 
Code sec.sec.31.012, 31.0125, 44.002(a) and 44.035(d) which provide the Texas 
Workforce Commission with authority to adopt rules to carry out the respective 
chapters; and Texas Education Code, sec.132.023 , which provides the Commission 
with the authority to adopt such rules necessary for carrying out Chapter 132. 
The proposed rules affect Texas Labor Code, Title 4, Subtitle B, Chapter 301, 
302 and 305; Texas Education Code, Chapter 132; and Texas Human Resources Code, 
Chapter 44.

sec.823.41. Decision.
(a) Generally. Within ten days from the date of the hearing's conclusion, the 
hearing officer will issue a written decision unless an order of continuance or 
dismissal is granted. 
(b) Content. The decision of the hearing officer must include a statement of 
appearances at the hearing by the parties and their hearing representatives; the 
hearing officer's findings of facts and conclusions of law reached on the 
issues; and whether the determination is affirmed, reversed or modified. 

sec.823.42.Reopened Decision for Non-appearance.
A party has the right to request the reopening of the hearing until the 
expiration of thirty days from the date of the decision if good cause exists for 
non-appearance at the hearing. The request must be in writing and detail the 
grounds for reopening. The Commission will determine whether the allegations 
establish that good cause exists to warrant reopening and will schedule a 
hearing, if deemed necessary, and render a decision.

sec.823.43. Rehearing Decision.
(a) A party has thirty days from the date the decision was mailed to file a 
motion for rehearing for the presentation of new evidence.
(b) Motions for rehearing must be in writing and allege the new evidence to be 
considered. 
(c) If the hearing officer determines that the allegations justify a rehearing, 
a hearing will be scheduled at a reasonable time and place. 
(d) The Commission shall issue a decision in response to a timely filed motion 
for rehearing. 
(e) The Commission may assume continuing jurisdiction to modify, correct, or 
reform a decision until the expiration of thirty days from the date of mailing 
of the decision.

sec.823.44.Finality of Decision.
(a) The decision of the hearing officer shall become the final administrative 
decision of the Commission after the expiration of forty days from the date of 
mailing of the decision unless a timely request for reopening or rehearing is 
filed with the Commission or the Commission assumes continuing jurisdiction to 
modify, correct, or reform a decision as provided by sec.823.43 of this title 
(relating to Rehearing Decision). 
(b) If a request for reopening or rehearing is timely filed or the Commission 
assumes continuing jurisdiction pursuant to sec.823.43 of this title (relating 
to Rehearing Decision), the resulting decision shall be final on the expiration 
of forty days from the date of mailing of the decision in response to the 
request for reopening or rehearing or on the expiration of forty days from the 
date of mailing of a subsequent decision issued by the Commission. 
This agency hereby certifies that the proposal has been reviewed by legal 
counsel and found to be within the agency's legal authority to adopt.
Issued in Austin, Texas, on January 5, 1998.
TRD-9800063
J. Randel (Jerry) Hill
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: February 16, 1998
For further information, please call: (512) 463-8812