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 1. ADMINISTRATION PART III. Office of the Attorney General CHAPTER 55.Child Support Enforcement SUBCHAPTER H.License Suspension 1 TAC sec.55.203 The Office of the Attorney General adopts amended Figure 1: 1 TAC sec.55.203(b) and Figure 2: 1 TAC sec.55.203(f)(2), the amended forms for the petitions in actions to suspend licenses for failure to pay child support, with changes to the proposed text published in the January 2, 1998, issue of the Texas Register (23 TexReg 23, 168-171). The amended forms are adopted to correspond with legislative amendments to Chapter 232 of the Family Code, Suspension of License for Failure to Pay Child Support or Comply with Subpoena. The following changes were made in the Petition to Suspend License forms: a typographical error was corrected in the sixth paragraph of the petitions by changing "this" to "the". The amended forms clarify the Petition to Suspend License and track the new statutory language of Family Code, sec.232.005 including a statement of the total amount of arrearages allegedly owed under a child support order. These forms affect the Family Code, Chapter 232. No comments were received regarding the adoption of the amendment. The amended forms are adopted under the Family Code, Chapter 232, Suspension of License for Failure to Pay Child Support or Comply with Subpoena, sec.232.016, which provides the Office of the Attorney General with the authority to prescribe forms and procedures for the implementation of Chapter 232. sec.55.203. Forms. (a) (No change.) (b) Petition to Suspend License. The petition shall take the form as follows: Figure: 1 TAC sec.55.203(b) (c)-(e) (No change.) (f) The Office of the Attorney General promulgates the following two forms as suggested model forms for use by the courts. (1) (No change.) (2) Petition to Suspend License. The suggested model petition form takes the form as follows: Figure: 1 TAC sec.55.203(f)(2) 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801758 Sarah Shirley Assistant Attorney General Office of the Attorney General Effective date: March 1, 1998 Proposal publication date: December 17, 1997 For further information, please call: (512) 475-4499 PART IV. Office of the Secretary of State CHAPTER 79.Corporations SUBCHAPTER A.General Provisions 1 TAC sec.79.2 The Office of the Secretary of State adopts an amendment to sec.79.2, relating to the manner in which business is conducted with the Corporations Section of the secretary of state. The amendment is adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10841) and will not be republished. The amendment is necessary to revise and clarify the language of the existing rule which presently requires, without exception, that all business with the secretary of state be conducted in writing. The amendment addresses changes brought about by Senate Bill 555, Chapter 375, Acts, 75th Legislature, Regular Session (1997); specifically, the provisions authorizing the submission of documents to the Corporations Section of the secretary of state electronically or by other technological means. No comments were received regarding adoption of the amendment. The amendment is adopted under the authority of Article 9.03, Texas Business Corporation Act, and Article 1396-9.05, Texas Non-Profit Corporation Act, which give the secretary of state the authority to efficiently administer the duties imposed on the secretary under the acts, and Section 20001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801334 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 1 TAC sec.sec.79.13-79.15, 79.17-79.19 The Office of the Secretary of State adopts the repeal of sec.sec.79.13-79.15 and sec.sec.79.17-79.19, concerning the filing requirements, procedures, and effect of certain business entity filings made with the Corporations Section of the secretary of state. The repeal of these sections is adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10842). The text will not be republished. The repeal is necessary to avoid duplication. New rules which incorporate many of the provisions of the existing rules, but which are reorganized into several new subchapters which are being concurrently proposed for adoption. No comments were received regarding the repeal of the sections. The proposed repeal is submitted under the authority of article 9.03, Texas Business Corporation Act, and Article 1396-9.05, Texas Non-Profit Corporation Act, which give the secretary of state the authority to efficiently administer the duties imposed on the secretary under the acts, and Section 20001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801335 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-??? SUBCHAPTER B.Document Review 1 TAC sec.sec.79.21-79.28 The Office of the Secretary of State adopts new subchapter B, Document Review, sec.sec.79.21-79.28, relating to filing procedures, review standards, and the processing of certain documents filed with the Corporations Section of the Office of the Secretary of State. The new rules are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10843) and will not be republished. The subchapter and rules are necessary for the purpose of clarifying and codifying procedures established by the secretary of state in the review of documents filed in the Corporations Section. Section 79.21 clarifies the ministerial role of the secretary of state by setting forth the level of administrative review of documents submitted on behalf of business organizations for filing with the Corporations Section of the secretary of state. Section 79.22 identifies the factors considered when prioritizing the processing of documents submitted for filing with the Corporations Section of the secretary of state. Section 79.23 clarifies the limits of the secretary of state's authority as it relates to fraudulent filings. Section 79.24 explains the types of corrections that may not be effected by the filing of articles or certificates of correction and clarifies that the secretary of state will not refund any portion of a fee based upon the submission and acceptance of articles of correction correcting the information upon which the fee for the document was based. Sections 79.25 and 79.26 relate to the filing of name reservations, name registrations, and applications for certificate of withdrawal and incorporate the provisions of sec.79.15 and sec.79.17 that are to be repealed for purposes of reorganization of Chapter 79 into subchapters. Section 79.27 explains the procedures relating to the filing of periodic reports by non-profit corporations. Section 79.28 sets forth the requirements for a registered office address for purposes of filing with the secretary of state. No comments were received regarding the adoption of the new subchapter and sections. The adoption of the new subchapter and sections is proposed under the authority of Article 9.03, Texas Business Corporation Act and Article 1396-9.05, Texas Non-Profit Corporation Act which grant the secretary of state the authority to efficiently administer the duties imposed on the secretary of state under the acts, and Section 2001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801336 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER C.Entity Names 1 TAC sec.sec.79.34, 79.43, 79.48, 79.50 The Office of the Secretary of State adopts the amendments to Subchapter C, Entity Names, sec.sec.79.34, 79.43, 79.48, and 79.50 relating to factors and conditions relevant to the secretary of state's determinations regarding entity names. The amendments are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10844) and will not be republished. The amendments are necessary to revise and clarify the language of the existing rules and to conform the rules to present practice and procedure. Section 79.34 is amended to delete language which created an ambiguity regarding use of the term "companies" as a basis for distinguishing between names. Section 79.43 is amended to include an additional example of a circumstance giving rise to the requirement that a letter of consent be obtained from a previously existing entity when the only difference in the names is the use of the term "companies." Section 79.50 is amended to include professional limited liability companies as a type of professional entity subject to the rule and to provide an exception to the letter of consent requirement when there is sufficient basis for distinguishing between professional entity names. Section 79.48 is amended to clarify that the timing of an applicant's submission of a document relating to an entity name at issue does not determine the secretary of state's final decision regarding the entity name. No comments were received regarding the adoption of the amendments. The amended sections are adopted under the authority of Article 9.03, Texas Business Corporation Act, and Article 1396-9.05, Texas Non-Profit Corporation Act, which give the secretary of state the authority to efficiently administer the duties imposed on the secretary under the acts, and Section 20001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801337 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER E.Delayed Effective Dates 1 TAC sec.sec.79.71-79.73 The Office of the Secretary of State adopts new subchapter E, Delayed Effective Dates, sec.sec.79.71-79.73, relating to filing procedures for documents having a delayed effective date, and the corresponding changes effected to the Corporations Section database upon the filing of such documents. New section 79.71 and sec.79.72 are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10845) and will not be republished. New section 79.73, which was proposed in the same issue, relates to changes made to the business information of domestic and foreign entities on file with the secretary of state and is adopted with changes to subsection (a)(2) and subsection (b)(1) and (2). The subsections are changed to include the terms "domestic" and "foreign" in order to more clearly distinguish between actions taken with respect to such entities. The new sections renumber and replace sections, sec.sec.79.13, 79.14, and 79.18, and incorporate changes necessary to implement Senate Bill 555, Chapter 375, Acts, 75th Legislature, Regular Session (1997) relating to the filing of conversion transactions. The new subchapter and sections are necessary for the purpose of providing a more clearly ordered structure to Chapter 79 and to incorporate changes relating to conversion transactions implemented by Senate Bill 555 which became effective September 1, 1997. Section 79.71 concerns the calculation of the 90th day following the date of filing of a document for the purposes of filing documents which will become effective upon the occurrence of a future act or event. Section 79.72 sets forth the filing requirements for the filing of a statement regarding the satisfaction or waiver of a condition triggering the effectiveness of a document filing. Section 79.73 outlines the procedures followed by the secretary of state upon the filing of a document with a delayed effective date and specifies the changes made to the business entity information contained in the Corporations Section's database. No comments were received regarding adoption of the new sections. The new subchapter and sections are adopted under the authority of Article 9.03, Texas Business Corporation Act and Article 1396-9.05, Texas Non-Profit Corporation Act which grant the secretary of state the authority to efficiently administer the duties imposed on the secretary of state under the acts, and Section 2001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. sec.79.73.Documents with Delayed Effective Dates. (a) Upon the filing of a document with a delayed effective date, the computer records of the secretary of state will be changed to show the filing of the document, the date of the filing, the future date on which the document will be effective or a code indicating that the effectiveness is based on a future condition, and the name of the surviving entity or entities, if applicable. In addition, at the time of such filing: (1) the status of any domestic entity on file with the secretary of state that is converting, merging out of existence, or dissolving, will be changed from active to inactive, and the status of any foreign entity withdrawing its certificate will be changed from active to inactive; (2) the status of any domestic entity to be created and filed with the secretary of state by the terms of a plan of merger, plan of conversion, articles of incorporation, articles of organization, or a certificate of limited partnership, or the status of any foreign entity obtaining a certificate authorizing the foreign entity to transact business in Texas shall appear in the active records of the secretary of state; and (3) any filings making amendments to articles of incorporation, articles of organization, a certificate of limited partnership, or a certificate authorizing a foreign entity to transact business in Texas will be recorded in the records of the secretary of state. (b) Upon filing of the document: (1) the name of any domestic entity on file with the secretary of state which is converting, merging out of existence, or dissolving, or the name of any foreign entity withdrawing its certificate of authority will not appear in the active records and will not be a bar to reservation or registration of an entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to the name of the converting, merging, or dissolving domestic entity or the withdrawing foreign entity; (2) the name of any domestic entity to be created and filed with the secretary of state by the terms of a plan of merger, plan of conversion, articles of incorporation, articles of organization, or a certificate of limited partnership, or the name of any foreign entity obtaining a certificate authorizing the foreign entity to transact business in Texas will appear in the active records of the secretary of state and will be a bar to reservation or registration of any entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to the name of an entity to be created or authorized to transact business in Texas by one of the document filings listed in this section; and (3) if a document filing provides for a change of name of an entity previously on file with the secretary of state, the new name of the entity will appear in the active records of the secretary of state and will be a bar to reservation or registration of any entity name or creation of an entity under a name which is the same as, deceptively similar to, or similar to any new name of the entity as provided in the document filing; (4) if a document filing provides for an amendment to the articles of incorporation, articles of organization, a certificate of limited partnership, or a certificate authorizing a foreign entity to transact business in Texas, the secretary of state will change the computer records to reflect any amendments to information which may be obtained from the computer database (e.g., authorized stock, registered agent/registered office, the name of a general partner). 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801338 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER F.Effect of Filings 1 TAC sec.79.81, sec.79.82 The Office of the Secretary of State adopts new Subchapter F, Effect of Filings, sec.79.81 and sec.79.82, relating to the effect of certain filings on the business organization information maintained in the database of the Corporations Section of the secretary of state. New sec.79.81 and sec.79.82 of the new subchapter are adopted with changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10847-10848). The changes in new sec.79.81(b) clarify the procedures followed when processing articles of conversion that convert a foreign qualified entity to a domestic corporation, limited partnership or limited liability company. The section is changed by deletion of the phrase "and the name of the converted entity" in the first sentence of the subsection and by the addition of language specifically stating that the filing of the conversion document does not terminate the entity's certificate of authority. The change in new sec.79.82 is the deletion of the phrase "or a converting qualified entity that converted to a domestic entity" in subparagraph (4) in order to eliminate an inconsistency with the procedures set forth in new sec.79.81. The new rules are being adopted for the purpose of implementing the changes effected by Senate Bill 555, Chapter 375, Acts, 75th Legislature, R.S. (1997); specifically, conversion transactions which allow a domestic or foreign business entity to change its organizational form without an interruption in the entity's existence. Additionally, the new subchapter and sections are part of the secretary of state's reorganization of Chapter 79 into subchapters. Section 79.81 outlines the procedures followed by the secretary of state upon the filing of a conversion transaction and specifies the changes made to the business entity information contained in the Corporations Section's database. The section also informs the public of other statutory filings that may need to be filed with the secretary of state by a foreign business entity that has converted. Section 79.82 replaces Section 79.19, which is being repealed under separate submission. Section 79.82 relates to the abandonment of a document previously filed with the secretary of state and incorporates changes necessary to include the conversion transaction in its procedures. No comments were received regarding the adoption of the new rules. The new subchapter and sections are adopted under the authority of article 9.03, Texas Business Corporation Act, and article 1396-9.05, Texas Non-Profit Corporation Act, which give the secretary of state the authority to efficiently administer the duties imposed on the secretary under the acts, and Section 20001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. sec.79.81. Conversion Filings. (a) Upon filing of a conversion document where the converting entity is a domestic corporation, limited partnership, or limited liability company (i.e., a domestic entity), the computer records of the secretary of state relating to the converting domestic entity will be changed to show the filing of the conversion document, the date of the filing, the future date on which the document will be effective or a code indicating that the effectiveness is based on a future condition, and the name of the converted entity. In addition, at the time of such filing: (1) the status of the converting domestic entity will be changed from active to inactive; and (2) the status of the converted domestic entity to which the converting entity has converted shall appear in the active records of the secretary of state indexed under a charter number and type code applicable to the type of entity to which it converted. (b) Upon filing of a conversion document where the converting entity is a foreign corporation, limited partnership, or limited liability company with an active certificate of authority (i.e., a qualified entity) which is to be converted to a domestic entity, the computer records of the secretary of state relating to the converting qualified entity will be changed to show the filing of the conversion document, the date of the filing, and the future date on which the document will be effective or a code indicating that the effectiveness is based on a future condition, if applicable. In addition, at the time of such filing the status of the converted domestic entity to which the converting qualified entity has converted shall appear in the active records of the secretary of state indexed under a charter number and type code applicable to the type of entity to which it converted. The filing of a conversion document converting a foreign qualified entity to a domestic entity does not terminate the certificate of authority of the foreign qualified entity. The foreign qualified entity may apply to withdraw its certificate of authority prior to the filing of the conversion or file a statement of termination pursuant to article 8.14, Business Corporation Act, article 7.09, Limited Liability Company Act, or section 9.06, Revised Limited Partnership Act, as applicable. (c) A foreign corporation, limited partnership, or limited liability company with an active certificate of authority (i.e., a qualified entity) that is authorized under the laws of its jurisdiction of organization to convert and that converts effecting a change to its jurisdiction of organization without a change to its organizational form, shall file an application to amend its certificate of authority or certificate of registration to reflect the date of the conversion of the qualified entity and the jurisdiction of formation of the converted entity. A certificate from the secretary of state or other proper filing officer of the new jurisdiction of organization that evidences the conversion of the entity's jurisdiction of organization must accompany the application for amended certificate of authority. (d) A foreign corporation, limited partnership, or limited liability company with an active certificate of authority (i.e., a qualified entity) that is authorized under the laws of its jurisdiction of organization to convert and that converts effecting a change to its organizational form shall file a termination of its certificate of authority pursuant to article 8.14, Business Corporation Act, article 7.09, Limited Liability Company Act, or section 9.06, Revised Limited Partnership Act, as applicable. If the converted entity is to transact business in this state, the converted entity must obtain a certificate of authority under the laws applicable to the type of foreign entity to which the entity converted. sec.79.82 .Abandonment of Document. If a document filing is abandoned in accordance with a statutory provision for abandonment, the secretary of state: (1) will change the status of all the entities filed with the secretary of state which would have merged out of existence, dissolved, or withdrawn to active on the computer records of the agency and record the filing of the abandonment. If the names of these entities are not available, the entities must file articles of amendment or take other action to change the entity name or bring the name into compliance with applicable statutory provisions as a condition of acceptance of the abandonment; (2) will change the status of all entities that would have been created and filed or authorized to transact business in Texas with the secretary of state by the terms of the document filing to inactive on the computer records of the agency; (3) will change the status of a converted entity that would have been created and filed in Texas with the secretary of state by the terms of the articles of conversion to inactive on the computer records of the agency; and (4) will change the status of a converting domestic entity filed with the secretary of state to active on the computer records of the secretary of state. If the name of the entity is not available, the entity must file articles of amendment or take other action to change the entity name or bring the entity name into compliance with applicable statutory provisions as a condition of acceptance of the abandonment. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801339 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 CHAPTER 80.Unincorporated Business Entities SUBCHAPTER A.Limited Liability Partnerships 1 TAC sec.sec.80.1-80.4 The Office of the Secretary of State adopts the repeal of sec.sec.80.1-80.4, relating to limited liability partnership filings with the secretary of state without changes to the text as proposed in the November 7, 1997 issue of the Texas Register (22 TexReg 10848). The text will not be republished. The secretary of state adopts the repeal of these sections for the purpose of deleting obsolete provisions and adopting new rules which address filing requirements and procedures for foreign limited liability partnerships as provided by the enactment of Senate Bill 555, Chapter 375, Acts, 75th Legislature, Regular Session(1997). The repeal of these sections deletes redundant provisions which were codified in 1993 with the enactment of the Texas Revised Partnership Act (Article 6132b-1), by the 73rd Legislature. No comments were received regarding the proposed repeal of these sections. The repeal of sec.sec.80.1-80.4 is adopted under the authority of sec.3.08(b)(15) and sec.10.02(n) of the Texas Revised Partnership Act which give the secretary of state the authority to adopt procedural rules on filing domestic and foreign limited liability partnership documents. Section 2001.004, Government Code, requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801340 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 1 TAC sec.sec.80.1-80.7 The Office of the Secretary of State adopts new Subchapter A, Limited Liability Partnerships, sec.sec.80.1-80.7, concerning filing requirements and procedures for the registration of domestic limited liability partnerships and the qualification of out-of-state limited liability partnerships. New sec.80.2 and sec.80.7 are adopted with changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10849). New sec.sec.80.1, 80.3, 80.5, and 80.6, which appeared in the same issue, are adopted without changes to the proposed text and will not be republished. The new subchapter and sections address certain filing issues and concerns not addressed by the existing rules which are being repealed. The new sections are necessary to implement the provisions of Senate Bill 555, Chapter 375, Acts, 75th Legislature, Regular Session (1997); specifically, the provisions requiring the qualification with the secretary of state of out-of-state limited liability partnerships transacting business in Texas. Proposed new sec.80.1 addresses the filing requirements for registration as a domestic limited liability partnership and clarifies what must be done when the partnership has not obtained a federal identification number at the time of registration. Proposed new sec.80.2 sets forth the filing requirements for out- of-state limited liability partnerships qualifying to transact business in Texas and clarifies what must be done when the partnership has not obtained a federal identification number at the time of qualification with the secretary of state. Section 80.3 sets forth the standard of review for limited liability partnership registration and qualification documents. Section 80.4 clarifies the types of documents that may be amended, changed, or corrected and the fee structure for such filings, and explains the ways a qualified foreign limited liability partnership may effect a change to its registered agent or registered office address information. Section 80.5 provides for the termination of a registration when the partnership ceases to exist as a partnership by means of merger or conversion, and establishes the filing requirements for such termination. Section 80.6 explains the procedures followed when the secretary of state revokes the filing of a document when the filing fee for the document was paid by an instrument or credit card that was dishonored when presented for payment. Section 80.7 provides notice to the public that a foreign limited partnership that is registered as a foreign limited liability partnership also must comply with the registration and qualification provisions of the Texas Revised Limited Partnership Act. One comment was received from an out-of-state limited liability partnership on the new sections. The commenter, Richard Dicharry of Phelps Dunbar, LLP, asked whether the secretary of state could define or clarify when a partner of a foreign limited liability partnership would be considered to be "in Texas" for purposes of completing the qualification statement and computing the filing fee. The secretary of state agreed that clarification was needed and has responded by adding subsection (f) to sec.80.2 which will outline the circumstances under which a partner would be considered to be "in Texas" for purposes of completing the qualification statement promulgated by the secretary of state and for computing the filing fee. The new subsection includes such factors as licensing and the duration of a partner's presence in the state. In addition, subsection (e) has been changed to clarify that a foreign limited liability limited partnership is to calculate the filing fee based upon the number of general and not limited partners in Texas. The new sections are adopted under the authority of Article 6132b-3.08(b)(15) and Article 6132b-10.02, Texas Revised Partnership Act, which give the secretary of state authority to adopt procedural rules on filing limited liability partnership documents under those sections, and Section 20001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. sec.80.2.Statement of Foreign Qualification. (a) Initial statement. To transact business in Texas, a foreign limited liability partnership must comply with the Texas Revised Partnership Act, Texas Civil Statutes, Article 6132b, sec.10.02. The secretary of state has promulgated a form for this purpose; however, use of such form is not mandatory. Applications submitted for filing with the secretary of state must be executed by a majority in interest of the partners or by one or more partners authorized by a majority in interest of the partners and must contain the following information: (1) the name of the partnership; (2) the federal tax identification number of the partnership; (3) the state of formation and the date of its initial registration as a limited liability partnership in that state; (4) a statement that the foreign limited liability partnership validly exists as a limited liability partnership under the laws of the state of its formation; (5) the street address of a partnership office in Texas and the street address of the partnership's chief executive office; (6) the street address of its proposed registered office in Texas and the name of its proposed registered agent in Texas at such address; (7) a statement that the partnership appoints the secretary of state as its agent for service of process under the circumstances set forth in Section 10.01(k), Texas Revised Partnership Act; (8) the number of partners in Texas at the date of application; and (9) a brief statement of the business in which the partnership engages. (b) Name of the partnership. The name of the registered limited liability partnership shall contain the words "registered limited liability partnership" or "limited liability partnership" or the abbreviations "R.L.L.P.," "L.L.P.," "RLLP," or "LLP" as the last words or letters of its name. The secretary of state does not review the name of the partnership, or a change of name, to determine whether the name conforms with the entity name availability rules of sec.sec.79.30-79.54 of this title (relating to Corporations). (c) Federal tax identification number. A partnership which has applied for, but not obtained, a federal tax identification number at the time of submission may provide a statement to that effect in its application for registration. Once the partnership has obtained its federal tax identification number, the partnership shall amend its application for registration to provide the identification number required under Section 10.02. (d) Registered Office. The registered office address of the limited liability partnership must include a street or building address for purposes of providing the public with notice of the physical location at which process may be served on the registered agent; a post office box or lock box alone is not a sufficient address for the registered office. The address of a commercial business which provides "private mail box" services is not sufficient as a registered office address, unless the commercial enterprise is the business of the designated registered agent. If the registered office is in a city with a population of less than 5,000, the secretary of state will accept an address other than a street address for the registered office. (e) Fee. The fee for filing a statement of foreign qualification or a renewal of foreign qualification is $200 per partner in Texas, but not less than $200 and not more than $750. In the case of a limited liability limited partnership, calculation of the filing fee would be determined by the number of general, not limited, partners in Texas at the time of submission. (f) Partners in Texas. For purposes of this section, a partner is considered to be in Texas if: (1) the partner is a resident of the state; (2) the partner is domiciled or located in the state; (3) the partner is licensed or otherwise legally authorized to perform the services of the partnership in this state; or (4) the partner, or a representative of the partnership working under the direct supervision or control of the partner, will be providing services or otherwise transacting the business of the partnership within the state for a period of more than 30 days. sec.80.7.Foreign Limited Liability Limited Partnerships. A foreign limited partnership that is subject to registration under the provisions of sec.9.02(a) of the Texas Revised Limited Partnership Act and that has the status of a registered limited liability partnership under the laws of a state other than Texas also must file a statement of foreign qualification under sec.10.02 of the Texas Revised Partnership Act before transacting business in Texas. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801341 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER B.Unincorporated Nonprofit Associations 1 TAC sec.80.29 The Office of the Secretary of State adopts an amendment to sec.80.29, relating to the revocation of the filing of a document when the fee for the document was paid by an instrument or credit card that was dishonored when presented by the secretary of state for payment. The amendment is adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10851) and will not be republished. The amendment to sec.80.29, eliminates the need to provide the nonprofit association 30 days within which to pay the fee bringing the procedures in line with similar revocation provisions found in Article 7.01C(2) of the Texas Business Corporation Act and Article 1396-7.01C(2) of the Texas Non-Profit Corporation Act. In addition, the amended section clarifies where notice of the revocation will be sent. The amendment is necessary to make the rule consistent with procedures followed in the revocation of documents filed by corporate entities. No comments were received regarding the adoption of the amended section. The adoption of the amendment is proposed under the authority of sec.12(g) of the Texas Uniform Unincorporated Nonprofit Association Act (Article 1396-70.01 et. seq.) which gives the secretary of state the authority to adopt procedural rules on filing documents under section 12 of the act. This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801342 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 CHAPTER 83.Limited Partnership 1 TAC sec.sec.83.1-83.6 The Office of the Secretary of State adopts the repeal of sec.sec.83.1-83.6, relating to limited partnership documents filed with the secretary of state under the provisions of the Texas Uniform Partnership Act (Article 6132a). The repeal of these sections is adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10852). The text will not be republished. The repeal of these rules is necessary to delete obsolete provisions which have been inapplicable to limited partnership filings since the repeal and expiration of the Texas Uniform Partnership Act on September 1, 1992. The repeal of the rules will make possible the adoption of new rules addressing policies and procedures for limited partnership documents filed pursuant to the Texas Revised Limited Partnership Act (Article 6132a-1). No comments were received regarding the adoption of the repeal of these sections. The adoption of the repeal is submitted under the authority of sec.2001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801343 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER A.General Provisions 1 TAC sec.sec.83.1-83.5 The Office of the Secretary of State adopts new Subchapter A, sec.sec.83.1-83.5, relating to limited partnership documents filed with the secretary of state under the provisions of the Texas Revised Limited Partnership Act (Article 6132a-1.01 et. seq.). The new subchapter and sections are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10852) and will not be republished. The new sec.sec.83.1-83.5, are necessary to set forth the standards of review for limited partnership filings and to include information regarding specific filing procedures applicable to limited partnership documents filed with the secretary of state under the provisions of the Texas Revised Limited Partnership Act. The new subchapter and sections replace sections, sec.sec.83.1-83.5, which relate to filings under the Texas Uniform Limited Partnership Act (now repealed and expired) and that are being repealed under separate submission. New sec.83.1 allows for the filing of the limited partnership agreement when it contains the information required of a certificate of limited partnership under the Texas Revised Limited Partnership Act; sec.83.2 clarifies the requirements for a registered agent and registered office address; sec.83.3 sets forth the standard of review of limited partnership documents; sec.83.4 relates to the computation of the fee imposed for late registration by a foreign limited partnership and provides for a ten day grace period; and sec.83.5 describes the notice provided to a limited partnership when the secretary of state revokes the filing of a document when the fee for the document was paid by an instrument that was dishonored when presented for payment. No comments were received regarding the adoption of the new sections. The adoption is proposed under the authority of sec.2001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801344 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER B.Periodic Reports 1 TAC sec.sec.83.21-83.24 The Office of the Secretary of State adopts new Subchapter B, sec.sec.83.21- 83.24, relating to the filing of periodic reports for limited partnerships under the provisions of the Texas Revised Limited Partnership Act (Article 6132a-1). The new subchapter and sections are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10853) and will not be republished. Under the provisions of sec.13.05, Texas Revised Limited Partnership Act, the secretary of state is authorized to require limited partnerships in this state to file a report no more than once every four years. The new subchapter and sections are necessary to clarify and codify the established policies and procedures relating to the filing of the periodic report, and to clarify the consequences for the failure of the limited partnership to file the report when required to do so by the secretary of state. Section 83.21 specifies the content of the periodic report, explains how changes to the report information are to be made, and what changes can be effected by the filing of the periodic report. Section 83.22 specifies the address to which notices relating to the filing of the periodic report are sent and clarifies that the failure of the limited partnership to receive notice does not relieve the partnership from the need to file the report. Section 83.23 provides that the secretary of state will not file an amendment submitted by a limited partnership which has forfeited its right to transact business for its failure to file the periodic report. Section 83.24 allows a limited partnership to file a periodic report when not required to do so by the secretary of state, but clarifies that the voluntary filing does not relieve the partnership from the requirement to file the report when directed to do so by the secretary of state. No comments were received regarding the adoption of the new sections. The adoption of the new subchapter and sections is proposed under the authority of sec.2001.004, Government Code, which requires all state agencies, including the secretary of state, to adopt rules of practice which state the nature and requirements of formal and informal procedures. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801345 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 CHAPTER 93.Trademarks The Office of the Secretary of State adopts amendments to Chapter 93, sec.sec.93.1-93.2, 93.41-93.43, 93.51-93.55, 93.61-93.62, 93.66-93.67, 93.91, 93.93, 93.101, 93.112-93.113, 93.117, 93.131-93.133, 93.153, 93.163, and 93.181- 93.183, relating to trademark registration and renewal filing requirements and examination procedures and policies of the secretary of state. The amendments to the sections are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10854) and will not be republished. The amended sections are adopted for the purpose of implementing the provisions of House Bill 2569 which was enacted by the 75th Legislature and became effective on September 1, 1997, and for the purposes of redesignating the chapter and reorganizing the chapter into subchapters, clarifying information regarding certain procedures, and for replacing certain terminology used to identify the organizational section responsible for the processing, examination, and registration of trademarks. Chapter 93 is amended to delete references to an organization section identified as the trademark section or trademark office and to replace the terminology with terms that more accurately describe the organizational structure within the context of the rules. Additionally, the undesignated head relating to Assignments of Marks is amended to include reference to the recordation of other instruments as provided by the passage of House Bill 2569. The secretary of state also amends the Chapter by organizing the undesignated heads as subchapters A through N, in conformity with the structure of other chapters within the Code. Section 93.1 is amended to delete references to the phrase trademark office as there is no section of the secretary of state specifically identified as such. Section 93.2 is amended to delete references to the trademark office and to clarify the basis of the written record. Section 93.41 is amended to clarify that an attorney may be used to represent an applicant in matters relating to an application for renewal of a trademark and assignment of a trademark registration, as well as an application to register a trademark. Section 93.42 and sec.93.43 are amended to delete references to the trademark office. Section 93.51 and sec.93.53 are amended to conform the rule with the changes implemented by House Bill 2569; specifically, clarifying that the fee associated with the submission of an application is a processing fee and not a filing fee. Section 93.52 is amended to delete references to the trademark office. Section 93.54 is amended to address changes in procedure and factors considered by the trademark examiners when establishing priority of examination of conflicting pending applications which have the same date of receipt. The amendment to this section is made necessary by the passage of House Bill 2569 which eliminated the verification requirement for applications and which effectively removed a means by which the date of execution of the document could be determined. Section 93.55 is amended to clarify that an application will receive a filing date once the mark is determined to meet the standards of registration under sec.16.08 of the Texas Business & Commerce Code. Section 93.55 also is amended to conform the rule to changes implemented by House Bill 2569; specifically, clarifying that the fee associated with the submission of an application is a fee for processing the application and not a fee for the filing or registration of the application. Section 93.61 and sec.93.62 are amended to reflect changes implemented by House Bill 2569 which amended the provisions regarding the information required in an application to register a trademark and deleted the requirement that an application be verified by the applicant. Section 93.66 and sec.93.67 are amended to delete references to the trademark office and to make other conforming changes. Section 93.91 is amended to clarify that a printer's proof or reproduction of a drawing of the mark or logo is insufficient as an example of the actual use of the mark on the goods or in the advertising of the services. Section 93.93 is amended to incorporate information regarding acceptable specimens or examples of use in connection with computer programs or computer services. Section 93.101 is amended to incorporate changes in classification made to the International Classification of Goods and Services utilized by the United States Patent and Trademark Office and to incorporate information regarding the classification of certain computer services. Section 93.112 and sec.93.113 are amended to delete references to the trademark office and replace the use of the term with more appropriate terminology. Section 93.117 is amended to clarify the time during which an application may be expressly abandoned and to delete references to the trademark office. Section 93.131 and sec.93.132 are amended to implement House Bill 2569 which deleted the requirement that an application for registration be verified by the applicant and to delete references to the trademark office. Section 93.133 is amended for purposes of clarifying the manner in which information in an application is to be amended. Section 93.153 is amended to delete references to the trademark office. Section 93.163 is amended to clarify the information to be provided by a registrant upon renewal when the mark is not in use at the time of renewal and to implement the changes enacted by the passage of House Bill 2569; specifically, the elimination of the verification requirement for an application to renew a trademark registration. Section 93.181, which relates to the voluntary cancellation of a trademark registration by the registrant, is amended to delete the requirement that the registrant provide an affidavit regarding the loss of the original certificate if the original cannot be returned as required by the rule. Section 93.182 is amended to delete reference to a statutory provision that was repealed by the passage of House Bill 2569 and to include a reference to an administrative cancellation upon receipt of evidence of a judicial cancellation. Section 93.183 is amended to delete provisions that are redundant of the statute and to clarify that the secretary of state is not a necessary party to a judicial cancellation of a registration. No comments were received regarding adoption of the amended sections. SUBCHAPTER A.General Information and Correspondence 1 TAC sec.93.1, sec.93.2 The adoption of the amendments is proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802283 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER B.Representation 1 TAC sec.sec.93.41, 93.42, 93.43 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802284 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER C.Application for Registration 1 TAC sec.sec.93.51, 93.52, 93.53, 93.54, 93.55 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802285 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER D.The Written Application 1 TAC sec.sec.93.61, 93.62, 93.66, 93.67 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802286 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER F.Specimens 1 TAC sec.93.91, sec.93.93 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802287 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER G.Classification 1 TAC sec.93.101 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802288 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 1 TAC sec.sec.93.112, 93.113, 93.117 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802289 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER I.Amendments 1 TAC sec.sec.93.131, 93.132, 93.133 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802290 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER K.Certificate 1 TAC sec.93.153 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802291 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER L.Term and Renewal 1 TAC sec.93.163 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802292 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER N.Cancellation of Registration 1 TAC sec.sec.93.181, 93.182, 93.183 The adoption of the amendments are proposed under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802293 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 The Written Application 1 TAC sec.93.63 The Office of the Secretary of State adopts the repeal of sec.sec.93.63; 93.114; 93.152 and 93.154 relating to examination, filing, and recordation requirements and procedures for trademark documents submitted to the secretary of state. The repeal of these sections is adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10858, 10862, and 10864). The text will not be republished. The repeal of sec.sec.93.63, 93.114, and 93.154 is necessary in order to delete provisions that are no longer necessary or are made inapplicable or redundant by the passage of House Bill 2569 by the 75th Legislature, effective September 1, 1997. Section 93.63 outlines the information and material required to complete a trademark application. Section 93.114 relates to the reexamination procedure. Section 93.154 relates to the recording of a change of name of the registrant. The repeal of sec.93.152 is necessary to allow for the adoption of new sec.93.152 which relates to the correction of specific information contained in the trademark records maintained by the secretary of state, as well as the correction of errors contained in a certificate issued by the secretary of state in connection with a trademark registration, renewal, assignment, or transfer of ownership or change of name. No comments were received regarding the adoption of the repeal of these sections. The repeal is submitted under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802294 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 Examination of an Application and Action by Applicants 1 TAC sec.93.114 The repeal is submitted under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802295 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 Certificate 1 TAC sec.93.152, sec.93.154 The repeal is submitted under the authority of section 16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802296 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER D.The Written Application 1 TAC sec.93.63 The Office of the Secretary of State adopts new sections to Chapter 93, sec.sec.93.63, 93.103, 93.114, 93.118, 93.152, 93.154, 93.172, and 93.184, relating to trademark registration and renewal filing requirements and examination procedures and policies of the secretary of state. The new sections are adopted without changes to the proposed text as published in the November 7, 1997, issue of the Texas Register (22 TexReg 10854) and will not be republished. The new sections are adopted for the purpose of implementing the provisions of House Bill 2569, Chapter 248, Acts, 75th Legislature, Regular Session (1997), effective September 1, 1997, and for the purposes of addressing certain issues and clarifying information regarding certain procedures not previously addressed by rule. New sec.sec.93.63, 93.114, 93.152, and 93.154, replace sections that are being repealed and address issues raised by the passage of House Bill 2569 and clarify existing policy relating to the examination, registration and recordation of trademark documents by the secretary not previously addressed by rule. New sec.sec.93.103, 93.118, 93.172, and 19.184, are proposed new to implement the provisions of House Bill 2569 and to clarify existing policy relating to the examination of trademark applications by the secretary not previously addressed by rule. Section 93.63 provides general criteria for drafting an acceptable description of goods or services in connection with which a mark is sought for registration. Common errors of the type described by the section give rise to technical objections to registration being raised by the trademark examiner. The new section may reduce the incidence of rejection of a trademark application on the basis of an unacceptable description of goods or services. New sec.93.103 is proposed to provide information in relation to the appropriate classification of computer services. The increase in applications for trademarks for computer related goods and services makes it necessary to provide guidelines for the classification of such goods or services, and to require greater specificity in the descriptions for such goods or services for purposes of examination in determining likelihood of confusion with existing registrations. Section 93.114 clarifies the circumstances under which factual information from third parties regarding the registrability of a mark undergoing examination by the secretary of state will be made part of the record by the secretary of state. The section also clarifies that third party objections to registration that are merely adversarial in nature are inappropriate and are to be resolved judicially in a suit between the parties. Section 93.118 clarifies that a final action or final decision of the secretary of state that may be judicially reviewed pursuant to sec.16.24, Business & Commerce Code is limited to a suit by an applicant or registrant seeking judicial review of the refusal of the secretary of state to register or renew the registration of a trademark, and does not include the judicial review of a registration issued by the secretary of state. Section 93.152 relates to the correction of specific information contained in the trademark records maintained by the secretary of state. Section 93.152 is necessary in order to establish a procedure whereby the secretary of state can correct the information in a identification of goods or services to delete from the identification the registered word mark of another party or to correct drafting errors in the identification of the registrant, and in any certificate issued by the secretary of state in connection with a trademark registration, renewal, assignment, or transfer of name. New sec.93.154 and sec.93.172 implement the provisions of House Bill 2569; specifically the provisions providing for the recordation of instruments relating to the transfer of ownership or change of name of the registrant, other than an assignment . Section 93.154 sets forth the requirements for requesting a new certificate of registration in the new name of the registrant or in the name of the transferee. Section 93.172 establishes the filing requirements and procedures for recordation of an instrument relating to the transfer of ownership of a mark, other than an assignment. New sec.93.184 describes the revocation of filing procedures followed by the secretary of state when the fee for the trademark document was paid with an instrument or credit card that was dishonored when presented by the secretary of state for payment. The procedures and notice of revocation provided conform with the revocation of the filing by the secretary of state of corporate documents under similar circumstances. No comments were received regarding the adoption of the new sections. The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802297 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER G.Classification 1 TAC sec.93.103 The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802298 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER H.Examination of an Application and Action by Applicants 1 TAC sec.93.114, sec.93.118 The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802299 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER K.Certificate 1 TAC sec.93.152, sec.93.154 The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802302 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER M.Assignment of Marks and Recordation of Other Instruments 1 TAC sec.93.172 The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802300 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 SUBCHAPTER N.Cancellation of Registration 1 TAC sec.93.184 The adoption of the new sections is proposed under the authority of sec.16.21, Texas Business & Commerce Code which grants the secretary of state the authority to adopt rules relating to the filing of trademark applications, renewals and assignments, and other filings under Subchapter B of Chapter 16, Business & Commerce Code. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9802301 Clark Kent Ervin Assistant Secretary of State Office of the Secretary of State Effective date: February 18, 1998 Proposal publication date: November 7, 1997 For further information, please call: (512) 463-5586 PART XII. Advisory Commission on State Emergency Communications CHAPTER 253.Practice and Procedure 1 TAC sec.sec.253.1-253.31 The Advisory Commission on State Emergency Communications (ACSEC) adopts new Chapter 253 concerning general rules of practice and procedures, without changes to the proposed text as published in the October 3, 1997, issue of the Texas Register(22 TexReg 9786). The new sections are being adopted for collection procedures and contested cases before ACSEC relating to the untimely delivery of 9-1-1 emergency service fees and 9-1-1 equalization and poison surcharges and concerning the form of a petition for rulemaking and the procedure for the petition's submission, consideration and disposition. No comments were received regarding the adoption of the new section. Commission staff did have discussions with the staff from the State Office of Administrative Hearings on Senate Bill 331 from the 75th Texas Legislature. The Commission does not make any changes to the proposed rules base on these discussions. The Commission, nevertheless, recognizes that the State Office of Administrative Hearings' new procedural rules as to hearings, pursuant to Senate Bill 331, should apply to all contested cases filed on or after January 1, 1998. The new sections are being adopted under Government code sec. 2001.004, which requires a state agency to adopt rules of practice stating the nature and requirement of all available formal and informal procedures, and Government code, sec.2001.021, which requires a state agency to prescribe the form for a petition by a person requesting the state agency to adopt a rule and the procedure for the petition's submission, consideration and disposition. Texas Health and Safety Code, Chapter 771 is affected by the adopted new rule. 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. Filed with the Office of the Secretary of State on February 6, 1998. TRD-9801677 James D. Goerke Executive Director Advisory Commission on State Emergency Communications Effective date: February 26, 1998 Proposal publication date: October 3, 1997 For further information, please call: (512) 305-6911 TITLE 10. COMMUNITY DEVELOPMENT PART I. Texas Department of Housing and Community Affairs CHAPTER 49.Low-Income Tax Credit Rule-1996 10 TAC sec.sec.49.1-49.15 The Texas Department of Housing and Community Affairs (the Department) adopts the repeals of sec.sec.49.1-49.15, concerning the Low Income Tax Credit Rules without changes. The Sections are repealed in order to enact new sections conforming to the requirements of new regulations enacted under the Internal Revenue Code of 1986, sec.42 as amended, which provides for credits against federal income taxes for owners of qualified low income rental housing. Daisy Stiner, Deputy Executive Director, has determined that for each year of the first five years the repeals are in effect the public benefit anticipated as a result of enforcing the repeals will be to permit the adoption of new rules for the allocation of low income housing tax credit authority within the State of Texas, thereby enhancing the State's ability to provide decent, safe and sanitary housing for Texans through the tax credit program administered by the Department. There will be no effect on small businesses. There is no anticipated economic cost to persons who are required to comply with the repeals as proposed. No comments have been received regarding adoption of the repeals The repeals are adopted pursuant to the authority of the Texas Government Code, Chapter 2306; Acts of the 73rd Legislature, Regular Senate Bill 45, Chapter 141, effective May 16, 1993; and Acts of the 73rd Legislature, Senate Bill 1356, Chapter 725, effective September 1, 1993; and the Internal Revenue Code of 1986, sec.42 as amended, which provides the Department with the authority to adopt rules governing the administration of the Department and its programs and Executive Order AWR-91-4 (June 17, 1991), which provides this Department with the authority to make housing credit allocations in the State of Texas. The Texas Government Code, Chapter 2306, is affected by this adopted repeal. 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. Filed with the Office of the Secretary of State on February 9, 1998. TRD-9801836 Larry Paul Manley Executive Director Texas Department of Housing and Community Affairs Effective date: March 1, 1998 Proposal publication date: November 24, 1997 For further information, please call: (512) 475-3726 10 TAC sec.sec.49.1-49.16 The Texas Department of Housing and Community Affairs (the Department) adopts the new sec.sec.49.1-49.16, concerning the Qualification Allocation Plan and Rules (the Rules), with changes to the proposed text as published in the December 5, 1997 issue of the Texas Register (22 TexReg 11880) to provide procedures for the allocation, by the Department, of low income housing tax credits available under federal income tax laws to owners of qualified low income rental housing projects. This adoption is contingent upon the Governor's approval by February 28, 1998 pursuant to sec.2306.671(c) of the Texas Government Code, Title 10. The new sections are being adopted to provide procedures for the allocation, by the Department, of low income housing tax credits available under federal income tax laws to owners of qualified low income rental housing projects. SUMMARY OF COMMENTS RECEIVED UPON PUBLICATION OF THE PROPOSED RULES IN THE TEXAS REGISTER ON DECEMBER 5, 1997, AND COMMENTS MADE AT PUBLIC HEARINGS HELD BY THE DEPARTMENT. On December 5, 1997, the proposed Rules was published in the Texas Register thereby commencing the required 30-day comment period. Said comment period ended on January 5, 1998. The Department received 93 requests for copies of the proposed Rules from the public. During the public comment period the Department held two public hearings. The Department received both oral and written comments. The scope of public comments concerning the Rules pertain to the following issues: Definitions {Sec. 49.2} It was suggested that the TxRD definition be changed. Department's Response - The Department concurs and proposes that the definition be modified as follows: "TxRD - The Rural Development (RD) services of the United States Department of Agriculture (USDA) serving the State of Texas (formerly known as TxFmHA) or its successor." Board's Recommendation - Department's response accepted. Rural Set-Aside {Sec. 49.5(a)} It was suggested that the 25% TxRD apportionment of the Rural Set-aside be increased to 50%. Department's Response - The Department believes that the 25% apportionment adequately meets the concerns of TxRD. It is noted that TxRD projects can also receive credits outside of the 25% TxRD reserve. Board's Recommendation - Department's response accepted. Rural Development Projects One comment was made requesting the compliance and monitoring fee be reduced to $100 for TxRD projects while another requested that the inspections be waived for TxRD projects. Department's Response - The Department's compliance and monitoring staff has numerous duties associated with TxRD projects. The compliance and monitoring fee reflects the costs associated with these compliance and monitoring duties. Inspections by the Department are necessary to gain an understanding of the transactions being proposed, to monitor progress, and to complete the Department's due diligence prior to the issuance of Forms 8609. These inspections are necessary as part of an ongoing monitoring process. Board's Recommendation - Department's response accepted. Prison Community List {Reference Manual} It was suggested that Jefferson County be added to the Prison Community List. Department's Response - We recognize the need for affordable housing in Jefferson County. The current list is specifically comprised of rural areas that were recently awarded a state prison. The Department is not able to add Jefferson County to the list because it does not qualify under the program's Prison Community definition as set forth in the QAP. The Department's program is constantly undergoing change and will take the comment received into future consideration. Board's Recommendation - Department's response accepted. Proposed Additions to Comply with Rider 11(c) to Article VII of the General Appropriation Act Requirements {Sec. 49.6 and Sec. 49.8} The General Appropriation Act, Article VII, Rider 11(c) requires that a general contractor hired by an applicant or an applicant, if the applicant serves as general contractor, must demonstrate a history of constructing similar types of housing without the use of federal tax credits. A member of the Legislature contacted the Department indicating that the language currently proposed in the draft version of the QAP might be read to imply that this requirement pertains to only those projects claiming experience points. Department's Response - To clarify the intent of this law, the Department is proposing the following: 1. Sec. 49.6(b) Threshold Criteria "(14) EXHIBIT 114: must be the original copy of the completed and executed General Contractor Certification Form (EXHIBIT 114) provided as part of the Application Submission Procedures Manual; 2. Sec. 49.6(c)(4)(A) EXHIBIT 210 The criteria and conditions which are specifically related to general contractors as outlined in Section 49.8 of this title (relating to Housing Credit Allocations) must be met in order to receive a final allocation of credits. Therefore, while points may be awarded for experience under this Section 49.6(c)(4)(A) during the application process, if upon review of documents required under Section 49.8 of this title (relating to Housing Credit Allocations), the general contractor is shown not to have the required experience, the conditions of the commitment notice or carryover agreement will not have been met and the final allocation of credits may be denied; and 3. Sec. 49.8. Housing Credit Allocations (c) The General Contractor hired by the Project Owner must meet specific criteria as defined by the Seventy-fifth Legislature. A general contractor hired by an applicant or an applicant, if the applicant serves as general contractor must demonstrate a history of constructing similar types of housing without the use of federal tax credits. Evidence must be submitted to the Department which sufficiently documents that the general contractor has constructed some housing without the use of low income housing credits. This documentation will be required as a condition of the commitment notice or carryover agreement, and must be complied with prior to commencement of construction and at cost certification and final allocation of credits." Board's Recommendation - Department's response accepted. Tenant Populations with Special Housing Needs {Sec. 49.6(c)(6)(A)} It was suggested in one public comment that the Department develop a QAP which promotes the development of affordable housing for seniors. The commentator stated that last year only 8% of the units awarded in the State of Texas under the LIHTC program were targeted for seniors and that there are factors in both the scoring and underwriting criteria that are not conducive to the selection of projects for seniors in this competitive process. Some members of the development community have expressed a concern that the requirements of the elderly provision currently in the draft QAP might violate the Fair Housing Act. Department's Response - The Department appreciates the public comments received on this issue and has given them consideration. While the comments regarding the scoring and underwriting criteria will be considered further, the Department believes the QAP does promote the development of affordable housing for seniors. It is noted that last year 17% of the units awarded under the LIHTC program were targeted for seniors. The QAP seeks to promote multiple housing objectives for a diverse tenant group, including both elderly and non-elderly populations. The Department and the Board, through their discretionary authority, strive to ensure that the allocation reflects this diversity by taking factors other than points into consideration. After discussing the issue with outside counsel and the Department's general counsel, it has been determined that the current language, while more restrictive than federal law with respect to units constructed for, and occupied by at least one person who is 60 years of age or older, it is not a violation of the act. To clarify that developers still may adhere to the "62 years of age and older" alternative exemption of the Fair Housing Act and with respect to the provisions of the Fair Housing Act as to projects intended for, and solely occupied by persons 62 years of age or older, the amended language shown below is being proposed: Sec. 49.6(c) Selection Criteria "(A) This criterion applies to elderly Projects which must provide significant facilities and services specifically designed to meet the physical and social needs of the residents. Significant services may include congregate dining facilities, social and recreation programs, continuing education, welfare information and counseling, referral services, transportation and recreation. Other attributes of such Projects include providing hand rails along steps and interior hallways, grab bars in bathrooms, routes that allow for barrier-free lever type doorknobs and single lever faucets, as well as elevators for Projects of over two stories. Elderly Projects must not contain any Units with three or more bedrooms. Such a Project must conform to the Federal Fair Housing Act in all respects and must be a Project: (i) intended for, and solely occupied by Persons 62 years of age or older; or (ii) in which all Units (excluding those occupied by an employee or owner) are constructed for, and occupied by at least one Person who is 60 years of age or older; and (iii) which adheres to policies and procedures which demonstrate a firm commitment by the owner and manager to provide housing for Persons 60 years of age or older. (10 points)" Board's Recommendation - Department's response accepted. Tenant Populations with Special Housing Needs {Sec. 49.6(c)(6)(B)} It was requested that changes to the QAP be made to increase affordable, accessible housing for Texans with disabilities. The changes also included suggestions to increase the financial stability of tax credit projects serving tenants with disabilities and to ensure compliance with the Fair Housing Accessibility Guidelines. Department's Response - The Department appreciates the public comments received on this issue and has created a task force comprised of members of the Department and the development community to address these concerns. The Department will work with the entities who are providing accessible units in meeting the requirements as set forth in the QAP. The task force will work on disseminating information regarding qualified tenants with special needs to the development community and to address other issues prior to program year 1999. It should be noted that electing to claim points for setting aside units for persons with physical or mental disabilities does not preclude compliance with the Fair Housing Accessibility Guidelines or any other applicable federal, state or local laws governing accessibility for such groups. It is recommended that this section remain unchanged at this time. Board's Recommendation - Department's response accepted. The new sections are adopted under the Texas Government Code, Chapter 2306 and Texas Civil Statutes. Article 4413(501) as amended by the 73rd Legislature, Chapter 725 and 141, and Chapter 2001 and 2002, Texas Government Code, V.T.C.A. The Internal Revenue Code of 1986, Section 42 as amended, provides for credits against federal income taxes for owners of qualified low income rental housing projects. That section provides for the allocation of available tax credit amount by state housing credit agencies. Pursuant to Executive Order AWR-91-4 (June 17, 1991), the Texas Department of Housing and Community Affairs was authorized to make housing credit allocation for the State of Texas. As required by the Internal Revenue Code, Section 42 (m)(1), the Department developed a Qualified Allocation Plan which sets forth sec.49.3 through sec.49.8 of this plan (relating to State Housing Credit Ceiling, Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments, Set-Asides, Commitments and Preferences, Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects; Compliance Monitoring, Housing Credit Allocations). sec.49.1.Scope. The Rules in this chapter apply to the allocation by the Texas Department of Housing and Community Affairs (the Department) of certain low income housing tax credits authorized by applicable federal income tax laws. The Internal Revenue Code of 1986, sec.42, as amended, provides for credits against federal income taxes for owners of qualified low income rental housing Projects. That section provides for the allocation of the available tax credit amount by state housing credit agencies. Pursuant to Executive Order AWR-91-4 (June 17, 1991), the Department was authorized to make housing credit allocations for the State of Texas. As required by the Internal Revenue Code, sec.42(m)(1), the Department developed a Qualified Allocation Plan (QAP) which is set forth in sec.49.3 through sec.49.8 of this title (relating to State Housing Credit Ceiling, Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments, Set- Asides, Commitments and Preferences, Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects; Compliance Monitoring, Housing Credit Allocations). Sections in this chapter establish procedures for applying for and obtaining an allocation of the low income housing tax credit, along with insuring that the proper Threshold Criteria, Selection Criteria, priorities and preferences are followed in making such allocations. It shall be the goal of this Department and the Board, through these provisions, to encourage diversity through broad geographic allocation of tax credits within the state and to promote maximum utilization of the available tax credit amount. The criteria utilized to realize this goal shall include, but are not limited to, evaluation of geographic location within the state of developments applying for tax credits, concentration of tax credit developments and other affordable housing developments within specific markets and submarkets, site conditions of the developments, and a development's impact on and conformance with the goals and objectives as stated in the QAP and the Rules. The foregoing shall be implemented to be consistent with ensuring that the tax credits are allocated to owners of Projects that will serve the Department's public policy objectives and federal requirements to provide housing to persons and families of very low and low income. It is the policy of the Department to encourage the use of Historically Underutilized Businesses (HUBs) in all of the Department's programs. In response to this policy, the Department has established a minimum goal of 30% participation of HUBs in the low income housing tax credit program. Project Owners are encouraged to achieve these minimum goals. sec.49.2.Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Ad Hoc Tax Credit Committee-That Committee comprised of members of the Board of the Department charged with the direct oversight of the Low Income Housing Tax Credit Program, also referred to as the "Committee." Affiliate-An individual, corporation, partnership, joint venture, limited liability company, trust, estate, association, cooperative or other organization or entity of any nature whatsoever that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with any other Person, and specifically shall include parents or subsidiaries. Agreement and Election Statement-A document in which the Project Owner elects, irrevocably, to fix the applicable credit percentage with respect to a building or buildings, as that in effect for the month in which the Department and the Project Owner enter into a binding agreement as to the housing credit dollar amount to be allocated to such building or buildings, which Agreement and Election Statement shall be executed by the Project Owner no later than five days after the end of the month of execution of the agreement as to housing credit dollar amount. Applicable Fraction-The fraction used to determine the Qualified Basis of the qualified low income building, which is the smaller of the Unit fraction or the floor space fraction, as defined more fully in the Code, sec.42(c)(1). Applicable Percentage-The percentage used to determine the amount of the low income housing tax credit, as defined more fully in the Code, sec.42(b). Applicant-Any Person and any Affiliate of such Person, corporation, a partnership, joint venture, association, or other that submits an Application to the Department requesting a tax credit allocation pursuant to the Rules and the QAP. The Applicant is also the Project Owner unless the Applicant transfers or assigns its interest in the Project (which assignment can only occur with the consent of the Department). Each Project Owner, and each of the Project Owner's successors in interest, shall be obligated to carry out the commitments made to the Department by the Applicant. Application-An Application in the form prescribed by the Department, including any required exhibits or other supporting materials, filed with the Department by a Project Owner requesting a low income housing tax credit allocation. Application Acceptance Period-That period of time as published in the Texas Register during which Applications for tax credits may be submitted to the Department. Application Round-The period beginning with the start of the Application Acceptance Period and lasting until such time as all available credits (as stipulated by the Department) are allocated, provided that the Application Round not extend beyond the last day of the calendar year. Applications for Projects which receive at least 50% of their financing from the proceeds of tax exempt bonds may be submitted at any time during the year. Application Submission Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of Applications for low income housing tax credits, which manual may be amended from time to time by the Department. Appraiser-A real estate professional certified or licensed by the Texas Appraiser Licensing and Certification Board who has satisfied continuing education requirements. The appraiser must have, at a minimum, 5 years appraisal experience, preferably in the geographic area of the property to be appraised. It is desirable, but not required, that the appraiser have a professional designation or be an active member of a professional accredited appraisal institution. Beneficial Owner-A "Beneficial Owner" means: (A) Any Person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares; (i) voting power which includes the power to vote, or to direct the voting as any other Person or the securities thereof, and/or (ii) investment power which includes the power to dispose, or direct the disposition of, any Person or the securities thereof. (B) Any Person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or any other contract, arrangement or device with the purpose or effect of divesting such Person of Beneficial Ownership (as defined herein) of a security or preventing the vesting of such Beneficial Ownership as part of a plan or scheme to evade inclusion within the definitional terms contained herein; and (C) Any Person who has the right to acquire Beneficial Ownership during the Compliance Period, including but not limited to any right to acquire any such Beneficial Ownership; (i) through the exercise of any option warrant or right, (ii) through the conversion of a security, (iii) pursuant to the power to revoke a trust, discretionary account or similar arrangement, or (iv) pursuant to the automatic termination of a trust, discretionary account, or similar arrangement. (D) Provided, however, that any Person who acquires a security or power specified in clauses (i), (ii) or (iii) of this subparagraph, with the purpose or effect or changing or influencing the control of any other Person, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition is deemed to be the Beneficial Owner of the securities which may be acquired through the exercise or conversion of such security or power. Any securities not outstanding which are subject to options, warrants, rights or conversion privileges as deemed to be outstanding for the purpose of computing the percentage of outstanding securities of the class owned by such Person but are not deemed to be outstanding for the purpose of computing the percentage of the class by any other Person. Board-The governing Board of Directors of the Department and may also denote as used in this chapter, the Committee. Carryover Allocation-An allocation of current year tax credit authority by the Department pursuant to the provisions of the Code, sec.42(h)(1)(E) and Treasury Regulations, sec.1.42-6. Carryover Allocation Document-A document issued by the Department to a Project Owner pursuant to sec.49.4(k) of this title (relating to Applications; Environmental Assessments; Market Study; Reservations; Notification; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments). Carryover Allocation Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of request for Carryover Allocations for low income housing tax credits, which said manual may be amended from time to time by the Department. Code-The Internal Revenue Code of 1986, as amended from time to time, together with any applicable regulations, rules, rulings, revenue procedures, information statements or other official pronouncements issued thereunder by the United States Department of the Treasury or the Internal Revenue Service relating to the Low Income Housing Tax Credit Program authorized by the Code, sec.42, and as may be amended from time to time. Commitment Notice-A notice issued by the Department to a Project Owner pursuant to sec.49.4(h) of this title (relating to Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments) and also referred to as the "commitment". Compliance Period-With respect to a building, the period of 15 taxable years, beginning with the first taxable year of the Credit Period pursuant to the Code, sec.42(i)(1). Contractor-One who contracts for the construction, or rehabilitation of an entire building or Project, rather than a portion of the work. The Contractor hires subcontractors, such as plumbing contractors, electrical contractors, etc., coordinates all work, and is responsible for payment to the said subcontractors. This party may also be referred to as the "general contractor". Control-(including the terms "controlling," "controlled by, and/or "under common control with") the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of any Person, whether through the ownership of voting securities, by contract or otherwise. Cost Certification Procedures Manual-That certain manual produced by the Department which sets forth procedures, forms, and guidelines for the filing of requests for IRS Forms 8609 for Projects placed in service under the Low Income Housing Tax Credit Program, which said manual may be amended from time to time by the Department. Credit Period-With respect to a building within a Project, the period of ten taxable years beginning with the taxable year the building is placed in service or, at the election of the Project Owner, the succeeding taxable year, as more fully defined in the Code, sec.42(f)(1). Declaration of Land Use Restrictive Covenants (LURA)-An agreement between the Department, the Project Owner and all successors in interest in the Project Owner which encumbers the Project with respect to provisions stipulated in the Code, sec.42, sec.sec.49.1-49.15 of this title (relating to Low Income Housing Tax Credit Qualified Allocation Plan and Rules), and the Texas Government Code, Chapter 2306 as may be amended from time to time. The LURA includes an Extended Low Income Housing Commitment Agreement. Department-The Texas Department of Housing and Community Affairs, a public and official governmental Department of the State of Texas created and organized under the Texas Department of Housing and Community Affairs Act, Texas Government Code, Chapter 2306 and Texas Civil Statutes, Article 4413(501) as amended by the 73rd Legislature, Chapter 725 and 141. Development Team-All Persons or Affiliates thereof which play(s) a material role in the development, construction, rehabilitation, management and/or continuing operation of the subject Property, which may include any consultant(s) hired by the Applicant for the purpose of the filing of an Application for low income housing tax credits with the Department. Difficult Development Area-Any area which is so designated by the Secretary of the United States Department of Housing and Urban Development (HUD) as an area which has high construction, land, and utility costs relative to area median family income. Eligible Basis-With respect to a building within a Project, the building's Eligible Basis as defined in the Code, sec.42(d). Equity Gap-The difference between the total sources of financing for the Project and the total Project costs that is to be filled with the proceeds of the credit. Extended Low Income Housing Commitment Agreement-An agreement between the Department, the project owner and all successors in interest to the project owner concerning the extended low income housing use of buildings within the project throughout the extended use period as provided in the Code, sec.42(h)(6). Financial Statement-Document(s) which provides information about the Applicant's economic resources, claims against those resources, and the interests of owners at specific dates as more fully described in subparagraphs (A)-(D) of this definition. (A) Statement of Financial Position/Balance Sheet - a listing, as of a particular date, of all assets and claims against those assets (liabilities). The difference is equity. (B) Income Statement - a listing that relates to a specific period of time, presenting an entity's results of operations. (C) Statement of Retained Earnings - reports all changes in retained earnings during the accounting period, reconciles beginning and ending retained earning balances and provides a connecting link between the income statement and the balance sheet. (D) Cash Flow Statement - a report listing the changes in an entity's cash and cash equivalents, classified by principal sources and uses, for a given period. General Projects-Any project which is not a Qualified Nonprofit Project or is not under consideration in the Rural/Prison set-aside as such terms are defined by the Department. General Pool-The pool of credits that have been returned or recovered from prior years' allocations or current year's Commitment Notices after the Board has made its initial allocation of the current year's available credit ceiling. General pool credits will be used to fund Applications on the waiting list without regard to set-aside. Governmental Entity-Includes federal or state agencies, departments, boards, bureaus, commissions, authorities, and political subdivisions, special districts and other similar entities. Historically Underutilized Businesses-Pursuant to Texas Civil Statutes, Article 601b, sec.sec.1.02, 1.03, and 1.04, entitled State Purchasing and General Services Act which is codified at Chapter 2161, Texas Government Code, entitled Historically Underutilized Businesses, a business in the form of a corporation, partnership or joint venture which is at least 51% owned, or a sole proprietorship which is 100% owned by a person or persons who have been historically underutilized due to their identification as a member of a certain group. The following are the groups which will be considered pursuant to this definition: (A) African Americans - persons having origins in any of the Black racial groups of Africa; (B) Hispanic Americans - persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race; (C) Asian-Pacific Americans - persons whose origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, Philippines, Samoa, Guam, U.S. Trust Territories of the Pacific and the Northern Marianas; (D) Native Americans - persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians; or (E) Women - includes all women of any ethnicity. Homeless Person-An individual or family that lacks a fixed, regular, and adequate nighttime residence as more fully defined in 24 Code of Federal Regulations, sec.841.1, and as may be amended from time to time. Housing Credit Agency-A governmental entity charged with the responsibility of allocating low income housing tax credits pursuant to the Code, sec.42. For the proposes of these Rules, the Department is the sole "Housing Credit Agency" of the State of Texas. Housing Credit Allocation-An allocation by the Department to a Project Owner of low income housing tax credit in accordance with sec.49.8 of this title (relating to Housing Credit Allocations). Housing Credit Allocation Amount-With respect to a Project or a building within a Project, that amount the Department determines to be necessary for the financial feasibility of the Project and its viability as a qualified low income housing Project throughout the Compliance Period and allocates to the Project. HUD-The United States Department of Housing and Urban Development, or its successor. Intermediary Costs-Costs associated with the sale or use of tax credits to raise equity capital. Such costs include but are not limited to syndication and partnership organization costs and fees, filing fees, broker commissions, related attorney and accounting fees, appraisal, engineering, environmental site assessment, etc. IRS-The Internal Revenue Service, or its successor. Local Tax Exempt Organization-An entity which is described in the Code, sec.501(c)(3) or (4), as these cited provisions may be amended from time to time, and which is registered or qualified to conduct business in the State of Texas and/or the governmental unit wherein the Project will be situated. Person-Means, without limitation, any natural person, corporation, partnership, limited partnership, joint venture, limited liability company, trust, estate, association, cooperative, government, political subdivision, agency or instrumentality or other organization of any nature whatsoever and shall include any group of Persons acting in concert toward a common goal. Persons with Disabilities-A person who: (A) has a physical, mental or emotional impairment that; (i) is expected to be of a long, continued and indefinite duration, (ii) substantially impedes his or her ability to live independently, and (iii) is of such a nature that the ability could be improved by more suitable housing conditions, or (B) has a developmental disability, as defined in section 102(7) of the Developmental Disabilities Assistance and Bill of Rights Act (42 U.S.C. 6001- 6007). Prison Community-A city or town which is located outside of a Metropolitan Statistical Area (MSA) or Primary Metropolitan Statistical Area (PMSA) and was recently awarded a state prison as set forth in the Reference Manual. Project-A low income rental housing Property the owner of which represents that it is or will be a qualified low income housing Project within the meaning of the Code, sec.42(g). With regards to this definition, the "Project" is that Property which is the basis for the Application for low income housing tax credits. May also be referred to as the subject "property". Project Consultant-Any Person (without ownership interest in the Project) who provides professional services relating to the filing of an Application, Carryover Allocation Document, and/or cost certification documents. Project Owner-Any Person or Affiliate thereof that owns or proposes to develop the Project or expects to acquire Control of the Project pursuant to a purchase contract satisfactory to the Department. Property-The real estate and all improvements thereon which are the subject of the Application (including all items of personal property affixed or related thereto), whether currently existing or proposed to be built thereon in connection with the Application. Qualified Allocation Plan-An allocation plan executed by the Governor of the State of Texas which sets forth the Threshold Criteria, Selection Criteria, priorities, preferences, and compliance and monitoring as provided in the Code, sec.42(m)(1) and as further provided in sec.49.3 through sec.49.8 of this title (relating to State Housing Credit Ceiling, Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments, Set-Asides, Commitments and Preferences, Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects; Compliance Monitoring, Housing Credit Allocations). Qualified Basis-With respect to a building within a Project, the building's Eligible Basis multiplied by the Applicable Fraction, within the meaning of the Code, sec.42(c)(1). Qualified Census Tract-Any census tract which is so designated by the Secretary of HUD and, for the most recent year for which census data are available on household income in such tract, in which 50% or more of the households have an income which is less than 60% of the area median family income for such year. Qualified Market Analyst-A real estate appraiser certified or licensed by the Texas Appraiser or Licensing and Certification Board or a real estate consultant or other professional currently active in the subject property's market area who demonstrates competency, expertise, and the ability to render a high quality written report. The individual's experience and educational background will provide the general basis for determining competency as a Market Analyst. Such determination will be at the sole discretion of the Department. The Qualified Market Analyst must not be related to or Affiliated with the Project Consultant, or the independent CPA employed for certifying the 10% test and/or the final Project cost certification. Qualified Nonprofit Organization-An organization that is described in the Code, sec.501(c)(3) or (4), as these cited provisions may be amended from time to time, that is exempt from federal income taxation under the Code, sec.501(a), that is not Affiliated with or Controlled by a for profit organization, and includes as one of its exempt purposes the fostering of low income housing within the meaning of the Code, sec.42(h)(5)(C). Qualified Nonprofit Project-A Project in which a Qualified Nonprofit Organization has Control (directly or through a partnership or wholly-owned subsidiary) and materially participates (within the meaning of the Code, sec.469(h), as may be amended from time to time) in its development and operation throughout the Compliance Period. Real Estate Owned (REO) Projects-Any existing residential development that is owned or that is being sold by an insured depository institution in default, or by a receiver or conservator of such an institution, or is a property owned by HUD, Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac), federally chartered bank, savings bank, savings and loan association, Federal Home Loan Bank or a federally approved mortgage company or any other federal agency. Reference Manual-That certain manual, and any amendments thereto, produced by the Department which sets forth reference material pertaining to the Low Income Housing Tax Credit Program. Rehabilitation Expenditure-Amounts incurred in connection with the rehabilitation which the Project Owner represents to be "Rehabilitation Expenditures" within the meaning of the Code, sec.42(e)(2). Residential Development-Any Project that is comprised of at least one "Unit" as such term is defined in this title. Rules-The Department's low income housing tax credit Rules, sec.sec.49.1-49.15 of this title (relating to Low Income Housing Tax Credit Qualified Allocation Plan and Rules) excluding sec.49.3 through sec.49.8 of this title (relating to State Housing Credit Ceiling, Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments, Set-Asides, Commitments and Preferences, Threshold Criteria; Evaluation Factors; Selection Criteria; Final Ranking; Credit Amount; Tax Exempt Bond Financed Projects; Compliance Monitoring, Housing Credit Allocations). Rural Project-A Project located within an area which: (A) is situated outside the boundaries of a PMSA or MSA; or (B) is situated within the boundaries of a PMSA or MSA if it has a population of not more than 20,000 and does not share boundaries with an urbanized area; or (C) is located in an area that is eligible for funding by TxRD. Scattered Site Project- "A group of buildings, (excluding apartments and townhomes) which would (but for their lack of proximity) qualify as a Project for purposes of the Code and which are all rent restricted, owned by the same Project Owner and financed under a common plan. This shall include all single family detached housing, duplexes, triplexes and fourplexes, except fourplexes in clusters of four or more on contiguous property under common ownership, management and Control. An existing Rural Project that is federally assisted within the meaning of sec.42(d)(6)(B) of the Code and is under common ownership, management and Control shall not be considered as a Scattered Site Project. For qualifying Rural Projects, construction activity must be rehabilitation only with no expansion to the existing development. Rural Projects purchased from HUD will also qualify as being federally assisted." Any project comprised of single family detached homes of 35 units or less that is located within a city or county with a population of not more than 20,000 or 50,000, respectfully, shall not be considered a Scattered Site Project. Additionally, all the proposed units must be located on contiguous property under common ownership, management and control or dispersed within existing residential subdivisions. Selection Criteria-Criteria used to determine housing priorities of the State under the Low Income Housing Tax Credit Program. Small Development-A Project consisting of not more than ten single-family detached Units or 35 multifamily Units, which is not a part of, or contiguous to, a larger Project. Special Housing Project-Any Project developed specifically for Special Housing Need Groups, including mental health/mental retardation Projects, group homes, housing for the homeless, transitional housing, elderly Projects, congregate care facilities, projects for persons with HIV/AIDS, or as otherwise defined in the State Consolidated Plan. State Housing Credit Ceiling-The limitation imposed by the Code, sec.42(h), on the aggregate amount of housing credit allocations that may be made by the Department during any calendar year, as determined from time to time by the Department in accordance with the Code, sec.42(h)(3). Sustaining Occupancy-The figure at which occupancy income is equal to all operating expenses and mandatory debt service requirements for a Project. Threshold Criteria-Criteria used to determine the Project's qualifications which are the minimum level of acceptability for consideration under the Low Income Housing Tax Credit Program. Total Housing Development Cost-The total of all costs incurred or to be incurred by the Project Owner in acquiring, constructing, rehabilitating and financing a Project, as determined by the Department based on the information contained in the Project Owner's Application. Such costs include Intermediary Costs, reserves and any expenses attributable to commercial areas. Projects which include commercial space must allocate the relative portion of all applicable expenses to the commercial space and exclude the same from Total Development Costs. In determining the Equity Gap calculation, the Department will not deduct from the Project's sources of funds the amount of financing associated with the commercial use, unless such financing specifically identifies in its terms that it is being provided for the commercial use. TxRD-The Rural Development (RD) services of the United States Department of Agriculture (USDA) serving the State of Texas (formerly known as TxFmHA) or its successor. Unit-Any residential rental unit in a Project consisting of an accommodation containing separate and complete physical facilities and fixtures for living, sleeping, eating, cooking and sanitation. The term "Unit" includes a single room occupancy housing unit used on a non-transient basis. sec.49.3.State Housing Credit Ceiling. (a) The Department shall determine the State Housing Credit Ceiling for each calendar year as provided in the Code, sec.42(h)(3)(C). (b) The Department shall publish each such determination in the Texas Register within 30 days after notification by the Internal Revenue Service. (c) The aggregate amount of Housing Credit Allocations made by the Department during any calendar year shall not exceed the State Housing Credit Ceiling for such year as provided in the Code, sec.42. sec.49.4.Applications; Environmental Assessments; Market Study; Commitments; Extensions; Carryover Allocations; Agreements and Elections; Extended Commitments. (a) Any Project Owner requesting a Housing Credit Allocation for a Project must submit an Application to the Department which Application shall be originally executed by the Project Owner. This Application shall contain full and complete information as to each item specified in the Application Submission Procedures Manual, as amended. When any item is marked "not applicable," the Project Owner shall provide a written explanation why such item is "not applicable." Failure to provide a detailed written explanation will result in the Application being deemed incomplete and not accepted for filing. The Department is also authorized to request the Project Owner to provide any additional information it deems relevant as clarification to the Application. The Department will require, as a part of a completed Application, information to be submitted by the Project Owner which identifies the number of HUBs to be used in the development and/or continuous operation of the Project, in a form specified within the Application Submission Procedures Manual. Further, the Department will require the Project Owner to supply sufficient documentation which will represent the means by which these HUBs were or are to be selected. The Project Owner is also advised that the Department will be requesting information pertaining to the use of HUBs in the actual development of the Project at the time of final allocation of tax credits, pursuant to sec.49.8(c) of this title (relating to Housing Credit Allocations). (b) As part of the complete Application the Applicant must submit the most current Phase I Environmental Assessment of the subject Property, dated not more than 12 months from the date of Application to the Department. In the event that a Phase I Environmental Assessment on the Project is older than 12 months, the Project Owner may supply the Department with an update letter from the Person or organization which prepared the initial assessment; provided, however, that the Department will not accept any Phase I Environmental Assessment which is more than 24 months old. This environmental assessment should be conducted and reported in conformity with the standards of the American Society for Testing and Materials (ASTM) and such other recognized industry standards as a reasonable person would deem relevant in view of the Property's anticipated use for human habitation. The report must include, but is not limited to, a review of records, interviews with people knowledgeable about the Property, a certification that the environmental engineer has conducted an inspection of the Property, the building(s), and adjoining Properties, as well as any other industry standards concerning the preparation of this type of environmental assessment. If the report recommends further studies or establishes that environmental hazards curren