Volume 42 Number 51 December 22, 2017 Pages

Transcription

1 Volume 42 Number 51 December 22, 2017 Pages

2 School children's artwork is used to decorate the front cover and blank filler pages of the Texas Register. Teachers throughout the state submit the drawings for students in grades K-12. The drawings dress up the otherwise gray pages of the Texas Register and introduce students to this obscure but important facet of state government. The artwork featured on the front cover is chosen at random. Inside each issue, the artwork is published on what would otherwise be blank pages in the Texas Register. These blank pages are caused by the production process used to print the Texas Register. Texas Register, (ISSN , USPS ), is published weekly (52 times per year) for $ ($ for first class mail delivery) by Matthew Bender & Co., Inc., 3 Lear Jet Lane Suite 104, P O Box 1710, Latham, NY Material in the Texas Register is the property of the State of Texas. However, it may be copied, reproduced, or republished by any person without permission of the Texas Register director, provided no such republication shall bear the legend Texas Register or "Official" without the written permission of the director. The Texas Register is published under the Government Code, Title 10, Chapter Periodicals Postage Paid at Albany, N.Y. and at additional mailing offices. POSTMASTER: Send address changes to the Texas Register, 136 Carlin Rd., Conklin, N.Y Secretary of State - Rolando B. Pablos Director - Robert Sumners a section of the Office of the Secretary of State P.O. Box Austin, TX (512) FAX (512) register@sos.texas.gov Staff Leti Benavides Belinda Kirk Deana Lackey Jill S. Ledbetter Cecilia Mena Joy L. Morgan Breanna Mutschler Barbara Strickland Tami Washburn

3 ATTORNEY GENERAL Requests for Opinions EMERGENCY RULES TEXAS JUVENILE JUSTICE DEPARTMENT SUBSTANCE ABUSE FACILITIES AND PROGRAMS 37 TAC PROPOSED RULES TEXAS HISTORICAL COMMISSION PRACTICE AND PROCEDURE 13 TAC TAC TEXAS EDUCATION AGENCY HEALTH AND SAFETY 19 TAC , DEPARTMENT OF STATE HEALTH SERVICES GENERAL SANITATION 25 TAC TEXAS DEPARTMENT OF INSURANCE LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES 28 TAC , , , , TAC TEXAS WATER DEVELOPMENT BOARD RESEARCH AND PLANNING FUND 31 TAC , GROUNDWATER MANAGEMENT 31 TAC REGIONAL WATER PLANNING 31 TAC TAC , TAC TAC , TAC TAC , FINANCIAL ASSISTANCE PROGRAMS 31 TAC TAC TAC TAC COMPTROLLER OF PUBLIC ACCOUNTS PROPERTY TAX ADMINISTRATION 34 TAC DEPARTMENT OF AGING AND DISABILITY SERVICES NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION 40 TAC TAC , TAC , , TAC , , TAC TAC TAC , , TAC TAC TAC TAC TAC TAC TEXAS DEPARTMENT OF MOTOR VEHICLES MOTOR VEHICLE DISTRIBUTION 43 TAC VEHICLE TITLES AND REGISTRATION 43 TAC TAC TAC TAC , SALVAGE VEHICLE DEALERS, SALVAGE POOL OPERATORS AND SALVAGE VEHICLE REBUILDERS 43 TAC WITHDRAWN RULES STATE PRESERVATION BOARD RULES AND REGULATIONS OF THE BOARD 13 TAC ADOPTED RULES TEXAS HEALTH AND HUMAN SERVICES COMMISSION MEDICAID HEALTH SERVICES 1 TAC TAC TABLE OF CONTENTS 42 TexReg 7241

4 TEXAS HISTORICAL COMMISSION STATE ARCHEOLOGICAL PROGRAM 13 TAC 25.1, PRACTICE AND PROCEDURE 13 TAC , TAC TAC 26.10, 26.14, 26.16, TAC 26.19, 26.20, RAILROAD COMMISSION OF TEXAS COAL MINING REGULATIONS 16 TAC TEXAS LOTTERY COMMISSION ADMINISTRATION OF STATE LOTTERY ACT 16 TAC , TAC , , , , , , , , TAC , , , CHARITABLE BINGO OPERATIONS DIVISION 16 TAC , , , , , , , , , TAC TEXAS BOARD OF ARCHITECTURAL EXAMINERS REGISTERED INTERIOR DESIGNERS 22 TAC TAC , TAC , TAC TAC TEXAS BOARD OF VETERINARY MEDICAL EXAMINERS GENERAL ADMINISTRATIVE DUTIES 22 TAC TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS LICENSING AND ENFORCEMENT RULES 22 TAC TAC TEXAS MEDICAL DISCLOSURE PANEL INFORMED CONSENT 25 TAC 601.2, TEXAS DEPARTMENT OF INSURANCE LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES 28 TAC TEXAS WATER DEVELOPMENT BOARD RURAL WATER ASSISTANCE FUND 31 TAC COMPTROLLER OF PUBLIC ACCOUNTS TEXAS BULLION DEPOSITORY 34 TAC RULE REVIEW Proposed Rule Reviews Texas Appraiser Licensing and Certification Board Adopted Rule Reviews Texas Historical Commission TABLES AND GRAPHICS IN ADDITION Office of the Attorney General Texas Water Code and Texas Health and Safety Code Settlement Notice Comptroller of Public Accounts Certification of the Average Closing Price of Gas and Oil Office of Consumer Credit Commissioner Notice of Rate Ceilings Texas Education Agency Request for Proficiency Tests for the Assessment of English Learners Texas Commission on Environmental Quality Agreed Orders Amended Notice of Hearing Enforcement Orders Notice of Application and Public Hearing for an Air Quality Standard Permit for a Concrete Batch Plant with Enhanced Controls Proposed Air Quality Registration Number Notice of Public Hearing Notice of Public Hearing Notice of Public Hearing Notice of Public Hearing Notice of Public Meeting on January 25, 2018, in Pearland, Brazoria County, Texas Regarding the James Barr Facility State Superfund Site TABLE OF CONTENTS 42 TexReg 7242

5 Notice of Water Rights Application Texas Forensic Science Commission Correction of Error Texas Health and Human Services Commission Notice of Public Hearing on Proposed Medicaid Payment Rate for Levulan Kerastick Notice of Public Hearing on Proposed Medicaid Payment Rates for the 2018 Annual Healthcare Common Procedure Coding System Updates Department of State Health Services Licensing Actions for Radioactive Materials Texas Parks and Wildlife Department Notice of Proposed Real Estate Transactions Public Utility Commission of Texas Notice of Application for a Service Provider Certificate of Operating Authority Notice of Application for Retail Electric Provider Certification Notice of Application for Sale, Transfer, or Merger Notice of Application for Waiver from Requirements Notice of Application to Obtain Water Certificate of Convenience and Necessity Notice of Application to Obtain Water Certificate of Convenience and Necessity Notice of Petition for Recovery of Universal Service Funding Notice of Petition for Recovery of Universal Service Funding Sam Houston State University Notice of Intent to Seek Financial Report Auditing and Consulting Services Texas Department of Transportation Dallas District Notice Affording an Opportunity for a Public Hearing - District Projects and Programs Affecting Bicycle Use on the State Highway System Public Notice - Advertising in Texas Department of Transportation's Travel Literature and Texas Highways Magazine Texas Water Development Board Applications for December TABLE OF CONTENTS 42 TexReg 7243

6 Open Meetings Statewide agencies and regional agencies that extend into four or more counties post meeting notices with the Secretary of State. Meeting agendas are available on the Texas Register's Internet site: Members of the public also may view these notices during regular office hours from a computer terminal in the lobby of the James Earl Rudder Building, 1019 Brazos (corner of 11th Street and Brazos) Austin, Texas. To request a copy by telephone, please call Or request a copy by register@sos.state.tx.us For items not available here, contact the agency directly. Items not found here: minutes of meetings agendas for local government bodies and regional agencies that extend into fewer than four counties legislative meetings not subject to the open meetings law The Office of the Attorney General offers information about the open meetings law, including Frequently Asked Questions, the Open Meetings Act Handbook, and Open Meetings Opinions. The Attorney General's Open Government Hotline is OPEN ( ) or tollfree at (877) OPEN TEX ( ). Additional information about state government may be found here: Meeting Accessibility. Under the Americans with Disabilities Act, an individual with a disability must have equal opportunity for effective communication and participation in public meetings. Upon request, agencies must provide auxiliary aids and services, such as interpreters for the deaf and hearing impaired, readers, large print or Braille documents. In determining type of auxiliary aid or service, agencies must give primary consideration to the individual's request. Those requesting auxiliary aids or services should notify the contact person listed on the meeting notice several days before the meeting by mail, telephone, or RELAY Texas. TTY:

7 Requests for Opinions RQ-0198-KP Requestor: The Honorable J.M. Lozano Chair, Committee on Higher Education Texas House of Representatives Post Office Box 2910 Austin, Texas Re: Whether a member of a school district board of trustees is subject to the resign to run provisions of article 16, section 65 of the Texas Constitution and whether an officeholder listed in that section automatically resigns by making a statement that the officeholder is considering or exploring a candidacy for another office (RQ-0198-KP) Briefs requested by January 5, 2018 RQ-0199-KP Requestor: Mr. J. Winston Krause Chairman Texas Lottery Commission Post Office Box Austin, Texas Re: Whether the rights that a grandfathered bingo commercial lessor holds under a commercial lessor license may be transferred to another entity under the license transfer provisions of the Bingo Enabling Act (RQ-0199-KP) Briefs requested by January 11, 2018 For further information, please access the website at or call the Opinion Committee at (512) TRD Amanda Crawford General Counsel Office of the Attorney General Filed: December 11, 2017 RQ-0200-KP Requestor: Mr. Edward A. Dion El Paso County Auditor 800 East Overland Street, Room 406 El Paso, Texas Re: County authority to collect or delegate the collection of money owed to the county (RQ-0200-KP) Briefs requested by January 11, 2018 For further information, please access the website at or call the Opinion Committee at (512) TRD Amanda Crawford General Counsel Office of the Attorney General Filed: December 13, 2017 ATTORNEY GENERAL December 22, TexReg 7245

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9 TITLE 37. PUBLIC SAFETY AND CORREC- TIONS PART 11. TEXAS JUVENILE JUSTICE DEPARTMENT CHAPTER 353. SUBSTANCE ABUSE FACILITIES AND PROGRAMS 37 TAC The Texas Juvenile Justice Department is renewing the effectiveness of an emergency new for a 60-day period. The text of the emergency amendment was originally published in the September 15, 2017, issue of the Texas Register (42 TexReg 4717). Filed with the Office of the Secretary of State on December 11, TRD Jill Mata General Counsel Texas Juvenile Justice Department Original effective date: September 1, 2017 Expiration date: February 27, 2018 For further information, please call: (512) EMERGENCY RULES December 22, TexReg 7247

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11 TITLE 13. CULTURAL RESOURCES PART 2. TEXAS HISTORICAL COMMISSION CHAPTER 26. PRACTICE AND PROCEDURE SUBCHAPTER E. MEMORANDA OF UNDERSTANDING WITH OTHER STATE AGENCIES 13 TAC The Texas Historical Commission (THC) proposes a repeal to Rule 26.26, Memorandum of Understanding with the Texas Water Development Board (TWDB) is no longer needed due to administrative changes at the TWDB and changes in project review coordination needs. This repeal has been agreed upon by both the THC and the TWDB due to the aforementioned administrative changes at the TWDB and changes in the review coordination needs between the two agencies. Therefore, the memorandum of understanding is no longer needed. Mark Wolfe, Executive Director, has determined that for the first five-year period that this rule repeal is in effect there will be no fiscal implications for state or local governments as a result of this repeal. Mr. Wolfe has also determined that for each year of the first five-year period that this rule repeal is in effect, the public benefit will be the clarification of the review coordination needs between the agencies. The proposed repeal does not impose a cost on regulated persons or entities; therefore, it is not subject to Texas Government Code, Mr. Wolfe has determined that there will be no effect on rural communities, small businesses, or micro-businesses; therefore, no regulatory flexibility analysis, specified in Texas Government Code, , is required. There is no anticipated economic cost to persons who are required to comply with the proposed repeal. During the first five years that the rule would be repealed, the proposed repeal: will not create or eliminate a government program; will not result in the addition or reduction of employees; will not require an increase or decrease in future legislative appropriations; will not lead to an increase or decrease in fees paid to a state agency; will not create a new regulation; will not expand, limit, or repeal an existing regulation; and will not result in an increase or decrease in the number of individuals subject to the rule. During the first five years that the rule would be repealed, the proposed amendment will not positively or adversely affect the Texas economy. Comments on the proposed repeal may be submitted to Mark Wolfe, Executive Director, Texas Historical Commission, P.O. Box 12276, Austin, Texas Comments will be accepted for 30 days after publication in the Texas Register. The repeal is proposed under Title 9, Chapter 191 of the Texas Natural Resources Code, which provides the Commission with authority to promulgate rules that will reasonably affect the purposes of this chapter. No other statutes, articles, or codes are affected by this repeal Memorandum of Understanding with Texas Water Development Board. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TAC The Texas Historical Commission (THC) proposes amendments to These amendments have been agreed upon by both the THC and the Texas Parks and Wildlife Department (TPWD) and constitute minor editing and modest alterations in the potential scope of work for archeological reconnaissance and intensive survey that are covered under the Memorandum of Understanding (MOU). The proposed amendments allow TPWD staff archeologists to increase the number of backhoe trenches used in standard reconnaissance and intensive level surveys and the amendments also expand the maximum number of square acres that can be investigated under annual permits without TPWD having to apply for project specific permits. Mark Wolfe, Executive Director for THC, has determined that for the first five-year period that this rule amendment is in effect there will be no fiscal implications for state or local governments as a result of this amendment. Mr. Wolfe has determined that for each year of the first five-year period that this rule amendment is in effect, the anticipated public benefit will be the streamlining of construction and maintenance project reviews submitted to THC. The proposed amendment PROPOSED RULES December 22, TexReg 7249

12 does not impose a cost on regulated persons or entities; therefore, it is not subject to Texas Government Code, Mr. Wolfe has also determined that there will be no effect on rural communities, small business, or microbusinesses; therefore, no regulatory flexibility analysis as specified in Texas Government Code, , is required. There is no anticipated economic cost to persons who are required to comply with the proposed amendment. During the first five years that the rule would be in effect, the proposed amendment: will not create or eliminate a government program; will not result in the addition or reduction of employees; will not require an increase or decrease in future legislative appropriations; will not lead to an increase or decrease in fees paid to a state agency; will not create a new regulation; will not expand, limit, or repeal an existing regulation; and will not result in an increase or decrease in the number of individuals subject to the rule. During the first five years that the rule would be in effect, the proposed amendment will not positively or adversely affect the Texas economy. Comments on the proposed amendment may be submitted to Mark Wolfe, Executive Director, Texas Historical Commission, P.O. Box 12276, Austin, Texas Comments will be accepted for 30 days after publication in the Texas Register. These amendments are proposed under Title 9, Chapter 191 of the Texas Natural Resources Code, which provides the THC with authority to promulgate rules that will reasonably affect the purposes of this chapter. No other statutes, articles, or codes are affected by these amendments Memorandum of Understanding with Texas Parks and Wildlife Department. (a) Introduction. It is the public policy and in the interest of the State of Texas to locate, protect, and preserve archeological sites and historic properties situated on public lands. Furthermore, it is in the public interest to enter into agreements to provide for timely and efficient construction of transportation facilities, reservoirs, public buildings, parks, and infrastructure. Memoranda of Understanding (MOU) and Memoranda of Agreement (MOA) are formal agreements which provide for the preservation of environment and cultural resources; wise, productive use of the cultural and natural resources; good stewardship of publicly owned landmarks; and protection of public and private investment in historic preservation. (b) Primary Considerations and Stipulations. All agreements are subject to this chapter. Primary considerations in the development of permit specific memoranda shall include the significance of the cultural resource(s), and the nature of the impact of the project on the cultural resource(s). The memoranda will stipulate basic information related to the data recovery program for each permitted project, including, but not limited to: the significance of the area to be excavated; the methods and techniques to be employed; the coordination of the excavation with project construction schedules; and the estimated budget for all phases of work related to the investigation, including artifact analysis and report production. Memoranda of Understanding between the Texas Historical Commission (THC) and the Texas Parks and Wildlife Department (TPWD) follow. (c) TPWD will comply with the provisions of this section. For the purpose of this section, "TPWD lands" means lands owned or under the control of TPWD. (1) General Provisions. (A) TPWD shall: (i) require that all archeological investigations on TPWD lands are conducted under Antiquities Permits obtained by persons who meet THC requirements for principal investigator as listed in 26.4 of this title (relating to Professional Qualifications and Requirements); (ii) notify the THC of pending construction and maintenance projects in accordance with all applicable provisions of this section; (iii) perform and report on construction monitoring, archeological surface reconnaissance, and intensive cultural resource surveys on TPWD lands, in accordance with all applicable provisions of this section; and (iv) notify THC when cultural resources are discovered on TPWD lands. (B) THC will issue an annual Antiquities Permit for investigations on TPWD lands to the TPWD Cultural Resources Program Director by January 15th of each year that this MOU is in effect, upon a finding by THC of successful completion by TPWD of the annual Antiquities Permit issued two years before that date. (C) This MOU may be revised and amended upon the agreement of TPWD and THC. (2) THC Archeological Review of Proposed Projects on TPWD Lands. (A) Projects reviewed by THC. Construction or maintenance projects on TPWD lands that impact the ground surface or subsurface shall be submitted for THC review prior to project inception, when the project: (i) impacts a total or cumulative area of potential effect greater than ten (10) [five] acres and involves construction or maintenance activities in areas where similar activities have not occurred before; (ii) consists of disking, plowing, or other periodic activities impacting a total or cumulative area of potential effect greater than 120 acres, even if similar activities have occurred in that area before; (iii) is new or replacement fence construction that involves new fence line roads, fire lanes, bulldozing, or other grounddisturbing activities aside from post holes and impacts a total or cumulative area of potential effect greater than ten (10) acres; (iv) is grading or maintenance of a road or fire break when the road or fire break, water diversion features, and/or its ditches will be lengthened, widened, or deepened beyond previous disturbance from construction and/or maintenance holes and impacts a total or cumulative area of potential effect greater than ten (10) acres; (v) involves activities related to prescription burning of any kind that disturb the ground surface or subsurface in areas larger than ten (10) acres where similar activities have not occurred before; or (vi) is any type of project not described in subparagraph (B) of this paragraph. (B) Projects not reviewed by THC. Construction or maintenance projects on TPWD lands that result in no impact to the ground surface or subsurface will not be reviewed by THC prior to project inception. In addition, construction or maintenance projects on TPWD lands that result in impact to the ground surface or subsurface 42 TexReg 7250 December 22, 2017 Texas Register

13 will not be reviewed by THC prior to project inception when the project: (i) impacts a total or cumulative area of potential effect of five acres or less; (ii) consists of disking, plowing, or other periodic activities impacting a total or cumulative area of potential effect of less than 120 acres where similar activities have occurred before; (iii) is new or replacement fence construction that does not involve new fence line roads, fire lanes, bulldozing, or other ground disturbing activities aside from post holes and impacts a total or cumulative area of potential effect greater than ten (10) acres; (iv) is grading, disking, or other maintenance of a road or fire break when the road or fire break, related water diversion features, and/or its ditches will not be lengthened, widened, or deepened beyond previous disturbance from construction and/or maintenance holes and impacts a total or cumulative area of potential effect greater than ten (10) acres; or (v) is prescription burning or hand clearing of any kind that does not disturb the ground surface, historic structures, and/or rock art. (C) Prior THC approval of ground-disturbing projects. Projects that involve continuing impacts of the same nature and extent approved by THC need not be reviewed again if no archeological sites have been recorded within those project areas. THC will review continuing impacts of the same nature and extent in areas where archeological sites are present at 10 year intervals from the original date of approval to proceed. (D) TPWD review of projects. TPWD will review all projects that have the potential to impact cultural resources. Notwithstanding the provisions of this subparagraph, TPWD may elect to initiate archeological investigations when proposed projects have the potential to impact cultural resources, on the recommendation of the Cultural Resources Program Director. (E) TPWD will provide cultural resources training to State Parks and Wildlife Management Area personnel. On the direction of the Cultural Resources Program Director (CRPD), Wildlife Facilities Coordinator (WFC), or their designees, TPWD personnel who have received cultural resources training within the past 5 years may observe construction and maintenance activities, to ensure that cultural resources are considered during TPWD activities. If any archeological sites are revealed by such activities, TPWD personnel will report them to the CRPD, WFC, or their designees. (3) Procedures for Proposed Projects. (A) Notification to THC of proposed projects. TPWD shall send THC written or electronic notification no less than 30 days in advance of proposed projects that require review under paragraph (2)(A) of this subsection, and/or Section 106 of the National Historic Preservation Act (16 U.S.C. 470f). In rare cases when a response from THC is needed in less than 30 days, notification may be made by telephone or electronic mail, with a written or electronic notification to follow. Project review requests concerning Wildlife Management Areas shall be directed to THC through the WFC or their designee, and project review requests concerning State Parks and other TPWD properties shall be directed to THC through the CRPD or their designee. Each notification must include information on: (i) the type of project that is proposed, including the nature and extent of its impacts; area; (ii) any prior impacts that have affected the project (iii) locational data for the project area and [the project location plotted on a copy of a USGS 7.5' topographic quadrangle map, showing] any known archeological sites in the vicinity; and (iv) any known archeological sites and/or archeological investigations within the proposed project area. (B) THC response to project review requests. THC shall respond in writing (hard copy or electronic format) to each project review request within 30 days of its receipt. Archeological investigations may be deemed necessary by THC as a result of this review. If THC does not respond to TPWD within that period of time, TPWD may proceed with internal authorization of the proposed project without further notice to THC. (C) THC approval of proposed projects. When THC concurs with a finding of a qualified TPWD archeologist or archeologist contracted by TPWD that no archeological sites are located in a proposed construction area or that a proposed project will not adversely impact cultural resources, TPWD may proceed with the project on receipt of written concurrence (hard copy or electronic format) from THC. (D) Archeological site evaluation. When a qualified TPWD archeologist or archeologist contracted by TPWD identifies an archeological site or sites in a proposed project area, he or she will evaluate whether each site appears to merit official State Antiquities Landmark designation under of this title (relating to Criteria for Evaluating Archeological Sites). (E) Protection of significant sites. If adverse impacts to an archeological site(s) can be avoided during construction, the archeologist will mark the site in the field and TPWD personnel will not damage that area or a TPWD archeologist will provide GIS data to field staff who will mark the archeological site for protection. If TPWD conducts vegetation clearing on significant archeological sites, it shall be done by hand to avoid damage to the site. On-site decisions made by TPWD archeologists regarding protective measures for archeological sites will be respected by TPWD employees and contractors, and will balance the need to conserve significant sites with timely project completion. (F) Mitigation of impacts to significant sites. If an archeological site that merits official State Antiquities Landmark designation would be adversely impacted by a proposed project, TPWD will propose mitigation measures and request THC consultation and recommendations. If TPWD or THC ascertains that further investigations are necessary prior to or during a construction or maintenance project, these investigations must be performed before the project may proceed. (G) Archeological site discovery. Whenever cultural resources are discovered on TPWD lands, they will be reported to the CRPD, WFC, or their designees, who will report this information to THC and maintain central repositories of cultural resource information. (4) THC Review and Coordination of Third Party Projects on TPWD Lands. (A) TPWD will ensure that archeological investigations conducted on TPWD lands on behalf of other entities promote the identification and conservation of cultural resources. PROPOSED RULES December 22, TexReg 7251

14 (B) TPWD will require principal investigators conducting archeological investigations on TPWD lands on behalf of third parties to obtain individual Antiquities Permits for those investigations. (C) THC will notify TPWD if they should become aware of proposed archeological investigations on lands that TPWD manages, but are owned by another entity, and/or that are sponsored by an entity other than TPWD. (D) THC shall issue Antiquities Permits to entities conducting archeological investigations on TPWD lands on behalf of third parties, only after receiving written (hard copy or electronic format) notice that TPWD has approved the research designs, scopes, methods, and reporting requirements for those permits, and the CRPD, WFC, or their designee has signed the Landowner's Certification on those permit applications. tensions. (E) THC will notify TPWD prior to granting permit ex- (F) TPWD will require that background research for archeological projects on TPWD lands is conducted at the TPWD Archeology Laboratory in Austin prior to the field investigations, unless otherwise stipulated. (G) TPWD will review all reports or sections of reports for archeological investigations on TPWD lands, regardless of whether those projects extend beyond TPWD boundaries. The CRPD, WFC, or their designee will provide written (hard copy or electronic format) comments on draft reports within 30 days to the principal investigator, and principal investigators shall provide revised draft reports to TPWD in which TPWD comments are addressed. After TPWD concurs that those comments have been addressed, TPWD will submit reports to THC for review, under a cover letter from the CRPD, WFC, or their designee notifying THC that those draft reports have been reviewed and approved by TPWD. In all phases of investigations, third parties will communicate with THC only through CRPD, WFC, or their designee. (5) Scope of TPWD Annual Antiquities Permit Archeological Investigations. (A) Archeological investigations. The annual permit authorizes construction monitoring, surface reconnaissance, shovel test excavation, controlled unit excavation up to [excavation of shovel tests less than] 1 by 1 meter in horizontal dimension, mechanical [auger] testing, rock art recording and conservation, and intensive cultural resource surveys of TPWD lands up to 200 acres per project conducted during that calendar year. (i) Reconnaissance surveys as defined in of this title (relating to Archeological Permit Categories) conducted under the annual permit may exceed 200 acres per project. (ii) Up to twelve (12) [five] backhoe or other mechanical trench excavations may be used during survey-level investigations to determine whether buried cultural deposits exist, and to obtain geoarcheological (geomorphological) data. (iii) The following investigations are not authorized under this permit. Intensive surveys covering over 200 acres and/or advanced archeological investigations such as testing or data recovery as defined in of this title (relating to Archeological Permit Categories) will not be conducted under this permit. Architectural investigations are not authorized under this permit. (B) Qualifications. Investigations will be conducted under the supervision of qualified TPWD archeologists or, at the discretion of the CRPD, archeologists contracted by TPWD who meet THC requirements for principal investigator as listed in 26.4 of this title. The CRPD, WFC, or their designees may designate qualified TPWD archeologists to serve as Principal Investigators for particular projects. (C) Standards. All archeological investigations performed on TPWD lands must meet current professional archeological standards as promulgated by the Council of Texas Archeologists [described in 26.4 of this title]. (6) THC Review of Reports on Archeological Investigations under annual Antiquities Permit. (A) Archeological investigations conducted on TPWD lands under the annual Antiquities Permit that require THC review under paragraph (2)(A) of this subsection or other state or federal regulations will be reported in the annual Antiquities Permit report. At the discretion of the CRPD, additional investigations that do not require THC review may be included in the annual Antiquities Permit report, and will be clearly designated as such. (B) Interim reports. When TPWD seeks project approval from THC as a result of archeological investigations conducted on TPWD lands under the annual Antiquities Permit, the CRPD, WFC, or their designees may send THC a concise interim report on the findings of the investigations. The interim report will contain information on: (i) the type of project that is proposed, including the nature and extent of its impacts; area; (ii) any prior impacts that have affected the project (iii) locational data for the area of archeological investigations and any archeological sites encountered [the project location plotted on a copy of a USGS 7.5' topographic quadrangle, showing the area of archeological investigations and any archeological sites encountered]; (iv) a summary of the scope, findings, and conclusions of the archeological investigations; (v) evaluations of each archeological site's suitability for official State Antiquities Landmark designation under of this title (relating to Criteria for Evaluating Archeological Sites); and (vi) a project approval request or recommendations for further work, as appropriate. (C) THC review of interim reports. THC shall respond in writing (hard copy or electronic format) to interim reports within 30 days of receipt. When appropriate, THC will concur with the report findings and recommendations after review. If THC does not respond to TPWD within that period of time, TPWD may proceed with internal authorization of the proposed project without further notice to THC. (D) Draft reports. TPWD archeologists and archeologists contracted by TPWD who conduct investigations under the annual Antiquities Permit at the discretion of the CRPD shall provide the CRPD with concise, informative draft reports with supporting documents. All interim reports described in subparagraph (B) of this paragraph will be expanded into draft reports meeting the requirements of the Council of Texas Archeologists Guidelines for Cultural Resources Management Short Reports. The archeologist will submit shapefiles of areas investigated and copies of TexSite forms for the sites described in the report to the CRPD along with each draft report. All sites shall have trinomial designations assigned by the Texas Archeological Research Laboratory, The University of Texas at Austin. (E) Draft annual Antiquities Permit report. The TPWD draft annual Antiquities Permit report on each year's investigations will be compiled and edited by the CRPD or their designee, and the CRPD 42 TexReg 7252 December 22, 2017 Texas Register

15 will submit the report to THC for review by May 1 of the following year. THC shall provide comments in writing (hard copy or electronic format) on the draft annual report within 30 days of receipt. If THC does not respond to TPWD within that period of time, TPWD may proceed with publication of the final annual report without further notice to THC. (F) Final annual Antiquities Permit report. The final TPWD annual Antiquities Permit report shall be in a format that conforms to 26.16(a)(1) of this title (relating to Reports Relating to Archeological Permits). Upon approval of the draft annual Antiquities Permit report by THC, TPWD will submit the final report to THC no later than 120 days after TPWD has received THC approval, and will distribute copies in accord with of this title. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 19. EDUCATION PART 2. TEXAS EDUCATION AGENCY CHAPTER 103. HEALTH AND SAFETY SUBCHAPTER DD. COMMISSIONER'S RULES CONCERNING VIDEO SURVEILLANCE OF CERTAIN SPECIAL EDUCATION SETTINGS 19 TAC , The Texas Education Agency (TEA) proposes amendment to and new , concerning video surveillance of certain special education settings. The proposed amendment and new section would reflect requirements in Senate Bill (SB) 1398, 85th Texas Legislature, Regular Session, SB 507, 84th Texas Legislature, Regular Session, 2015, created Texas Education Code (TEC), , and required video surveillance to promote the safety of students receiving special education and related services in certain self-contained classrooms and other special education settings. SB 1398, 85th Texas Legislature, Regular Session, 2017, amended TEC, , providing clarification on who may make a request for cameras, on how a request must be made, on how local educational agencies (LEAs) must respond to requests for cameras, and on who may review a recording made under TEC, , and under what circumstances this can occur. TEC, (l), includes timelines for having cameras in operation following a request. TEC, (m)-(o), includes the right to ask the TEA to expedite a review of 1) a school district's denial for cameras; 2) a school district's request to extend the timeline to put the cameras in operation; and 3) a school district's determination not to release a recording. TEC, (p), requires the commissioner to adopt rules to address requests for expedited reviews and related appeals. Finally, TEC, , provides clarification of terms used in the statute. The proposed amendment to , Video Surveillance of Certain Special Education Settings, would clarify and add definitions, refer to the process to appeal local decisions, and provide additional details relating to policies and procedures for the placement, operation, and maintenance of video cameras. Proposed new , Commissioner's Review of Actions Concerning Video Cameras in Special Education Settings, would establish provisions relating to the applicability, denial of a request, and extension of time for hearings and reviews of actions taken relating to the denial of a request for placement of a video camera or a determination not to release a video. TEC, , as amended by SB 1398, requires the TEA to collect data related to requests for cameras and how LEAs responded to the requests; however, the proposed amendment and new rule would not impose any new or additional reporting requirements. The proposed amendment and new rule would require school districts and charter schools to adopt and/or amend policies and procedures to implement SB FISCAL NOTE. Penny Schwinn, chief deputy commissioner for academics, has determined that for the first five-year period the amendment and new section are in effect, there will be no additional costs for state or local government as a result of enforcing or administering the amendment and new section. Potential costs to school districts and open-enrollment charter schools resulting from SB 1398 will vary depending on the number of self-contained and other special education settings in the district or charter school and on the number of cameras necessary to adequately cover each classroom. There is no effect on local economy for the first five years that the proposed amendment and new section are in effect; therefore, no local employment impact statement is required under Texas Government Code, The proposed amendment and new section do not impose a cost on regulated persons and, therefore, are not subject to Texas Government Code, GOVERNMENT GROWTH IMPACT. The TEA has determined that the proposed amendment and new section do have a government growth impact pursuant to Texas Government Code, The proposal creates a new regulation. TEC, , as amended by SB 1398, includes the right to ask the TEA to expedite a review of a school district's denial for cameras, a school district's request to extend the timeline to put the cameras in operation, and a school district's determination not to release a recording. The TEA must adopt rules to address requests for expedited reviews and related appeals. Proposed new is in response to the new requirements. PUBLIC BENEFIT/COST NOTE. Ms. Schwinn has determined that for each year of the first five years the amendment and new section are in effect the public benefit anticipated as a result of enforcing proposed amendment and new section would be clarification of certain requirements in SB There is no anticipated economic cost to persons who are required to comply with the proposed amendment and new section. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEX- IBILITY ANALYSIS FOR SMALL BUSINESSES, MICROBUSI- NESSES, AND RURAL COMMUNITIES. There is no direct adverse economic impact for small businesses, microbusinesses, and rural communities; therefore, no regulatory flexibility anal- PROPOSED RULES December 22, TexReg 7253

16 ysis, specified in Texas Government Code, , is required. REQUEST FOR PUBLIC COMMENT. The public comment period on the proposal begins December 22, 2017, and ends January 22, Comments on the proposal may be submitted to Cristina De La Fuente-Valadez, Rulemaking, Texas Education Agency, 1701 North Congress Avenue, Austin, Texas Comments may also be submitted electronically to In addition, a public hearing to solicit testimony and input on the proposed amendment and new rule will be held at 8:30 a.m. on January 8, 2018, in Room 1-104, William B. Travis Building, 1701 North Congress Avenue, Austin, Texas Anyone wishing to testify at the hearing must sign in between 8:15 a.m. and 9:00 a.m. on the day of the hearing. The hearing will conclude once all who have signed in have been given the opportunity to comment. STATUTORY AUTHORITY. The amendment and new section are proposed under Texas Education Code (TEC), , as amended by SB 1398, 85th Texas Legislature, Regular Session, 2017, which requires video surveillance in certain special education settings to promote student safety; TEC, (k), which authorizes the commissioner to adopt rules to implement and administer TEC, , including rules regarding the special education settings to which the section applies; and TEC, , as amended by SB 1398, 85th Texas Legislature, Regular Session, 2017, which authorizes the commissioner to adopt rules to address requests for expedited reviews and related appeals. CROSS REFERENCE TO STATUTE. The amendment and new section implement Texas Education Code (TEC), , as amended by SB 1398, 85th Texas Legislature, Regular Session, Video Surveillance of Certain Special Education Settings. (a) Requirement to implement. In [Beginning with the school year, in] order to promote student safety, on written request by a parent, school district board of trustees, governing body of an open-enrollment charter school, principal or assistant principal, [trustee,] or staff member, as authorized by Texas Education Code (TEC) (a-1), a school district or an open-enrollment charter school must provide video equipment to campuses in accordance with TEC [Texas Education Code (TEC)], , and this section. Campuses that receive video equipment must place, operate, and maintain video cameras in self-contained classrooms or other special education settings in accordance with TEC, , and this section. (b) Definitions. For purposes of TEC, , and this section, the following terms have the following meanings. (1) Parent means a person described in TEC, , whose child receives special education and related services in one or more [for at least 50 percent of the instructional day in a] self-contained classrooms [classroom] or other special education settings [setting]. Parent also means a student who receives special education and related services in one or more [for at least 50 percent of the instructional day in a] self-contained classrooms [classroom] or other special education settings [setting] and who is 18 years of age or older or whose disabilities of minority have been removed for general purposes under Texas Family Code, Chapter 31, unless the student has been determined to be incompetent or the student's rights have been otherwise restricted by a court order. (2) Staff member means a teacher, a related service provider, a paraprofessional, a counselor, or an educational aide assigned to work in a self-contained classroom or other special education setting [an employee of the school district or open-enrollment charter school]. [(3) Trustee means a member of a school district's board of trustees or a member of an open-enrollment charter school's governing body.] (3) [(4)] Open-enrollment charter school means a charter granted to a charter holder under TEC, or , identified with its own county district number. (4) [(5)] Self-contained classroom means a classroom on a regular school campus (i.e., a campus that serves students in general education and students in special education) of a school district or an open-enrollment charter school, including a room attached to the classroom used for time-out, but not including a classroom that is a resource room instructional arrangement under TEC, , in which a majority of the students in regular attendance are provided special education and related services and have one of the following instructional arrangements/settings described in the student attendance accounting handbook adopted under of this title (relating to Adoption by Reference: Student Attendance Accounting Handbook): (A) self-contained (mild/moderate/severe) regular campus; (B) full-time early childhood (preschool program for children with disabilities) special education setting; (C) residential care and treatment facility--self-contained (mild/moderate/severe) regular campus; (D) residential care and treatment facility--full-time early childhood special education setting; (E) off home campus--self-contained (mild/moderate/severe) regular campus; or (F) off home campus--full-time early childhood special education setting. (5) [(6)] Other special education setting means a classroom on a separate campus (i.e., a campus that serves only students who receive special education and related services) of a school district or open-enrollment charter school, including a room attached to the classroom or setting used for time-out, in which a majority of the students in regular attendance are provided special education and related services and have one of the following instructional arrangements/settings described in the student attendance accounting handbook adopted under of this title: (A) residential care and treatment facility--separate campus; or (B) off home campus--separate campus. (6) [(7)] Video camera means a video surveillance camera with audio recording capabilities. (7) [(8)] Video equipment means one or more video cameras and any technology and equipment needed to place, operate, and maintain video cameras as required by TEC, , and this section. Video equipment also means any technology and equipment needed to store and access video recordings as required by TEC, , and this section. (8) [(9)] Incident means an event or circumstance that: (A) involves alleged "abuse" or "neglect," as those terms are described in Texas Family Code, , of a student by an employee of the school district or charter school or alleged 42 TexReg 7254 December 22, 2017 Texas Register

17 "physical abuse" or "sexual abuse," as those terms are described in Texas Family Code, , of a student by another student; and (B) allegedly occurred in a self-contained classroom or other special education setting in which video surveillance under TEC, , and this section is conducted. (9) School business day means a day that campus or school district administrative offices are open. (10) Time-out has the meaning assigned by TEC, (c) Exclusions. A school district or open-enrollment charter school is not required to provide video equipment to a campus of another district or charter school or to a nonpublic school. In addition, the Texas School for the Deaf, the Texas School for the Blind and Visually Impaired, the Texas Juvenile Justice Department, and any other state agency that provides special education and related services to students are not subject to the requirements in TEC, , and this section. (d) Use of funds. A school district or open-enrollment charter school may solicit and accept gifts, grants, and donations from any person to implement the requirements in TEC, , and this section. A district or charter school is not permitted to use Individuals with Disabilities Education Act, Part B, funds or state special education funds to implement the requirements of TEC, , and this section. (e) Dispute resolution. The special education dispute resolution procedures in 34 Code of Federal Regulations, and , do not apply to complaints alleging that a school district or open-enrollment charter school has failed to comply with TEC, , and/or this section. Complaints alleging violations of TEC, , and/or this section must be addressed through the district's or charter school's local grievance procedures or other dispute resolution channels. To the extent that appeals from local grievance processes or other dispute resolution channels regarding alleged violations of TEC, , are permissible, the provisions of of this title (relating to Commissioner's Review of Actions Concerning Video Cameras in Special Education Settings) control. (f) Regular school year and extended school year services. TEC, , and this section apply to video surveillance during the regular school year and during extended school year services. (g) Policies and procedures. Each school district board of trustees and open-enrollment charter school governing body must adopt written policies relating to the placement, operation, and maintenance of video cameras [surveillance] under TEC, , and this section. At a minimum, the policies must include: (1) a statement that video surveillance is for the purpose of promoting student safety in certain self-contained classrooms and other special education settings; (2) information on how a person may appeal an action by the district or school that the person believes to be in violation of this section or a policy adopted in accordance with this section, including the appeals process under TEC, 7.057; (3) a requirement that the district or school provide a response to a request made under this section not later than the seventh school business day after receipt of the request by the person to whom it must be submitted under TEC, (a-3), that authorizes the request or states the reason for denying the request; (4) except as provided by paragraph (6) of this subsection, a requirement that a school or a campus begin operation of a video camera in compliance with this section not later than the 45th school business day, or the first school day after the 45th school business day if that day is not a school day, after the request is authorized unless the Texas Education Agency (TEA) grants an extension of time; (5) a provision permitting the parent of a student whose admission, review, and dismissal committee has determined that the student's placement for the following school year will be in a classroom or other special education setting in which a video camera may be placed under this section to make a request for the video camera by the later of: (A) the date on which the current school year ends; or (B) the 10th school business day after the date of the placement determination by the admission, review, and dismissal committee; (6) if a request is made by a parent in compliance with paragraph (5) of this subsection, unless the TEA grants an extension of time, a requirement that a school or campus begin operation of a video camera in compliance with this section not later than the later of: (A) the 10th school day of the fall semester; or (B) the 45th school business day, or the first school day after the 45th school business day if that day is not a school day, after the date the request is made; (7) [(2)] the procedures for requesting video surveillance and the procedures for responding to a request for video surveillance; (8) [(3)] the procedures for providing advanced written notice to the campus staff and the parents of the students assigned to a self-contained classroom or other special education setting that video and audio surveillance will be conducted in the classroom or setting; (9) [(4)] a requirement that video cameras be operated at all times during the instructional day when students are present in a self-contained classroom or other special education setting in which video cameras are placed; (10) [(5)] a statement regarding the personnel who will have access to video equipment or video recordings for purposes of operating and maintaining the equipment or recordings; (11) [(6)] a requirement that a campus continue to operate and maintain any video camera placed in a self-contained classroom or other special education setting for as long as the classroom or setting continues to satisfy the requirements in TEC, (a); (12) [(7)] a requirement that video cameras placed in a selfcontained classroom or other special education setting be capable of recording video and audio of all areas of the classroom or setting, except bathrooms and areas in which a student's clothes are changed. Incidental coverage of the inside of a bathroom or any area of the classroom or other special education setting in which a student's clothes are changed is permitted only to the extent that such coverage is the result of the layout of the classroom or setting [that no video surveillance may be conducted of the inside of a bathroom or other area used for toileting or diapering a student or removing or changing a student's clothes] ; (13) [(8)] a statement that video recordings must be retained for at least three [six] months after the date the video was recorded; (14) [(9)] a statement that the regular or continual monitoring of video is prohibited and that video recordings must not be used for teacher evaluation or monitoring or for any purpose other than the promotion of student safety; (15) [(10)] at the school district's or open-enrollment charter school's discretion, a requirement that campuses post a notice at the entrance of any self-contained classroom or other special educa- PROPOSED RULES December 22, TexReg 7255

18 tion setting in which video cameras are placed stating that video and audio surveillance are conducted in the classroom or setting; (16) [(11)] the procedures for reporting a complaint alleging that an incident occurred in a self-contained classroom or other special education setting in which video surveillance under TEC, , and this section is conducted; (17) [(12)] the local grievance procedures for filing a complaint alleging violations of TEC, , and/or this section; and (18) [(13)] a statement that video recordings made under TEC, , and this section are confidential and a description of the limited circumstances under which the recordings may be viewed. (h) Confidentiality of video recordings. A video recording made under TEC, , and this section is confidential and may only be viewed by the following individuals, to the extent not limited by the Family Educational Rights and Privacy Act of 1974 (FERPA) or other law: (1) a staff member or a parent of a student involved in an incident described in subsection (b)(8) [(b)(9)] of this section that is documented by a video recording for which a complaint has been reported to the district, charter school, or [charter] school; (2) appropriate Texas Department of Family and Protective Services personnel as part of an investigation under Texas Family Code, ; (3) a peace officer, school nurse, district or school administrator trained in de-escalation and restraint techniques as provided by commissioner rule, or a human resources staff member designated by the school district's board of trustees or open-enrollment charter school's governing body in response to a complaint or an investigation of an incident described in subsection (b)(8) [(b)(9)] of this section; or (4) appropriate Texas Education Agency or State Board for Educator Certification personnel or agents as part of an investigation. (i) Exception to restrictions on viewing. A contractor or employee performing job duties relating to the installation, operation, or maintenance of video equipment or the retention of video recordings who incidentally views a video recording does not violate subsection (h) of this section. (j) [(i)] Child abuse and neglect reporting. If a person described in subsection (h)(3) or (4) of this section views a video recording and has cause to believe that the recording documents possible abuse or neglect of a child under Texas Family Code, Chapter 261, the person must submit a report to the Texas Department of Family and Protective Services or other authority in accordance with the local policy adopted under of this title (relating to Reporting Child Abuse and Neglect) and Texas Family Code, Chapter 261. (k) [(j)] Disciplinary actions and legal proceedings. If a person described in subsection (h)(2), (3), or (4) of this section views a video recording and believes that it documents a possible violation of school district, open-enrollment charter school, or campus policy, the person may allow access to the recording to appropriate legal and human resources personnel of the district or charter school to the extent not limited by FERPA or other law. A recording believed to document a possible violation of school district, open-enrollment charter school, or campus policy relating to the neglect or abuse of a student may be used in a disciplinary action against district or charter school personnel and must be released in a legal proceeding at the request of a parent of the student involved in the incident documented by the recording. A recording believed to document a possible violation of school district, open-enrollment charter school, or campus policy relating to the neglect or abuse of a student must be released for viewing by the district or charter school employee who is the subject of the disciplinary action at the request of the employee. (l) [(k)] Access rights. Subsections [(i) and] (j) and (k) of this section do not limit the access of a student's parent to an educational record of the student under FERPA or other law. To the extent any provisions in TEC, , and this section conflict with FERPA or other federal law, federal law prevails Commissioner's Review of Actions Concerning Video Cameras in Special Education Settings. (a) Applicability. This section shall apply to all hearings and reviews of actions taken under Texas Education Code (TEC), , concerning school districts. To the extent that this section conflicts with any other sections governing hearings before the commissioner of education, including Chapter 157, Subchapter AA of this title (relating to General Provisions for Hearings Before the Commissioner of Education) and Subchapter BB of this title (relating to Specific Appeals to the Commissioner), this section shall prevail. (b) Denial of request. The following standards and procedures apply to a denial of a request for the placement of a video camera or the determination not to release a video to a person under TEC, (1) Once a request for placement of a video camera or a request to release a video is administratively denied under TEC, (i) or (l)(2), the requestor must exhaust administrative remedies through the school district's grievance process before the denial of the request is appealed to the commissioner. (2) After local remedies are exhausted, the requestor may appeal the denial to the commissioner under TEC, (3) The following timelines are established. (A) A petition for review shall be filed with the commissioner within 20 days of the decision of the board of trustees being first communicated to the requestor or requestor's counsel, whichever occurs first. The petition for review shall be made in accordance with (c) of this title (relating to Hearings Brought Under Texas Education Code, 7.057) and may include a request for expedited review. (B) The district's answer and local record shall comply with (b) and (c) of this title (relating to Answers) and (d) of this title and shall be filed with the commissioner within 20 days of the school district receiving notification from the commissioner of the appeal. (4) A request for expedited review is governed by the following. (A) A request for expedited review shall be filed with the commissioner within 20 days of the school district receiving notification from the commissioner that a petition for review has been filed. (B) If no request for an expedited review is timely made, the case will proceed according to the procedures for an appeal under TEC, (C) A school district, parent, staff member, or administrator may request an expedited review. Any request for an expedited review shall include the names, telephone numbers, and addresses of all interested parties to the request. Interested parties are all persons who brought the grievance and all persons who testified or made written statements during the grievance process. (D) If a timely request for expedited review is filed, the commissioner shall notify all interested persons that an expedited review has been filed and of their right to file arguments in accordance with the briefing schedule. All interested parties shall receive all filings 42 TexReg 7256 December 22, 2017 Texas Register

19 in the case. The commissioner shall send to all interested parties the petition for review, the request for expedited review, and all other filings in the case as of the time the request for expedited review is filed. All persons filing any document in the case after the commissioner has provided to the interested parties the documents on file at the time the request for an expedited review is made shall provide each interested party, the petitioner, and the respondent with a copy of the additional filing, which shall be sent by the filing party to each interested party by the same method as the filing is sent to the commissioner. (E) All briefing and exceptions to the proposal for decision and replies to the same in a case where expedited review is requested shall have citations to the record to support all alleged facts and shall have appropriate citations to legal authority to support all legal claims. (F) If a request for expedited review is timely filed, the commissioner will establish a briefing schedule. (G) All interested parties who are in favor of granting the request for expedited review shall file briefing at the time specified for the petitioner. (H) All interested persons who are opposed to granting the request for expedited review shall file briefing at the same time as the respondent. (I) Briefing is not limited to the issues specifically raised in the pleadings in the case. However, no new arguments may be raised in the reply briefs. Reply briefs may contain new citations to the record and legal authority. (J) A proposal for decision shall be issued which applies the substantial evidence standard to the local record. A proposal for decision shall constitute the preliminary judgment in an appeal. (K) Exceptions to a proposal for decision shall be filed within 10 days of the issuance of the proposal for decision. (L) Replies to exceptions to a proposal for decision shall be made within 20 days of the issuance of the proposal for decision and shall respond to the arguments made in the exceptions to the proposal for decision. (M) If no exceptions to the proposal for decision are timely filed, the commissioner will issue a decision in the case. (N) If exceptions to the proposal for decision are timely filed, the commissioner will issue a decision in the case after the time for replies to exceptions to a proposal for decision has passed. (O) A decision of the commissioner under this subsection is appealable under TEC, 7.057(d). (c) Extension of time. A request for an extension of time to begin the operation of a video camera under TEC, , shall be made and decided using the following procedures. (1) Any request by a school district for an extension of time to begin the operation of a video camera shall be filed with the commissioner prior to the 45th school business day after a request to begin operating a video camera is received. (2) A request for an extension of time to begin the operation of a video camera shall specify why an extension of time should be granted. The request shall include affidavits supporting any factual claims made in the request and reference any legal authority as to why the request should be granted. The request may include a request for expedited review. The request shall name the individual who requested the installation of cameras and provide the individual's address and telephone number. Immediately following the individual's address and telephone number there shall appear in bold type: "You have been identified as the individual who requested the operation of a video camera that is the subject of this request to the commissioner of education to extend the statutory timeline. You may but are not required to participate in the proceedings before the commissioner concerning the school district's request for an extension of time. It is entirely up to you whether and to what extent you wish to participate in these proceedings. The procedures governing these proceedings are found at 19 Texas Administrative Code (c) and Texas Education Code, " (3) A request for an extension of time to begin the operation of a video camera shall list the names, telephone numbers, and addresses of all interested parties to the request. All interested parties include all parents of students in the classroom or other special education setting for which a video camera has been requested and all staff who provided services in a class for which a video camera has been requested. (4) All documents in a case shall be filed with the Division of Hearings and Appeals, Texas Education Agency, 1701 N. Congress Avenue, Austin, Texas 78701, facsimile number (512) Documents can be filed by mail, delivery, or facsimile. All documents must be actually received by the Division of Hearings and Appeals by the date specified in this section. The mailbox rule does not apply to filings in this case. Filing by facsimile is strongly encouraged. (5) All filings in a case shall be sent to the school district, the individual who initially requested the installation of the cameras, and all interested parties who have filed a request to receive documents filed in this case by the same method as the request is filed with the commissioner. Due to the requirements of Family Education Rights and Privacy Act, the names, telephone numbers, and addresses of parents and other publicly identifiable student information may not be given out to the interested parties. The copies of the filings sent to interested parties shall redact all publicly identifiable student information. (6) Any response to a request for an extension of time to begin the operation of a video camera shall be filed with the commissioner by an interested party within 20 days of the filing of the request. If no response to the request is timely filed, the commissioner shall issue a final decision within 30 days of the filing of the request. (7) A response to a request for an extension of time to begin the operation of a video camera shall specify why an extension of time should or should not be granted. The response shall include affidavits supporting any factual claims made in the request and reference any legal authority as to why the request should or should not be granted. The response may include a request for expedited review. (8) A request for expedited review must be filed with the commissioner within 20 days of the filing of the request for an extension of time to begin the operation of a video camera. If a request for expedited review is made, all interested parties shall be notified that they have been identified as interested parties in the request for an extension of time to begin the operation of a video camera. In particular the interested parties will be informed that it is their choice whether or not to participate in the proceedings before the commissioner, that it is entirely up to them to determine to what extent they wish to participate in the proceedings, that the procedures governing these proceedings are found in this subsection and TEC, , and that upon their written request filed with the commissioner they will be sent all filings in this case. (9) If a request for an expedited review is not made, the commissioner shall issue a final decision within 45 days of the filing of the request for an extension of time to begin the operation of a video camera, unless the commissioner determines that an evidentiary hear- PROPOSED RULES December 22, TexReg 7257

20 ing would be helpful in deciding the issues raised. If the commissioner decides to hold an evidentiary hearing, the commissioner shall establish the timelines and procedures to be used. Whether to conduct the hearing by telephone or other electronic methods will be considered. (10) If a request for expedited review is made, the following procedures shall be followed. (A) Any reply by the school district to any response to the request shall be filed with the commissioner within 25 days of the filing of the request for an extension of time to begin the operation of a video camera. (B) A preliminary judgment shall be made by the commissioner within 35 days of the filing of the request for an extension of time to begin the operation of a video camera. (C) Any interested party or the school district may file objections to preliminary judgment within 40 days of the filing of the request for an extension of time to begin the operation of a video camera. (D) Any reply to an objection to a preliminary judgment must be filed within 45 days of the filing of a request for an extension of time to begin the operation of a video camera. (E) The commissioner shall issue a final decision within 55 days of the filing of the request for an extension of time to begin the operation of a video camera, unless the commissioner determines that an evidentiary hearing would be helpful in deciding the issues raised. If the commissioner decides to hold an evidentiary hearing the commissioner shall establish the timelines and procedures to be used. Whether to conduct the hearing by telephone or other electronic methods will be considered. (11) A commissioner's final decision under this subsection is not subject to appeal. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 25. HEALTH SERVICES PART 1. DEPARTMENT OF STATE HEALTH SERVICES CHAPTER 265. GENERAL SANITATION SUBCHAPTER B. TEXAS YOUTH CAMPS SAFETY AND HEALTH 25 TAC The Executive Commissioner of the Health and Human Services Commission, on behalf of the Department of State Health Services (DSHS), proposes new , concerning Waiver; Appeal. BACKGROUND AND PURPOSE The new section is necessary to comply with House Bill 492, 85th Legislature, Regular Session, 2017, that amended Health and Safety Code, Chapter 141, by adding , relating to a waiver for certain youth camp programs from youth camp licensing. SECTION-BY-SECTION SUMMARY The purpose of new is to establish criteria that a youth camp program must meet to request a waiver from DSHS from youth camp licensing; establish criteria for which a waiver may be revoked; and establish the appeal process for a waiver that has been revoked. FISCAL NOTE Donna Sheppard, Chief Financial Officer, has determined that for each year of the first five years that the section will be in effect, there will be fiscal implications to state government as a result of enforcing and administering the sections as proposed. DSHS will lose revenue from licensing fees for those camps that meet the criteria, probably less than $ for each of the first five years. This would only apply to one or two camps that meet the criteria for requesting the waiver. There will be no effect on local government. GOVERNMENT GROWTH IMPACT STATEMENT DSHS has determined that during the first five years that the section will be in effect: (1) the proposed rule will not create or eliminate a government program; (2) implementation of the proposed rule will not affect the number of employee positions; (3) implementation of the proposed rule will not require an increase or decrease in future legislative appropriations; (4) the proposed rule will require a decrease in fees paid to the agency; (5) the proposed rules will create a new rule; (6) the proposed rules will not expand, limit, or repeal an existing rule; (7) the proposed rule will decrease the number of individuals subject to the rule; and (8) DSHS has insufficient information to determine the proposed rule's effect on the state's economy. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS Jon Huss, Associate Commissioner, has also determined that there will be no adverse impact on small businesses, micro-businesses or rural communities required to comply with the section as proposed. The rule does not impose any additional costs on small businesses, micro-businesses, or rural communities that are required to comply with the rule. The rule does not apply to rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT 42 TexReg 7258 December 22, 2017 Texas Register

21 There are no anticipated economic costs to persons who are required to comply with the section as proposed. There is no anticipated negative impact on local employment. COSTS TO REGULATED PERSONS Texas Government Code, does not apply to this rule because the rule is necessary to protect the health, safety, and welfare of the residents of Texas; does not impose a cost on regulated persons; and is necessary to implement legislation that does not specifically state that applies to the rule. PUBLIC BENEFIT In addition, Mr. Huss has also determined that for each year of the first five years that the section will be in effect, the public will benefit from adoption of the section. The public benefit anticipated from enforcing or administering the section is to better ensure the health and safety of children attending youth camps. REGULATORY ANALYSIS DSHS has determined that this proposal is not a "major environmental rule" as defined by Government Code, "Major environmental rule" is defined to mean a rule the specific intent of which is to protect the environment or reduce risk to human health from environmental exposure and that may adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment or the public health and safety of a state or a sector of the state. This proposal is not specifically intended to protect the environment or reduce risks to human health from environmental exposure. TAKINGS IMPACT ASSESSMENT DSHS has determined that the proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Government Code, PUBLIC COMMENT Written comments on the proposal may be submitted to Rules Coordination Office, 1100 W 49th St, MC 1911, Austin, TX 78756; or ed to HHSRulesCoordinationOffice@hhsc.state.tx.us within 30 days of the publication of this proposal in the Texas Register. To be considered, comments must be submitted no later than 30 days after the date of this issue of the Texas Register. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to HHSC before 5:00 p.m. on HHSC last working day of the comment period; or (3) faxed or ed by midnight on the last day of the comment period. When ing comments, please indicate "Comments on Proposed Rule 18R002" in the subject line. STATUTORY AUTHORITY The new section is authorized by Health and Safety Code, , which authorizes the Executive Commissioner of the Health and Human Services Commission to adopt rules necessary to administer the youth camp program; Health and Safety Code, , relating to a waiver for certain programs from youth camp licensing; and Government Code, , and Health and Safety Code, , which authorize the Executive Commissioner of the Health and Human Services Commission to adopt rules and policies necessary for the operation and provision of health and human services by the health and human services system. The new section is authorized by Health and Safety Code, Chapters 141 and 1001; and Government Code, Chapter Waiver; Appeal. (a) The department may grant a waiver from the requirements of this chapter to a program that meets the conditions described in Health and Safety Code, (a). The program seeking the waiver shall provide proof to the department that the program meets the conditions described in Health and Safety Code, (a) before the department may grant a waiver. To ensure that the program continues to be eligible for a waiver, the department may require the program to resubmit proof of meeting the conditions described in Health and Safety Code, (a) no more frequently than one time per calendar year or as part of an investigation described in subsection (c) of this section. (b) A waiver granted by the department under subsection (a) of this section is valid until the waiver is revoked for cause by the department. Examples of cause for revocation include but are not limited to: (1) the failure to ensure the health, safety, or welfare of persons at the program; or (2) the failure to report abuse or neglect occurring at the program as required by Family Code, Chapter 261. (c) The department may conduct an investigation in response to an allegation that there is cause to revoke a program's waiver or that a program no longer meets the conditions described in Health and Safety Code, (a). (d) A person who operates a program for which an application for a waiver under this section has been denied or for which a waiver under this section has been revoked may appeal the action in the manner provided for appeal of contested cases under Government Code, Chapter When the department proposes to deny or revoke a waiver granted under this section, it shall give notice of the proposed action in writing and shall provide information on how to request an administrative hearing. The program shall make a written request for a hearing within 30 days from the date on the notice letter sent by the department. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 7, TRD Barbara L. Klein Interim General Counsel Department of State Health Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 28. INSURANCE PART 1. TEXAS DEPARTMENT OF INSURANCE PROPOSED RULES December 22, TexReg 7259

22 CHAPTER 3. LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES SUBCHAPTER T. MINIMUM STANDARDS FOR MEDICARE SUPPLEMENT POLICIES (Editor's note: In accordance with Texas Government Code, , which permits the omission of material which is "cumbersome, expensive, or otherwise inexpedient," the figure in 28 TAC 28 TAC (c)(2)(E) is not included in the print version of the Texas Register. The figure is available in the on-line version of the December 22, 2017, issue of the Texas Register.) The Texas Department of Insurance proposes amendments to 28 Texas Administrative Code , , , , and , and it proposes the repeal of 28 TAC These sections relate to Medicare supplement policies. These proposed amendments and repeal are necessary to implement the most recent revisions to the National Association of Insurance Commissioner's (NAIC) Medicare supplement insurance model regulation to comply with the Medicare Access and CHIP Reauthorization Act of 2015, Public Law , at 42 U.S.C. 1395ss(z). The department proposes amendments to 28 TAC , , , , and , as necessary, to update outdated contact information and administrative and statutory citations. Proposed amendments to these sections are also necessary for consistency with the agency's writing style. The department proposes amendments to 28 TAC (b)(1)(E). These proposed amendments are necessary to permit, under certain circumstances, an issuer to replace a certificate with a certificate of the same standardized benefit plan when an individual moves from this state to a different state. The department also proposes to amend 28 TAC by deleting subsections (c) and (d), concerning benefit standards for 1990 standardized Medicare supplement plan policies and certificates issued for delivery on or after March 1, 1992, and with an effective date for coverage before June 1, This proposed amendment is necessary because the 1990 standardized Medicare supplement benefit plans are no longer issued. The department proposes to amend 28 TAC (f) by deleting the current refund calculation form and replacing it with a new refund calculation form. This proposed amendment is necessary to require an issuer to electronically submit the reporting form found on the department's website. The department proposes the repeal of 28 TAC , relating to the effective date of amendments and its impact on existing policies. This proposed repeal is necessary because this provision will be included under 28 TAC , relating to applicability and scope. EXPLANATION. The Medicare Access and CHIP Reauthorization Act (MACRA) was enacted on April 16, Starting on January 1, 2020, it prohibits the sale of Medicare supplement plans that cover Part B deductibles to a "newly eligible Medicare beneficiary." A "newly eligible Medicare beneficiary" is defined under 42 U.S.C. 1395ss(z)(2) as an individual who: has attained age 65 on or after January 1, 2020; becomes eligible for Medicare due to age, disability, or end-stage renal disease on or after January 1, 2020, by reason of entitlement under 42 U.S.C. 426(b) or 42 U.S.C ; or who is deemed to be eligible for benefits under 42 U.S.C. 426(a). Plans C, F, and High Deductible F, which include coverage for the Part B deductible, will not be available to a newly eligible individual. NAIC adopted revisions on August 29, 2016, to its NAIC Model Regulation to implement the MACRA requirements concerning Medicare supplement insurance. On September 1, 2017, the Department of Health and Human Services issued a notice in 82 Federal Register 169 recognizing the revised NAIC Model standards for regulation of Medicare supplement insurance for purposes of 42 U.S.C. 1395ss. If a state's Medicare supplement program does not provide for the application and enforcement of the NAIC Model Standards and requirements in 42 U.S.C. 1395ss(b)(1), no Medicare supplement policy may be issued in that state, unless the policy has been certified by the Secretary of the United States Department of Health and Human Services as meeting minimum standards and requirements under the procedures established in 42 U.S.C. 1395ss(a)(1). Title 42 U.S.C. 1395ss(b)(1) provides that Medicare supplement policies issued in a state are deemed to meet the federal requirements if the state's program regulating Medicare supplement policies provides for the application of standards that are at least as stringent as those contained in the NAIC Model Regulation and if the state's requirements are equal to or more stringent than those in subsection 42 U.S.C. 1395ss(c)(2)-(5). Insurance Code provides that, in addition to other rules required or authorized by Chapter 1652, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter 1652, including rules adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to retain certification as a state with an approved regulatory program for Medicare supplement insurance. Insurance Code provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. 1395ss. The standards may include provisions relating to terms of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law. Insurance Code (a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code (b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. 1395ss. Based on state and federal law, proposed amendments to , , , and are necessary to retain certification as a state with an approved regulatory program for Medicare supplement insurance. The department acknowledges that individuals issued a certificate in this state may move for various reasons to a different state and that issuers typically adjust premium rates to reflect costs in a given geographic location. Therefore, proposed amendments to 28 TAC (b)(1)(E), concerning group 42 TexReg 7260 December 22, 2017 Texas Register

23 Medicare supplement policies, provide that, if an individual holds a Texas-issued certificate in a group Medicare supplement policy, and the individual moves out of the state in which the certificate was issued, the issuer may replace the certificate with a certificate of the same standardized benefit plan type, approved by the new state of residence, if the issuer acts uniformly in its treatment of certificate holders who move out of state. This change is intended to provide administrative simplification for issuers related to rate filings. Insurance Code (c) provides that the commissioner may adopt rules relating to filing requirements for rates, rating schedules, and loss ratios. The proposed amendments to 28 TAC (f), concerning refund or credit calculations, are necessary for both efficiency and consistency in reporting the required data. A description of changes to specific sections follows. Section The proposal updates a statutory citation. The proposal also adds subsection (b) derived from current 28 TAC , which is proposed for repeal. Placing these provisions in is more consistent with the subject matter of the applicability and scope of Insurance Code Chapter This proposed new subsection states that policies and certificates delivered or issued for delivery before June 1, 2010, are subject to the laws and rules as they existed at the time the policy was delivered or issued for delivery, and those sections are continued in effect for that purpose. Section The proposal adds a new definition to for "2020 newly eligible individual" for consistency with how such an individual is defined under MACRA, 42 U.S.C. 1395ss(z)(2), and it renumbers the remaining definitions as appropriate to reflect the addition of the new definition. The proposal also updates statutory citations in proposed new paragraph (20) to reflect the nonsubstantive recodification of the Insurance Code. Section The proposal updates administrative code citations in paragraph (11) to be consistent with as proposed. Section The proposal updates administrative code citations in subsections (a) and (d) to be consistent with as proposed. Section The proposal conforms to amendments made by MACRA that prohibit the sale of Medicare supplement plans that cover Part B deductibles to a newly eligible Medicare beneficiary. The proposal adds a new subsection (a) and redesignates the subsections that follow it to reflect this change. The following descriptions address the subsections as redesignated, unless stated otherwise. Proposed new subsection (a)(1) clarifies that the standards and requirements of subsections (b) and (c) apply to all Medicare supplement policies or certificates delivered or issued for delivery to 2020 newly eligible individuals, with the exception of subsections (b)(3)(c), (c)(5)(c), (c)(5)(e), and (c)(5)(f). The proposal further clarifies that 2020 newly eligible individuals are only eligible to purchase standardized Medicare supplement benefit plans A, B, D, G, High Deductible G, K, L, M, and N. The proposal states that standardized Medicare supplement plans C, F, and High Deductible F may not be offered to 2020 newly eligible individuals. The proposal further states in subsections (b) and (c) that benefit standards applicable to Medicare supplement policies and certificates issued or issued for delivery with an effective date before June 1, 2010, remain subject to the laws and rules in effect when the policy or certificate was delivered or issued for delivery. The proposal makes a correction to a citation in subsection (b)(1)(e)(iii) by changing "(iv)" to "(v)." This proposed amendment is necessary because the citation is inconsistent with the citation reference in the NAIC Model Rule. The proposal adds new subsection (b)(1)(e)(vi), which provides that if an individual is a Texas certificate holder in a group Medicare supplement policy and the individual moves out of the state where the certificate was issued, the issuer may replace the Texas certificate with a certificate of the same standardized benefit plan type, approved by the new state of residence, if the issuer treats all certificate holders who move out of state uniformly. The proposal adds the words "G with High Deductible" in subsection (b)(2) and clarifies that (c)(1)(b)(i) applies to any individual who first became eligible for Medicare before January 1, The proposal adds new subsection (c)(5)(h) to provide the standardized plan requirements for Plan G with High Deductible. To streamline and simplify the rules, the proposal deletes current subsections (c) and (d), concerning benefit standards for 1990 Standardized Medicare supplement benefit plans, policies, or certificates, and specific references to these plans and prestandardized Medicare supplement benefit plans. However, as stated in proposed (b), these plans remain subject to the laws and rules in effect when the policy or certificate was delivered or issued for delivery. For consistency with the proposed new outline of coverage, the proposal updates deductible and out-of-pocket limit amounts to reflect 2017 coverage levels, as published by CMS. The proposal also updates administrative code citations to reflect the proposed redesignations within the section. Section The proposal revises (f) to state that an issuer must use the online data reporting form found on the department s website concerning calculations to electronically submit the required data no later than May 31st of each year. The proposal also deletes the current Figure: 28 TAC (f) and replaces it with a proposed new Figure: 28 TAC (f) to improve the clarity of the language and grammar within the form and to add a checkbox that enables an issuer with no data to report to automatically populate zeros in all relevant form fields. The proposal also updates the statutory citation in subsection (g) to reflect the nonsubstantive recodification of the Insurance Code. Section The proposal deletes (c)(2)(F), relating to Outline of Coverage form, relating to policies sold with an effective date for coverage before June 1, 2010, and on or after March 1, 1992, and repeals Form No. LHL 050 Rev. 12/04. The proposal amends subsection (c)(2)(e), concerning the Outline of Coverage form, Form No. LHL 050 Rev. 06/09, applicable to policies with an effective date for coverage of June 2010 or later. The proposal also repeals LHL 050 Rev. 06/09 and creates an updated version of the form titled "LHL 050 Rev. 12/17." Proposed new LHL 050 Rev. 12/17 includes disclosure provisions that were inadvertently excluded from LHL 050 Rev. 06/09 that address limitations and exclusions, refund of premium, and grievance procedures, which are consistent with subsections (c)(2)(b)-(d). The proposed new form also reflects proposed amendments to , by including a new benefit chart of Medicare supplement plans sold on or after January 1, 2020, PROPOSED RULES December 22, TexReg 7261

24 and by modifying the Plan G summary to reflect the new high deductible option. The proposal makes nonsubstantive editorial and formatting changes to conform to the agency's current style and to improve the rule's clarity. The proposal also updates an administrative code citation at subsection (a)(4)(c) to reflect as proposed. In order to provide adequate time for issuers to make changes to the outline of coverage and file new forms, consistent with LHL 050 Rev. 12/17, proposed (c)(2)(E) indicates that issuers are not required to begin using the proposed new form until July 1, Section The proposal amends (c) to clarify the products that 2020 newly eligible individuals are entitled to purchase under the guaranteed issue provisions. Section The proposal updates a statutory citation to reflect the nonsubstantive recodification of the Insurance Code. Section The proposal updates a statutory citation to reflect the nonsubstantive recodification of the Insurance Code. Section The proposal repeals current Proposed amendments to (b) incorporate some of the provisions repealed in , as previously described. Section The proposal corrects a citation to include the full name of a section title and updates a statutory citation to reflect the nonsubstantive recodification of the Insurance Code. Section The proposal deletes outdated language related to enrollment prior to The proposal also updates an administrative code citation in subsection (d), consistent with proposed In addition to the proposed changes previously described, the proposal makes nonsubstantive editorial and formatting changes in , , , , , , , , , , and This proposal includes provisions related to NAIC model rules, regulations, directives, or standards, and, the department must consider whether authority exists to enforce or adopt NAIC model rules, regulations, directives, or standards under Insurance Code and The department has determined that Insurance Code and do not prohibit the proposed amendments because Insurance Code provides that, in addition to other rules required or authorized by Chapter 1652, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter These rules include those adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to retain certification as a state with an approved regulatory program for Medicare supplement insurance. FISCAL NOTE AND LOCAL EMPLOYMENT IMPACT STATE- MENT. Patricia Brewer, team lead for the Life and Health Regulatory Initiatives Team, has determined that for each year of the first five years the proposed amendments and repeal will be in effect, there will be no measureable fiscal impact on state and local governments as a result of the enforcement or administration of this proposal. Ms. Brewer does not anticipate any measurable effect on local employment or the local economy as a result of this proposal. PUBLIC BENEFIT AND COST NOTE. For each of the first five years the proposed amendments and repeal are in effect, Ms. Brewer expects that administering and enforcing the proposed amendments and repeal will have the public benefits of: (1) ensuring that the department's rules and outline-of-coverage form comply with Insurance Code , , , , , and in order to retain certification as a state with an approved regulatory program for Medicare supplement insurance; (2) adopting a new refund calculation data reporting form that will ease issuers reporting and submission process; and (3) ensuring that Texas certificate holders who move to a different state retain the same standardized benefit plan type when the issuer satisfies certain requirements concerning certificate holders who move to a different state. Ms. Brewer expects that the proposed amendments and repeal will not increase the cost of compliance with Insurance Code Chapter 1652 because it does not impose requirements beyond those under state and federal law. Insurance Code provides that, in addition to other rules required or authorized by this chapter, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter 1652, including rules adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to retain certification as a state with an approved regulatory program for Medicare supplement insurance. Insurance Code provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. 1395ss. The standards may include provisions relating to terms of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law. Insurance Code (a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code (b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. 1395ss. Insurance Code provides, in part, that the rules adopted under must include provisions and requirements that are at least equal to those required by federal law, including the rules, regulations, and standards adopted under 42 U.S.C. 1395ss. Issuers are permitted, but not required, to replace a certificate issued in Texas with a certificate of the same standardized plan type approved in a certificate holder's new state of residence. Any associated cost is attributable to the issuer's decision to replace the certificate and does not result from the enforcement or administration of the proposed new subsection. Insurance Code (b) provides that the commissioner by rule must prescribe the format and content of the outline of coverage required by subsection (a). The rules must address the style, arrangement, and overall appearance of the outline of coverage, including the size, color, and prominence of type and the arrangement of text and captions. Issuers must update outline-of-coverage forms to comply with the proposed new LHL 050 Rev. 12/17 form and file the form with the department for review. The costs associated with implementation are the result of the enactment of MACRA and the 42 TexReg 7262 December 22, 2017 Texas Register

25 requirements under Insurance Code Chapter 1652 for the commissioner to adopt reasonable rules necessary and proper to carry out Chapter This includes model rules adopted under federal law relating to the regulation of Medicare supplement benefit plan coverage and that are necessary for this state to retain certification as a state with an approved regulatory program for Medicare supplement insurance. Therefore, the costs associated with changing the outline-of-coverage form do not result from the enforcement or administration of the proposed amendments and repeal. The department estimates that there are no measurable additional costs in the submission of the electronic refund calculation reporting form over the internet. Insurance Code (c) provides that the commissioner may adopt rules relating to filing requirements for rates, rating schedules, and loss ratios. The proposed amendment to require electronic submission of the refund calculation reporting form will benefit both the issuers reporting and the department. Issuers will not have to print and scan the reports to submit them to the department. The department will not have to print the reports to manually enter the information into the database, which is time consuming and can lead to data entry errors. Because of the integrated error checking, the department will spend less time corresponding with issuers about data errors. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEX- IBILITY ANALYSIS. The department has determined that the proposed amendments and repeal will not have an adverse economic effect or a disproportionate impact on small or micro businesses or on rural communities. Any costs are the result of implementation of federal and state law requirements, which do not permit lowered requirements for small businesses. Additionally, the proposal permits, but does not require, issuers to replace a Texas certificate with a certificate of the same standardized benefit plan type, approved by the new state of residence, when an individual who is a certificate holder in a group Medicare supplement policy moves out of the state. The proposed new refund calculation data reporting form requires electronic submission, which will ease the reporting and submission process and should result in no measurable costs to issuers. As a result, and in accordance with Government Code (c), the department is not required to prepare a regulatory flexibility analysis. EXAMINATION OF COSTS UNDER GOVERNMENT CODE The department has determined that the proposed amendments are required by and are consistent with federal law (MACRA) and Insurance Code Chapter 1652 and do not impose requirements on any individual or entity other than those imposed under federal and state laws. Any costs to such persons result from the federal enactment of MACRA and Insurance Code Chapter 1652 and are not the result of the adoption, enforcement, or administration of the proposed amendments and repeal. In addition, Government Code does not apply to this proposal because it is necessary to implement MACRA under Insurance Code , , , , , and 42 U.S.C. 1395ss to ensure that Texas retains certification as a state with an approved regulatory program for Medicare supplement insurance. TAKINGS IMPACT ASSESSMENT. The department has determined that no private real property interests are affected by this proposal and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code REQUEST FOR PUBLIC COMMENT. Submit any written comments on the proposal no later than 5:00 p.m., Central time, on January 22, 2018, by mail to the Office of the Chief Clerk, Mail Code 113-2A, Texas Department of Insurance, P.O. Box , Austin, Texas ; or by to chiefclerk@tdi.texas.gov. Simultaneously submit an additional copy of the comments to Patricia Brewer, Regulatory Initiatives Team, Life and Health Lines Office, Mail Code 106-1D, Texas Department of Insurance, P.O. Box , Austin, Texas ; or by to lhlcomments@tdi.texas.gov. Separately submit any request for a public hearing to the Texas Department of Insurance, Office of the Chief Clerk, Mail Code 113-2A, P.O. Box , Austin, Texas , or by to chiefclerk@tdi.texas.gov, before the close of the public comment period. If the department holds a hearing, the commissioner will consider written and oral comments presented at the hearing. 28 TAC , , , , STATUTORY AUTHORITY. The amended sections are proposed under Insurance Code , , , , , , and ; and 42 U.S.C. 1395ss. Insurance Code provides that, in addition to other rules required or authorized by this chapter, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter 1652, including rules adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to obtain or retain certification as a state with an approved regulatory program. Insurance Code provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. 1395ss. The standards may include provisions relating to terms of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law. Insurance Code (a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code (b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. 1395ss. Insurance Code (c) provides that the commissioner may adopt rules relating to filing requirements for rates, rating schedules, and loss ratios. Insurance Code provides, in part, that the rules adopted under must include provisions and requirements that are at least equal to those required by federal law, including the rules, regulations, and standards adopted under 42 U.S.C. 1395ss. Insurance Code (a) provides that for full and fair disclosure in the sale of Medicare supplement benefit plans, a Medi- PROPOSED RULES December 22, TexReg 7263

26 care supplement benefit plan or certificate may not be delivered or issued for delivery in Texas unless an outline of coverage that complies with is delivered to the applicant when the applicant applies for the coverage, and Insurance Code (b) provides that the commissioner by rule must prescribe the format and content of the outline of coverage required by (a). The rules must address the style, arrangement, and overall appearance of the outline of coverage, including the size, color, and prominence of type and the arrangement of text and captions. Insurance Code provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the department under the Insurance Code and other laws of Texas. Title 42 U.S.C. 1395ss(a)(2)(A) provides, in part, that no Medicare supplemental policy may be issued in a state on or after the date specified, unless the state s regulatory program provides for the application and enforcement of the NAIC Model Standards and requirements. CROSS REFERENCE TO STATUTE. Amendments to 28 TAC , , , , and affect Insurance Code , , , , , , and ; and 42 U.S.C. 1395ss Applicability and Scope. (a) Except as otherwise specifically provided, this subchapter applies to: (1) all Medicare supplement policies as defined in [the] Insurance Code [, Article 3.74, 1(b)(3),] and of this title (relating to Definitions) delivered or issued for delivery in this state on or after the effective date of this subchapter; and (2) all certificates issued under group Medicare supplement policies, for which certificates have been delivered or issued for delivery in this state regardless of the place where the policy was delivered or issued for delivery. In this subchapter, the required minimum standards for Medicare supplement insurance, which make specific reference to a policy or policies, are equally applicable to a group certificate or certificates. (b) Policies and certificates delivered or issued for delivery before June 1, 2010, are subject to the laws and rules as they existed at the time the policy was delivered or issued for delivery and those sections or portions of sections are continued in effect for that purpose Definitions. The following words and terms, when used in this subchapter, [shall] have the following meanings, unless the context clearly indicates otherwise. (1) 1990 Standardized Medicare supplement benefit plan, 1990 Standardized benefit plan, or 1990 plan--a group or individual policy of Medicare supplement insurance issued or issued for delivery on or after March 1, 1992, and with an effective date for coverage before [prior to] June 1, (2) 2010 Standardized Medicare supplement benefit plans, 2010 Standardized benefit plan, or 2010 plan--a group or individual policy of Medicare supplement insurance with an effective date for coverage on or after June 1, (3) 2020 newly eligible individual--an individual who is newly eligible for Medicare on or after January 1, 2020: (A) by reason of attaining age 65 on or after January 1, 2020; or (B) by reason of entitlement to benefits under Part A under section 42 U.S.C. 426(b) or 42 U.S.C , or who is deemed to be eligible for benefits under section 42 U.S.C. 426(a) on or after January 1, An individual who becomes Medicare eligible or turns 65 before January 1, 2020, is not a 2020 newly eligible individual. (4) [(3)] Applicant-- (A) In the case of an individual Medicare supplement policy, the person who seeks to contract for insurance or other health benefits. (B) In the case of a group Medicare supplement policy, the proposed certificate holder. (5) [(4)] Bankruptcy--The situation that occurs when a Medicare Advantage organization that is not an issuer has filed, or has had filed against it, a petition for declaration of bankruptcy and has ceased doing business in Texas [this state]. (6) [(5)] Certificate--Any certificate issued under a group Medicare supplement policy, for which a certificate has been delivered or issued for delivery in this state regardless of the place where the policy was delivered or issued for delivery. (7) [(6)] Continuous period of creditable coverage--the period during which an individual was covered by creditable coverage, if, during the period of the coverage, the individual had no breaks in coverage greater than 63 days. (8) [(7)] Creditable coverage--any coverage of an individual as defined in of this title (relating to Definitions). (9) [(8)] Employee welfare benefit plan--a plan, fund, or program of employee benefits as defined in 29 U.S.C [Section 1002] (Employee Retirement Income Security Act). (10) [(9)] Health Maintenance Organization (HMO)--An entity as defined in 42 U.S.C. 300e(a). (11) [(10)] Insolvency--The situation that [which] occurs when an issuer has had an order of liquidation entered against it with a finding of insolvency by a court of competent jurisdiction in the issuer's state of domicile. (12) [(11)] Issuer--An insurance company, fraternal benefit society, health care service plan, health maintenance organization, or any other entity delivering or issuing for delivery in this state Medicare supplement policies or certificates. (13) [(12)] Medicaid--Grants to States for Medical Assistance Programs, Title XIX of the Social Security Act Amendments of 1965 as then constituted or later amended [Then Constituted or Later Amended]. (14) [(13)] Medicare--The Health Insurance for the Aged Act, Title XVIII of the Social Security Act Amendments of 1965 as then constituted or later amended [Then Constituted or Later Amended]. (15) [(14)] Medicare Advantage organization--an entity as defined in 42 U.S.C. 1395w-28(a)(1). (16) [(15)] Medicare Advantage plan--a plan of coverage for health benefits under Medicare Part C as defined in 42 U.S.C. 1395w-28(b)(1), and includes: (A) coordinated care plans that [which] provide health services, including but not limited to HMO [health maintenance organization] plans (with or without a point of service [point-of-service] 42 TexReg 7264 December 22, 2017 Texas Register

27 option), plans offered by provider-sponsored organizations, and preferred provider organization plans; (B) medical savings account plans coupled with a contribution into a Medicare Advantage medical savings account; and (C) Medicare Advantage private fee-for-service plans. (17) [(16)] Medicare Advantage private fee-for-service plan--an entity as defined in 42 U.S.C. 1395w-28(b)(2). (18) [(17)] MMA--The Medicare Prescription Drug, Improvement, and Modernization Act of (19) [(18)] Medicare Select policy or Medicare Select certificate--a Medicare supplement policy or certificate, respectively, that contains restricted network provisions. (20) [(19)] Medicare supplement policy--a group or individual policy of accident and sickness insurance or a subscriber contract of a group hospital service corporation subject to [the] Insurance Code[,] Chapter 842 (concerning Group Hospital Service Corporations) [20], or, to the extent required by federal law, an evidence of coverage issued by an HMO [a health maintenance organization] subject to Insurance Code Chapter 843 (concerning Health Maintenance Organizations) [the Texas Health Maintenance Organization Act], for which a policy, subscriber contract, or [such] evidence of coverage is advertised, marketed, or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical, or surgical expenses of persons eligible for Medicare. The term does not include: (A) a policy, contract, subscriber contract, or evidence of coverage of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or combination thereof, or for members or former members, or combination thereof, of the labor organizations; (B) a policy or health care benefit plan including a policy or contract of group insurance or group contract of a group hospital service corporation subject to [the] Insurance Code[,] Chapter 842 [20], or group evidence of coverage issued by an HMO [a health maintenance organization] subject to Insurance Code Chapter 843 [the Health Maintenance Organization Act], when such policy or plan is not marketed or held to be a Medicare supplement policy or benefit plan; or (C) an individual or group evidence of coverage issued under [pursuant to] a contract in accordance with [under] the Federal Social Security Act, 1876 (42 U.S.C. 1395, et seq.) by an HMO [a health maintenance organization] subject to Insurance Code Chapter 843 [the Texas Health Maintenance Organization Act (Texas Insurance Code, Chapters 20A and 843)]; (D) a Medicare Advantage plan established under Medicare Part C; (E) an Outpatient Prescription Drug plan established under Medicare Part D; or (F) a Health Care Prepayment Plan (HCPP) that provides benefits under [pursuant to] an agreement under 1833(a)(1)(A) of the Federal Social Security Act (42 U.S.C. 1395, et seq.) (21) [(20)] Point of service [Point-of-service]--A benefit option as defined in 42 C.F.R (22) [(21)] Pre-Standardized Medicare supplement benefit plan, Pre-Standardized benefit plan or Pre-Standardized plan--a group or individual policy of Medicare supplement insurance issued or issued for delivery before [prior to] March 1, (23) [(22)] Provider-sponsored [Sponsored] organization- -An entity as defined in 42 U.S.C. 1395w-25(d)(1). (24) [(23)] Qualified actuary--an actuary who is a member of either the Society of Actuaries or the American Academy of Actuaries. (25) [(24)] Secretary--The Secretary of the United States Department of Health and Human Services Policy Definitions and Terms. No insurance policy, subscriber contract, certificate, or evidence of coverage may be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy unless the [such] policy, subscriber contract, certificate, or evidence of coverage contains definitions or terms that [which] conform to the requirements of this section. (1) "Accident[,]" or "Accidental Injury[,]" or "Accidental Means" must [shall] be defined to employ "result" language and may [shall] not include words that [which] establish an accidental means test or use words such as "external, violent, visible wounds," or similar words of description or characterization. (A) The definition may [shall] not be more restrictive than the following: "Injury or injuries for which benefits are provided means accidental bodily injury sustained by the insured person that [which] is the direct result of an accident, independent of disease or bodily infirmity or any other cause, and occurs while insurance or health coverage is in force." (B) The definition may provide that injuries do not include injuries for which benefits are provided under any workers' compensation, employer's liability, or similar law, or motor vehicle no-fault plan, unless prohibited by law. (2) "Benefit Period" or "Medicare Benefit Period" may not be defined as more restrictive than as that defined in the Medicare program. (3) "Convalescent Nursing Home," "Extended Care Facility," or "Skilled Nursing Facility" may [shall] not be defined more restrictively than as defined in the Medicare program. (4) "Health Care Expenses" are, for purposes of of this title [chapter] (relating to Loss Ratio Standards and Refund or Credit of Premiums), those expenses of health maintenance organizations associated with the delivery of health care services and analogous to incurred losses of insurers. (5) "Hospital" may be defined in relation to its status, facilities, and available services, or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals, but not more restrictively than as defined in the Medicare program. (6) "Medicare" must [shall] be defined in the policy, certificate, or evidence of coverage. Medicare may be substantially defined as "The Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965 as then constituted or later amended [Then Constituted or Later Amended]" or "Title I, Part I of Public Law 89-97, as enacted [Enacted] by the 89th Congress of the United States of America and popularly known as the Health Insurance for the Aged Act, as then constituted, and any later amendments or substitutes." [thereof," or words of similar import.] (7) "Medicare-Approved [Medicare Approved] Amounts" refer to the level of service or amount of health care reimbursement recognized and approved for a particular medical or health care service or procedure by Medicare. (8) "Medicare-Eligible [Medicare Eligible] Expenses" are health care expenses of the kinds covered by Medicare Parts A and PROPOSED RULES December 22, TexReg 7265

28 B, to the extent recognized as reasonable and medically necessary by Medicare. (9) "Nurses" may be defined so that the description of nurse is restricted to a type of nurse, such as registered graduate professional nurse (RN), a licensed practical nurse (LPN), or a licensed vocational nurse (LVN). If the words "nurse," "trained nurse," or "registered nurse" are used without specific instruction, then the use of the [such] terms requires the issuer to recognize the services of any individual who qualifies under such terminology in accordance with the applicable statutes or administrative rules of the Texas Board of Nursing [licensing or registry board of Texas]. (10) "Physician" may [shall] not be defined more restrictively than as defined in the Medicare program. An issuer must recognize and accept, to the extent of its obligation under the contract, all providers of medical care and treatment, when such services are within the scope of the provider's licensed authority and are provided under [pursuant to] applicable laws. (11) "Sickness" may [shall] not be defined to be more restrictive than the following: "Sickness means illness or disease of a covered person that [which] first manifests itself after the effective date of insurance or health coverage and while the insurance or health coverage is in force." The definition may [shall] not be construed to limit (b)(1) of this title (relating to Minimum Benefit Standards). The definition may be further modified to exclude sicknesses or diseases for which benefits are provided under any workers' compensation, occupational disease, employer's liability, or similar law Policy Provisions. (a) Except for permitted preexisting [pre-existing] condition clauses described in (b)(1)(A) of this title (relating to Minimum Benefit Standards), no policy or certificate may be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than those of Medicare. (b) No Medicare supplement policy or certificate may use waivers to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions. (c) No Medicare supplement policy, contract, or certificate in force in this state may [shall] contain benefits that [which] duplicate benefits provided by Medicare. (d) Subject to (b)(1)(D) and (E) of this title, a Medicare supplement policy with benefits for outpatient prescription drugs in existence before [prior to] January 1, 2006, must [shall] be renewed for current policyholders who do not enroll in Part D at the option of the policyholder. (e) A Medicare supplement policy with benefits for outpatient prescription drugs may [shall] not be issued after December 31, (f) After December 31, 2005, a Medicare supplement policy with benefits for outpatient prescription drugs may not be renewed after the policyholder enrolls in Medicare Part D unless: (1) the policy is modified to eliminate outpatient prescription coverage for expenses of outpatient prescription drugs incurred after the effective date of the individual's coverage under a Part D plan; and (2) premiums are adjusted to reflect the elimination of outpatient prescription drug coverage at the time of Medicare Part D enrollment, accounting for any claims paid, if applicable Minimum Benefit Standards. (a) Benefit standards for standardized Medicare supplement benefit plan policies or certificates issued to 2020 newly eligible individuals. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) provides that no policy or certificate that provides coverage of the Medicare Part B deductible may be advertised, solicited, delivered, or issued for delivery in this state as a Medicare supplement policy or certificate to individuals newly eligible for Medicare on or after January 1, Benefit standards applicable to Medicare supplement policies and certificates issued to individuals eligible for Medicare before January 1, 2020, remain subject to the requirements of subsections (b) and (c) of this section. All policies issued to a 2020 newly eligible individual, as defined in this subchapter, must comply with the following benefit standards: (1) Benefit requirements. The standards and requirements of subsections (b) and (c) of this section apply to all Medicare supplement policies or certificates delivered or issued for delivery to 2020 newly eligible individuals, with the exception of subsections (b)(3)(c), (c)(5)(c), (c)(5)(e), and (c)(5)(f) of this section. (2) Eligibility to purchase. A 2020 newly eligible individual is only eligible to purchase standardized Medicare supplement benefit plans A, B, D, G, High Deductible G, K, L, M, and N. Standardized Medicare supplement benefit plans C, F, and High Deductible F may not be offered to 2020 newly eligible individuals. (b) [(a)] Benefit standards for 2010 standardized Medicare supplement benefit plan policies or certificates issued or issued for delivery with an effective date for coverage on or after [Standards for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued or Issued for Delivery with an Effective Date for Coverage on or After] June 1, This section specifies the minimum standards applicable to all Medicare supplement policies or certificates issued or issued for delivery in this state with an effective date for coverage on or after June 1, No insurance policy, subscriber contract, certificate, or evidence of coverage may be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy unless the policy, contract, certificate, or evidence of coverage meets the applicable standards in paragraphs (1) - (3) of this subsection. No issuer may offer or issue any 1990 Standardized Medicare supplement benefit plan for sale on or after June 1, Benefit standards applicable to Medicare supplement policies and certificates issued or issued for delivery with an effective date before [prior to] June 1, 2010, remain subject to the laws and rules in effect when the policy or certificate was delivered or issued for delivery [requirements of subsections (c) and (d) of this section]. These are minimum standards and do not prevent [preclude] the inclusion of other provisions or benefits that [which] are not inconsistent with these standards. (1) General standards. The following standards apply to Medicare supplement policies and certificates and are in addition to all other requirements of this subchapter, [the] Insurance Code Chapter 1652, and any other applicable law. (A) A Medicare supplement policy or certificate must [shall] not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage. (i) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer must [shall] waive any time [periods] applicable to preexisting condition waiting periods, elimination periods, and probationary peri- 42 TexReg 7266 December 22, 2017 Texas Register

29 ods in the new Medicare supplement policy or certificate to the extent the [such] time was spent under the original policy. (ii) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate which has been in effect for at least six months, the replacing policy or certificate must [shall] not provide any time period applicable to preexisting conditions, waiting periods, elimination periods, and probationary periods for benefits. (iii) If a Medicare supplement policy or certificate is issued or issued for delivery to an applicant who qualifies under (b) of this title [subchapter] (relating to Guaranteed Issue for Eligible Persons) or (a) of this title [subchapter] (relating to Open Enrollment), the issuer must [shall] reduce the period of any preexisting condition exclusion as required by (a)(2) of this subchapter and (c) and (d) of this title [subchapter]. (B) A Medicare supplement policy or certificate may [shall] not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents. (C) A Medicare supplement policy or certificate must [shall] provide that benefits designed to cover cost-sharing [cost sharing] amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible, copayment, or coinsurance amounts. Premiums may be modified to correspond with such changes. (D) A [No] Medicare supplement policy or certificate may not: [shall] (i) provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium;[,] or (ii) be canceled [cancelled] or nonrenewed by the insurer solely on the grounds of deterioration of health. (E) Each Medicare supplement policy must [shall] be guaranteed renewable and must [shall] comply with the provisions of clauses (i) - (vi) [(v)] of this subparagraph. (i) The issuer may [shall] not cancel or nonrenew the policy solely on the ground of health status of the individual. (ii) The issuer may [shall] not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation. (iii) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided in clause (v) [(iv)] of this subparagraph, the issuer must [shall] offer certificate holders an individual Medicare supplement policy that, [which] at the option of the certificate holder: (I) provides for continuation of the benefits contained in the group policy; or (II) provides for benefits that otherwise meet the requirements of this subparagraph. (iv) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer must [shall]: (I) offer the certificate holder the conversion opportunity described in clause (iii) of this subparagraph; or (II) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy. (v) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy must [shall] offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy may [shall] not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced. (vi) If an individual is issued a certificate in Texas in a group Medicare supplement policy and the individual moves out of the state, the issuer may replace the Texas certificate with a certificate of the same standardized benefit plan type, approved by the new state of residence, if the issuer acts uniformly in its treatment of certificate holders who move out of Texas. (F) Termination of a Medicare supplement policy or certificate must [shall] be without prejudice to any continuous loss that [which] commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be conditioned on [upon] the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits must not be considered in determining a continuous loss. (G) A Medicare supplement policy or certificate must [shall] comply with clauses (i) - (iv) of this subparagraph: (i) A Medicare supplement policy or certificate must [shall] provide that benefits and premiums under the policy or certificate will [shall] be suspended at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to that assistance. (ii) If suspension occurs and if the policyholder or certificate holder loses entitlement to medical assistance, the policy or certificate must [shall] be automatically reinstituted effective as of the date of termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement. (iii) Each Medicare supplement policy must [shall] provide that benefits and premiums under the policy will [shall] be suspended (for any period that may be provided by federal regulation) at the request of the policyholder or certificate holder if the policyholder or certificate holder is entitled to benefits under Section 226(b) of the Social Security Act and is covered under a group health plan (as defined in Section 1862(b)(1)(A)(v) of the Social Security Act). If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy must [shall] be automatically reinstituted, effective as of the date of loss of coverage, if the policyholder or certificate holder provides notice of loss of coverage within 90 days after the date of the loss. (iv) Reinstitution of coverages must [shall] comply with subclauses (I) - (III) of this clause. (I) Reinstitution of coverage must [shall] not provide for any waiting period with respect to treatment of preexisting conditions. (II) Reinstitution of coverage must [shall] provide for resumption of coverage that is substantially equivalent to coverage in effect before the date of suspension. PROPOSED RULES December 22, TexReg 7267

30 (III) Reinstitution of coverage must [shall] provide for classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended. (2) Standards for basic (core) benefits common [Basic (Core) Benefits Common] to Medicare supplement insurance benefit plans [Supplement Insurance Benefit Plans] A, B, C, D, F, F with High Deductible, G, G with High Deductible, M, and N. Every issuer of Medicare supplement insurance benefit plans must [shall] make available a policy or certificate including only the following basic "core" package of benefits to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare Supplement Insurance Benefit Plans in addition to the basic core package, but not instead [in lieu] of it. These plans include: (A) coverage of Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period; (B) coverage of Part A Medicare eligible expenses incurred for hospitalization to the extent not covered by Medicare for each Medicare lifetime inpatient reserve day used; (C) on [upon] exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system (PPS) rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must [shall] accept the issuer's payment as payment in full and may not bill the insured for any balance; (D) coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood or equivalent quantities of packed red blood cells, as defined under federal regulations, unless replaced in accordance with federal regulations; (E) coverage for the coinsurance amount[,] or, in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount[,] of Medicare eligible expenses under Part B, regardless of hospital confinement, subject to the Medicare Part B deductible; (F) coverage of cost sharing for all Part A Medicareeligible [Medicare eligible] hospice care and respite care expenses. (3) Standards for additional benefits [Additional Benefits]. The following additional benefits must [shall] be included in Medicare supplement benefit Plans B, C, D, F, F with High Deductible, G, G with High Deductible, M, and N as provided by subsection (c) [(b)] of this section. (A) Medicare Part A Deductible: (i) coverage for 100 percent of the Medicare Part A inpatient hospital deductible amount per benefit period; or (ii) coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period. (B) Skilled nursing facility care [Nursing Facility Care]: coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A. (C) Medicare Part B deductible [Deductible]: coverage for 100 percent of the Medicare Part B deductible amount per calendar year regardless of hospital confinement. (D) One hundred percent [Hundred Percent] of the Medicare Part B excess charges [Excess Charges]: coverage for all of the difference between the actual Medicare Part B charges as billed, not to exceed any charge limitation established by the Medicare program or state law, and the Medicare-approved Part B charge. (E) Medically necessary emergency care in a foreign country [Necessary Emergency Care in a Foreign Country]: coverage to the extent not covered by Medicare for 80 percent of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which [care] would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, "emergency care" means [shall mean] care needed immediately because of an injury or an illness of sudden and unexpected onset. (c) [(b)] Standard Medicare supplement benefit plans for 2010 standardized Medicare supplement benefit plan policies or certificates issued or issued for delivery with an effective date for coverage on or after [Supplement Benefit Plans for 2010 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued or Issued for Delivery with an Effective Date for Coverage on or After] June 1, The following standards are applicable to all Medicare supplement policies or certificates issued or issued for delivery in this state with an effective date for coverage on or after June 1, No insurance policy, subscriber contract, certificate, or evidence of coverage may be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy unless the policy, contract, certificate, or evidence of coverage complies with these benefit plan standards. Benefit plan standards applicable to Medicare supplement policies and certificates issued or issued for delivery with an effective date for coverage before June 1, 2010, remain subject to the laws and rules in effect when the policy or certificate was delivered, or issued for delivery [requirements of subsections (c) and (d) of this section]. (1) An issuer of a Medicare supplement policy or certificate must [shall] comply with subparagraphs (A) and (B) of this paragraph: (A) An issuer must [shall] make available to each prospective policyholder and certificate holder a policy form or certificate form containing only the basic (core) benefits, as defined in subsection (b) [(a)](2) of this section. (B) If an issuer makes available any of the additional benefits described in subsection (b)[(a)](3) of this section, or offers standardized benefit Plans K or L (as described in paragraph (5)(I)[(H)] and (J)[(I)] of this subsection), then the issuer must [shall] make available to each prospective policyholder and certificate holder, in addition to a policy form or certificate form with only the basic (core) benefits as described in subparagraph (A) of this paragraph, a policy form or certificate form containing either: (i) standardized benefit Plan C (as described in paragraph (5)(C) of this subsection); or (ii) standardized benefit Plan F (as described in paragraph (5)(E) of this subsection), for any individual who first became eligible for Medicare before January 1, (2) No groups, packages, or combinations of Medicare supplement benefits other than those listed in this subsection may [shall] be offered for sale in this state, except as may be permitted in paragraph (6) of this subsection and in of this title [subchapter] (relating to Medicare Select Policies, Certificates, and Plans of Operation). 42 TexReg 7268 December 22, 2017 Texas Register

31 (3) Benefit plans must [shall] be uniform in structure, language, and format, as well as designation, to the standard benefit plans listed in this paragraph and conform to the definitions in of this title [subchapter] (relating to Definitions). Each benefit plan must [shall] be structured in accordance with the format provided in subsection (b)[(a)](2) and (b)(3) of this section[;] or, in the case of Plans K or L, in accordance with the format provided in paragraph (5)(I)[(H)] or (J)[(I)] of this subsection,[;] and list the benefits in the order shown. For purposes of this subsection, "structure, language, and format" means style, arrangement, and overall content of a benefit. (4) In addition to the benefit plan designations required in paragraph (3) of this subsection, an issuer may use other designations to the extent permitted by law. (5) The make-up of 2010 Standardized Benefit Plans is as specified in subparagraphs (A) - (L) [(K)] of this paragraph. (A) Standardized Medicare supplement benefit Plan A must [shall] include only the following: The basic (core) benefits as defined in subsection (b)[(a)](2) of this section. (B) Standardized Medicare supplement benefit Plan B must [shall] include only the following: The basic (core) benefits as defined in subsection (b)[(a)](2) of this section, plus 100 percent of the Medicare Part A deductible as defined in subsection (b)[(a)](3)(a)(i) of this section. (C) Standardized Medicare supplement benefit Plan C must [shall] include only the following: The basic (core) benefits as defined in subsection (b)[(a)](2) of this section, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), (C), and (E) of this section, respectively. (D) Standardized Medicare supplement benefit Plan D must [shall] include only [the following]: The basic (core) benefits (as defined in subsection (b)[(a)](2) of this section), plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a [an] foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), and (E) of this section, respectively. (E) Standardized Medicare supplement (regular) Plan F must [shall] include only the following: The basic (core) benefits as defined in subsection (b) [(a)](2) of this section, plus 100 percent of the Medicare Part A deductible, the skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), (C), (D), and (E) of this section, respectively. (F) Standardized Medicare supplement Plan F with [With] High Deductible must [shall] include 100 percent of covered expenses following the payment of the annual deductible set forth in clause (ii) of this subparagraph. (i) The basic (core) benefits as defined in subsection (b)[(a)](2) of this section, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B deductible, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), (C), (D), and (E) of this section, respectively. (ii) The annual deductible in Plan F with [With] High Deductible must [shall] consist of out-of-pocket expenses, other than premiums, for services covered by regular Plan F, and must [shall] be in addition to any other specific benefit deductibles. The basis for the deductible is $2,200 for 2017, and will [shall be $1,500 and shall] be adjusted annually by the Secretary [of the U.S. Department of Health and Human Services] to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. (G) Standardized Medicare supplement benefit Plan G must [shall] include only the following: The basic (core) benefits as defined in subsection (b)[(a)](2) of this section, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), (D), and (E), respectively. Effective January 1, 2020, Plan G with a High Deductible, as described in subsection (c)(5)(h), may be offered to any individual who is eligible for Medicare before January 1, (H) Standardized Medicare supplement Plan G with High Deductible must include 100 percent of the covered expenses following the payment of the annual deductible set forth in clause (ii) of this subparagraph. (i) The basic (core) benefits as defined in subsection (b)(2) of this section, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, 100 percent of the Medicare Part B excess charges, and medically necessary emergency care in a foreign country as defined in subsection (b)(3)(a)(i), (B), (D), and (E), respectively. (ii) The annual deductible in Plan G with High Deductible must consist of out-of-pocket expenses, other than premiums, for services covered by regular Plan G, and must be in addition to any other specific benefit deductibles. The basis for the deductible is $2,200 for 2017, and will be adjusted annually by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the 12-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. (I) [(H)] Standardized Medicare supplement Plan K [is mandated by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and] must [shall] include only the following: (i) Part A hospital coinsurance [Hospital Coinsurance], 61st through 90th days: Coverage of 100 percent of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period; (ii) Part A hospital coinsurance [Hospital Coinsurance], 91st through 150th days: Coverage of 100 percent of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period; (iii) Part A hospitalization after [Hospitalization After] 150 days [Days]: On [Upon] exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100 percent of the Medicare Part A eligible expenses for hospitalization paid at the applicable PPS [prospective payment system (PPS)] rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider must [shall] accept the issuer's payment as payment in full and may not bill the insured for any balance; (iv) Medicare Part A deductible [Deductible]: Coverage for 50 percent of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in clause (x) of this subparagraph; PROPOSED RULES December 22, TexReg 7269

32 (v) Skilled nursing facility care [Nursing Facility Care]: Coverage for 50 percent of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for posthospital [post-hospital] skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in clause (x) of this subparagraph; (vi) Hospice care [Care]: Coverage for 50 percent of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in clause (x) of this subparagraph; (vii) Blood: Coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in clause (x) of this subparagraph; (viii) Part B cost sharing [Cost Sharing]: Except for coverage provided in clause (ix) of this subparagraph, coverage for 50 percent of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in clause (x) of this subparagraph; (ix) Part B preventive services [Preventive Services]: Coverage of 100 percent of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and (x) Cost sharing after out-of-pocket limits [Sharing After Out-of-Pocket Limits]: Coverage of 100 percent of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $5,120 in 2017 [$4000 in 2006], indexed each year by the appropriate inflation adjustment specified by the Secretary [of the U.S. Department of Health and Human Services]. (J) [(I)] Standardized Medicare supplement Plan L must [is mandated by The Medicare Prescription Drug, Improvement and Modernization Act of 2003, and shall] include only the following: (i) the benefits described in subparagraph (I)[(H)](i), (ii), (iii), and (ix) of this paragraph; (ii) the benefit described in subparagraph (I)[(H)](iv), (v), (vi), (vii), and (viii) of this paragraph, but substituting 75 percent for 50 percent; and (iii) the benefit described in subparagraph (I)[(H)](x) of this subsection, but substituting $2,560 for $5,120 [$2000 for $4000]. (K) [(J)] Standardized Medicare supplement Plan M must [shall] include only the following: The basic (core) benefit as defined in subsection (b)[(a)](2) of this section, plus 50 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(ii), (B), and (E) of this section, respectively. (L) [(K)] Standardized Medicare supplement Plan N must [shall] include only the following: The basic (core) benefit as defined in subsection (b)[(a)](2) of this section, plus 100 percent of the Medicare Part A deductible, skilled nursing facility care, and medically necessary emergency care in a foreign country as defined in subsection (b)[(a)](3)(a)(i), (B), and (E) of this section, respectively, with copayments in the following amounts: (i) the lesser of $20 or the Medicare Part B coinsurance or copayment for each covered health care provider office visit (including visits to medical specialists); and (ii) the lesser of $50 or the Medicare Part B coinsurance or copayment for each covered emergency room visit; however, this copayment must [shall] be waived if the insured is admitted to any hospital and the emergency visit is subsequently covered as a Medicare Part A expense. (6) An issuer may, with the prior approval of the commissioner, offer policies or certificates with new or innovative benefits, in addition to the standardized benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may [shall] include only benefits that are appropriate to Medicare supplement insurance, are new or innovative, are not otherwise available, and are cost effective [cost-effective]. Approval of new or innovative benefits must not adversely impact the goal of Medicare supplement simplification. New or innovative benefits may [shall] not include an outpatient prescription drug benefit. New or innovative benefits may [shall] not be used to change or reduce benefits, including a change of any cost-sharing provision, in any standardized plan. [(c) Benefit Standards for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued or Issued for Delivery on or After March 1, 1992, and with an Effective Date for Coverage Prior to June 1, No insurance policy, subscriber contract, certificate, or evidence of coverage may be advertised, solicited, or issued for delivery in this state as a Medicare supplement policy unless the policy, contract, certificate, or evidence of coverage meets the applicable standards in paragraphs (1) - (3) of this subsection. These are minimum standards and do not preclude the inclusion of other provisions or benefits which are not inconsistent with these standards.] [(1) General standards. The following standards apply to Medicare supplement policies and are in addition to all other requirements of this subchapter, the Insurance Code Chapter 1652, and any other applicable law.] [(A) A Medicare supplement policy shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because they involved a preexisting condition. The policy or certificate may not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.] [(i) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate, the replacing issuer shall waive any time periods applicable to preexisting condition waiting periods, elimination periods, and probationary periods in the new Medicare supplement policy or certificate to the extent such time was spent under the original policy.] [(ii) If a Medicare supplement policy or certificate replaces another Medicare supplement policy or certificate which has been in effect for at least six months, the replacing policy or certificate shall not provide any time period applicable to preexisting conditions, waiting periods, elimination periods and probationary periods for benefits.] [(iii) If a Medicare supplement policy or certificate is issued or issued for delivery to an applicant who qualifies under (b) of this subchapter or (a) of this subchapter, the issuer shall reduce the period of any preexisting condition exclusion as required by (a)(2) of this subchapter and (c) and (d) of this subchapter.] 42 TexReg 7270 December 22, 2017 Texas Register

33 [(B) A Medicare supplement policy may not indemnify against losses resulting from sickness on a different basis than losses resulting from accidents.] [(C) A Medicare supplement policy shall provide that benefits designed to cover cost sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible amount and copayment percentage factors. Premiums may be modified to correspond with such changes.] [(D) No Medicare supplement policy shall provide for termination of coverage of a spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than the nonpayment of premium, or be cancelled or nonrenewed by the insurer solely on the grounds of deterioration of health.] [(E) Each Medicare supplement policy shall be guaranteed renewable and shall comply with the provisions of clauses (i) - (v) of this subparagraph.] [(i) The issuer shall not cancel or nonrenew the policy for any reason other than nonpayment of premium or material misrepresentation.] [(ii) If the Medicare supplement policy is terminated by the group policyholder and is not replaced as provided in clause (iv) of this subparagraph, the issuer shall offer certificate holders Medicare supplement coverage which provides benefits as set out in subclause (I) or (II) of this clause, as follow:] [(I) an individual Medicare supplement policy which (at the option of the certificate holder):] [(-a-) provides for continuation of the benefits contained in the group policy; or] [(-b-) provides for benefits that otherwise meet the requirement of this paragraph; or] [(II) continuation of benefits under the group plan until there are no longer any certificate holders remaining who have opted for continuation of benefits under the group policy terminated by the policyholder.] [(iii) If an individual is a certificate holder in a group Medicare supplement policy and the individual terminates membership in the group, the issuer shall:] [(I) offer the certificate holder conversion opportunity described in clause (ii) of this subparagraph; or] [(II) at the option of the group policyholder, offer the certificate holder continuation of coverage under the group policy.] [(iv) If a group Medicare supplement policy is replaced by another group Medicare supplement policy purchased by the same policyholder, the issuer of the replacement policy shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new policy shall not result in any exclusion of preexisting conditions that would have been covered under the group policy being replaced.] [(v) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the MMA, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this paragraph.] [(F) Termination of a Medicare supplement policy shall be without prejudice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period during which the policy was in force may be predicated upon the continuous total disability of the insured, limited to the duration of the policy benefit period, if any, or payment of the maximum benefits. Receipt of Medicare Part D benefits will not be considered in determining a continuous loss.] [(G) A Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended at the request of the policyholder or certificate holder for the period (not to exceed 24 months) in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under Title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of such policy or certificate within 90 days after the date the individual becomes entitled to such assistance.] [(i) If suspension occurs and if the policyholder or certificate holder loses entitlement to medical assistance, the policy or certificate shall be automatically reinstituted (effective as of the date of termination of entitlement) as of the termination of entitlement if the policyholder or certificate holder provides notice of loss of entitlement within 90 days after the date of loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.] [(ii) Each Medicare supplement policy or certificate shall provide that benefits and premiums under the policy or certificate shall be suspended (for any period that may be provided by federal regulation) at the request of the policyholder or certificate holder if the policyholder or certificate holder is entitled to benefits under Section 226(b) of the Social Security Act and is covered under a group health plan (as defined in Section 1862(b)(1)(A)(v) of the Social Security Act). If suspension occurs and if the policyholder or certificate holder loses coverage under the group health plan, the policy or certificate shall be automatically reinstated (effective as of the date of loss of coverage) if the policyholder or certificate holder provides notice of loss of coverage within 90 days after the date of such loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.] [(iii) for the following:] Reinstitution of such coverages shall provide [(I) waiver of any waiting period with respect to treatment of preexisting conditions;] [(II) resumption of coverage which is substantially equivalent to coverage in effect before the date of such suspension. If the suspended Medicare supplement policy provided coverage for outpatient prescription drugs, reinstitution of the policy for Medicare Part D enrollees shall be without coverage for outpatient prescription drugs and shall otherwise provide substantially equivalent coverage to the coverage in effect before the date of the suspension; and] [(III) classification of premiums on terms at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had the coverage not been suspended.] [(H) If a Medicare supplement policy eliminates an outpatient prescription drug benefit as a result of requirements imposed by the MMA, the modified policy shall be deemed to satisfy the guaranteed renewal requirements of this paragraph.] [(2) Standards for the basic (core) benefits common to benefit plans A - J. Every issuer shall make available a policy or certificate including only the basic "core" package of benefits described in subparagraphs (A) - (E) of this paragraph to each prospective insured. An issuer may make available to prospective insureds any of the other Medicare supplement insurance benefit plans in addition to the basic core package, but not in lieu of it. The basic core benefits shall consist of the following:] PROPOSED RULES December 22, TexReg 7271

34 [(A) coverage for Part A Medicare eligible expenses for hospitalization to the extent not covered by Medicare from the 61st day through the 90th day in any Medicare benefit period;] [(B) coverage for Part A Medicare eligible expenses, to the extent not covered by Medicare, incurred as daily hospital charges during use of Medicare lifetime hospital inpatient reserve days;] [(C) upon exhaustion of all Medicare hospital inpatient coverage including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;] [(D) coverage under Medicare Parts A and B for the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulation) unless replaced in accordance with federal regulation; and] [(E) coverage for the coinsurance amount (or in the case of hospital outpatient department services paid under a prospective payment system, the copayment amount) of Medicare eligible expenses under Part B regardless of hospital confinement, subject to the Medicare Part B deductible.] [(3) Standards for Additional Benefits. The additional benefits as uniformly defined in subparagraphs (A) - (J) of this paragraph and in subsection (d)(2)(o) of this section shall be included in Medicare Supplement Benefit Plans "B" through "J" only as provided in subsection (d)(2)(a) - (I) of this section.] [(A) Medicare Part A Deductible--Coverage for all of the Medicare Part A inpatient hospital deductible amount per benefit period.] [(B) Skilled Nursing Facility Care--Coverage for the actual billed charges up to the coinsurance amount from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A.] [(C) Medicare Part B Deductible--Coverage for all of the Medicare Part B deductible amount per calendar year regardless of hospital confinement.] [(D) Eighty Percent of the Medicare Part B Excess Charges--Coverage for 80% of the difference between the actual Medicare Part B charge as billed and the Medicare-approved Part B charge, not to exceed any charge limitation established by the Medicare program or state law.] [(E) One Hundred Percent of the Medicare Part B Excess Charges--Coverage for all of the difference between the actual Medicare Part B charge as billed and the Medicare-approved Part B charge, not to exceed any charge limitation established by the Medicare program or state law.] [(F) Basic Outpatient Prescription Drug Benefit--Coverage for 50% of outpatient prescription drug charges, after a $250 calendar year deductible, to a maximum of $1,250 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.] [(G) Extended Outpatient Prescription Drug Benefit-- Coverage for 50% of outpatient prescription drug charges, after a $250 calendar year deductible to a maximum of $3,000 in benefits received by the insured per calendar year, to the extent not covered by Medicare. The outpatient prescription drug benefit may be included for sale or issuance in a Medicare supplement policy until January 1, 2006.] [(H) Medically Necessary Emergency Care in a Foreign Country--Coverage to the extent not covered by Medicare for 80% of the billed charges for Medicare-eligible expenses for medically necessary emergency hospital, physician, and medical care received in a foreign country, which care would have been covered by Medicare if provided in the United States and which care began during the first 60 consecutive days of each trip outside the United States, subject to a calendar year deductible of $250, and a lifetime maximum benefit of $50,000. For purposes of this benefit, "emergency care" shall mean care needed immediately because of an injury or an illness of sudden and unexpected onset.] [(I) Preventive Medical Care Benefit or Services--Coverage for the preventive health services described in clauses (i) and (ii) of this subparagraph. Coverage for preventive medical care benefits or services shall be for the actual charges up to 100% of the Medicare-approved amount for each service, as if Medicare were to cover the service as identified in American Medical Association Current Procedural Terminology (AMA CPT) codes, to a maximum of $120 annually under this benefit. This benefit shall not include payment for any procedure covered by Medicare:] [(i) an annual clinical preventive medical history and physical examination that may include tests and services from clause (ii) of this subparagraph and patient education to address preventive health care measures;] [(ii) preventive screening tests or preventive services, the selection and frequency of which are determined to be medically appropriate by the attending physician.] [(J) At-Home Recovery Benefit--Coverage for services to provide short-term, at-home assistance with activities of daily living for those recovering from an illness, injury, or surgery.] [(i) For purposes of this benefit, the following definitions in subclauses (I) - (IV) of this clause shall apply.] [(I) Activities of daily living include, but are not limited to, bathing, dressing, personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally self-administered, and changing bandages or other dressings.] [(II) Care provider means a duly qualified or licensed home health aide or homemaker, personal care aide, or nurse provided through a licensed home health care agency or referred by a licensed referral agency or licensed nurses registry.] [(III) Home shall mean any place used by the insured as a place of residence, provided that such place would qualify as a residence for home health care services covered by Medicare. A hospital or skilled nursing facility shall not be considered the insured's place of residence. ] [(IV) At-home recovery visit means the period of a visit required to provide at-home recovery care, without limit on the duration of the visit, except each consecutive four hours in a 24-hour period of services provided by a care provider is one visit.] [(ii) Coverage requirements and limitations.] [(I) At-home recovery services provided must be primarily services which assist in activities of daily living.] [(II) The insured's attending physician must certify that the specific type and frequency of at-home recovery services are necessary because of a condition for which a home care plan of treatment was approved by Medicare.] 42 TexReg 7272 December 22, 2017 Texas Register

35 [(III) Coverage is limited to:] [(-a-) no more than the number and type of at-home recovery visits certified as necessary by the insured's attending physician. The total number of at-home recovery visits shall not exceed the number of Medicare approved home health care visits under a Medicare approved home care plan of treatment;] [(-b-) the actual charges for each visit up to maximum coverage of $40 per visit;] [(-c-) $1,600 per calendar year;] [(-d-) seven visits in any one week;] [(-e-) care furnished on a visiting basis in the insured's home;] [(-f-) services provided by a care provider as defined in this section;] [(-g-) at-home recovery visits while the insured is covered under the policy or certificate and not otherwise excluded;] [(-h-) at-home recovery visits received during the period the insured is receiving Medicare approved home care services or no more than eight weeks after the service date of the last Medicare approved home health care visit.] [(iii) Coverage is excluded for:] [(I) home care visits paid for by Medicare or other government programs; and] [(II) care provided by family members, unpaid volunteers, or providers who are not care providers.] [(d) Standard Medicare Supplement Benefit Plans for 1990 Standardized Medicare Supplement Benefit Plan Policies or Certificates Issued or Issued for Delivery on or After March 1, 1992 and with an Effective Date for Coverage Prior to June 1, 2010.] [(1) Requirement of uniformity for all Medicare supplement benefit plans. An issuer shall make available only those groups, packages or combinations of Medicare supplement benefits as described in this section, unless otherwise permitted by provisions of paragraph (2)(O) of this subsection and in of this subchapter. Benefit plans shall be uniform in structure, language, designation and format to the standard benefit plan "A," defined as the basic core plan of benefits in subsection (c)(2) of this section and described in paragraph (2)(A) of this subsection, and benefit plans "B" through "J," described in paragraph (2)(B) - (L) of this subsection. All benefit plans shall conform to the definitions set out in of this subchapter and of this subchapter (relating to Policy Definitions and Terms). Each benefit shall be structured in accordance with the format provided in subsection (c)(2) and (3) of this section. Each benefit plan shall list the benefits in the order shown in paragraph (2)(A) - (L) of this subsection. For purposes of this paragraph, "structure, language, and format" means style, arrangement and overall content of a benefit. In addition to the benefit plan designations required in this paragraph, an issuer may use other designations to the extent permitted by law.] [(2) Make-up of Benefit Plans. Subparagraphs (A) - (O) of this paragraph set out the composition of benefit plans. Each benefit plan shall meet the requirements of this subchapter.] [(A) Standardized Medicare Supplement Benefit Plan "A." Medicare supplement benefit Plan "A" shall include only the Core Benefits common to All Benefit Plans, as defined in subsection (c)(2) of this section.] [(B) Standardized Medicare Supplement Benefit Plan "B." Medicare supplement benefit Plan "B" shall include only the Core Benefits as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible as defined in subsection (c)(3) of this section.] [(C) Standardized Medicare Supplement Benefit Plan "C." Medicare supplement benefit Plan "C" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible and Medically Necessary Emergency Care in a Foreign Country as defined in subsection (c)(3) of this section.] [(D) Standardized Medicare Supplement Benefit Plan "D." Medicare supplement benefit Plan "D" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and the At-Home Recovery Benefit as defined in subsection (c)(3) of this section.] [(E) Standardized Medicare Supplement Benefit Plan "E." Medicare supplement benefit Plan "E" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medically Necessary Emergency Care in a Foreign Country and Preventive Medical Care as defined in subsection (c)(3) of this section.] [(F) Standardized Medicare Supplement Benefit Plan "F." Medicare supplement benefit Plan "F" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, the Skilled Nursing Facility Care, the Part B Deductible, One Hundred Percent of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in subsection (c)(3) of this section.] [(G) Standardized Medicare Supplement Benefit High Deductible Plan "F." Medicare supplement benefit high deductible Plan "F" shall include only the following: 100% of covered expenses following the payment of the annual high deductible Plan "F" deductible. The covered expenses include the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, 100% of the Medicare Part B Excess Charges, and Medically Necessary Emergency Care in a Foreign Country as defined in subsection (c)(3) of this section. The annual high deductible Plan "F" deductible shall consist of outof-pocket expenses, other than premiums for services covered by the Medicare supplement Plan "F" policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan "F" deductible shall be $1500 for 1998 and 1999, and shall be based on the calendar year. It shall be adjusted annually thereafter by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10.] [(H) Standardized Medicare Supplement Benefit Plan "G." Medicare supplement benefit Plan "G" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Eighty Percent of the Medicare Part B Excess Charges, Medically Necessary Emergency Care in a Foreign Country, and the At-Home Recovery Benefit as defined in subsection (c)(3) of this section.] [(I) Standardized Medicare Supplement Benefit Plan "H." Medicare supplement benefit Plan "H" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Basic Prescription Drug Benefit and Medically Necessary Emergency Care in a Foreign Country as defined in subsection (c)(3) of this section. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.] [(J) Standardized Medicare Supplement Benefit Plan "I." Medicare supplement benefit Plan "I" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medi- PROPOSED RULES December 22, TexReg 7273

36 care Part A Deductible, Skilled Nursing Facility Care, One Hundred Percent of the Medicare Part B Excess Charges, Basic Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country and At-Home Recovery Benefit as defined in subsection (c)(3) of this section. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.] [(K) Standardized Medicare Supplement Benefit Plan "J." Medicare supplement benefit Plan "J" shall include only the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, One Hundred Percent of the Medicare Part B Excess Charges, Extended Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, Preventive Medical Care and At-Home Recovery Benefit as defined in subsection (c)(3) of this section. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.] [(L) Standardized Medicare Supplement Benefit High Deductible Plan "J." Medicare supplement benefit high deductible Plan "J" shall include only the following: 100% of covered expenses following the payment of the annual high deductible Plan "J" deductible. The covered expenses include the Core Benefit as defined in subsection (c)(2) of this section, plus the Medicare Part A Deductible, Skilled Nursing Facility Care, Medicare Part B Deductible, 100% of the Medicare Part B Excess Charges, Extended Outpatient Prescription Drug Benefit, Medically Necessary Emergency Care in a Foreign Country, Preventive Medical Care and At-Home Recovery Benefit as defined in subsection (c)(3) of this section. The annual high deductible Plan "J" deductible shall consist of out-of-pocket expenses, other than premiums for services covered by the Medicare supplement Plan "J" policy, and shall be in addition to any other specific benefit deductibles. The annual high deductible Plan "J" deductible shall be $1500 for 1998 and 1999, and shall be based on the calendar year. It shall be adjusted annually thereafter by the Secretary to reflect the change in the Consumer Price Index for all urban consumers for the twelve-month period ending with August of the preceding year, and rounded to the nearest multiple of $10. The outpatient prescription drug benefit shall not be included in a Medicare supplement policy sold after December 31, 2005.] [(M) Standardized Medicare supplement benefit Plan "K" shall include only the following:] [(i) Coverage of 100% of the Part A hospital coinsurance amount for each day used from the 61st through the 90th day in any Medicare benefit period;] [(ii) Coverage of 100% of the Part A hospital coinsurance amount for each Medicare lifetime inpatient reserve day used from the 91st through the 150th day in any Medicare benefit period;] [(iii) Upon exhaustion of the Medicare hospital inpatient coverage, including the lifetime reserve days, coverage of 100% of the Medicare Part A eligible expenses for hospitalization paid at the applicable prospective payment system rate, or other appropriate Medicare standard of payment, subject to a lifetime maximum benefit of an additional 365 days. The provider shall accept the issuer's payment as payment in full and may not bill the insured for any balance;] [(iv) Medicare Part A Deductible: Coverage for 50% of the Medicare Part A inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is met as described in clause (x) of this subparagraph;] [(v) Skilled Nursing Facility Care: Coverage for 50% of the coinsurance amount for each day used from the 21st day through the 100th day in a Medicare benefit period for post-hospital skilled nursing facility care eligible under Medicare Part A until the out-of-pocket limitation is met as described in clause (x) of this subparagraph;] [(vi) Hospice Care: Coverage for 50% of cost sharing for all Part A Medicare eligible expenses and respite care until the out-of-pocket limitation is met as described in clause (x) of this subparagraph;] [(vii) Coverage for 50%, under Medicare Part A or B, of the reasonable cost of the first three pints of blood (or equivalent quantities of packed red blood cells, as defined under federal regulations) unless replaced in accordance with federal regulations until the out-of-pocket limitation is met as described in clause (x) of this subparagraph;] [(viii) Except for coverage provided in clause (ix) of this subparagraph, coverage for 50% of the cost sharing otherwise applicable under Medicare Part B after the policyholder pays the Part B deductible until the out-of-pocket limitation is met as described in clause (x) of this subparagraph;] [(ix) Coverage of 100% of the cost sharing for Medicare Part B preventive services after the policyholder pays the Part B deductible; and] [(x) Coverage of 100% of all cost sharing under Medicare Parts A and B for the balance of the calendar year after the individual has reached the out-of-pocket limitation on annual expenditures under Medicare Parts A and B of $4000 in calendar year 2006, indexed each year by the appropriate inflation adjustment specified by the Secretary.] [(N) Standardized Medicare supplement benefit Plan "L" shall include only the following:] [(i) The benefits described in subparagraph (M)(i), (ii), (iii) and (ix) of this paragraph;] [(ii) The benefits described in subparagraph (M)(iv), (v), (vi), (vii) and (viii) of this paragraph, but substituting 75% for 50%; and] [(iii) The benefit described in subparagraph (M)(x) of this paragraph, but substituting $2000 for $4000.] [(O) Any benefit that an issuer may, with the prior approval of the commissioner, offer in addition to the benefits provided in a policy or certificate that otherwise complies with the applicable standards. The new or innovative benefits may include benefits that are appropriate to Medicare supplement insurance, new or innovative, not otherwise available, cost-effective, and offered in a manner which is consistent with the goal of simplification of Medicare supplement policies. After December 31, 2005, the innovative benefit shall not include an outpatient prescription drug benefit.] Loss Ratio Standards and Refund or Credit of Premiums. (a) Minimum aggregate loss ratio standard. A Medicare supplement individual or group policy form may [shall] not be delivered or issued for delivery unless the individual or group policy form can be expected, as estimated for the entire period for which rates are computed to provide coverage, to return to policyholders and certificate holders in the form of aggregated benefits (not including anticipated refunds or credits) provided under the individual policy form or group policy form, on the basis of incurred claims experience or incurred health care expenses where coverage is provided by an HMO [a health maintenance organization] on a service, rather than reimbursement, basis and earned premiums for the applicable period, not including any changes in additional reserves[,] and in accordance with generally accepted actuarial principles and practices: 42 TexReg 7274 December 22, 2017 Texas Register

37 (1) at least 75 percent [75%] of the aggregate amount of premiums earned in the case of group policies; or (2) at least 65 percent [65%] of the aggregate amount of premiums earned in the case of individual policies. (b) HMO [Health maintenance organization] loss ratio standard. An HMO [A health maintenance organization] loss ratio, where coverage is provided on a service rather than reimbursement basis, must [shall] be calculated on the basis of incurred claims experience or incurred health care expenses and earned premiums for the period and in accordance with accepted actuarial principles and practices. Incurred health care expenses where coverage is provided by an HMO may [a health maintenance organization shall] not include: (1) home office and overhead costs; (2) advertising costs; (3) commissions and other acquisition costs; (4) taxes; (5) capital costs; (6) administrative costs; and (7) claims processing costs. (c) Calendar-year [Calendar year] experience loss ratio standard. For the most recent calendar year, the ratio of incurred losses to earned premiums for all policies or certificates that [which] have been in force for three years or more, as of December 31st of the most recent year, must [shall] be equal to or greater than: and (2) at least 65 percent [65%] in the case of individual policies. (1) at least 75 percent [75%] in the case of group policies; (d) Filing of rates and rating schedules. All filings of rates and rating schedules must [shall] demonstrate that expected claims in relation to premiums comply with the requirements of this section when combined with actual experience to date. Filings of rate revisions must [shall] also demonstrate that the anticipated loss ratio over the entire future period for which the revised rates are computed to provide coverage can be expected to meet the appropriate loss ratio standards. For individual or group policies issued before [prior to] March 1, 1992, the provisions of paragraph (3) of this subsection must be met with respect to expected claims in relation to premiums. For purposes of submitting a rate filing under this section, policy forms, whether for open or closed blocks of business, providing for similar benefits must [shall] be combined. But [However,] for purposes of the required combination set out in this section, issuers may distinguish between policy forms providing for similar benefits for individuals 65 years of age or over and policy forms providing for similar benefits for individuals under age 65. Once policy forms have been combined, they remain so for all rating purposes. When forms have been [so] combined, a rate revision request must [shall] not differentiate between the experience of the individual forms. Where significant inconsistencies between rate levels exist among [between] forms providing similar benefits, some deviation in rate revision must [shall] be allowed to reduce the significant inconsistencies. (1) Each Medicare supplement policy or certificate form must [shall] be accompanied, on [upon] submission for approval, by an actuarial memorandum. The [Such] memorandum must [shall] be prepared and signed by a qualified actuary in accordance with generally accepted actuarial principles and practices, and must [shall] contain the information listed in the following subparagraphs: (A) the form number that the actuarial memorandum addresses; (B) a brief description of benefits provided; (C) a schedule of rates to be used; (D) a complete explanation of the rating process, including assumptions, claims data, methodology, and formulae used in developing the gross premium rates; (E) a statement of what experience base will be used in future rate adjustments; (F) a certification that the anticipated aggregate loss ratio is at least 65 percent [65%] (for individual coverage) or at least 75 percent [75%] (for group coverage), which [certification] should include a statement of the period over which the aggregate loss ratio is expected to be realized; (G) a table of anticipated loss ratio experience for representative issue ages for each year from issue over the period during [of time over] which the aggregate loss ratio is to be realized; and (H) a certification that the premiums are reasonable in relation to the benefits provided. (2) Subsequent rate adjustment filings, except for those rates filed solely due to a change in the Part A calendar year deductible, must [shall] also provide an actuarial memorandum, prepared by a qualified actuary[,] in accordance with generally accepted actuarial principles and practices, which must [memorandum shall] contain the following information: [in the following subparagraphs.] (A) the [The] form number addressed by the actuarial memorandum; [shall be included.] (B) a [A] brief description of benefits provided; [shall be included.] (C) a [A] schedule of rates before and after the rate change; [shall be included.] (D) a [A] statement of the reason and basis for the rate change; [shall be included.] (E) a [A] demonstration and certification by the qualified actuary [shall be included] to show that the past plus future expected experience after the rate change, will result in an aggregate loss ratio equal to, or greater than, the required minimum aggregate loss ratio;[.] (i) this [This] rate change and demonstration must [shall] be based on the experience of the named form in Texas only, if that experience is fully credible, as set out in paragraph (3) of this subsection;[.] (ii) this [The] rate change and demonstration must [shall] be based on experience of the named form nationwide, with credibility factors as set out in paragraph (3) of this subsection applied, if the named form is used nationwide and the Texas experience is not fully credible;[.] (iii) this [The] rate change and demonstration must [shall] be based on experience of the named form in Texas only, with credibility factors as set out in paragraph (3) of this subsection applied, if the named form is used in Texas only and the Texas experience is not fully credible;[.] (F) for [For] policies or certificates in force less than three years, a demonstration [shall be included] to show that the thirdyear loss ratio is expected to be equal to[,] or greater than[,] the applicable percentage; and[.] PROPOSED RULES December 22, TexReg 7275

38 (G) a [A] certification by the qualified actuary that the resulting premiums are reasonable in relation to the benefits provided [shall be included]. (3) For purposes of this subsection, if a group or individual policy form has 2,000 or more policies in force, then full credibility (100 percent) must [(100%) shall] be given to the experience. If fewer than 500 policies are in force, then no credibility (0 percent) must [(0%) shall] be given to the experience. The principle of linear interpolation must [shall] be used for in force [in-force] numbers between 500 and 2,000. For group policy forms, the reference in this paragraph to the number of in force [in-force] policies means the number of in force [in-force] certificates under group policies. For purposes of this section, "in force" means either the average number of policies in force for the experience period used to support the need for a rate revision, or the number of policies in force as of the ending date of the experience period used to support the need for a rate revision. Once an issuer makes a decision as to which definition it will apply to a particular policy form, the [such] decision is irrevocable. An issuer may submit specific alternate credibility standards to the department for consideration. In order for an alternate standard of credibility to be acceptable for application, the issuer must demonstrate that the standards are based on sound actuarial principles, and that the resulting loss ratios are in substantial compliance with the requirements of subsections (a), (b), and (c) of this section. (4) For individual policies issued before [prior to] March 1, 1992, the expected claims in relation to premiums must [shall] meet: (A) the originally filed [originally-filed] anticipated loss ratio when combined with the actual experience since inception; (B) a loss ratio of at least 65 percent [65%] when combined with actual experience beginning with June 1, 1996, to date; and (C) a loss ratio of at least 65 percent [65%] over the entire future period for which the rates are computed to provide coverage. (e) Annual filing of premium rates required. Every issuer of Medicare supplement policies and certificates issued before or after March 1, 1992, in this state must [shall] file annually its rates, rating schedule, and supporting documentation, including ratios of incurred losses to earned premiums, for the most recent calendar year broken down by calendar year of issue or by policy duration, for purposes of demonstrating that the issuer is in compliance with the loss ratio standards[,] and for approval by the department [Department] in accordance with the filing requirements of this section and the requirements of of this title (relating to Increases to Premium Rates). The supporting documentation must [shall] also demonstrate, in accordance with actuarial standards of practice using reasonable assumptions, that the appropriate loss ratio standards can be expected to be met over the entire period for which rates are computed. The [Such] demonstration must [shall] exclude active life reserves. An expected third-year loss ratio that [which] is greater than or equal to the applicable percentage must [shall] be demonstrated for policies or certificates in force less than three years. The annual filing requirements in this subsection must [shall] be as follows: (1) the NAIC Medicare supplement experience exhibit, which summarizes the experience of each individual form with business in force in Texas; (2) the NAIC Medicare supplement experience exhibit, which summarizes the experience of each group form with business in force in Texas; (3) rates and rating schedules for each form with business in force in Texas; (4) a certification by the qualified actuary that the policies or certificates in force less than three years are anticipated to produce a third-year loss ratio that [which] is greater than or equal to the applicable loss ratio percentage; and (5) a certification by the qualified actuary that the expected losses in relation to premiums over the entire period for which the policy is rated comply with the required minimum aggregate loss ratio standard. (f) Refund or credit calculation. An issuer must use the online reporting form found on the department's website at and electronically submit the data required by this section, which is [shall collect and file with the commissioner by May 31 of each year the data] contained in Figure: 28 TAC (f) of [the "Medicare Supplement Refund Calculation Form," published as Figure 1 to] this section. Issuers must submit the report to the department no later than May 31 of each year.[, for each type in a standard Medicare supplement benefit plan. This form is published by the Texas Department of Insurance and copies of this form are available from the Life/Health Group, Mail Code 106-1A of the Texas Department of Insurance, P.O. Box , Austin, Texas ] Figure: 28 TAC (f) (1) If, on the basis of the experience as reported, the benchmark ratio since inception (ratio 1) exceeds the adjusted experience ratio since inception (ratio 3), then a refund or credit calculation is required. The refund calculation must [shall] be done on a statewide basis for each type in a standard Medicare supplement benefit plan. For purposes of the refund or credit calculation, experience on policies issued within the reporting year must [shall] be excluded. (2) A refund or credit will [shall] be made only when the benchmark loss ratio exceeds the adjusted experience loss ratio and the amount to be refunded or credited exceeds a de minimis level. The refund must [shall] include interest from the end of the calendar year to the date of the refund or credit at a rate specified by the Secretary [secretary of health and human services], but in no event may [shall] it be less than the average rate of interest for 13-week treasury notes. A refund or credit against premiums due must [shall] be made by September 30 following the experience year on [upon] which the refund or credit is based. (3) For an individual or group policy or certificate issued before [prior to] March 1, 1992, the issuer, for purposes of complying with this subsection, must [shall] make the refund or credit calculation separately for all individual policies combined and all group policies combined for experience after June 1, [Figure: 28 TAC (f)(3)] (g) Premium adjustments to conform with minimum standards for loss ratios. As soon as practicable, but before [prior to] the effective date of enhancements to Medicare benefits, every issuer of Medicare supplement insurance policies, contracts, or coverage in this state must [shall] file with the commissioner, in accordance with the applicable filing procedures of this state, the items required in paragraphs (1) and (2) of this subsection. (1) Issuers must file the appropriate [Appropriate] premium adjustments necessary to produce loss ratios as anticipated for the current premium for the applicable policies or contracts [shall be filed]. Documents necessary to justify the adjustment must [shall] accompany the filing. (A) Every issuer of Medicare supplement insurance or benefits to a resident of this state under [pursuant to the] Insurance Code Chapter 1652 must[, Article 3.74 shall] make premium adjustments: 42 TexReg 7276 December 22, 2017 Texas Register

39 (i) necessary to produce [product] an expected loss ratio under the policy or contract that [as] will conform with the minimum loss ratio standards for Medicare supplement policies; and (ii) expected to result in a loss ratio at least as great as that originally anticipated in the rates used to produce current premium by the issuer for the Medicare supplement insurance policies or contracts. (B) No premium adjustment that [which] would modify the loss ratio experience under the policy, other than the adjustments described in this subsection, should be made with respect to a policy at any time other than on [upon] its renewal date or anniversary date. (C) If an issuer fails to make premium adjustments that are acceptable to the commissioner, the commissioner may order premium adjustments, refunds, or premium credits deemed necessary to achieve the loss ratio required by this section. (2) Any appropriate riders, endorsements, or policy forms needed to accomplish the Medicare supplement insurance modifications necessary to eliminate benefit duplications with Medicare must [shall] be filed. The riders, endorsements, or policy forms must [shall] provide a clear description of the Medicare supplement benefits provided by the policy or contract. (h) Maintenance of data. Incurred claims and earned premium experience must [shall] be maintained for each policy form with business in force in Texas, by calendar year of issue, and must [shall] be made available to the department [Texas Department of Insurance] Required Disclosure Provisions. (a) General rules. (1) Medicare supplement policies and certificates must [shall] include a renewal or continuation provision. The language or specifications of the renewal or continuation [such] provision must be consistent with the type of contract issued. The provision must [provisions shall] be appropriately captioned, [and shall] appear on the first page of the policy, and [shall] include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the age of the policyholder. (2) Except for riders or endorsements by which the issuer effectuates a request made in writing by the policyholder, or by which the issuer exercises a specifically reserved right under a Medicare supplement policy, or by which the issuer is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after the date of issue or at reinstatement or renewal that [which] reduce or eliminate benefits or coverage in the policy must [shall] require signed acceptance by the policyholder. After the date of issue of the policy or certificate, any rider or endorsement that [which] increases benefits or coverage with concomitant increase in premium during the policy term must [shall] be agreed to in writing and signed by the policyholder[,] unless the benefits are required by the minimum standards for Medicare supplement insurance policies, or unless the increased benefits or coverage is required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the additional premium charge must [shall] be set forth in the policy. (3) Medicare supplement policies may [shall] not provide for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or similar words and phrases [of similar import]. (4) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions: (A) the limitations must [shall] appear as a separate paragraph of the policy or certificate and be labeled as "Preexisting Condition Limitations;" (B) the policy or certificate must [shall] define the term "preexisting condition" and must [shall] provide an explanation of the term in its accompanying outline of coverage; and (C) the policy or certificate must [shall] include a provision explaining the reduction of the preexisting condition limitation for individuals who [that] qualify under (b)(1)(A) of this title (relating to Minimum Benefit Standards), (a)(2) of this title (relating to Guaranteed Issue for [to] Eligible Persons), or (c) and (d) of this title (relating to Open Enrollment). (5) Medicare supplement policies and certificates must [shall] have a notice prominently printed on the first page or attached to the first page [thereto] stating in substance that the policyholder or certificate holder has [shall have] the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. (6) Issuers of accident and sickness policies, certificates, or subscriber contracts that [which] provide hospital or medical-expense [medical expense] coverage on an expense-incurred [expense incurred] or indemnity basis, to persons [a person(s)] eligible for Medicare must [shall] provide to those applicants a Guide to Health Insurance for People with Medicare(Guide) in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services of the United States Department of Health and Human Services in no smaller than 12-point type. (A) For purposes of this section, "form" means the language, format, style, type size, type proportional spacing, bold character, and line spacing. (B) If a Guide [Guide] incorporating the latest statutory changes is not available from a government agency, companies may comply with this provision by modifying the latest available Guide [Guide] to the extent required by applicable law. (C) Except as provided in this section, delivery of the Guide must [Guide shall] be made whether or not any [such] policies, certificates, subscriber contracts, or evidences of coverage are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this regulation. (D) Except in the case of direct response issuers, delivery of the Guide must [Guide shall] be made to the applicant at the time of application, and acknowledgment of receipt of the Guide must [Guide shall] be obtained from the applicant by the issuer. Issuers must [Provided, however, issuers shall] deliver the Guide [Guide] to the applicant for a direct response Medicare supplement policy on [upon] request, but not later than at the time the policy is delivered. (7) Except as otherwise provided in this section, the terms "Medicare Supplement," "Medigap," "Medicare Wrap-Around" and similar words or phrases [of similar import] may not be used unless the policy is issued in compliance with of this title. (b) Outline of coverage requirements for Medicare supplement policies. (1) Issuers of Medicare supplement coverage in this state must [shall] provide an outline of coverage to all applicants, including certificate holders under group policies, at the time application is presented to the prospective applicant[,] and, except for direct-response [direct response] policies, must [shall] obtain an acknowledgment of receipt of the [such] outline from the applicant. PROPOSED RULES December 22, TexReg 7277

40 (2) If a Medicare supplement policy or certificate is issued on a basis that [which] would require revision of the outline of coverage delivered at the time of application, a substitute outline of coverage properly describing the policy or certificate actually issued must [shall] accompany the [such] policy or certificate when it is delivered. The outline of coverage must [and] contain the following statement in no less than 12-point type, immediately above the company name: "Notice: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued." (c) Form for outline of coverage. In providing outlines of coverage to applicants under [pursuant to] the requirements of subsection (b)(1) of this section, insurers must [shall] use a form that [which] complies with the requirements of this subsection. The outline of coverage must contain each of the following four parts in the following order: a cover page, premium information, disclosure pages, and charts displaying the features of each benefit plan offered by the issuer. The outline of coverage must [shall] be in the language and format prescribed in paragraphs (1) and (2) of this subsection in no less than 12-point type. (1) All plans must [shall] be shown on the cover page, and the plans [plan(s)] that are offered by the issuer must [shall] be prominently identified. Premium information for plans that are offered must [shall] be shown on the cover page or immediately following the cover page and must [shall] be prominently displayed. The premium and mode must [shall] be stated for all plans that are offered to the prospective applicant. All possible premiums for the prospective applicant must [shall] be illustrated. (2) The items in subparagraphs (A) - (C) of this paragraph must [shall] be included in the outline of coverage in addition to the items specified in the plan-specific outline-of-coverage forms. (A) Dollar amounts that [which] are shown in parentheses for each of the plan-specific charts on the following pages are for the calendar year in which the charts were published. Issuers must [shall], for each plan offered, appropriately complete outline-of-coverage-chart statements about amounts to be paid by Medicare, the plan, and the covered person by replacing the amount in parentheses with the dollar amount corresponding to each covered service for the applicable calendar year benefit period. (B) The outline of coverage must include an explanation of any limitations and exclusions. Those limitations and exclusions resulting from Medicare program provisions may be disclosed [as such] by reference and need not be explained in their entirety. All limitations and exclusions related to preexisting conditions [,] and all other limitations and exclusions not resulting from Medicare regulations must be fully explained in the outline of coverage. (C) The outline of coverage must include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium on [upon] the death of an insured or on the surrender of the policy or certificate. If the policy contains these [such] provisions, a description of the provisions [them] must be included. (D) The outline of coverage for Medicare Select policies or certificates must [shall] include information regarding grievance procedures that [which] meet the requirements of (m) of this title [subchapter] (relating to Medicare Select Policies, Certificates, and Plans of Operation). (E) The commissioner adopts [by reference] the Outline of Coverage form, [Form No.] LHL 050 Rev. 12/17. This form [06/09, which] contains a chart of benefits for each of the standard Medicare supplement plans and required disclosures applicable to policies sold with an effective date for coverage of June 1, 2010, or later. Issuers must begin using form LHL 050 Rev. 12/17 no later than July 1, [The form is available at Figure: 28 TAC (c)(2)(E) [(F) The commissioner adopts by reference the Outline of Coverage form, Form No. LHL 050 Rev. 12/04, which contains a chart of benefits for each of the standard Medicare supplement plans and required disclosures applicable to policies sold with an effective date for coverage prior to June 1, 2010, and on or after March 1, The form is available at (d) Notice requirements. (1) As soon as practicable, but no later than 30 days before [prior to] the annual effective date of any Medicare benefit changes, every issuer providing Medicare supplement coverage to a resident of this state must [shall] notify its policyholders, contract holders, and certificate holders of modifications it has made to Medicare supplement insurance policies, contracts, or certificates. The notice must [shall]: (A) include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement insurance policy, contract, or certificate; and (B) inform each covered person as to when any premium adjustment is to be made due to changes in Medicare. (2) The notice of benefit modifications and any premium adjustments must [shall] be in outline form and in clear and simple terms so as to facilitate comprehension. (3) The notice may [shall] not contain or be accompanied by any solicitation. (4) Issuers must [shall] comply with any notice requirements of the MMA Guaranteed Issue for Eligible Persons. (a) Guaranteed issue. (1) Eligible persons are those individuals described in subsection (b) of this section who seek to enroll under the Medicare supplement policy during the period specified in subsection (d) of this section, and who submit evidence of the date of termination, disenrollment, or Medicare Part D enrollment with the application for a Medicare supplement policy. (2) With respect to eligible persons, an issuer must not deny or condition the issuance or effectiveness of a Medicare supplement policy described in subsection (c) of this section that is offered and is available for issuance to newly enrolled individuals by the issuer, and must not discriminate in the pricing of a Medicare supplement policy because of health status, claims experience, receipt of health care, or medical condition, and must not impose an exclusion of benefits based on a preexisting condition under a Medicare supplement policy. (b) Eligible persons [Persons]. An eligible person is an individual described in any of the following paragraphs: (1) The individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare, and the plan terminates, or the plan ceases to provide supplemental health benefits to the individual; or the individual is enrolled under an employee welfare benefit plan that is primary to Medicare and the plan terminates or the plan ceases to provide all health benefits to the individual because the individual leaves the plan. (2) The individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Part C of Medi- 42 TexReg 7278 December 22, 2017 Texas Register

41 care, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under 1894 of the Social Security Act, and there are circumstances similar to the following that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan: (A) the certification of the organization or plan has been terminated; or (B) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides; (C) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the Secretary, but not including termination of the individual's enrollment on the basis described in 1851(g)(3)(B) of the Social Security Act (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under 1856), or the plan is terminated for all individuals within a residence area; (D) the individual demonstrates, in accordance [accord] with guidelines established by the Secretary, that: (i) the organization offering the plan substantially violated a material provision of the organization's contract under 42 U.S.C. Chapter 7, Subchapter XVIII, Part D in relation to the individual, including the failure to provide an individual on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide the covered care in accord with applicable quality standards; or (ii) the organization, or agent, or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or (E) the individual meets other exceptional conditions as the Secretary may provide. (3) The individual is enrolled with an entity listed in subparagraphs (A) - (D) of this paragraph and enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under paragraph (2) of this subsection: (A) an eligible organization under a contract under 1876 of the Social Security Act (Medicare cost); (B) a similar organization operating under demonstration project authority, effective for periods before April 1, 1999; (C) an organization under an agreement under 1833(a)(1)(A) of the Social Security Act (health care prepayment plan); or (D) an organization under a Medicare Select policy; and (4) the individual is enrolled under a Medicare supplement policy and the enrollment ceases because: (A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or of other involuntary termination of coverage or enrollment under the policy; (B) the issuer of the policy substantially violated a material provision of the policy; or (C) the issuer, [or] an agent, or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual; (5) the individual was enrolled under a Medicare supplement policy and terminates enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Part C of Medicare, any eligible organization under a contract under 1876 of the Social Security Act (Medicare cost), any similar organization operating under demonstration project authority, any PACE provider under 1894 of the Social Security Act, or a Medicare Select policy; and the subsequent enrollment is terminated by the individual during any period within the first 12 months of the subsequent enrollment (during which time the individual is permitted to terminate the subsequent enrollment under 1851(e) of the Social Security Act); or (6) the individual, on [upon] first becoming enrolled in Medicare Part B for benefits at age 65 or older, enrolls in a Medicare Advantage plan under Part C of Medicare, or with a PACE provider under 1894 of the Social Security Act, and disenrolls from the plan or program no later than 12 months after the effective date of enrollment. (7) The individual enrolls in a Medicare Part D plan during the initial enrollment period and, at the time of enrollment in Part D, was enrolled under a Medicare supplement policy that covers outpatient prescription drugs and the individual terminates enrollment in the Medicare supplement policy and submits evidence of enrollment in Medicare Part D along with the application for a policy described in subsection (c)(4) of this section. (8) The individual loses eligibility for health benefits under Title XIX of the Social Security Act (Medicaid). (9) The individual meets the following requirements: (A) the individual was enrolled in both the federal Medicare program and the Texas Health Insurance Pool on December 31, 2013; and (B) the individual's Pool coverage terminated on or after December 31, (c) Products to which eligible persons are entitled. [Which Eligible Persons are Entitled. The Medicare supplement policy to which eligible persons are entitled under:] (1) Persons described by subsection [Subsection] (b)(1), (2), (3), (4), (8), and (9) of this section are entitled to [is] a Medicare supplement policy that [which] has a benefit package classified as follows: (A) Plan A, B, C, F (including F with a High Deductible [high deductible]), K, or L offered by any issuer, for an individual 65 years of age or older who first became eligible for Medicare before January 1, 2020, except that for persons under 65 years of age, it is a policy that [which] has a benefit package classified as Plan A; or[.] (B) Plan A, B, D, G (including G with a High Deductible), K, or L offered by any issuer, for a 2020 newly eligible individual who is 65 years of age or older, except that for persons under 65 years of age, it is a policy that has a benefit package classified as Plan A. (2) Persons described by subsection [Subsection] (b)(5) of this section are entitled to [is] the same Medicare supplement policy in which the individual was most recently [previously] enrolled, if available from the same issuer[,] or, if not available, a policy described in paragraph (1) of this subsection. If [After December 31, 2005, if] the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, the Medicare supplement policy described in this paragraph is the policy available from the same issuer but modified to remove outpatient prescription drug coverage, or at the election of the policyholder, a policy described in paragraph (1) of this subsection. PROPOSED RULES December 22, TexReg 7279

42 (3) Persons described by subsection [Subsection] (b)(6) of this section are entitled to [must include] any Medicare supplement policy offered by any issuer, with the exception of plans C or F (including F with a High Deductible) for a 2020 newly eligible individual. (4) Persons described by subsection [Subsection] (b)(7) of this section are entitled to [is] a Medicare supplement policy that has a benefit package classified as follows: (A) Plan A, B, C, F (including F with a High Deductible [high deductible]), K, or L, and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage, for an individual who first became eligible for Medicare before January 1, 2020; or[.] (B) Plan A, B, D, G (including G with a High Deductible), K, or L, and that is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage, for a 2020 newly eligible individual. (d) Guaranteed issue time period [Issue Time Period]. (1) In the case of an individual described in subsection (b)(1) of this section: (A) for a plan that supplements the benefits under Medicare, the guaranteed issue period begins on the later of: (i) the date the individual receives a notice of termination or cessation of all supplemental health benefits (or, if a notice is not received, the date the individual receives notice that a claim has been denied because of the [such] termination or cessation); or (ii) the date the applicable coverage terminates or ceases; and ends 63 days later; or (B) for a plan that is primary to the benefits under Medicare, the guaranteed issue period begins on the later of: (i) the date the individual receives a notice of termination or cessation of all health benefits (or if a notice is not received, the date the individual receives notice that a claim has been denied because of the [such] termination or cessation); or (ii) the date the applicable coverage terminates or ceases; and ends 63 days later. (2) In [in] the case of an individual described in subsection (b)(2), (3), (5), or (6) of this section whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.[;] (3) In [in] the case of an individual described in subsection (b)(4)(a) of this section, the guaranteed issue period begins on the earlier of the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any, and the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.[;] (4) In [in] the case of an individual described in subsection (b)(2), (4)(B) and (C), (5), or (6) of this section, who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date of disenrollment.[;] (5) In [in] the case of an individual described in subsection (b)(7) of this section, the guaranteed issue period begins on the date the individual receives notice under 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.[;] (6) In [in] the case of an individual described in subsection (b) of this section, but not described in paragraphs (1) - (5) of this subsection, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date of disenrollment.[; and] (7) In [in] the case of an individual described in subsection (b)(9) of this section, the guaranteed issue period begins on the date that the individual's coverage in the Texas Health Insurance [Risk] Pool terminates and ends 63 days later. (e) Extended Medicare supplement access [Supplement Access] for interrupted trial periods [Interrupted Trial Periods]. (1) In the case of an individual described in subsection (b)(5) of this section (or deemed to be so described[,] under this paragraph), whose enrollment with an organization or provider described in subsection (b)(5) of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another organization or provider, the subsequent enrollment will be deemed to be an initial enrollment as described in subsection (b)(5) of this section. (2) In the case of an individual described in subsection (b)(6) of this section (or deemed to be so described[,] under this paragraph), whose enrollment with a plan or in a program described in subsection (b)(6) of this section is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another plan or program, the subsequent enrollment will be deemed to be an initial enrollment as described in subsection (b)(6) of this section. (3) For purposes of subsection (b)(5) and (6) of this section, no enrollment of an individual with an organization or provider described in subsection (b)(5) of this section, or with a plan or in a program described in subsection (b)(6) of this section, may be deemed to be an initial enrollment under this paragraph after the 2-year period beginning on the date on which the individual first enrolled with the organization, provider, plan, or program Filing Requirements for Out-of-State Group Policies. Every issuer providing group Medicare supplement insurance benefits to a resident of this state under [pursuant to the] Insurance Code Chapter 1652 must[, Article 3.74, shall], for information purposes, file with the department's Life and Health Lines Office [Life/Health Group of the Texas Department of Insurance] a copy of any master policy issued in connection with any certificate used in this state; all such certificates must [shall] be filed in accordance with the filing requirements and procedures applicable to group Medicare supplement policies issued in this state Permitted Compensation Arrangements. (a) An issuer or other entity designated in [the] Insurance Code [, Article 3.74, 1(a),] may provide commission or other compensation to an agent for the sale of a Medicare supplement policy or certificate only if the first-year commission or other first-year compensation is no more than 200 percent [200%] of the commission or other compensation paid for selling or servicing the policy or certificate in the first renewal year, or the first 12-month service period immediately following the initial 12-month service period of the policy in instances where premium payment is other than on an annual basis. 42 TexReg 7280 December 22, 2017 Texas Register

43 (b) The commission or other compensation provided in the second and subsequent renewal years where payment of premium is on an annual basis, or the second and subsequent 12-month service periods of the policy in instances where premium payment is other than on an annual basis, must be the same as that provided in the first renewal year, or first 12-month service period of the policy in instances where premium payment is other than on an annual basis, and must be provided for a reasonable number of renewal years, or successive 12-month service periods, but not less than six years following the inception of the first renewal year in the instance of premium payment on an annual basis, or the 12-month service period immediately following the initial 12-month service period of the policy in instances where premium payment is other than on an annual basis. (c) No issuer may [shall] provide compensation to its agents and no agent may [shall] receive compensation greater than the renewal compensation payable by the replacing issuer on renewal policies or certificates if an existing policy or certificate is replaced. (d) For purposes of this section, "compensation" includes pecuniary or nonpecuniary remuneration of any kind relating to the sale or renewal of the policy or certificate including, but not limited to, bonuses, gifts, prizes, awards, and finders fees Increases to Premium Rates. Premium rates, rating schedules, and supporting documentation for a Medicare supplement policy or certificate to be used in this state must [shall] be filed with the department [Texas Department of Insurance] and approved by the commissioner. Any request for an increase to rates for Medicare supplement policies or certificates issued before or after March 1, 1992, is subject to review by and hearing before the commissioner if one or more of the following conditions, as determined by an actuary for the department, is present:[.] (1) The increase, exclusive of any increase occasioned by changes in the laws regulating Medicare supplement coverages, is not necessary to maintain an anticipated lifetime loss ratio at least equal to the minimum that is required by statute and set out in of this title (relating to Loss Ratio Standards and Refund or Credit of Premiums). (2) An increase to premium has been effected on the same block or blocks of business within the preceding 12 months. (3) An increase to premium would result in unfair discrimination, as provided in [the] Insurance Code Chapter 544 [, Article 21.21, 4(7)(b)], between individuals of the same class and of essentially the same hazard in the amount of premium, policy fees, or rates charged for a policy or contract. (4) An increase to premium would result in the benefits offered under the policy form to be unreasonable in relation to the premiums charged. (5) An increase to premium would have the practical effect of altering the rating structure of the policy form to which it is applied, or would create a new set of rating criteria under the [such] policy form. (6) A contemplated increase to premium has the practical effect of resulting in a series of planned future increases to premium rather than a one-time increase Open Enrollment. (a) No issuer may [shall] deny or condition the issuance or [of] effectiveness of any Medicare supplement policy or certificate available for sale in this state, nor discriminate in the pricing of [such] a policy or certificate because of the health status, claims experience, receipt of health care, or medical condition of an applicant where an application for a policy or certificate is submitted before [prior to] or during the six-month period beginning with the first day of the first month in which an individual is first enrolled for benefits under Medicare Part B. No issuer may [shall] engage in a premium rating practice that [which] results in higher premiums for any policy solely because the [such] policy is issued under [pursuant to] the provisions of this section. For individuals 65 years of age or older when first enrolled for benefits under Medicare Part B who apply for Medicare supplement coverage under this subsection, each Medicare supplement policy and certificate currently available from an issuer must [shall] be made available to all applicants without regard to age. (b) The provisions of paragraphs (1) and (2) [- (3)] of this subsection apply to Medicare supplement issuers with respect to persons who qualify for Medicare before attaining 65 years of age. (1) An issuer must comply with the first two sentences of subsection (a) of this section with respect to a person who: (A) qualifies for Medicare before attaining 65 years of age, who first enrolls for benefits under Medicare Part B on or after January 1, 1997, and who applies for a Medicare supplement policy or certificate during the period of eligibility described in subsection (a) of this section; or (B) enrolled in Medicare Part B before attaining 65 years of age, who applies for a Medicare supplement policy or certificate upon attaining 65 years of age, during the period of eligibility described in subsection (a) of this section that would apply if the person first enrolled in Medicare Part B on [upon] attaining 65 years of age. (2) An issuer must make available, at a minimum, Plan A of the standard Medicare supplement plans to individuals who qualify under this subsection. [(3) An issuer must comply with the provisions of this subsection with respect to a person who:] [(A) enrolled for Medicare Part B benefits before attaining 65 years of age during the period beginning March 1, 1992 and ending January 1, 1997;] [(B) was not otherwise eligible to apply for a Medicare supplement policy or certificate on a guaranteed issue basis during that time period; and] [(C) applies for a Medicare supplement policy or certificate during the period of eligibility beginning January 1, 1997 and ending July 1, 1997.] (c) If an applicant qualifies under subsection (a) of this section, is 65 years of age or older, and submits an application during the [time] period referenced in subsection (a) of this section and, as of the date of application: (1) has had a continuous period of creditable coverage of at least six months, the issuer may [shall] not exclude benefits based on a preexisting condition; or (2) has had a continuous period of creditable coverage that is less than six months, the issuer must [shall] reduce the period of any preexisting condition exclusion by the aggregate of the period of creditable coverage applicable to the applicant as of the enrollment date. (d) Except as provided in subsection (c) of this section, of this title [chapter] (relating to Guaranteed Issue for Eligible Persons), and (b)(1)(A) of this title [chapter] (relating to Minimum Benefit Standards), subsection (a) of this section may [shall] not be construed as preventing the exclusion of benefits under a policy during the first six months[,] based on a preexisting condition for which the policyholder or certificate holder received treatment or PROPOSED RULES December 22, TexReg 7281

44 was otherwise diagnosed during the six months before the coverage became effective. (e) The following examples illustrate the application of subsection (c)(1) and (2) of this section, as prescribed by the Secretary: (1) Individual A- [:] No preexisting condition exclusion period. Relevant creditable coverage history: Individual A had coverage under an individual policy for four months beginning on May 1, 1998, through August 31, 1998, followed by a gap in coverage of 61 days until October 31, Individual A had coverage under an individual health plan beginning on November 1, 1998, for three months through January 31, 1999, followed by a gap in coverage of 59 days or until March 31, 1999, on which date Individual A submitted an application for a Medicare supplement policy. Under this example, the Medicare supplement issuer may not apply a preexisting condition exclusion period because Individual A has seven months of creditable coverage without a gap in coverage greater than 63 days. (2) Individual B- [:] Subject to a three-month [three months] preexisting condition exclusion period. Relevant creditable coverage history: Individual B is covered under an individual health insurance policy for one month beginning May 1, 1998, through May 31, 1998, followed by a gap in coverage of 61 days from June 1, 1998, through July 31, On August 1, 1998, Individual B is covered under an association health plan for two months through September 30, 1998, followed by a gap in coverage of 31 days or until October 31, 1998, on which date Individual B [B's] submitted an application for Medicare supplement coverage. Individual B has three months of creditable coverage. Under this example, the issuer of a Medicare supplement policy must give Individual B a three-month credit against any preexisting condition exclusion period. (3) Individual C- [:] Subject to a six-month [six month] preexisting condition exclusion period. Relevant creditable coverage history: Individual C is covered under an individual health insurance policy for one month beginning May 1, 1998, through May 31, 1998, followed by a gap in coverage of 61 days from June 1, 1998, through July 31, On August 1, 1998, Individual C is covered under an association health plan for two months through September 30, 1998, followed by a gap in coverage of 64 days or until November 4, 1998, on which date Individual C submitted an application for Medicare supplement coverage. Individual C has a gap in coverage of greater than 63 days. As a result, under this example, the Medicare supplement issuer can fully apply the preexisting condition exclusion provision to Individual C. (f) Invitation to contract advertisements, as defined in (b) of this title (relating to Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising), must [shall] include the following statement: "Benefits and premiums under this policy may be suspended for up to 24 months if you become entitled to benefits under Medicaid. You must request that your policy be suspended within 90 days of becoming entitled to Medicaid. If you lose (are no longer entitled to) benefits from Medicaid, this policy can be reinstated if you request reinstatement within 90 days of the loss of such benefits and pay the required premium." Medicare Select Policies, Certificate, and Plans of Operations. (a) This section applies [shall apply] to Medicare Select policies, certificates, and plans of operation, as defined in this section. (b) No policy or certificate may be advertised as a Medicare Select policy or certificate unless it meets the requirements of this section. (c) The following words and terms, when used in this section, [shall] have the following meanings, unless the context indicates otherwise. These words and terms must [shall] be defined and included in all Medicare Select policies, certificates, and plans of operation. (1) Complaint--Any dissatisfaction expressed by an individual concerning a Medicare Select issuer or its network providers. (2) Emergency care [Care]--Bona fide emergency services provided after the sudden onset of a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, such that the absence of immediate medical attention could reasonably be expected to result in: (A) placing the patient's health in serious jeopardy; (B) serious impairment to bodily functions; or (C) serious dysfunction of any bodily organ or part. (3) Grievance--Dissatisfaction expressed in writing by an individual insured under a Medicare Select policy or certificate with the administration, claims practices, or provision of services concerning a Medicare Select issuer or its network providers. (4) Medicare Select issuer [Issuer]--An issuer offering, or seeking to offer, a Medicare Select policy or certificate. (5) Medicare Select policy [Policy] or Medicare Select certificate [Certificate]--A Medicare supplement policy or certificate, respectively that contains restricted network provisions. (6) Network provider [Provider]--A provider of health care, or a group of providers of health care, which has entered into a written agreement with the issuer to provide benefits covered under a Medicare Select policy. (7) Nonnetwork provider [Non-network Provider]--A provider of health care, or a group of providers of health care, that has not entered into a written agreement with the issuer to provide benefits covered under a Medicare Select policy. (8) Restricted network provisions [Network Provisions]-- Any provision which conditions the payment of benefits, in whole or in part, on the use of network providers. (9) Service area [Area]--The geographic area approved by the commissioner as part of the plan of operation or amended plan of operation, within which an issuer is authorized to offer a Medicare Select policy. (d) The commissioner may authorize an issuer to offer a Medicare Select policy or certificate, under [pursuant to] this section and the Omnibus Budget Reconciliation Act (OBRA) of 1990, 4358, if the commissioner finds that the issuer has satisfied all of the requirements of this subchapter. (e) A Medicare Select issuer may [shall] not issue a Medicare Select policy or certificate in this state until the commissioner approves its plan of operation [has been approved by the commissioner]. A Medicare Select issuer may not file a Medicare Select policy under [the] Insurance Code Chapter 1701, Subchapter B[, Article 3.42(c)], until the commissioner has approved its plan of operation [has been approved by the commissioner]. (f) A Medicare Select issuer must [shall] file a proposed plan of operation with the department [Department], the form and content of which is [shall be] subject to approval by the commissioner. The plan of operation must [shall] contain, at a minimum, the information in paragraphs (1) - (7) of this subsection, and at the time of submission must [shall] have a form number printed or typed on the lower left hand corner of the face page. 42 TexReg 7282 December 22, 2017 Texas Register

45 (1) The plan must contain evidence that all covered services that are subject to restricted network provisions are available and accessible through network providers, including a demonstration of each of the items referenced in subparagraphs (A) - (E) of this paragraph. (A) Services can be provided by network providers with reasonable promptness with respect to geographic location, hours of operation and after-hour care. The hours of operation and availability of after-hour care must [shall] reflect usual practice in the local area. Geographic availability must [shall] reflect the usual travel times within the community. (B) The number of network providers in the service area must be documented by credible statistics to be sufficient, with respect to current and expected policyholders, either: (i) to deliver adequately all services that are subject to a restricted network provision; or (ii) to make appropriate referrals. (C) Written agreements with network providers describing specific responsibilities must be included. (D) Emergency care availability 24 hours per day and seven days a week must be demonstrated. (E) In the case of covered services [that are] subject to a restricted-network [restricted network] provision and that are provided on a prepaid basis, there are written agreements with network providers prohibiting the providers from billing or otherwise seeking reimbursement from or recourse against any individual covered under a Medicare Select policy or certificate. This subparagraph does [shall] not apply to supplemental charges or coinsurance amounts as stated in the Medicare Select policy or certificate. (2) A clear description of the service area must be provided by narrative statement or [and/or] a map. (3) The grievance procedure used [to be utilized] must be described. (4) The quality assurance program must be described, including: (A) the formal organizational structure; (B) the written criteria for selection, retention, and removal of network providers; and (C) the procedures for evaluating quality of care provided by network providers, and the process to initiate corrective action when warranted. (5) Network providers must be listed and described[,] by specialty. (6) Copies of the written information proposed to be used by the issuer to comply with subsection (k) of this section must be provided. (7) Any other information requested by the commissioner must be provided. (g) A Medicare Select issuer must [shall] file any proposed changes to the plan of operation, except for changes to the list of network providers, with the commissioner 60 days before [prior to] implementing the [such] changes. Changes will [Such changes shall] be considered approved by the commissioner after 30 days unless specifically disapproved or unless the issuer requests an extension of the 30-day period and the commissioner grants the requested extension. (h) An updated list of network providers must [shall] be filed with the commissioner at least quarterly. If there is no change to the list of network providers within a particular calendar quarter, correspondence indicating no change from the prior reporting period to the current reporting period must, at a minimum, be filed to meet the reporting requirements of this subchapter. (i) A Medicare Select policy or certificate may [shall] not restrict payment for covered services provided by nonnetwork [non-network] providers if: (1) the services are for symptoms requiring emergency care or are immediately required for an unforeseen illness, injury, or a condition; and (2) it is not reasonable to obtain the [such] services through a network provider. (j) A Medicare Select policy or certificate must [shall] provide payment for full coverage under the policy for covered services that are not available through network providers. (k) A Medicare Select issuer must [shall] make full and fair disclosure, in writing, of the provisions, restrictions, and limitations of the Medicare Select policy or certificate to each applicant. This disclosure must [shall] include at least the following: (1) an outline of coverage sufficient to permit the applicant to compare the coverage and premiums of the Medicare Select policy or certificate with other Medicare supplement policies or certificates offered by the issuer and with other Medicare Select policies or certificates; (2) a description (including address, phone number, and hours of operation) of the network providers, including primary care physicians, specialty physicians, hospitals, and other providers; (3) a description of the restricted network provisions, including payments for coinsurance and deductibles when providers other than network providers are utilized (except to the extent specified in the policy or certificate, expenses incurred when using out-of-network providers do not count toward the out-of-pocket annual limit contained in plans K and L); (4) a description of coverage for emergency and urgently needed care and other out-of-service area coverage; (5) a description of limitations on referrals to restricted network providers and to other providers; (6) a description of the policyholder's rights to purchase any other Medicare supplement policy or certificate otherwise offered by the issuer; and (7) a description of the Medicare Select issuer's quality assurance program and grievance procedure. (8) For hospital network providers, the statement in 12-point bold-face type: "Only certain hospitals are network providers under this policy. Check with your physician to determine if he or she has admitting privileges at the network hospital. If he or she does not, you may be required to use another physician at time of hospitalization or you will be required to pay for all expenses." This statement must [shall] also be included in the "invitation to contract" advertisement, as that term is defined in (b) of this title (relating to Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising). (l) Before [Prior to] the sale of a Medicare Select policy or certificate, a Medicare Select issuer must [shall] obtain from the applicant a signed and dated form stating that the applicant has received the in- PROPOSED RULES December 22, TexReg 7283

46 formation provided under [pursuant to] subsection (k) of this section and that the applicant understands the restrictions of the Medicare Select policy or certificate. (m) A Medicare Select issuer must [shall] have and use procedures for hearing complaints and resolving written grievances from the subscribers. Such procedures must [shall] be aimed at mutual agreement for settlement and may include arbitration procedures. If a binding arbitration procedure is included, the insured must have made an informed choice to accept binding arbitration after having been advised of the right to reject this method of dispute or claim resolution. (1) The grievance procedure must [shall] be described in the policy and certificates and in the outline of coverage. The in-hospital grievance procedure must [shall] be outlined separately from the grievance procedures for other treatments or [and/or] services, or both. All grievances should be addressed immediately and resolved as soon as possible. Grievances relating to ongoing hospital treatment should be addressed immediately on receipt of any written or oral grievance, and be resolved as quickly as possible in a manner that [which] does not interfere with, obstruct, or interrupt continued proper medical treatment and care of the patient. The timetable for their resolution must [shall] comply with all applicable provisions of the Insurance Code. (2) At the time the policy or certificate is issued, the issuer must [shall] provide detailed information to the policyholder describing how a grievance may be registered with the issuer, both during the period of care and after care. (3) Grievances must [shall] be considered in a timely manner and must [shall] be transmitted to appropriate decision makers [decision-makers] who have authority to fully investigate the issue and take corrective action. (4) If a grievance is found to be valid, corrective action must [shall] be taken promptly. (5) All concerned parties must [shall] be notified about the results of a grievance. (6) The issuer must [shall] report no later than each March 31st to the commissioner regarding its grievance procedure. The report must [shall] be in a format prescribed by the commissioner, must [and shall] contain the number of grievances filed in the past year, and must include a summary of the subject, nature, and resolution of the [such] grievances. (n) At the time of initial purchase, a Medicare Select issuer must [shall] make available to each applicant for a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate otherwise offered by the issuer. (o) At the request of an individual covered under a Medicare Select policy or certificate, a Medicare Select issuer must [shall] make available to the individual covered the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer that [which] has comparable or lesser benefits and that [which] does not contain a restricted network provision. The issuer must [shall] make the policies or certificates available without requiring evidence of insurability after the Medicare Select policy or certificate has been in force for six months. (p) For the purposes of this subsection, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purposes of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Part B excess charges. (q) Medicare Select policies and certificates must [shall] provide for continuation of coverage in the event the Secretary [secretary of health and human services] determines that Medicare Select policies and certificates issued under [pursuant to] this section should be discontinued due to either the failure of the Medicare Select Program to be reauthorized under law or its substantial amendment. (1) Each Medicare Select issuer must [shall] make available to each individual covered under a Medicare Select policy or certificate the opportunity to purchase any Medicare supplement policy or certificate offered by the issuer that [which] has comparable or lesser benefits and that [which] does not contain a restricted network provision. The issuer must [shall] make these [such] policies and certificates available without requiring evidence of insurability. (2) For the purposes of this subsection, a Medicare supplement policy or certificate will be considered to have comparable or lesser benefits unless it contains one or more significant benefits not included in the Medicare Select policy or certificate being replaced. For the purpose [purposes] of this paragraph, a significant benefit means coverage for the Medicare Part A deductible, coverage for at-home recovery services, or coverage for Part B excess charges. (r) A Medicare Select issuer must [shall] comply with reasonable requests for data made by state or federal agencies, including the United States Department of Health and Human Services, for the purpose of evaluating the Medicare Select Program. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 6, TRD Norma Garcia General Counsel Texas Department of Insurance Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TAC STATUTORY AUTHORITY. The repeal of is proposed under Insurance Code , , , , , , and ; and 42 U.S.C. 1395ss. Insurance Code provides that, in addition to other rules required or authorized by this chapter, the commissioner must adopt reasonable rules necessary and proper to carry out Chapter 1652, including rules adopted in accordance with federal law relating to the regulation of Medicare supplement benefit plan coverage that are necessary for this state to obtain or retain certification as a state with an approved program. Insurance Code provides, in part, that the commissioner must adopt reasonable rules to establish specific standards for provisions in Medicare supplement benefit plans and standards for facilitating comparisons of different Medicare supplement benefit plans. The standards are in addition to and must be in accordance with applicable laws of this state; applicable federal law, rules, regulations, and standards; and any model rules and regulations required by federal law, including 42 U.S.C. 1395ss. The standards may include provisions relating to terms 42 TexReg 7284 December 22, 2017 Texas Register

47 of renewability; benefit limitations, exceptions, and reductions; and exclusions required by state or federal law. Insurance Code (a) provides that the commissioner must adopt reasonable rules to establish minimum standards for benefits and claim payments under Medicare supplement benefit plans. Insurance Code (b) states that the standards for benefits and claim payments must include the requirements for certification of Medicare supplement benefit plans under 42 U.S.C. 1395ss. Insurance Code provides, in part, that the rules adopted under must include provisions and requirements that are at least equal to those required by federal law, including the rules, regulations, and standards adopted under 42 U.S.C. 1395ss. Insurance Code (a) provides that for full and fair disclosure in the sale of Medicare supplement benefit plans, a Medicare supplement benefit plan or certificate may not be delivered or issued for delivery in Texas unless an outline of coverage that complies with is delivered to the applicant when the applicant applies for the coverage, and Insurance Code (b) provides that the commissioner by rule must prescribe the format and content of the outline of coverage required by subsection (a). The rules must address the style, arrangement, and overall appearance of the outline of coverage, including the size, color, and prominence of type and the arrangement of text and captions. Insurance Code provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the department under the Insurance Code and other laws of Texas. Title 42 U.S.C. 1395ss(a)(2)(A) provides, in part, that no Medicare supplemental policy may be issued in a state on or after the date specified, unless the State's regulatory program provides for the application and enforcement of the NAIC Model Standards and requirements. CROSS REFERENCE TO STATUTE. The repeal of affects Insurance Code , , , , , , and ; and 42 U.S.C. 1395ss Effective Date of Amendments; Impact on Existing Policies. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 6, TRD Norma Garcia General Counsel Texas Department of Insurance Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 31. NATURAL RESOURCES AND CONSERVATION PART 10. TEXAS WATER DEVELOPMENT BOARD CHAPTER 355. RESEARCH AND PLANNING FUND SUBCHAPTER C. REGIONAL WATER PLANNING GRANTS 31 TAC , The Texas Water Development Board ("TWDB" or "board") proposes amendments to relating to regional water planning grant notice of funds and submission and review of applications and relating to use of funds. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED AMENDMENT. The purpose of the amendment is to correct an administrative rule reference related to a previous rule revision, clarify the roles of the regional water planning group and its designated political subdivision during the funding application process, and to revise eligibility requirements for travel expenses associated with regional water planning. The specific provisions being amended or added and the reasons for the amendments are addressed in more detail below. SECTION BY SECTION DISCUSSION OF PROPOSED AMENDMENTS. Subchapter C. Regional Water Planning Grants. Section Notice of Funds and Submission and Review of Applications. In , subsection (c) is revised to clarify the role of who is providing notice from the regional water planning group (RWPG) to the RWPG s designated political subdivision and correct a reference to notice requirements from 31 Texas Administrative Code (d) to the correct reference of (e). Section (d) is revised to clarify the role of who is providing information on the funding application from the RWPG to the RWPG s designated political subdivision. Section (e)(7) is revised to clarify the role of who conducts the planning effort from the RWPG s designated political subdivision to the RWPG. Section Use of Funds. Section (b)(1) is revised to allow eligibility of travel expenses associated with RWPG activities as authorized by the RWPG and Executive Administrator and by the General Appropriations Act. FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERN- MENTS Ms. Rebecca Trevino, Chief Financial Officer, has determined that there will be no significant fiscal implications for state or local governments as a result of the proposed rulemaking. For the first five years these rules are in effect, there are not expected to be additional costs to state or local governments resulting from their administration. These rules are not expected to result in reduction in costs to local governments. These rules are not expected to result in reductions in costs to state government. PROPOSED RULES December 22, TexReg 7285

48 These rules are not expected to have any impact on state or local revenues. The rules do not require any increase in expenditures for state or local governments as a result of administering these rules. Because these rules will not impose a cost on regulated persons, the requirement included in Texas Government Code Section to repeal a rule does not apply. The requirement in Section does not apply because this rule is amended to correct an internal citation reference. PUBLIC BENEFITS AND COSTS Ms. Rebecca Trevino also has determined that for each year of the first five years the proposed rulemaking is in effect, there will be no impact to the public. LOCAL EMPLOYMENT IMPACT STATEMENT The board has determined that a local employment impact statement is not required because the proposed rule does not adversely affect a local economy in a material way for the first five years that the proposed rule is in effect because it will impose no new requirements on local economies. The board also has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of enforcing this rulemaking. The board also has determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary. These rules are designed to clarify language by correcting a reference. DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION The board reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code , and determined that the rulemaking is not subject to Texas Government Code, , because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to correct a reference regarding the TWDB s rules related to regional water planning grant funding. Even if the proposed rule were a major environmental rule, Texas Government Code, still would not apply to this rulemaking because Texas Government Code, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: 1) does not exceed federal law; 2) does not exceed an express requirement of state law; 3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) is not proposed solely under the general powers of the agency, but rather Texas Water Code and Therefore, this proposed rule does not fall under any of the applicability criteria in Texas Government Code, The board invites public comment regarding this draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. TAKINGS IMPACT ASSESSMENT The board evaluated this proposed rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter The specific purpose of this rule is to correct a reference from a previous rulemaking. The board's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this proposed rule because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code (b)(4). The board is the agency that administers the regional water planning process in order to develop a state water plan. Nevertheless, the board further evaluated this proposed rule and performed an assessment of whether it constitutes a taking under Texas Government Code, Chapter Promulgation and enforcement of this proposed rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject proposed regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule requires compliance with state law regarding the state water planning process. Therefore, the proposed rule does not constitute a taking under Texas Government Code, Chapter GOVERNMENT GROWTH IMPACT STATEMENT The board reviewed the proposed rulemaking in light of the government growth impact statement requirements of Texas Government Code and has determined, for the first five years the proposed rule would be in effect, the proposed rule will not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing employee positions; (3) require an increase or decrease in future legislative appropriations to the agency; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect this state's economy. The proposed rule provides greater clarity on the regional water planning process and is required to implement legislative changes. SUBMISSION OF COMMENTS Written comments on the proposed rulemaking may be submitted by mail to Mr. Todd Chenoweth, Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas , by to rulescomments@twdb.texas.gov, or by fax to (512) Comments will be accepted until 5:00 p.m. on January 31, STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and TexReg 7286 December 22, 2017 Texas Register

49 The proposed rulemaking affects Chapter 16 of the Texas Water Code Notice of Funds and Submission and Review of Applications. (a) The EA will publish notice in the Texas Register advising RWPGs that funds are available and that applications will be accepted from eligible applicants for grants to develop a scope of work or to develop or revise regional water plans. The notice will describe the form and manner for applications. A RWPG may not receive grant funds unless the RWPG has provided the EA with a copy of the RWPG's adopted by-laws. (b) The RWPG shall provide a written designation to the EA naming the political subdivision that is authorized to apply for grant funds on behalf of the RWPG. The RWPG shall ensure that the designated political subdivision has the legal authority to conduct the procurement and enter into the contracts necessary for regional planning. (c) The political subdivision [RWPG] shall provide notice that an application for funding is being submitted in accordance with (e) [(d)] of this title (relating to Notice and Public Participation). (d) The EA may request clarification from the political subdivision [RWPG] if necessary to evaluate the application. Incomplete applications may be rejected and returned to the applicant. After the initial round of planning grant funds, an eligible applicant may submit additional applications for tasks not previously funded. The EA may fund additional applications under this subchapter, but is not required to provide such additional funding. (e) The applications shall be evaluated by the following criteria: (1) degree to which proposed planning does not duplicate previous or ongoing planning; (2) project organization and budget; (3) scope of work of project; (4) eligibility of tasks for funding under this subchapter; (5) the relative need of the political subdivision for the money based upon an assessment of the necessary scope of work and cost to develop the regional water plan as compared to statewide needs for development of all regional water plans; (6) the legal authority of the political subdivision to participate in the development and implementation of a regional water plan; and (7) the degree to which regional water planning by the RWPG [political subdivision] will address the water supply needs in the regional water planning area Use of Funds. (a) Limitations of Funding. The Board has sole discretion in determining which activities are necessary for the development or revision of regional water plans. However, no funds will be provided for the following: (1) activities for which the Board determines existing information or data is sufficient for the planning effort including: (A) detailed evaluations of cost of water management strategies where recent information for planning is available to evaluate the cost associated with the strategy; (B) evaluations of groundwater resources for which a desired future condition has been submitted to the Board pursuant to Texas Water Code (d) (relating to Joint Planning in a Management Area); (C) evaluations of groundwater resources for which current information is available from the Board or other entity sufficient for evaluation of the resource; (D) determination of water savings resulting from standard conservation practices for which current information is available from the Board; (E) revision of the adopted state population and demand projections; (F) revision of state environmental planning criteria for new surface water supply projects; and (G) collection of data describing groundwater or surface water resources where information for evaluation of the resource is currently available; (2) activities directly related to the preparation of applications for state or federal permits or other approvals, activities associated with administrative or legal proceedings by regulatory agencies, and preparation of engineering plans and specifications; (3) activities related to planning for individual system facility needs other than identification of those facilities necessary to transport water from the source of supply to a regional water treatment plant or to a local distribution system; (4) costs associated with administration of the plan's development, including but not limited to: (A) compensation for the time or expenses of RWPGs members' service on or for the RWPG; (B) costs of administering the RWPGs; (C) costs of public notice and meetings, including time and expenses for attendance at such meetings; (D) costs for training; (E) costs of reviewing products developed due to this grant; and (F) costs of administering the regional water planning grant and associated contracts; and (5) analyses of benefits and costs of water management strategies unless the water management strategy requires a state or federal permit and the RWPG has completed the analysis required by of this title (relating to Identification and Evaluation of Potentially Feasible Water Management Strategies), and the RWPG demonstrates to the satisfaction of the executive administrator that these analyses are needed to determine the selection of the water management strategy. (b) Funding Administrative Costs. The following administrative costs are eligible for funding if the RWPG or its chairperson certifies, during a public meeting, that the expenses are eligible for reimbursement and are correct and necessary: (1) travel expenses, as authorized by the General Appropriations Act[, for RWPG voting members who certify that they are not eligible for reimbursement from their employer; travel expenses] are available only for attendance at a posted meeting of the RWPG unless the travel is specifically authorized by the RWPG and EA; (2) costs associated with providing translators and accommodations for persons with disabilities for public meetings when re- PROPOSED RULES December 22, TexReg 7287

50 quired by law or deemed necessary by the RWPGs and certified by the chairperson; (3) direct costs, not including personnel costs, for placing public notices in newspapers for the legally required public hearings and of providing copies of information for the public and for members of the RWPGs as needed for the efficient performance of planning work; and (4) the cost of postage for mailing notices of public hearings and other actions to persons and entities listed in Chapter 357 of this title (relating to Regional Water Planning). (c) Subcontracting. A RWPG through the eligible applicant's contractor or subcontractor may obtain professional services, including the services of a planner, land surveyor, licensed engineer, or attorney, for development or revision of a regional water plan only if such services are procured on the basis of demonstrated competence and qualifications through a request for qualifications process in accordance with Texas Government Code Chapter (d) Notwithstanding limitations on funding described in this section, the EA may, in his sole discretion, authorize funding for a cost benefit analysis of water management strategies. The EA shall consider funding such an analysis when the strategies serve the same demand, but the costs and benefits differ significantly among the strategies. The EA shall consider the overarching benefits to the state when determining whether to provide such funding. The EA may provide cost benefit analysis in other situations, as he deems necessary and appropriate. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) CHAPTER 356. GROUNDWATER MANAGEMENT SUBCHAPTER C. SUBMISSION OF DESIRED FUTURE CONDITIONS 31 TAC The Texas Water Development Board ("TWDB" or "board") proposes an amendment to 31 Texas Administrative Code (TAC) relating to submission of desired future conditions. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED AMENDMENT. The purpose of the amendment is to implement legislative changes from House Bill (HB) 2215, 85th (R) Legislative Session. The specific provision being amended and the reason for the amendment is addressed in more detail below. SECTION BY SECTION DISCUSSION OF PROPOSED AMENDMENT Subchapter C. Submission of Desired Future Conditions. Section Submission Date. Section is revised to implement a change to Texas Water Code (d-3) made by HB The change requires that desired future conditions must be approved by a resolution adopted by a two-thirds vote of all the groundwater conservation district representatives in a groundwater management area not later than January 5, Subsequent desired future conditions must be proposed and finally adopted by the district representatives before the end of each successive five-year period after that date. FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERN- MENTS Ms. Rebecca Trevino, Chief Financial Officer, has determined that there will be no significant fiscal implications for state or local governments as a result of the proposed rulemaking. For the first five years these rules are in effect, there are not expected to be additional costs to state or local governments resulting from their administration. These rules are not expected to result in reduction in costs to local governments. These rules are not expected to result in reductions in costs to state government. These rules are not expected to have any impact on state or local revenues. The rules do not require any increase in expenditures for state or local governments as a result of administering these rules. Because these rules will not impose a cost on regulated persons, the requirement included in Texas Government Code to repeal a rule does not apply. Furthermore, the requirement in does not apply because these rules are necessary to implement legislation. The board invites public comment regarding this fiscal note. Written comments on the fiscal note may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. PUBLIC BENEFITS AND COSTS Ms. Rebecca Trevino also has determined that for each year of the first five years the proposed rulemaking is in effect, there will be no impact to the public. LOCAL EMPLOYMENT IMPACT STATEMENT The board has determined that a local employment impact statement is not required because the proposed rule does not adversely affect a local economy in a material way for the first five years that the proposed rule is in effect because it will impose no new requirements on local economies. The board also has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of enforcing this rulemaking. The board also has determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary. These rules are designed to implement legislative changes, address stakeholder concerns, and clarify previously existing language. DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION The board reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code , and determined that the rulemaking is not subject 42 TexReg 7288 December 22, 2017 Texas Register

51 to Texas Government Code, , because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to implement legislative changes and provide greater clarity regarding the TWDB's rules related to regional water planning. Even if the proposed rule were a major environmental rule, Texas Government Code, still would not apply to this rulemaking because Texas Government Code, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: 1) does not exceed federal law; 2) does not exceed an express requirement of state law; 3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) is not proposed solely under the general powers of the agency, but rather Texas Water Code Therefore, this proposed rule does not fall under any of the applicability criteria in Texas Government Code, The board invites public comment regarding this draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. TAKINGS IMPACT ASSESSMENT The board evaluated this proposed rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter The specific purpose of this rule is to implement legislative changes, address stakeholder concerns raised through preliminary input, and clarify rules to make them more understandable regarding the TWDB's rules related to regional water planning. The proposed rule would substantially advance this stated purpose by adding language related to legislative changes and clarifying existing language related to regional water planning. The board's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this proposed rule because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code (b)(4). The board is the agency that administers the regional water planning process in order to develop a state water plan. Nevertheless, the board further evaluated this proposed rule and performed an assessment of whether it constitutes a taking under Texas Government Code, Chapter Promulgation and enforcement of this proposed rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject proposed regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule requires compliance with state law regarding the state water planning process. Therefore, the proposed rule does not constitute a taking under Texas Government Code, Chapter GOVERNMENT GROWTH IMPACT STATEMENT The board reviewed the proposed rulemaking in light of the government growth impact statement requirements of Texas Government Code and has determined, for the first five years the proposed rule would be in effect, the proposed rule will not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing employee positions; (3) require an increase or decrease in future legislative appropriations to the agency; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect this state's economy. The proposed rule provides greater clarity on the joint groundwater planning process and is required to implement legislative changes. SUBMISSION OF COMMENTS Written comments on the proposed rulemaking may be submitted by mail to Mr. Todd Chenoweth, Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas , by to rulescomments@twdb.texas.gov, or by fax to (512) Comments will be accepted until the 5:00 p.m. of the 31st day following publication in the Texas Register. STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code The proposed rulemaking affects Chapter 36 of the Texas Water Code Submission Date. (a) The desired future conditions must be approved by a resolution adopted by [Not later than five years after the date on which] the districts in a groundwater management area not later than January 5, 2022, [last collectively adopted a desired future condition, the districts shall propose a desired future condition for adoption] in accordance with Texas Water Code Subsequent desired future conditions must be proposed and finally adopted by the district representatives before the end of each successive five-year period after that date. (b) The districts in a groundwater management area may, as part of the process for adopting and submitting desired future conditions, propose classification of a portion or portions of a relevant aquifer as non-relevant if the districts determine that aquifer characteristics, groundwater demands, and current groundwater uses do not warrant adoption of a desired future condition. In such a case no desired future condition is required. The districts must submit the following documentation to the agency related to the portion of the relevant aquifer proposed to be classified as non-relevant: (1) A description, location, and/or map of the aquifer or portion of the aquifer; (2) A summary of aquifer characteristics, groundwater demands, and current groundwater uses, including the total estimated recoverable storage as provided by the executive administrator, that sup- PROPOSED RULES December 22, TexReg 7289

52 port the conclusion that desired future conditions in adjacent or hydraulically connected relevant aquifer(s) will not be affected; and (3) An explanation of why the aquifer or portion of the aquifer is non-relevant for joint planning purposes. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) CHAPTER 357. REGIONAL WATER PLANNING The Texas Water Development Board ("TWDB" or "board") proposes amendments to , , , , , , , , and relating to regional water planning. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED AMENDMENT. The purpose of the amendments is to implement legislative changes from Senate Bills 347 and 1511 and House Bill 2215, 85th (R) Legislative Session, address stakeholder concerns raised through preliminary input, and clarify rules to make them more understandable. The specific provisions being amended or added and the reasons for the amendments are addressed in more detail below. Concurrent with the review of these proposed amendments, TWDB has proposed revisions to planning guidance documents contained in its current contracts with the regional water planning groups (RWPG). This draft guidance may be found at and comments may be submitted SECTION BY SECTION DISCUSSION OF PROPOSED AMENDMENTS. Subchapter A. General Information. Section Definitions and Acronyms. Section (7) is revised to correct a reference in this proposal. The definition of "Technical Memorandum" is added as (33) to establish a document that forms the basis for making a decision regarding implementation of simplified planning as provided for by Senate Bill 1511 (SB 1511), 85th (R) Legislative Session (relating to the state and regional water planning process and the funding of projects included in the state water plan). Sections (33) - (42) are subsequently renumbered to (34) - (43). Section Designations. A new (e)(6) is added to implement a change to Texas Water Code (TWC) (c), made by SB The change requires that a representative of the State Soil and Water Conservation Board serve as an ex-officio member of each RWPG. Section General Regional Water Planning Group Responsibilities and Procedures. Section (a)(1) is revised to implement a change to TWC (h)(1) made by SB The change requires that the public meeting held prior to the preparation of the regional water plan (RWP) to gather suggestions and recommendations from the public as to issues to address be conducted at a central location that is readily accessible to the public. A new (a-1) is added to implement a change to TWC (h) made by Senate Bill 347 (SB 347), 85th (R) Legislative Session (relating to the applicability of open meetings and public information laws to regional water planning groups and their committees). The change requires that each RWPG and any committee or subcommittee of a RWPG are subject to Chapters 551 (relating to Open Meetings) and 552 (relating to Public Information), Government Code. Section (b) is revised to implement a change to TWC (h)(10) made by SB The change addresses the legislative requirement that RWPGs amend their plans to exclude water management strategies or projects determined to be infeasible as defined by TWC (h)(10). The rule revision requires that, beginning with the development of the 2026 RWP, the RWPG present its analysis of infeasible strategies contained in its currently adopted plan in conjunction with the public meeting held to determine its process for identifying potentially feasible water management strategies for their upcoming plan and amend their adopted RWP as appropriate. Additionally, beginning with the development of the 2026 RWP, the notice requirements for this meeting will be those in (c) to extend the notice and comment period for those associated with the identified infeasible water management strategies or projects. Section (c) is added to require RWPG submittal of an approved Technical Memorandum, which has previously been only a contractual requirement. The Technical Memorandum is a deliverable at the approximate mid-point of the planning cycle that presents a key, preliminary analysis of water demands, water availability, existing supply, and needs in a regional water planning area. This contractual requirement is being added as a rule including for the purpose of formalizing the document that forms the basis for making a decision regarding simplified planning. Starting with the development of the 2026 RWP, the Technical Memorandum will also be the documentation of the RWPG's determination that water management strategies or projects from the previously adopted RWP are no longer feasible. Section (d) is added to allow for Executive Administrator review and comment on the Technical Memorandum and declaration of intent to pursue simplified planning. If the RWPG declares intent to pursue simplified planning, it must receive written approval from the Executive Administrator prior to implementing simplified planning. Section (e) is revised to implement a change to TWC (i) made by SB 1511 and clarify the process for the previously existing simplified planning provision. The change states that RWPGs may elect to implement simplified planning, during planning cycles that do not immediately follow the implementation of the U.S. Census and in accordance with guidance to be provided by TWDB. Following updated source water availability 42 TexReg 7290 December 22, 2017 Texas Register

53 analyses, if there are no significant changes to the water availability, water supplies, or water demands in the regional water planning area as determined by the planning group, the planning group may choose to develop a simplified RWP, as described in (f)(3), in accordance with guidance provided by the Executive Administrator and without over-allocation of any water supply source utilized in the regional water planning area. Section (f) is revised to outline the steps a RWPG must take in pursuing simplified planning. It requires completion of the Technical Memorandum; meeting new statutory or other planning requirements; adopting previous RWP or State Water Plan information, where appropriate; and conducting other activities upon approval of the Executive Administrator necessary to complete an RWP. These changes are made in order to implement changes to TWC (i) made by SB 1511 and to clarify the process for simplified planning. Section (g) is added to require an additional public hearing on a RWPG's decision to pursue simplified planning. Section (h) is added to require an RWPG meeting to consider comments received and take action on declaring to implement simplified planning for the regional water planning area. In summary, the changes to to implement the simplified planning provisions of SB 1511 require three meetings. First, the decision to pursue simplified planning must occur with completion of the Technical Memorandum. Second, the RWPG must hold a public hearing on the decision to pursue simplified planning and take comments for a period of 30 days following the hearing. Third, the RWPG must hold a meeting to consider the comments received and make a final declaration on implementation of simplified planning. Subchapter B. Guidance Principles and Notice Requirements. Section Notice and Public Participation. Section (a) is amended to implement a change to TWC (h) made by SB 347. The change requires that each RWPG and any committee or subcommittee of a RWPG are subject to Chapters 551 (relating to Open Meetings) and 552 (relating to Public Information), Government Code. Section (a) is amended to reflect that the notice requirements included in this section for the RWPGs are in addition to Chapter 551, Government Code. RWPGs should also analyze Chapter 551, Government Code, in deciding what notice requirements apply to their meetings. Section (b)(1) is revised to clarify the required notice period for a RWPG for certain actions including approving revision requests to draft population and water demand projections, specifying that plans previous to the 2026 RWP will continue to follow these notice requirements when presenting their process of identifying potentially feasible water management strategies, approving requests to submit alternative strategy substitution approvals to the Executive Administrator, declaration of implementation of simplified planning following consideration of comments received at a public hearing on the RWPG's intent to pursue simplified planning, and meetings of RWPG committees and subcommittees. Section (c)(1) is revised to include that the RWPG's approval to submit its Technical Memorandum shall meet the defined notice requirements in the subsection and that, beginning with the development of the 2026 RWP, the process for identifying potentially feasible water management strategies, including the presentation of the analysis of infeasible water management strategies or projects, will be held to these longer notice requirements to increase notice to those associated with water management strategies or projects determined to be no longer feasible. Section (c)(2) is revised to clarify the previously required posting requirements of the public notice. Section (c)(4)(D) is added to include notice requirements for project sponsors of water management strategies or projects that have been identified as infeasible. Section (d)(1) is revised to include that the RWPG's declaration to pursue simplified planning will be subject to a public hearing and associated notice as defined in this subsection. Section (d)(3)(D) is revised to reflect a renumbered paragraph in this proposed revision. Section (d)(5)(G) is added to require additional notice of simplified planning declarations to RWPGs that share sources, water management strategies, or projects with the RWPG that intends to pursue simplified planning. Section (d)(5)(H) is added to include notice requirements for project sponsors of water management strategies or projects that are being amended from an approved regional water plan due to being identified as infeasible. Section (d)(7) is revised to clarify that document provision requirements are to be consistent with the other Subsections of A new (d)(8) is added to implement a change to TWC (h)(3) made by SB The change requires that the public hearing for the initially prepared plan be conducted at a central location that is readily accessible to the public. Section (d)(7) is subsequently renumbered to (d)(9). Section (d)(9)(A)(i) is revised to require a 30-day comment period following the public hearing on the declaration of intent to pursue simplified planning. Section (d)(9)(C)(i) is revised to require RWPG consideration of public comments received prior to declaring implementation of simplified planning. Section General Considerations for Development of Regional Water Plans. Section (14) is revised to require consideration of the water conservation best management practices available on the Texas Water Development Board's website in RWP development. This new requirement is in response to stakeholder comments received during and following a previous rulemaking. Section (14) is subsequently renumbered to (15). Subchapter C. Planning Activities for Needs Analysis and Strategy Recommendations. Section Water Supply Analysis. Section (d) is revised to implement a change to TWC (e) made by House Bill 2215, 85th (R) Legislative Session (relating to the deadline for adoption of desired future conditions in groundwater conservation districts). The change requires that RWPs shall be consistent with desired future conditions in the regional water planning area as of the most recent deadline for the board to adopt the state water plan. PROPOSED RULES December 22, TexReg 7291

54 Subchapter D. Impacts, Drought Response, Policy Recommendations, and Implementation. Section Infrastructure Financing Analysis. Section is revised to clarify the previously existing requirement of TWC (q) that RWPGs should assess what role the state should have in financing recommended strategies and projects, including proposed increases in the level of state participation. Section Implementation and Comparison to Previous Regional Water Plan. Section (a) is revised to implement a change to TWC (a-1) made by SB The change requires that the state water plan assess impediments to implementation of board-prioritized projects. The proposed revision to the subsection addresses information to be collected by the planning groups to support the state water plan assessment of impediments to implementation. Subchapter E. Adoption, Submittal, and Amendments to Regional Water Plans. Section Amendments to Regional Water Plans. Section (e) is revised to clarify the current public notice and process for a RWPG to substitute an alternative water management strategy for a recommended water management strategy into their approved RWP. Section (g) is revised to implement a change to TWC (h)(10) made by SB The change requires RWPGs to amend their RWPs to exclude water management strategies or projects that cease to be feasible. The rule revision references existing requirements for RWP amendments to be utilized as appropriate and requires the planning group to address why the strategy or project was determined to be infeasible. Section (g) is subsequently renumbered to (h). Subchapter F. Consistency and Conflicts in Regional Water Plans. Section Interregional Conflicts. Section (d) is revised to implement a change to TWC (h)(6) made by SB The change requires that the public hearing on the proposed recommendation for resolution of an interregional conflict be conducted at a central location that is readily accessible to the public within the respective regional water planning areas. Section Conflicts Between Regional Water Plans and Groundwater Management Plans. Section (d) is revised to implement a change to TWC (p-2) made by SB The change requires that the public hearing on the revised groundwater management plan resulting from the resolution of a conflict between an approved RWP and an approved groundwater management plan be conducted at a central location that is readily accessible to the public within the district. Section (e) is revised to implement a change to TWC (p-1) made by SB The change requires that the public hearing on the revised RWP resulting from the resolution of a conflict between an approved RWP and an approved groundwater management plan be conducted at a central location that is readily accessible to the public within the regional water planning area. FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERN- MENTS Ms. Rebecca Trevino, Chief Financial Officer, has determined that there will be no significant fiscal implications for state or local governments as a result of the proposed rulemaking. For the first five years these rules are in effect, there are not expected to be additional costs to state or local governments resulting from their administration. These rules are not expected to result in reduction in costs to local governments. These rules are not expected to result in reductions in costs to state government. These rules are not expected to have any impact on state or local revenues. The rules do not require any increase in expenditures for state or local governments as a result of administering these rules. Because these rules will not impose a cost on regulated persons, the requirement included in Texas Government Code to repeal a rule does not apply. Furthermore, the requirement in does not apply because these rules are necessary to implement legislation, address stakeholder concerns raised through preliminary input, and clarify rules to make them more understandable. The board invites public comment regarding this fiscal note. Written comments on the fiscal note may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. PUBLIC BENEFITS AND COSTS Ms. Rebecca Trevino also has determined that for each year of the first five years the proposed rulemaking is in effect, there will be no impact to the public. LOCAL EMPLOYMENT IMPACT STATEMENT The board has determined that a local employment impact statement is not required because the proposed rule does not adversely affect a local economy in a material way for the first five years that the proposed rule is in effect because it will impose no new requirements on local economies. The board also has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of enforcing this rulemaking. The board also has determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary. These rules are designed to implement legislative changes, address stakeholder concerns, and clarify previously existing language. DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION The board reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code , and determined that the rulemaking is not subject to Texas Government Code, , because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to implement legislative changes and provide greater clarity regarding the TWDB's rules related to regional water planning. 42 TexReg 7292 December 22, 2017 Texas Register

55 Even if the proposed rule were a major environmental rule, Texas Government Code, still would not apply to this rulemaking because Texas Government Code, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: 1) does not exceed federal law; 2) does not exceed an express requirement of state law; 3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) is not proposed solely under the general powers of the agency, but rather Texas Water Code Therefore, this proposed rule does not fall under any of the applicability criteria in Texas Government Code, The board invites public comment regarding this draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. TAKINGS IMPACT ASSESSMENT The board evaluated this proposed rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter The specific purpose of this rule is to implement legislative changes, address stakeholder concerns raised through preliminary input, and clarify rules to make them more understandable regarding the TWDB's rules related to regional water planning. The proposed rule would substantially advance this stated purpose by adding language related to legislative changes and clarifying existing language related to regional water planning. The board's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this proposed rule because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code (b)(4). The board is the agency that administers the regional water planning process in order to develop a state water plan. Nevertheless, the board further evaluated this proposed rule and performed an assessment of whether it constitutes a taking under Texas Government Code, Chapter Promulgation and enforcement of this proposed rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject proposed regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule requires compliance with state law regarding the state water planning process. Therefore, the proposed rule does not constitute a taking under Texas Government Code, Chapter GOVERNMENT GROWTH IMPACT STATEMENT The board reviewed the proposed rulemaking in light of the government growth impact statement requirements of Texas Government Code and has determined, for the first five years the proposed rule would be in effect, the proposed rule will not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing employee positions; (3) require an increase or decrease in future legislative appropriations to the agency; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect this state's economy. The proposed rule provides greater clarity on the regional water planning process and is required to implement legislative changes. SUBMISSION OF COMMENTS Written comments on the proposed rulemaking may be submitted by mail to Mr. Todd Chenoweth, Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas , by to rulescomments@twdb.texas.gov, or by fax to (512) Comments will be accepted until 5:00 p.m. on January 31, SUBCHAPTER A. GENERAL INFORMATION 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Definitions and Acronyms. The following words, used in this chapter, have the following meanings. (1) Agricultural Water Conservation--Defined in of this title (relating to Definition of Terms). (2) Alternative Water Management Strategy--A fully evaluated Water Management Strategy that may be substituted into a Regional Water Plan in the event that a recommended Water Management Strategy is no longer recommended. (3) Availability--Maximum amount of raw water that could be produced by a source during a repeat of the Drought of Record, regardless of whether the supply is physically connected to or legally accessible by Water User Groups. (4) Board--The Texas Water Development Board. (5) Collective Reporting Unit--A grouping of utilities located in the Regional Water Planning Area. Utilities within a Collective Reporting Unit must have a logical relationship, such as being served by common Wholesale Water Providers, having common sources, or other appropriate associations. (6) Commission--The Texas Commission on Environmental Quality. (7) County-Other--An aggregation of utilities and individual water users within a county and not included in paragraphs (42)(A)- (D) of this section [Subsections (41)(A) - (D)]. (8) Drought Contingency Plan--A plan required from wholesale and retail public water suppliers and irrigation districts pursuant to Texas Water Code (relating to Drought Contingency Plans for Certain Applicants and Water Right Holders). The plan may consist of one or more strategies for temporary supply and demand management and demand management responses to temporary and PROPOSED RULES December 22, TexReg 7293

56 potentially recurring water supply shortages and other water supply emergencies as required by the Commission. (9) Drought Management Measures--Demand management activities to be implemented during drought that may be evaluated and included as Water Management Strategies. (10) Drought Management Water Management Strategy--A drought management measure or measures evaluated and/or recommended in a State or Regional Water Plan that quantifies temporary reductions in demand during drought conditions. (11) Drought of Record--The period of time when historical records indicate that natural hydrological conditions would have provided the least amount of water supply. (12) Executive Administrator (EA)--The Executive Administrator of the Board or a designated representative. (13) Existing Water Supply--Maximum amount of water that is physically and legally accessible from existing sources for immediate use by a Water User Group under a repeat of Drought of Record conditions. (14) Firm Yield--Maximum water volume a reservoir can provide each year under a repeat of the Drought of Record using anticipated sedimentation rates and assuming that all senior water rights will be totally utilized and all applicable permit conditions met. (15) Interbasin Transfer of Surface Water--Defined and governed in Texas Water Code (relating to Interbasin Transfers) as the diverting of any state water from a river basin and transfer of that water to any other river basin. when: (16) Interregional Conflict--An interregional conflict exists (A) more than one Regional Water Plan includes the same source of water supply for identified and quantified recommended Water Management Strategies and there is insufficient water available to implement such Water Management Strategies; or (B) in the instance of a recommended Water Management Strategy proposed to be supplied from a different Regional Water Planning Area, the Regional Water Planning Group with the location of the strategy has studied the impacts of the recommended Water Management Strategy on its economic, agricultural, and natural resources, and demonstrates to the Board that there is a potential for a substantial adverse effect on the region as a result of those impacts. (17) Intraregional Conflict--A conflict between two or more identified, quantified, and recommended Water Management Strategies in the same Initially Prepared Plan that rely upon the same water source, so that there is not sufficient water available to fully implement all Water Management Strategies and thereby creating an over-allocation of that source. (18) Initially Prepared Plan (IPP)--Draft Regional Water Plan that is presented at a public hearing in accordance with (d) of this title (relating to Notice and Public Participation) and submitted for Board review and comment. (19) Major Water Provider (MWP)--A Water User Group or a Wholesale Water Provider of particular significance to the region's water supply as determined by the Regional Water Planning Group. This may include public or private entities that provide water for any water use category. (20) Modeled Available Groundwater (MAG) Peak Factor--A percentage (e.g., greater than 100 percent) that is applied to a modeled available groundwater value reflecting the annual groundwater availability that, for planning purposes, shall be considered temporarily available for pumping consistent with desired future conditions. The approval of a MAG Peak Factor is not intended as a limit to permits or as guaranteed approval or pre-approval of any future permit application. (21) Planning Decades--Temporal snapshots of conditions anticipated to occur and presented at even intervals over the planning horizon used to present simultaneous demands, supplies, needs, and strategy volume data. A Water Management Strategy that is shown as providing a supply in the 2040 decade, for example, is assumed to come online in or prior to the year (22) Political Subdivision--City, county, district, or authority created under the Texas Constitution, Article III, 52, or Article XVI, 59, any other Political Subdivision of the state, any interstate compact commission to which the state is a party, and any nonprofit water supply corporation created and operating under Texas Water Code Chapter 67 (relating to Nonprofit Water Supply or Sewer Service Corporations). (23) Regional Water Plan (RWP)--The plan adopted or amended by a Regional Water Planning Group pursuant to Texas Water Code (relating to Regional Water Plans) and this chapter. (24) Regional Water Planning Area (RWPA)--Area designated pursuant to Texas Water Code (25) Regional Water Planning Group (RWPG)--Group designated pursuant to Texas Water Code (26) RWPG-Estimated Groundwater Availability--The groundwater Availability used for planning purposes as determined by RWPGs to which (d)(2) of this title (relating to Water Supply Analysis) is applicable or where no desired future condition has been adopted. (27) Retail Public Utility--Defined in Texas Water Code (relating to Water Rates and Services) as "any person, corporation, public utility, water supply or sewer service corporation, municipality, Political Subdivision or agency operating, maintaining, or controlling in this state facilities for providing potable water service or sewer service, or both, for compensation." (28) Reuse--Defined in of this title (relating to Definition of Terms). (29) State Drought Preparedness Plan--A plan, separate from the State Water Plan, that is developed by the Drought Preparedness Council for the purpose of mitigating the effects of drought pursuant to Texas Water Code (relating to State Drought Preparedness Plan). (30) State Drought Response Plan--A plan prepared and directed by the chief of the Texas Division of Emergency Management for the purpose of managing and coordinating the drought response component of the State Water Plan and the State Drought Preparedness Plan pursuant to Texas Water Code (relating to Drought Response Plan). (31) State Water Plan--The most recent state water plan adopted by the Board under the Texas Water Code (relating to State Water Plan). (32) State Water Planning Database--Database maintained by TWDB that stores data related to population and Water Demand projections, water Availability, Existing Water Supplies, Water Management Strategy supplies, and Water Management Strategy Projects. It is used to collect, analyze, and disseminate regional and statewide water planning data. 42 TexReg 7294 December 22, 2017 Texas Register

57 (33) Technical Memorandum--Documentation of the RWPG's preliminary analysis of Water Demand projections, water Availability, Existing Water Supplies, and Water Needs and declaration of the RWPG's intent of whether or not to pursue simplified planning. (34) [(33)] Unmet Water Need--The portion of an identified Water Need that is not met by recommended Water Management Strategies. (35) [(34)] Water Conservation Measures--Practices, techniques, programs, and technologies that will protect water resources, reduce the consumption of water, reduce the loss or waste of water, or improve the efficiency in the use of water that may be presented as Water Management Strategies, so that a water supply is made available for future or alternative uses. For planning purposes, Water Conservation Measures do not include reservoirs, aquifer storage and recovery, or other types of projects that develop new water supplies. (36) [(35)] Water Conservation Plan--The most current plan required by Texas Water Code (relating to Water Conservation Plans) from an applicant for a new or amended water rights permit and from any holder of a permit, certificate, etc. who is authorized to appropriate 1,000 acre-feet per year or more for municipal, industrial, and other non-irrigation uses and for those who are authorized to appropriate 10,000 acre-feet per year or more for irrigation, and the most current plan required by Texas Water Code from a Retail Public Utility that provides potable water service to 3,300 or more connections. These plans must include specific, quantified 5-year and 10-year targets for water savings. (37) [(36)] Water Conservation Strategy--A Water Management Strategy with quantified volumes of water associated with Water Conservation Measures. (38) [(37)] Water Demand--Volume of water required to carry out the anticipated domestic, public, and/or economic activities of a Water User Group during drought conditions. (39) [(38)] Water Management Strategy (WMS)--A plan to meet a need for additional water by a discrete Water User Group, which can mean increasing the total water supply or maximizing an existing supply, including through reducing demands. A Water Management Strategy may or may not require associated Water Management Strategy Projects to be implemented. (40) [(39)] Water Management Strategy Project (WMSP)- -Water project that has a non-zero capital costs and that when implemented, would develop, deliver, or treat additional water supply volumes, or conserve water for Water User Groups or Wholesale Water Providers. One WMSP may be associated with multiple WMSs. (41) [(40)] Water Need--A potential water supply shortage based on the difference between projected Water Demands and Existing Water Supplies. (42) [(41)] Water User Group (WUG)--Identified user or group of users for which Water Demands and Existing Water Supplies have been identified and analyzed and plans developed to meet Water Needs. These include: (A) Privately-owned utilities that provide an average of more than 100 acre-feet per year for municipal use for all owned water systems; (B) Water systems serving institutions or facilities owned by the state or federal government that provide more than 100 acre-feet per year for municipal use; (C) All other Retail Public Utilities not covered in subparagraphs [paragraphs] (A) and (B) of this paragraph that provide more than 100 acre-feet per year for municipal use; (D) Collective Reporting Units, or groups of Retail Public Utilities that have a common association and are requested for inclusion by the RWPG; (E) Municipal and domestic water use, referred to as County-Other, not included in subparagraphs [paragraphs] (A)-(D) of this paragraph [subsection]; and (F) Non-municipal water use including manufacturing, irrigation, steam electric power generation, mining, and livestock watering for each county or portion of a county in an RWPA. (43) [(42)] Wholesale Water Provider (WWP)--Any person or entity, including river authorities and irrigation districts, that delivers or sells water wholesale (treated or raw) to WUGs or other WWPs or that the RWPG expects or recommends to deliver or sell water wholesale to WUGs or other WWPs during the period covered by the plan. The RWPGs shall identify the WWPs within each region to be evaluated for plan development Designations. (a) The Board shall review and update the designations of RW- PAs as necessary but at least every five years, on its own initiative or upon recommendation of the EA. The Board shall provide 30 days notice of its intent to amend the designations of RWPAs by publication of the proposed change in the Texas Register and by mailing the notice to each mayor of a municipality with a population of 1,000 or more or which is a county seat that is located in whole or in part in the RW- PAs proposed to be impacted, to each water district or river authority located in whole or in part in the RWPA based upon lists of such water districts and river authorities obtained from the Commission, and to each county judge of a county located in whole or in part in the RW- PAs proposed to be impacted. After the 30 day notice period, the Board shall hold a public hearing at a location to be determined by the Board before making any changes to the designation of an RWPA. (b) If upon boundary review the Board determines that revisions to the boundaries are necessary, the Board shall designate areas for which RWPs shall be developed, taking into consideration factors such as: (1) River basin and aquifer delineations; (2) Water utility development patterns; (3) Socioeconomic characteristics; (4) Existing RWPAs; (5) Political Subdivision boundaries; (6) Public comment; and (7) Other factors the Board deems relevant. (c) After an initial coordinating body for a RWPG is named by the Board, the RWPGs shall adopt, by two-thirds vote, bylaws that are consistent with provisions of this chapter. Within 30 days after the Board names members of the initial coordinating body, the EA shall provide to each member of the initial coordinating body a set of model bylaws which the RWPG shall consider. The RWPG shall provide copies of its bylaws and any revisions thereto to the EA. The bylaws adopted by the RWPG shall at a minimum address the following elements: (1) definition of a quorum necessary to conduct business; PROPOSED RULES December 22, TexReg 7295

58 (2) method to be used to approve items of business including adoption of RWPs or amendments thereto; (3) methods to be used to name additional members; (4) terms and conditions of membership; (5) methods to record minutes and where minutes will be archived as part of the public record; and (6) methods to resolve disputes between RWPG members on matters coming before the RWPG. (d) RWPGs shall maintain at least one representative of each of the following interest categories as voting members of the RWPG. However, if an RWPA does not have an interest category below, then the RWPG shall so advise the EA and no membership designation is required. (1) Public, defined as those persons or entities having no economic interest in the interests represented by paragraphs (2) - (12) of this subsection other than as a normal consumer; (2) Counties, defined as the county governments for the 254 counties in Texas; (3) Municipalities, defined as governments of cities created or organized under the general, home-rule, or special laws of the state; (4) Industries, defined as corporations, partnerships, sole proprietorships, or other legal entities that are formed for the purpose of making a profit and which produce or manufacture goods or services and which are not small businesses; (5) Agricultural interests, defined as those persons or entities associated with production or processing of plant or animal products; (6) Environmental interests, defined as those persons or groups advocating the conservation of the state's natural resources, including but not limited to soil, water, air, and living resources; (7) Small businesses, defined as corporations, partnerships, sole proprietorships, or other legal entities that are formed for the purpose of making a profit, are independently owned and operated, and have fewer than 100 employees or less than $1 million in gross annual receipts; (8) Electric generating utilities, defined as any persons, corporations, cooperative corporations, or any combination thereof, meeting each of the following three criteria: own or operate for compensation equipment or facilities which produce or generate electricity; produce or generate electricity for either wholesale or retail sale to others; and are neither a municipal corporation nor a river authority; (9) River authorities, defined as any districts or authorities created by the legislature which contain areas within their boundaries of one or more counties and which are governed by boards of directors appointed or designated in whole or part by the governor or board, including, without limitation, San Antonio River Authority and Palo Duro River Authority; (10) Water districts, defined as any districts or authorities, created under authority of either Texas Constitution, Article III, 52(b)(1) and (2), or Article XVI, 59, including districts having the authority to regulate the spacing of or production from water wells, but not including river authorities; (11) Water utilities, defined as any persons, corporations, cooperative corporations, or any combination thereof that provide water supplies for compensation except for municipalities, river authorities, or water districts; and (12) Groundwater management areas, defined as a single representative for each groundwater management area that is at least partially located within an RWPA. Defined as a representative from a groundwater conservation district that is appointed by the groundwater conservation districts within the associated groundwater management area. (e) The RWPGs shall add the following non-voting members, who shall receive meeting notifications and information in the same manner as voting members: (1) Staff member of the Board to be designated by the EA; (2) Staff member of the Texas Parks and Wildlife Department designated by its executive director; (3) Member designated by each adjacent RWPG to serve as a liaison; (4) One or more persons to represent those entities with headquarters located in another RWPA and which holds surface water rights authorizing a diversion of 1,000 acre-feet a year or more in the RWPA, which supplies water under contract in the amount of 1,000 acre-feet a year or more to entities in the RWPA, or which receives water under contract in the amount of 1,000 acre-feet a year or more from the RWPA; [and] (5) Staff member of the Texas Department of Agriculture designated by its commissioner; and [.] (6) Staff member of the State Soil and Water Conservation Board designated by its executive director. (f) Each RWPG shall provide a current list of its members to the EA; the list shall identify the interest represented by each member including interests required in subsection (d) of this section. (g) Each RWPG, at its discretion, may at any time add additional voting and non-voting representatives to serve on the RWPG for any new interest category, including additional representatives of those interests already listed in subsection (d) of this section that the RWPG considers appropriate for water planning. (h) Each RWPG, at its discretion, may remove individual voting or non-voting members or eliminate RWPG representative positions in accordance with the RWPG bylaws as long as minimum requirements of RWPG membership are maintained in accordance with subsection (d) of this section. (i) RWPGs may enter into formal and informal agreements to coordinate, avoid conflicts, and share information with other RW- PGs or any other interests within any RWPA for any purpose the RW- PGs consider appropriate including expediting or making more efficient water planning efforts. These efforts may involve any portion of the RWPG membership. Any plans or information developed through these efforts by RWPGs or by committees may be included in an RWP only upon approval of the RWPG. (j) Upon request, the EA will provide technical assistance to RWPGs, including on water supply and demand analysis, methods to evaluate the social and economic impacts of not meeting needs, and regarding Drought Management Measures and water conservation practices General Regional Water Planning Group Responsibilities and Procedures. 42 TexReg 7296 December 22, 2017 Texas Register

59 (a) Prior to the preparation for the RWPs, in accordance with the public participation requirements in of this title (relating to Notice and Public Participation), the RWPGs shall: (1) hold at least one public meeting at a central location readily accessible to the public within the regional water planning area to gather suggestions and recommendations from the public as to issues that should be addressed or provisions that should be included in the next regional or state water plan; (2) prepare a scope of work that includes a detailed description of tasks to be performed, identifies responsible parties for task execution, a task schedule, task and expense budgets, and describes interim products, draft reports, and final reports for the planning process; (3) approve any amendments to the scope of work only in an open meeting of the RWPG where notice of the proposed action was provided in accordance with of this title; and (4) designate a Political Subdivision as a representative of the RWPG eligible to apply for financial assistance for scope of work and RWP development pursuant to Chapter 355, Subchapter C of this title (relating to Regional Water Planning Grants). (a-1) Each RWPG and any committee or subcommittee of an RWPG are subject to Chapters 551 (relating to Open Meetings) and 552 (relating to Public Information), Government Code. (b) An RWPG shall hold a public meeting to determine the process for identifying potentially feasible WMSs; the process shall be documented and shall include input received at the public meeting; after reviewing the potentially feasible strategies using the documented process, then the RWPG shall list all possible WMSs that are potentially feasible for meeting a Water Need in the region. The public meeting under this subsection shall be in accordance with the requirements of (b) of this title, for the development of RWPs previous to the 2026 RWP. Beginning with the development of the 2026 RWP, and every RWP thereafter, this meeting shall be held in accordance with the requirements of (c) of this title and shall include the results of the analysis of infeasible WMSs or WMSPs, as defined by Texas Water Code (h)(10), included in the most recently adopted previous RWP. Infeasible WMSs or WMSPs shall be identified based on project sponsor provided information or local knowledge, as acquired through plan development activities such as surveys, and as determined based on implementation schedules consistent with implementation by the project sponsors. The group shall provide notice to all associated project sponsors and amend its adopted RWP as appropriate based upon the analysis. (c) The RWPGs shall approve and submit a Technical Memorandum to the EA after notice pursuant to (c) of this title. The Technical Memorandum shall include: (1) The most recent population and Water Demand projections adopted by the Board; (2) Updated source water Availability utilized in the RWPA, as entered into the State Water Planning Database; (3) Updated Existing Water Supplies, as entered into the State Water Planning Database; (4) Identified Water Needs and surpluses; (5) The documented process used by the RWPG to identify potentially feasible WMSs; (6) The potentially feasible WMSs identified as of the date of submittal of the Technical Memorandum to the EA, if any; (7) Beginning with the development of the 2026 RWP and each RWP thereafter, a listing of the infeasible WMSs and WMSPs as determined by the RWPG pursuant to TWC (h)(10) and subsection (b) of this section; and (8) During each off-census RWP development, the RWPG's declaration of intent to pursue simplified planning for that planning cycle. If the RWPG intends to pursue simplified planning, the RWPG shall document the process to authorize and initiate subsection (g) of this section. (d) The EA shall evaluate the Technical Memorandum and any declaration of intent to pursue simplified planning, if applicable, and issue written approval prior to implementation of simplified planning by the RWPG. (e) [(c)] If applicable, and approved by the EA, an RWPG may implement simplified planning in off-census planning cycles in accordance with guidance to be provided by the EA. An RWPG may only pursue simplified planning if: (1) the [If an] RWPG determines in its analysis of Water Needs that it has sufficient Existing Water Supplies in the RWPA to meet all Water Needs for the 50-year planning period while identifying Existing Water Supplies that are available for voluntary redistribution in the RWPA or to other RWPAs; or[,] (2) an RWPG determines, including based on its analysis of source water Availability, that there are no significant changes, as determined by the RWPG, to water Availability, Existing Water Supplies, or Water Demands in the RWPA. A determination that there have been no significant changes may not be based solely on an aggregated, region-wide basis without consideration of sub-regional changes. (f) If an RWPG elects to pursue simplified planning, it must: [RWPGs may conduct simplified regional water planning as follows:] (1) Complete the Technical Memorandum in subsection (c) of this section and, based upon the analysis, determine and document whether significant changes have resulted from the most recently adopted RWP;[(1) identify Existing Water Supplies that are available for voluntary redistribution in an RWPA or to other RWPAs;] (2) Meet new statutory or other planning requirements that come into effect during the most recent planning cycle; (3) [(2)] where appropriate, adopt previous RWP or State Water Plan information, updated as necessary, as the IPP and RWP, in accordance with guidance to be provided by the EA; and (4) [(3)] conduct other activities upon approval of the EA necessary to complete an RWP that meets rule and statute requirements, including that no water supply sources to the RWPA be over-allocated. (g) If an RWPG declares intention to pursue simplified planning with the submittal of its Technical Memorandum, in accordance with subsection (c) of this section, the RWPG shall hold a public hearing on the intent to pursue simplified planning for the RWPA, to be held after submitting the Technical Memorandum and in accordance in (d) of this title. This public hearing is not required for RWPGs that state they will not pursue simplified planning in their Technical Memorandum. (h) Following receipt of public comments, the RWPG shall hold a meeting in accordance with the requirements of (b) of this title to consider comments received and declare implementation of simplified planning. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. PROPOSED RULES December 22, TexReg 7297

60 Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER B. GUIDANCE PRINCIPLES AND NOTICE REQUIREMENTS 31 TAC , STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Notice and Public Participation. (a) Each RWPG and any committee or subcommittee of an RWPG are subject to Chapters 551 and 552, Government Code. A [RWPGs shall conduct all business in meetings posted and held in accordance with the Texas Open Meetings Act, Texas Government Code Chapter 551, with a] copy of all materials presented or discussed at an open meeting shall be made available for public inspection prior to and following the meetings and shall meet the additional notice requirements when specifically referenced as required under other subsections. In addition to the notice requirements of Chapter 551, Government Code, the following requirements apply to RWPGs. (b) All public notices required by this subsection shall comply with this section and shall meet the following requirements: (1) These notice requirements apply to the following RWPG actions: regular RWPG meetings; amendments to the regional water planning scope of work or budget; population projection and Water Demand projection revision requests to the EA regarding draft projections; process of identifying potentially feasible WMSs for plans previous to the 2026 RWPs; meetings to replace RWPG members or addition of new RWPG members; submittal of request to EA for approval of an Alternative WMS substitution; declaration of implementation of simplified planning following public hearing on intent to pursue simplified planning; [and] adoption of RWPs; and RWPG committee and subcommittee meetings. (2) Published 72 hours prior to the meeting. (3) Notice shall include: (A) a date, time, and location of the meeting; (B) a summary of the proposed action to be taken; and (C) the name, telephone number, and address of the person to whom questions or requests for additional information may be submitted. (4) Entities to be notified in writing include: (A) all voting and non-voting RWPG members; and (B) any person or entity who has requested notice of RWPG activities. (5) Notice and agenda to be posted: (A) On the website of the RWPG or host Political Subdivision. In lieu of posting the meeting notice and agenda on the website of the RWPG or host Political Subdivision, the notice and agenda may be provided, in writing, to the County Clerk of each county in the RWPA; and (B) Texas Secretary of State website. (6) Documents to be made available on the internet or in hard copy for public inspection prior to and following meeting include: (A) Agenda of meeting; and (B) Copies of all materials presented or discussed at the meeting. (c) Notice under this subsection shall meet the following requirements: (1) These notice requirements apply to the following RWPG actions: population projection and Water Demand projection revision requests to officially adopted Board projections; approval to submit Technical Memorandum; substitution of Alternative WMSs; process of identifying potentially feasible WMSs and presentation of analysis of infeasible WMSs or WMSPs for plans beginning with the 2026 plan; and minor amendments to RWPs. (2) Notice of meetings under this subsection shall be published/postmarked on the internet and[,] ed or[, and] mailed to the public before the 14th day preceding the date of the meeting. (3) Notice shall include: (A) a date, time, and location of the meeting; (B) a summary of the proposed action to be taken; (C) the name, telephone number, and address of the person to whom questions or requests for additional information may be submitted; and (D) information that the RWPG will accept written and oral comments at the meetings and information on how the public may submit written comments separate from such meetings. The RWPG shall specify a deadline for submission of public written comments of not earlier than 14 days after the meeting. (4) Entities to be notified in writing include: (A) all voting and non-voting RWPG members; (B) any person or entity who has requested notice of RWPG activities; [and] (C) each RWPG where a recommended or Alternative WMS being considered would be located; and[.] (D) for actions associated with infeasible WMSs or WMSPs, each project sponsor of a WMS or WMSP identified as infeasible. (5) Notice and associated meeting agenda to be posted: (A) On the website of the RWPG or host Political Subdivision. In lieu of posting the meeting notice and agenda on the website of the RWPG or host Political Subdivision, the notice and agenda may be provided, in writing, to the County Clerk of each county in the RWPA; and (B) Texas Secretary of State website. (6) Documents to be made available on the internet or in hard copy for public inspection prior to and following meeting include: (A) Agenda of meeting; and 42 TexReg 7298 December 22, 2017 Texas Register

61 (B) Copies of all materials, reports, plans presented or discussed at the meeting. (7) Public comments to be accepted as follows: (A) Written comments for 14 days prior to meeting with comments considered by RWPG members prior to action; and (B) Oral and written public comment during meeting; (C) Written comments must also be accepted for 14 days following the meeting and all comments received during the comment period must be submitted to the Board by the RWPG. (d) Notice under this subsection shall meet the following requirements: (1) These notice requirements apply to the following RWPG actions: holding a preplanning public meeting to obtain public input on development of the next RWP; public hearings on declarations to pursue simplified planning, major amendments to RWPs; and holding hearings for IPPs. (2) Notice shall be published in a newspaper of general circulation in each county located in whole or in part in the RWPA before the 30th day preceding the date of the public meeting or hearing. include: hearing; (3) Notice of the public meetings and public hearings shall (A) a date, time, and location of the public meeting or (B) a summary of the proposed action to be taken; (C) the name, telephone number, and address of the person to whom questions or requests for additional information may be submitted; and (D) information that the RWPG will accept written and oral comments at the hearings and information on how the public may submit written comments separate from such hearings. The RWPG shall specify a deadline for submission of public written comments as specified in paragraph (9)[(7)](A) of this subsection. (4) RWPGs shall make copies of the IPP available for public inspection at least 30 days before a public hearing required or held by providing a copy of the IPP in at least one public library in each county and either the county courthouse's law library, the county clerk's office, or some other accessible place within the county courthouse of each county having land in the RWPA and include locations of such copies in the notice for public hearing. For distribution of the IPP and adopted RWP, the RWPG may consult and coordinate with county and local officials in determining the most appropriate location in the county courthouse to ensure maximum accessibility to the public during business hours. Additionally, the RWPG may consult with local and county officials in determining which public library in the county can provide maximum accessibility to the public. According to the capabilities of the facility, the RWPG may provide the copy electronically, on electronic media, through an internet web link, or in hard copy. The RWPG shall make an effort to ensure ease of access to the public, including where feasible, posting the IPP on websites and providing notice of such posting. The public inspection requirement in this subsection applies only to IPPs; adopted RWPs are only required to be submitted to the Board pursuant to Texas Water Code, (i). (5) Notice shall be mailed to, at a minimum, the following: (A) Notification of all entities that are to be notified under subsection (c)(4) of this section; (B) Each mayor of a municipality, located in whole or in part in the RWPA, with a population of 1,000 or more or which is a county seat; (C) Each county judge of a county located in whole or in part in the RWPA; (D) Each special or general law district or river authority with responsibility to manage or supply water in the RWPA based upon lists of such water districts and river authorities obtained from the Commission; and (E) each Retail Public Utility, defined as a community water system, that serves any part of the RWPA or receives water from the RWPA based upon lists of such entities obtained from the Commission; [and] (F) each holder of record of a water right for the use of surface water the diversion of which occurs in the RWPA based upon lists of such water rights holders obtained from the Commission;[.] (G) for declarations of intent to pursue simplified planning, RWPGs with water supply sources, WMSs, or WMSPs shared with the RWPG declaring intent to pursue simplified planning; and (H) for amendments associated with infeasible WMSs or WMSPs, each project sponsor of a WMS or WMSP identified as infeasible. (6) Notice and associated hearing and meeting agenda shall also be posted: (A) On the website of the RWPG or host Political Subdivision. In lieu of posting the meeting notice and agenda on the website of the RWPG or host Political Subdivision, the notice and agenda may be provided, in writing, to the County Clerk of each county in the RWPA; (B) Texas Secretary of State website; and (C) In the Texas Register. (7) Documents to be made available on the internet or in hard copy for public inspection prior to and following meeting include: meeting. (A) Agenda of meeting; and (B) Copies of all materials presented or discussed at the (8) The public hearing for the IPP shall be conducted at a central location readily accessible to the public within the regional water planning area. (9) [(7)] Public comments to be accepted as follows: (A) Written comments submitted immediately following 30-day public notice posting and prior to and during meeting or hearing; and (i) Until not earlier than 30-days following the date of the public hearing on a major amendment to an RWP or declaration of intent to pursue simplified planning. (ii) Until not earlier than 60 days following the date of the public hearing on an IPP. hearing; (B) Verbal public comments at the noticed meeting or (C) Comments received must be considered as follows: (i) Comments associated with hearings must be considered by RWPG members when declaring implementation of simpli- PROPOSED RULES December 22, TexReg 7299

62 fied planning, adopting an RWP, or adopting a major amendment to an RWP. (ii) Comments associated with a preplanning meeting must be considered prior to taking RWPG action. (e) Notice under this subsection shall meet the following requirements: (1) These notice requirements apply when an RWPG is requesting research and planning funds from the Board. (2) Notice shall be published in a newspaper of general circulation in each county located in whole or in part in the RWPA at least 30 days prior to Board consideration of funding applications. (3) Notice shall include the name and address of the eligible applicant and the name of the applicant's manager or official representative; a brief description of the RWPA; the purposes of the planning project; the Board's name, address, and the name of a contact person with the Board; a statement that any comments must be filed with the EA and the applicant within 30 days of the date on which the notice is mailed or published. Prior to action by the Board, the applicant must provide one copy of the notice sent, a list of those to which the notice was sent, the date on which the notice was sent, copies of all notices as published showing name of the newspaper and the date on which the notice was published. (4) Notice shall be mailed to, at a minimum, the following: (A) Each mayor of a municipality, located in whole or in part in the RWPA, with a population of 1,000 or more or which is a county seat; (B) Each county judge of a county located in whole or in part in the RWPA; (C) Each special or general law district or river authority with responsibility to manage or supply water in the RWPA based upon lists of such water districts and river authorities obtained from the Commission; and (D) All other RWPGs. (5) Notice shall also be posted on the website of the RWPG or host Political Subdivision General Considerations for Development of Regional Water Plans. (a) RWPGs shall consider existing local, regional, and state water planning efforts, including water plans, information and relevant local, regional, state and federal programs and goals when developing the RWP. The RWPGs shall also consider: (1) Water Conservation Plans; (2) drought management and Drought Contingency Plans; (3) information compiled by the Board from water loss audits performed by Retail Public Utilities pursuant to of this title (relating to Water Loss Audits); (4) publicly available plans for major agricultural, municipal, manufacturing and commercial water users; (5) local and regional water management plans; (6) water availability requirements promulgated by a county commissioners court in accordance with Texas Water Code (relating to Priority Groundwater Management Areas); (7) the Texas Clean Rivers Program; (8) the U.S. Clean Water Act; (9) water management plans; (10) other planning goals including, but not limited to, regionalization of water and wastewater services where appropriate; (11) approved groundwater conservation district management plans and other plans submitted under Texas Water Code (relating to Local Water Planning); [and] (12) approved groundwater regulatory plans; (13) potential impacts on public health, safety, or welfare; (14) water conservation best management practices available on the TWDB website; and (15) [(14)] any other information available from existing local or regional water planning studies. (b) The RWP shall contain a separate chapter for the contents of , , , , , , , , and of this title and shall also contain a separate chapter for the contents of and , and of this title for a total of eleven separate chapters. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER C. PLANNING ACTIVITIES FOR NEEDS ANALYSIS AND STRATEGY RECOMMENDATIONS 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Water Supply Analysis. (a) RWPGs shall evaluate: (1) source water Availability during Drought of Record conditions; and (2) existing water supplies that are legally and physically available to WUGs and wholesale water suppliers within the RWPA for use during the Drought of Record. (b) Evaluations shall consider surface water and groundwater data from the State Water Plan, existing water rights, contracts and option agreements relating to water rights, other planning and water supply studies, and analysis of water supplies existing in and available to the RWPA during Drought of Record conditions. 42 TexReg 7300 December 22, 2017 Texas Register

63 (c) For surface water supply analyses, RWPGs shall use most current Water Availability Models from the Commission to evaluate the adequacy of surface water supplies. As the default approach for evaluating existing supplies, RWPGs shall assume full utilization of existing water rights and no return flows when using Water Availability Models. RWPGs may use better, more representative, water availability modeling assumptions or better site-specific information with written approval from the EA. Information available from the Commission shall be incorporated by RWPGs unless better site-specific information is available and approved in writing by the EA. (1) Evaluation of existing stored surface water available during Drought of Record conditions shall be based on Firm Yield. The analysis may be based on justified operational procedures other than Firm Yield. The EA shall consider a written request from an RWPG to use procedures other than Firm Yield. (2) Evaluation of existing run of river surface water available for municipal WUGs during Drought of Record conditions shall be based on the minimum monthly diversion amounts that are available 100 percent of the time, if those run of river supplies are the only supply for the municipal WUG. (d) RWPGs shall use modeled available groundwater volumes for groundwater Availability, as issued by the EA, and incorporate such information in its RWP unless no modeled available groundwater volumes are provided. Groundwater Availability used in the RWP must be consistent with the desired future conditions as of the most recent deadline for [date] the Board to adopt the [most recently adopted a] State Water Plan or, at the discretion of the RWPG, established subsequent to the adoption of the most recent State Water Plan. (1) An RWP is consistent with a desired future condition if the groundwater Availability amount in the RWP and on which an Existing Water Supply or recommended WMS relies does not exceed the modeled available groundwater amount associated with the desired future condition for the relevant aquifers, in accordance with paragraph (2) of this subsection or as modified by paragraph (3) of this subsection, if applicable. The desired future condition must be either the desired future condition adopted as of the most recent deadline for [date] the Board to adopt the [most recently adopted a] State Water Plan or, at the option of the RWPG, a desired future condition adopted on a subsequent date. (2) If no groundwater conservation district exists within the RWPA, then the RWPG shall determine the Availability of groundwater for regional planning purposes. The Board shall review and consider approving the RWPG-Estimated Groundwater Availability, prior to inclusion in the IPP, including determining if the estimate is physically compatible with the desired future conditions for relevant aquifers in groundwater conservation districts in the co-located groundwater management area or areas. The EA shall use the Board's groundwater availability models as appropriate to conduct the compatibility review. (3) In RWPAs that have at least one groundwater conservation district, the EA shall consider a written request from an RWPG to apply a MAG Peak Factor in the form of a percentage (e.g., greater than 100 percent) applied to the modeled available groundwater value of any particular aquifer-region-county-basin split within the jurisdiction of a groundwater conservation district, or groundwater management area if no groundwater conservation district exists, to allow temporary increases in annual availability for planning purposes. The request must: (A) Include written approval from the groundwater conservation district, if a groundwater conservation district exists in the particular aquifer-region-county-basin split, and from representatives of the groundwater management area; (B) Provide the technical basis for the request in sufficient detail to support groundwater conservation district, groundwater management area, and EA evaluation; and (C) Document the basis for how the temporary availability increase will not prevent the groundwater conservation district from managing groundwater resources to achieve the desired future condition. (e) RWPGs shall evaluate the Existing Water Supplies for each WUG and WWP. (f) Water supplies based on contracted agreements shall be based on the terms of the contract, which may be assumed to renew upon contract termination if the contract contemplates renewal or extensions. (g) Evaluation results shall be reported by WUG in accordance with (a) of this title (relating to Projected Population and Water Demands) and MWP in accordance with (b) of this title. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER D. IMPACTS, DROUGHT RESPONSE, POLICY RECOMMENDATIONS, AND IMPLEMENTATION 31 TAC , STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Infrastructure Financing Analysis. RWPGs shall assess and quantitatively report on how individual local governments, regional authorities, and other Political Subdivisions in their RWPA propose to finance recommended WMSs and associated WMSPs. The assessment shall also describe what role the RWPG proposes for the state in financing recommended WMSs and associated WMSPs, including proposed increases in the level of state participation in funding for regional projects to meet needs beyond the reasonable financing capability of local governments, regional authorities, and other political subdivisions involved in building water infrastructure Implementation and Comparison to Previous Regional Water Plan. (a) RWPGs shall describe the level of implementation of previously recommended WMSs and associated impediments to implementation in accordance with guidance provided by the board. Information on the progress of implementation of all WMSs that were recommended in the previous RWP, including conservation and Drought PROPOSED RULES December 22, TexReg 7301

64 Management WMSs; and the implementation of WMSPs that have affected progress in meeting the state's future water needs. (b) RWPGs shall provide a brief summary of how the RWP differs from the previously adopted RWP with regards to: (1) Water Demand projections; (2) Drought of Record and hydrologic and modeling assumptions used in planning for the region; (3) Groundwater and surface water Availability, Existing Water Supplies, and identified Water Needs for WUGs and WWPs; and (4) Recommended and Alternative WMSs and WMSPs. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER E. ADOPTION, SUBMITTAL, AND AMENDMENTS TO REGIONAL WATER PLANS 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Amendments to Regional Water Plans. (a) Local Water Planning Amendment Requests. A Political Subdivision in the RWPA may request an RWPG to consider specific changes to an adopted RWP based on changed conditions or new information. An RWPG must formally consider such request within 180 days after its receipt and shall amend its adopted RWP if it determines an amendment is warranted. If the Political Subdivision is not satisfied with the RWPG's decision on the issue, it may file a petition with the EA to request Board review the decision and consider changing the approved RWP. The Political Subdivision shall send a copy of the petition to the chair of the affected RWPG. (1) The petition must state: (A) the changed condition or new information that affects the approved RWP; (B) the specific sections and provisions of the approved RWP that are affected by the changed condition or new information; (C) the efforts made by the Political Subdivision to work with the RWPG to obtain an amendment; and (D) the proposed amendment to the approved RWP. (2) If the EA determines that the changed condition or new information warrants a change in the approved RWP, the EA shall request the RWPG to consider making the appropriate change and provide the reason in writing. The Political Subdivision that submitted the petition shall receive notice of any action requested of the RWPG by the EA. If the RWPG does not amend its plan consistent with the request within 90 days, it shall provide a written explanation to the EA, after which the EA shall present the issue to the Board for consideration at a public meeting. Before presenting the issue to the Board, the EA shall provide the RWPG, the Political Subdivision submitting the petition, and any Political Subdivision determined by the EA to be affected by the issue 30 days notice. At the public meeting, the Board may direct the RWPG to amend its RWP based on the local Political Subdivision's request. (b) Major Amendments to RWPs and State Water Plan. An RWPG may amend an adopted RWP at any meeting, after giving notice for a major amendment and holding a hearing according to (d) of this title (relating to Notice and Public Participation). An amendment is major if it does not meet the criteria of subsection (c), (d) or (e) of this section. An RWPG may propose amendments to an approved RWP by submitting proposed amendments to the Board for its consideration and possible approval under the standards and procedures of this section. (1) Initiation of a Major Amendment. An entity may request an RWPG amend its adopted RWP. An RWPG's consideration for action to initiate an amendment may occur at a regularly scheduled meeting. (2) RWPG Public Hearing. The RWPG shall hold a public hearing on the amendment as defined in (d) of this title. The amendment shall be available for agency and public comment at least 30 days prior to the public hearing and 30 days following the public hearing as defined in (d) of this title. (3) The proposed major amendment: (A) Shall not result in an over-allocation of an existing or planned source of water; and (B) Shall conform with rules applicable to RWP development as defined in Subchapters C and D of this chapter. (4) RWPG Major Amendment Adoption. The RWPG may adopt the amendment at a regularly scheduled RWPG meeting held in accordance with (b) of this title following the 30-day public comment period held in accordance with (d) of this title. The amendment shall include response to comments received. (5) Board Approval of Major Amendment. After adoption of the major amendment, the RWPG shall submit the amendment to the Board which shall consider approval of the amendment at its next regularly scheduled meeting following EA review of the amendment. (c) Minor Amendments to RWPs and State Water Plan. (1) An RWPG may amend its RWP by first providing a copy of the proposed amendment to the EA for a determination as to whether the amendment would be minor. (2) EA Pre-Adoption Review. The EA shall evaluate the proposed minor amendment prior to the RWPG's vote to adopt the amendment. An amendment is minor if it meets the following criteria: (A) does not result in over-allocation of an existing or planned source of water; (B) does not relate to a new reservoir; 42 TexReg 7302 December 22, 2017 Texas Register

65 (C) does not increase unmet needs or produce new unmet needs in the adopted RWP; (D) does not have a significant effect on instream flows, environmental flows or freshwater flows to bays and estuaries; (E) does not have a significant substantive impact on water planning or previously adopted management strategies; and the plan. (F) does not delete or change any legal requirements of (3) Determination by EA. If the EA determines that the proposed amendment is minor, EA shall notify, in writing, the RWPG as soon as practicable. (4) RWPG Public Meeting. After receipt of the written determination from the EA, the RWPG shall conduct a public meeting in accordance with (c) of this title. The public shall have an opportunity to comment and the RWPG shall amend the proposed minor amendment based on public comments, as appropriate, and to comply with existing statutes and rules related to regional water planning responses. (5) Board Approval of Minor Amendment. After adoption of the minor amendment, the RWPG shall submit the amendment to the Board which shall approve the amendment at its next regularly scheduled meeting unless the amendment contradicts or is in substantial conflict with statutes and rules relating to regional water planning. (d) Amendment for Water Planning for a Clean Coal Project. An amendment to an RWP or the State Water Plan to facilitate planning for water supplies reasonably required for a clean coal project, as defined by Texas Water Code 5.001, relating to the Texas Commission on Environmental Quality, shall be adopted by the process described in this section. However, an RWPG may amend the RWP to accommodate planning for a clean coal project without a public meeting or hearing if the EA determines that: or (1) the amendment does not significantly change the RWP; (2) the amendment does not adversely affect other WMSs in the RWP. (e) Substitution of Alternative WMSs. [After notice is provided in accordance with (c) of this title,] RWPGs may substitute one or more evaluated Alternative Water Management Strategies for a recommended strategy if the strategy originally recommended is no longer recommended and the substitution of the Alternative WMS is capable of meeting the same Water Need without over-allocating any source. Before substituting an Alternative WMS, the RWPG must provide public notice in accordance with (b) of this title and request written approval from the EA. If the EA approves the substitution, the RWPG must provide public notice in accordance with (c) of this title before taking action to substitute the Alternative WMS. [Proposed substitutions must receive written approval from the EA prior to substitution by the RWPG.] (f) In the instance of a substitution of an Alternative WMS or a proposed amendment with a recommended WMS to be supplied from a different RWPA, the RWPG recommending such strategy shall submit, concurrently with the submission of the substitution or proposed amendment to the EA, a copy of the substitution or proposed amendment to the RWPG for the location of such strategy. The provisions of sections (d), (e), (f), and (h), and , related to Interregional Conflicts, shall apply to substitution or amendment to the RWP in the same manner as those subdivisions apply to an IPP. (g) Amendment for Infeasible Recommended WMSs or WM- SPs. Following the results of the analysis presented at a public meeting in accordance with (b) of this title, an RWPG shall amend an adopted RWP to remove an infeasible recommended WMS or WMSP, as defined by Texas Water Code (h)(10). The RWPG will follow the amendment processes in accordance with subsections (b), (c), or (e) of this section. The amendment shall summarize the project components and address why they were determined to be infeasible. Subsequent amendments during the planning cycle for infeasible recommended WMS or WMSP may occur at the discretion of the RWPG based upon information presented to the RWPG by project sponsors. (h) [(g)] Amending the State Water Plan. Following amendments of RWPs, including substitutions of Alternative WMSs, the Board shall make any necessary amendments to the State Water Plan as outlined in of this title (relating to Guidelines). The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER F. CONSISTENCY AND CONFLICTS IN REGIONAL WATER PLANS 31 TAC , STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and The proposed rulemaking affects Chapter 16 of the Texas Water Code Interregional Conflicts. (a) In the event an RWPG has asserted an interregional conflict and the Board has determined that there is a potential for a substantial adverse effect on that region, or the Board finds that an interregional conflict exists between IPPs, the EA may use the following process: (1) notify the affected RWPGs of the nature of the interregional conflict; (2) request affected RWPGs appoint a representative or representatives authorized to negotiate on behalf of the RWPG and notify the EA in writing of the appointment; (3) request affected RWPGs' assistance in resolving the conflict; and (4) negotiate resolutions of conflicts with RWPGs as determined by the EA. (b) In the event the negotiation is unsuccessful, the EA may: (1) determine a proposed recommendation for resolution of the conflict; PROPOSED RULES December 22, TexReg 7303

66 (2) provide notice of its intent to hold a public hearing on proposed recommendations for resolution of the conflict by publishing notice of the proposed change in the Texas Register and in a newspaper of general circulation in each county located in whole or in part in the RWPAs involved in the dispute 30 days before the public hearing and by mailing notice of the public hearing 30 days before public hearing to those persons or entities listed in (d) of this title (relating to Notice and Public Participation) in the RWPAs proposed to be impacted, and to each county judge of a county located in whole or in part in the RWPAs proposed to be impacted and to each affected RWPG; (3) hold a public hearing on the proposed recommendation for resolution of the conflict at a time and place determined by the EA. At the hearing, the EA shall take comments from the RWPGs, Political Subdivisions, and members of the public on the issues identified by the Board as unresolved problems; and (4) make a recommendation to the Board for resolution of the conflict. (c) The Board shall consider the EA's recommendation and any written statements by a representative for each affected RWPG and determine the resolution of the conflict. The Board's decision is final and not appealable. (d) The EA shall notify affected RWPGs of Board's decision and shall direct changes to the affected RWPs, to be incorporated in accordance with Texas Water Code (h)(6) Conflicts Between Regional Water Plans and Groundwater Management Plans. (a) A groundwater conservation district may file a written petition with the EA stating that a potential conflict exists between the district's approved management plan developed under Texas Water Code (relating to Management Plans) and the approved State Water Plan. A copy of the petition shall be provided to the affected RWPG. The petition must state: (1) the specific nature of the conflict; (2) the specific sections and provisions of the approved management plan and approved State Water Plan that are in conflict; and (3) the proposed resolution to the conflict. (b) If the EA determines a conflict exists, the EA will provide technical assistance to and coordinate with the groundwater conservation district and the affected RWPG to resolve the conflict. Coordination may include any of the following processes: (1) requiring the RWPG to respond to the petition in writing; (2) meeting with representatives from the groundwater conservation district and the RWPG to informally mediate the conflict; and/or (3) coordinating a formal mediation session between representatives of the groundwater conservation district and the RWPG. (c) If the parties do not reach resolution, the EA will recommend a resolution to the conflict to the Board within 60 days of the date the mediation is completed. Notice shall be provided at least 15 days prior to the date of the Board meeting to discuss the proposed resolution. The Board may: (1) revise an approved RWP; and (2) revise a district's approved management plan. (d) If the Board requires a revision to the groundwater conservation district's approved management plan, the Board shall provide information to the groundwater conservation district on what revisions are required and why. The groundwater conservation district shall prepare any revisions to its plan based on the information provided by the Board and hold, after notice, at least one public hearing at a central location readily accessible to the public within the district. The groundwater conservation district shall consider all public and Board comments, prepare, revise, and adopt its plan, and submit the revised plan to the Board pursuant to Chapter 356 of this title (relating to Groundwater Management). If the groundwater conservation district disagrees with the decision of the Board, the district may appeal the decision to a district court in Travis County, Texas. (e) If the Board requires a revision to the approved RWP, the Board shall provide information to the RWPG on what revisions are required and why. The RWPG shall prepare the revisions as a major amendment to their approved RWP pursuant to (b) of this title. The RWPG shall hold, after notice, at least one public hearing at some central location readily accessible to the public within the regional water planning area. (f) At the Board's discretion, the Board shall include in the State Water Plan a discussion of the conflict and its resolution. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) CHAPTER 363. FINANCIAL ASSISTANCE PROGRAMS SUBCHAPTER A. GENERAL PROVISIONS The Texas Water Development Board ("TWDB" or "board") proposes amendments to 31 Texas Administrative Code (TAC) 363.2, , , and , relating to construction contracts requirements for iron and steel. BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED AMENDMENT. The TWDB proposes to amend various provisions in 31 TAC Chapter 363 to implement legislative changes from Senate Bill (SB) 1289, 85th Legislative Session, and to provide greater clarity. These legislative changes relate to required construction contract language for the use of iron and steel products produced in the United States. The specific proposed amendments and the reasons for those proposed amendments are discussed in more detail below. Concurrent with the review of these proposed amendments, TWDB has proposed a draft guidance documents with further detail and explanation. This draft guidance may be found at and comments on the guidance may be submitted to public-comment@twdb.texas.gov. 42 TexReg 7304 December 22, 2017 Texas Register

67 SECTION BY SECTION DISCUSSION OF PROPOSED AMENDMENTS. Division 1. Introductory Provisions Definitions of Terms. The definition of financial assistance is updated to include the State Water Implementation Fund for Texas and State Water Implementation Revenue Fund for Texas. Division 4. Prerequisites to Release of State Funds Engineering Design Approvals. Section is amended to only require two, rather than three copies of contract documents. This change is made to conform rule language to TWDB practice. Section is amended to add definitions of "iron and steel products," "manufacturing process," "mechanical and electrical components, equipment, systems and appurtenances," "political subdivision," "produced in the United States," and "project" to further explain the requirements of the section. These new definitions will assist in determining whether certain requirements or exceptions apply and will implement legislative changes enacted by SB Section is amended to reflect legislative changes enacted by SB The proposed amendments incorporate language from updated Texas Water Code and new Texas Government Code, Chapter 2252, Subchapter F. The proposed amendments in (b)(3) require political subdivisions and persons with projects funded with financial assistance from the board to include language in certain contracts and bid documents requiring that any iron or steel products produced through a manufacturing process used in the project be produced in the United States. This requirement applies to bid documents submitted to the board and construction contracts entered into after September 1, The requirements do not apply to funding through the State Water Implementation Fund for Texas or State Water Implementation Revenue Fund for Texas where the board has adopted a resolution approving an application for financial assistance before May 1, 2019, for any portion. Section is also amended to include exemptions to this requirement and a description of certain items that are not "iron or steel products" for purposes of this section. The TWDB will issue guidance to address the procedures for implementing certain exemptions. These exemptions include situations where the board or Executive Administrator makes a determination that iron or steel products produced in the United States to be used in the project are not produced in sufficient quantities, reasonably available, or of a satisfactory quality. The requirements do not apply if the board or Executive Administrator determines that the use of iron or steel products produced in the United States will increase the total cost of the project by more than 20 percent or if complying with the requirements is inconsistent with the public interest. While Texas Government Code assigns the responsibility for making exemption determinations to the governing body of the governmental entity, by this proposed rule, the Board intends to initially delegate this decision to the Executive Administrator so that this decision can be made quickly as projects are being implemented. Those persons dissatisfied by the Executive Administrator's decision have the option of seeking a final determination by the Board. Mechanical and electrical components, equipment, systems, and appurtenances are not considered iron or steel products. As to electrical components, this proposed rule is consistent with new Texas Government Code (b). As to mechanical components, this proposed rule is consistent with Environmental Protection Agency's guidance under a similar federal program, and it is the board's opinion that it is consistent with the intent of the statute. Additionally, the requirements only apply to iron or steel products that are permanently incorporated into a project. The proposed rules restrict these exemption determinations to the board and Executive Administrator because Texas Government Code provides that the exemptions are to be determined by "the governing body of the governmental entity responsible for the project." "Governmental entity" is specifically defined by the statute as "this state or a board, commission, department, office, or other agency in the executive branch of state government." Furthermore, "the term does not include a political subdivision," which is defined in that statute to include "a county, municipality, municipal utility district, water control and improvement district, special utility district, and other types of water district." The TWDB requests comments on whether any type of applicant for TWDB funding would qualify as a "governmental entity" under this statute and thus be empowered to make its own exemption determinations. The proposed rule states that entities receiving financial assistance from the TWDB for projects, as defined in the section, must obtain Executive Administrator approval of contract documents, including engineering plans and specifications and bid documents. Section applies to certain state-funded TWDB programs, including the Water Assistance Fund, the Water Loan Assistance Fund, the Storage Acquisition Program, the Colonia Self-Help Program, the Disadvantaged Rural Communities Program, the Water Infrastructure Fund, the State Water Implementation Fund for Texas and State Water Implementation Revenue Fund for Texas, the State Participation Program, the Development Fund (including water supply projects, water quality enhancement projects, flood control projects, and the Economically Distressed Areas Program), the Revenue Bond Program, and the Groundwater District Loan Program. Through 31 TAC 384.1, also applies to the Rural Water Assistance Fund. The requirements also apply to the Agricultural Water Conservation Program. This section does not apply to the TWDB's federally-funded programs, the Clean Water State Revolving Fund and the Drinking Water State Revolving Fund. The TWDB is of the opinion that the federal requirements preempt state law for these federal programs. The specific applicability to TWDB programs will be further explained and discussed in guidance to be distributed by the TWDB. Division 5. Construction Phase Inspection During Construction. Section is amended in order to provide greater clarity and to implement certain terminology changes. The changes are made for consistency purposes and to conform terminology in the rules to TWDB practice. Division 6. Post-Construction Responsibilities General Responsibilities. Section is amended in order to provide greater clarity and to implement certain terminology changes. The changes are made for consistency purposes and to conform terminology in the rules to TWDB practice. PROPOSED RULES December 22, TexReg 7305

68 FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERN- MENTS Ms. Rebecca Trevino, Chief Financial Officer, has determined that there may be a fiscal impact to local governments that choose to utilize financial assistance provided by the TWDB as a result of the rulemaking. Local governments who construct, alter, or remodel a building, structure, or infrastructure through TWDB financial assistance may see an increased cost estimated up to 20 percent of the total project costs due to potential increased costs for iron and steel products. No local governments are required to utilize the financial assistance provided by the TWDB. Therefore, these potential increased costs are not required and are not imposed on any local government. For the first five years these rules are in effect, there is no expected mandatory additional cost to state or local governments resulting from their administration. However, as mentioned, for the first five years these rules are in effect, there is a possibility for increased project costs when the rule's requirements are applied. If potential borrowers choose to seek financial assistance for these projects elsewhere, they may see an increased cost in the financial assistance due to higher interest rates and lack of grant funds. The potential for increased costs can only be determined through actually bidding these projects for foreign-made iron and steel versus iron and steel produced in the United States. The TWDB has not conducted this type of analysis. These rules are not expected to result in reductions in costs to either state or local governments. There is no expected reduction in costs for state or local governments because the proposed rule clarifies already-existing requirements or adds requirements for the use of iron and steel. These rules are not expected to have any impact on state or local revenues. The rules do not require any increase in expenditures for state or local governments as a result of administering these rules because no state or local governments are required to utilize financial assistance provided by the TWDB. Additionally, there are no foreseeable implications relating to state or local governments' costs or revenue resulting from these rules. Because these rules will not impose a cost on regulated persons, the requirement included in Texas Government Code Section to repeal a rule does not apply; local governments are not required to utilize financial assistance provided by the TWDB. Furthermore, the requirement in Texas Government Code Section does not apply because these rules are necessary to implement legislation. The board invites public comment regarding this fiscal note. Written comments on the fiscal note may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. PUBLIC BENEFITS AND COSTS Ms. Rebecca Trevino also has determined that for each year of the first five years the proposed rulemaking is in effect, the public will benefit from the rulemaking as it is intended to implement legislative changes and provide greater clarity to those seeking and receiving financial assistance from the board. LOCAL EMPLOYMENT IMPACT STATEMENT The board has determined that a local employment impact statement is not required because the proposed rule does not adversely affect a local economy in a material way for the first five years that the proposed rule is in effect because it will impose no new requirements on local economies. The board also has determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities as a result of enforcing this rulemaking. The board also has determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary. DRAFT REGULATORY IMPACT ANALYSIS DETERMINATION The board reviewed the proposed rulemaking in light of the regulatory analysis requirements of Texas Government Code , and determined that the rulemaking is not subject to Texas Government Code, , because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to implement legislative changes and provide greater clarity to those seeking and receiving financial assistance from the board. Even if the proposed rule were a major environmental rule, Texas Government Code, still would not apply to this rulemaking because Texas Government Code, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: 1) does not exceed any federal law; 2) does not exceed an express requirement of state law; 3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) is not proposed solely under the general powers of the agency, but rather Texas Water Code and Texas Government Code Therefore, this proposed rule does not fall under any of the applicability criteria in Texas Government Code, The board invites public comment regarding this draft regulatory impact analysis determination. Written comments on the draft regulatory impact analysis determination may be submitted to the contact person at the address listed under the Submission of Comments section of this preamble. TAKINGS IMPACT ASSESSMENT The board evaluated this proposed rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter The specific purpose of this rule is to implement legislative changes and provide greater clarity to those seeking and receiving financial assistance from the board. The proposed rule would substantially advance this stated purpose by incorporating new statutory language into rule language, updating internal references regarding TWDB financial assistance programs, and including definitions for terminology used in rule language. The board's analysis indicates that Texas Government Code, Chapter 2007 does not apply to this proposed rule because this 42 TexReg 7306 December 22, 2017 Texas Register

69 is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code, (b)(4). The board is the agency that provides financial assistance for the construction of water, wastewater, flood control, and other related projects. Nevertheless, the board further evaluated this proposed rule and performed an assessment of whether it constitutes a taking under Texas Government Code, Chapter Promulgation and enforcement of this proposed rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the subject proposed regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule requires compliance with state construction contract requirements without burdening or restricting or limiting an owner's right to property and reducing its value by 25% or more. Therefore, the proposed rule does not constitute a taking under Texas Government Code, Chapter GOVERNMENT GROWTH IMPACT STATEMENT The board reviewed the proposed rulemaking in light of the government growth impact statement requirements of Texas Government Code and has determined, for the first five years the proposed rule would be in effect, the proposed rule will not: (1) create or eliminate a government program; (2) require the creation of new employee positions or the elimination of existing employee positions; (3) require an increase or decrease in future legislative appropriations to the agency; (4) require an increase or decrease in fees paid to the agency; (5) create a new regulation; (6) expand, limit, or repeal an existing regulation; (7) increase or decrease the number of individuals subject to the rule's applicability; or (8) positively or adversely affect this state's economy. The proposed rule will implement new requirements for certain financial assistance provided by the board required by legislative changes. SUBMISSION OF COMMENTS Written comments on the proposed rulemaking may be submitted by mail to Mr. Todd Chenoweth, Office of General Counsel, Texas Water Development Board, P.O. Box 13231, Austin, Texas , by to rulescomments@twdb.texas.gov, or by fax to (512) Comments will be accepted until 5:00 p.m. on January 31st, ANNOUNCEMENT OF HEARING The board will hold a public hearing on this proposal on January 11, in Room 170, Stephen F. Austin Building, 1700 North Congress Avenue, Austin, Texas at 1:30 p.m. The hearing is structured for the receipt of oral or written comments by interested persons. Individuals may present oral statements when called upon. Open discussion and questions to the board will not be permitted during the hearing. Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact Merry Klonower at (512) as far in advance as possible, and no later than five (5) work days prior to the hearing so that appropriate arrangements can be made. DIVISION 1. INTRODUCTORY PROVISIONS 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and Texas Government Code Texas Water Code Chapters 15, 16, and 17 and Texas Government Code Chapter 2252 are affected by this rulemaking Definitions of Terms. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Words defined in the Texas Water Code, Chapter 15, 16 or 17, and not defined here shall have the meanings provided by the appropriate Texas Water Code chapter. (1) - (14) (No change.) (15) Financial assistance--loans, grants, or state acquisition of facilities by the board pursuant to the Texas Water Code, Chapters 15, Subchapters B, C, E, G, H, O, P, and Q; Chapter 16, Subchapters E, and F; Chapter 17, Subchapters D, F, G, I, K, and L; and Chapter 36, Subchapter L. (16) - (25) (No change.) The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 4. PREREQUISITES TO RELEASE OF STATE FUNDS 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and Texas Government Code Texas Water Code Chapters 15, 16, and 17 and Texas Government Code Chapter 2252 are affected by this rulemaking Engineering Design Approvals. (a) An applicant with a commitment of financial assistance from the board [A political subdivision] shall obtain Executive Administrator [executive administrator] approval of contract documents, including engineering plans and specifications and bid documents, prior to receiving bids and awarding construction contracts [the contract]. The applicant [political subdivision] shall submit two [three] copies of contract documents, which shall be as detailed as would be required for submission to contractors bidding on the work, and which shall be consistent with the engineering feasibility information submitted with the application. An additional copy of the contract documents is required for water supply projects requiring commission review. The contract documents must contain the following: (1) provisions assuring compliance with the board's rules and all relevant statutes; PROPOSED RULES December 22, TexReg 7307

70 (2) provisions providing for the political subdivision to retain a minimum of 5.0% of the progress payments otherwise due to the contractor until the building of the project is substantially complete and a reduction in the retainage is authorized by the executive administrator; (3) a contractor's act of assurance form to be executed by the contractor which shall warrant compliance by the contractor with all laws of the State of Texas and all rules and published policies of the board; and (4) any additional conditions that may be requested by the executive administrator. (b) Engineering Design Approvals for those Projects Required to use Iron or Steel Products Produced in the United States. (1) This section applies to Projects with the board and resulting bid documents submitted to the board or construction contracts entered into after September 1, (2) In this section, the following terms have the assigned meanings: (A) Iron and steel products--the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, construction materials. (B) Manufacturing Process--The application of a process to alter the form or function of materials or elements of a product in a manner that adds value and transforms the materials or elements into a new finished product functionally different from a finished product produced merely from assembling the materials into a product or elements into a product. (C) Mechanical and electrical components, equipment, systems, and appurtenances--includes pumps, motors, gear reducers, drives (including variable frequency drives), electric/pneumatic/manual accessories used to operate valves (such as electric valve actuators), mixers, gates, motorized screens (such as traveling screens), blowers/aeration equipment, compressors, meters, sensors, controls and switches, supervisory control and data acquisition (SCADA), membrane bioreactor systems, membrane filtration systems, filters, clarifiers and clarifier mechanisms, rakes, grinders, disinfection systems, presses (including belt presses), conveyors, cranes, HVAC (excluding ductwork), water heaters, heat exchangers, generators, cabinetry and housings (such as electrical boxes/enclosures), lighting fixtures, electrical conduit, emergency life systems, metal office furniture, shelving, laboratory equipment, analytical instrumentation, dewatering equipment, electrical supports/covers/shielding, and other appurtenances related to an electrical system necessary for operation or concealment. An electrical system includes all equipment, facilities, and assets owned by an electric utility, as that term is defined in Utilities Code. (D) Political subdivision--includes a county, municipality, municipal utility district, water control and improvement district, special utility district, and other types of water districts, including those created under Texas Constitution Article III, Section 52 or Article XVI, Section 59, and nonprofit water supply corporations created and operating under Texas Water Code, Chapter 67. (E) Produced in the United States--With respect to iron or steel products, a product for which all manufacturing processes, from initial melting through application of coatings, occur in the United States, other than metallurgical processes to refine steel additives. (F) Project--A contract between the board and a person or political subdivision. (3) Political subdivisions and persons with Projects funded with financial assistance from the board shall obtain Executive Administrator approval of contract documents, including engineering plans and specifications and bid documents, prior to receiving bids and awarding construction contracts. Contract documents and bid documents provided to all bidders must include language requiring that any iron or steel products produced through a manufacturing process used in the Project, be produced in the United States, specifically where funds will be used to: (A) infrastructure; or construct, remodel, or alter buildings, structures, or (B) supply a material for a project between the board and a person or a political subdivision; or (C) finance, refinance, or provide money from funds administered by the board for a project. (c) Exemptions. (1) Section (b)(3) does not apply if the board or Executive Administrator has made a determination that: (A) iron or steel products, produced in the United States, to be used in the Project are not: (i) produced in sufficient quantities; or (ii) reasonably available at the time contract documents and bid documents are executed with contractors or subcontractors; or or (iii) of a satisfactory quality to be used in the Project; (B) the use of iron or steel products produced in the United States will increase the total cost of the Project by more than 20 percent; or (C) complying with the use of iron or steel products as required by this section is inconsistent with the public interest. (2) The following components are exempt from complying with (b)(3) as they are not iron or steel products: (A) mechanical and electrical components, equipment, systems, and appurtenances; and (B) iron or steel products that are not permanently incorporated into a Project. (d) Section (b) does not apply where the board has adopted a resolution approving an application for financial assistance before May 1, 2019, for any portion of financing as described by or , Water Code. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD TexReg 7308 December 22, 2017 Texas Register

71 Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION TAC STATUTORY AUTHORITY CONSTRUCTION PHASE This rulemaking is proposed under the authority of Texas Water Code and Texas Government Code Texas Water Code Chapters 15, 16, and 17 and Texas Government Code Chapter 2252 are affected by this rulemaking Inspection During Construction. After the construction contract is awarded, an applicant receiving financial assistance from the board [the political subdivision] shall provide for adequate inspection of the project under the supervision of a registered professional engineer and require the engineer's assurance that the work is being performed in a satisfactory manner in accordance with the approved plans and specifications, other engineering design or permit documents, approved alterations, and provisions for environmental mitigative measures. The executive administrator is authorized to conduct site visits regarding [inspect] the construction and materials of any project at any time, but such site visits [inspection] shall never subject the State of Texas to any action for damages. The political subdivision shall take corrective action necessary to complete the project in accordance with approved plans and specifications. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 6. POST-CONSTRUCTION RESPONSIBILITIES 31 TAC STATUTORY AUTHORITY This rulemaking is proposed under the authority of Texas Water Code and Texas Government Code Texas Water Code Chapters 15, 16, and 17 and Texas Government Code Chapter 2252 are affected by this rulemaking General Responsibilities. (a) After the satisfactory completion of the project, the political subdivision shall be held responsible by the board for the continued compliance with all representations and assurances made to the board. To protect the state's monetary investment and the public interest, the executive administrator is authorized to conduct site visits of [inspect] the project and review operational and financial records. Certified copies of all documents relating to the operation of the project and compliance with agreements relating to board financial assistance shall be provided as requested. (b) Should any information obtained by the executive administrator indicate noncompliance with any agreements, the executive administrator shall require the political subdivision to take timely corrective action. Failure to correct problems may be cause for referral to the attorney general. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 11, TRD Todd Chenoweth General Counsel Texas Water Development Board Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 34. PUBLIC FINANCE PART 1. COMPTROLLER OF PUBLIC ACCOUNTS CHAPTER 9. PROPERTY TAX ADMINISTRA- TION SUBCHAPTER D. APPRAISAL REVIEW BOARD 34 TAC The Comptroller of Public Accounts proposes new 9.805, concerning appraisal review board evidence exchange and retention and audiovisual equipment requirements. The addition of is to implement legislative changes to Tax Code, (Hearing on Protest), which the 85th Legislature, 2017, enacted through passage of Senate Bill (SB) 1286, SECTIONS 1, 5, 6, and 8. The new section proposes to adopt the manner and form in which property owners or their agents and appraisal districts exchange materials for use at appraisal review board hearings that allows the appraisal review board to retain the materials as part of the board's hearing record. The new section also proposes to specify requirements for the audiovisual equipment an appraisal district may make available for use by a property owner or the property owner's agent at an appraisal review board hearing. Tom Currah, Chief Revenue Estimator, has determined that during the first five years that the proposed new rule is in effect, the rule: will not create or eliminate a government program; will not require the creation or elimination of employee positions; will not require an increase or decrease in future legislative appropriations to the agency; will not require an increase or decrease in fees paid to the agency; will not increase or decrease the number of individuals subject to the rules' applicability; and will not PROPOSED RULES December 22, TexReg 7309

72 positively or adversely affect this state's economy. This proposal creates a new rule. Mr. Currah also has determined that for each year of the first five years the rule is in effect, the public benefit anticipated as a result of enforcing the rule will be by improving the administration of local property valuation and taxation. The proposed new rule would have no fiscal impact on small businesses. There is no significant anticipated economic cost to individuals who are required to comply with the proposed rule. Comments on the proposal may be submitted to Mike Esparza, Director, Property Tax Assistance Division, P.O. Box 13528, Austin, Texas Comments may be submitted by sent to: Mike.Esparza@cpa.texas.gov and must be received no later than 30 days from the date of publication of the proposal in the Texas Register. The new section is proposed under Tax Code, (Hearing on Protest), which provides the comptroller with the authority to promulgate rules specifying not only the manner and form in which materials intended for use at appraisal review board hearings are to be exchanged that allows the appraisal review board to retain the materials as part of the board's hearing record but also the requirements for the audiovisual equipment an appraisal district may make available for use by a property owner or the property owner's agent at an appraisal review board hearing. The new section implements Tax Code, (Hearing on Protest) Appraisal Review Board Evidence Exchange and Retention and Audiovisual Equipment Requirements. (a) Exchange of evidence. Before or immediately after an appraisal review board hearing begins, the appraisal district and the property owner or the owner's agent shall each provide the other party with a duplicated set of the evidentiary materials the person intends to offer or submit to the appraisal review board for consideration at the hearing. One set of these materials is to be exchanged with and retained by the other party, and another set of these materials is to be provided to and retained by the appraisal review board as evidence for its records as required under of this title (relating to Requirements for Appraisal Review Board Records). The duplicated material sets shall be produced in either paper or electronic form. (b) Evidentiary materials in electronic form. Evidentiary materials produced in electronic form shall be saved in a file format type and downloaded to a small, portable, electronic device. The file format type and small, portable, electronic device must be considered generally accepted technology and must be suitable for retention by the recipient. For security purposes, the electronic files on devices produced pursuant to this section shall be capable of being scanned or reviewed for the presence of any malicious software or computer viruses before acceptance by or exposure to the recipient's computer system. (c) Electronic file format types and devices. The appraisal review board shall determine the types of file formats and devices which meet the requirements of subsection (b) of this section and specify the types of file formats and devices in the appraisal review board hearing procedures. Examples of file format types that may be considered acceptable include but are not limited to the Adobe portable document format (PDF); Microsoft Word, typically used for text documents; Microsoft Excel, typically used for spreadsheets and tables; Microsoft PowerPoint, typically used for presentations or slideshows; and JPEG (.jpg or.jpeg) for photographs. Examples of the general types of small, portable, electronic devices suitable for retention by the recipient that may be considered acceptable include but are not limited to USB flash drives (i.e., thumb or jump drives, USB or memory sticks), and compact discs (i.e., CDs, DVDs) with various characteristics. The appraisal district and the property owner or the owner's agent may agree to exchange evidence in a manner other than provided in appraisal review board hearing procedures so long as a copy of the evidence may be retained in the records of the appraisal review board and satisfies the requirements of subsection (b) of this section. (d) Audiovisual equipment requirements. If the appraisal district uses audiovisual equipment at appraisal review board hearings, the appraisal district shall make available this same equipment or audiovisual equipment of the same general type, kind, and character for use at the hearing by the property owner or the owner's agent. The equipment made available shall be capable of reading and accepting the same types of file formats and devices the appraisal review board has determined are generally accepted under subsection (c) of this section. In the alternative, property owners and their agents may bring their own audiovisual equipment for their presentation of evidentiary materials at appraisal review board hearings. If the operation of audiovisual equipment at the hearing requires access to and connection with the Internet for the presentation, the parties must provide their own Internet connection and access through their own service provider. The property owner and the owner's agent may not access the appraisal district office's network or Internet connection nor any of the appraisal district office's technology or equipment other than that made available under this section and described in the appraisal review board hearing procedures. The appraisal district and the property owner or the owner's agent may use audiovisual equipment with specifications that are different from those in the hearing procedures if the parties agree to do so in writing or verbally agree as shown in the audio recording of the hearing. (e) Appraisal Review Board hearing procedures. The following information regarding the exchange and presentation of evidence at appraisal review board hearings shall be provided in the appraisal review board hearing procedures: (1) identification of the file format types considered acceptable under subsection (c) of this section; (2) description of the types of small, portable, electronic devices suitable for retention by the recipient considered acceptable under subsection (c) of this section; (3) notice that property owners and their agents may bring their own audiovisual equipment for their presentation at appraisal review board hearings but must provide their own Internet access, if needed, through their own service provider; (4) whether the appraisal district uses audiovisual equipment at appraisal review board hearings; (5) if the appraisal district uses audiovisual equipment at appraisal review board hearings, a description of the type, kind, and character of audiovisual equipment the appraisal district makes available for use by property owners or their agents and which meets the requirements of subsection (d) of this section; and (6) notice that property owners and their agents may not access the appraisal district office's network or Internet connection nor any of the appraisal district office's technology or equipment other than that made available under this section and described in the hearing procedures. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. 42 TexReg 7310 December 22, 2017 Texas Register

73 Filed with the Office of the Secretary of State on December 6, TRD Lita Gonzalez General Counsel Comptroller of Public Accounts Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 40. SOCIAL SERVICES AND ASSIS- TANCE PART 1. DEPARTMENT OF AGING AND DISABILITY SERVICES CHAPTER 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION The Texas Health and Human Services Commission (HHSC) proposes amendments to , , , , , , , , , , , , and , in Chapter 19, Nursing Facility Requirements for Licensure and Medicaid Certification. HHSC proposes new , , , in Chapter 19. HHSC proposes the repeal of , , and , in Chapter 19. HHSC also proposes that Subchapter D in Chapter 19 be divided into nine divisions, with and in new Division 1, General Provisions; and in new Division 2, Facilities Licensed Before September 11, 2003; in new Division 3, Provisions Applicable to All Facilities; in new Division 4, Construction and Initial Survey; in new Division 5, Facilities Licensed On or After September 11, 2003 and Before April 2, 2018; in new Division 6, Plan Review; in new Division 7, Small House and Household Facilities; in new Division 8, Building Rehabilitations; and in new Division 9, Facilities Licensed On or After April 2, BACKGROUND AND PURPOSE The purpose of the changes to Title 40, Chapter 19, is to implement the Centers for Medicare & Medicaid Services (CMS) adoption of the 2012 edition of the National Fire Protection Association (NFPA) Life Safety Code (LSC) and 2012 edition of the NFPA 99 - Health Care Facilities Code (HCFC). CMS' final rule eliminates all references to the previously adopted 2000 edition of the LSC and requires a nursing facility provider to comply with the 2012 NFPA 101 and 2012 NFPA 99. The proposal replaces references to previous editions of NFPA 101 and NFPA 99, revises and reorganizes most rules in Chapter 19, Subchapter D (Facility Construction), and revises (Physical Environment) and (Standards for Certified Alzheimer's Facilities) to make the rule language consistent with the new federal language in the Code of Federal Regulations (CFR). The proposal places divisions in Subchapter D to further organize the subchapter. This reorganization creates four distinct categories of rules: rules applicable to all facilities; rules applicable to facilities licensed before September 11, 2003; rules applicable to facilities licensed on or after September 11, 2003 and before April 2, 2018; and rules applicable to facilities licensed on or after April 2, References to the "Texas Department of Human Services" or "DHS" and references to the "Department of Aging and Disability Services" or "DADS" are replaced with references to the "Texas Health and Human Services Commission" or "HHSC" throughout the proposal. The term "patient" is replaced with the term "resident" throughout the proposal. The term "assure" is replaced with the term "ensure" throughout the proposal. The references to the "Life Safety Code" are replaced with references to "NFPA 101." The terms "life support systems" and "life support systems and equipment" are replaced with "systems or equipment whose failure is likely to cause major injury or death to a resident." The proposal also makes editorial changes to improve clarity and readability. SECTION-BY-SECTION SUMMARY The proposed amendment to adds definitions of "HHSC," "Major injury," "NFPA," "NFPA 99," and "NFPA 101," and deletes the definitions of "HCFA," "Remodeling," and "Renovation." The proposed amendment to (b) adds the requirements for children from (c), (12), and (3). The proposed amendment to (c) adds the rule language from in order to move general waiver information under general requirements. The proposed amendment to (d)(1)-(4) clarifies which division requirements are applicable to which facilities based on when the facility is licensed. The proposed amendment to (d)(5) adds the rule language from (a) to clarify the general requirements for small house and household facilities. The proposed amendment to (e) clarifies that a facility must comply with the Tentative Interim Amendments (TIAs) issued by the NFPA. The proposed amendment to (f) indicates that building rehabilitation on existing buildings shall be classified in accordance with NFPA 101 and shall comply with NFPA 101 and , relating to Building Rehabilitation. The proposed amendment to (g) clarifies when buildings or portions of buildings may be occupied during construction, repair, alterations, or additions. The proposed amendment (h) indicates that existing life safety features shall not be removed or reduced when the feature is a requirement for new construction and clarifies when life safety features and equipment not required by NFPA 101 must be maintained or may be completely removed if approval is granted by HHSC. The proposed amendment to (i) indicates that facilities must perform a risk assessment in accordance with NFPA 99 and specifies the requirements for the risk assessment. The proposed amendment to (j) adds the rule language from current (b) to better organize the subchapter. Proposed new adds definitions for words and terms that are used in Subchapter D. These definitions are in addition to words and terms listed in of this chapter. PROPOSED RULES December 22, TexReg 7311

74 The proposed repeal of is necessary to move the rule language to new The current language in is eliminated because it is unnecessary. Proposed new (a) updates the references to the applicable life safety code and removes some unnecessary language. New (b) adds the provisions currently in (c), but updates the subsection to reflect the current applicable codes, standards, and guidelines. The repeal of is necessary to reorganize the subchapter. Rule language from is moved to (c) in order to have general waiver information under general requirements. The proposed amendment to reflects the requirements in the 2012 editions of NFPA 99 and NFPA 101. Subsection (a) states the general requirements for emergency power systems applicable to existing facilities and the rehabilitation or modernization of an existing emergency power system. The current provisions of are renumbered to subsections (b) and (c). The proposed amendment to updates the language in subsection (a) and relocates subsections (b) and (c) to (j) and (b) to better organize the subchapter. The proposed amendment to deletes passive voice and consolidates the requirements for pediatric residents under one section by relocating the requirements for pediatric resident room decorations and furnishings to (b)(4). The proposed amendment to relocates paragraphs (3) and (4), and adds paragraph (6). Paragraph (3), regarding environmental requirements for pediatric residents, is moved to proposed (b)(3) to consolidate pediatric requirements under one section. Paragraph (4), regarding cross-contamination of clean and soiled operations, is moved to (u) to consolidate the requirements for safety operations under one section. Paragraph (6) adds the requirement currently in (e). The proposed repeal of , Means of Egress, is necessary to move and delete the requirements that are included in other sections of this subchapter. The requirement in subsection (a) is already addressed in (n). The requirements in subsections (b) and (d) are addressed in the rules requiring facilities to comply with NFPA 101. The requirement in subsection (c) to have a working flashlight at each nurses' station is relocated to (a)(6) to consolidate the requirements for nurses' stations in facilities licensed before September 11, 2003, under one section. Sections and contain nurses' station requirements for facilities licensed at other times. The requirement in subsection (e), regarding hold-open devices on exit doors, is relocated to (6) for facilities licensed before September 11, Sections (5)(B) and (5)(B) contain the requirement regarding hold-open devices on exit doors for facilities licensed at other times. The proposed amendment to adds subsection (a)(6) and revises subsections (s) and (u). Subsection (a)(6) adds the rule language from (c) to consolidate requirements for nurses and auxiliary stations under one section. Subsection (s) removes outdated references to the Texas Department of Health and Texas Natural Resource Conservation Commission rules regarding special waste from health-care facilities. Subsection (u) adds that the use and storage of oxygen must comply with all NFPA standards, including NFPA 99, and changes references of NFPA 50 to NFPA 55. The proposed amendment to updates subsections (f), (j), (u), and (v). Subsection (f) changes the length of the functional test on every required battery emergency lighting system from 1/2 an hour to 30 seconds. Subsection (j) adds that a facility's smoking policy must now also cover smoking areas and smoking safety and take into account non-smokers. Subsection (u) adds the requirement regarding cross-contamination in clean and soiled operations that is currently in (4). Subsection (v) adds a requirement that a facility's fire safety plan include an emergency phone call to the fire department. The proposed amendment to revises subsections (a)(1), (a)(2), (c)(1) and (c)(3). Subsection (a)(1) clarifies that HHSC must be notified in writing before construction of a new facility or building rehabilitation other than that classified as repair begins. Subsection (a)(2) removes the definition of "remodeling," as this term is no longer used in these rules. Subsection (c)(1) states that, when the licensed capacity of a facility is not altered, HHSC may permit a facility to use the rehabilitated portion of a facility pending a final construction inspection or may determine a final construction inspection is not required. Subsection (c)(3) adds the statement, " facility may accept up to three residents between the time it receives initial approval from HHSC and the time the license is issued." This sentence is relocated from (4)(B) to consolidate the requirements regarding new construction and building rehabilitation. The proposed amendment to revises subsection (a) and removes subsections (d)-(f). Subsection (a) clarifies that the section applies to a facility constructed or licensed on or after September 11, 2003, but before April 2, Subsection (a) also adds subsection (a)(1) and removes subsection (a)(2) because it is not necessary. Subsection (a)(1) clarifies that buildings constructed or receiving design approval or building permits before July 5, 2016, must comply with the Existing Health Care Occupancies chapter of NFPA 101. All other buildings covered by this section must comply with the New Health Care Occupancies chapter of NFPA 101. Subsection (d) is removed and moved to to consolidate the requirements for building rehabilitation under one section. Subsections (e) and (f) are removed because they are not necessary. The proposed amendment to updates subsection (a), redesignates subsections (h) and (j), removes subsections (c) and (i), and adds subsection (k). Subsection (a) removes the language stating that site approval is normally required of the local building department and fire marshal having jurisdiction. This language is "reminder" language and is redundant because all construction, including site approval, must obey local ordinances. Subsection (h) removes the language limiting its application to auxiliary buildings with hazardous areas and storage buildings. All auxiliary buildings located within 20 feet of the main building must meet the applicable NFPA 101 requirements. Subsection (j)(4) removes the footage requirements for all-weather fire lanes. The requirement for an all-weather access lane to be no less than a properly constructed gravel lane is repealed. Subsections (c) and (i) are removed because the requirements regarding set-backs from the property line and open enclosed courts are outdated. The space requirements for windows, structures, and openings are covered in other areas of the subchapter. Subsection (k) adds the requirements for enclosed exterior spaces that are in a means of egress to a public way applicable to facilities licensed on or after September 1, 2003, and before April 2, The proposed amendment to revises subsection (d) and removes subsections (e), (f), and (h). Subsection (d) specifies the combustibility of exterior finishes. Subsection (e) is removed 42 TexReg 7312 December 22, 2017 Texas Register

75 because NFPA 101 does not require existing interior finishes to comply with the requirements for new construction. Chapter 43 of NFPA 101 and the new dictate the requirements for new interior finishes in any facility undergoing rehabilitation. Subsection (f) is removed because the requirement is not necessary for existing facilities. New facilities are governed by , which contains a similar requirement. Subsection (h) is removed because this provision is considered redundant. Federal rule and require handrails on both sides of corridors. ANSI A117.1 is superseded by the Americans with Disabilities Act and Texas Accessibility Standards, which are referenced elsewhere in the subchapter. In addition, provides the detailed requirements for handrails in certain existing facilities. The proposed amendment to (a)(5) permits operable window sections to be restricted to not more than six nor less than four inches for security or safety reasons. The proposed amendments to (a)(14)-(16) and (b)(1)(A)-(B) add the requirements applicable to facilities licensed on or after September 1, 2003, and before April Sections (a)(13)-(15) and (13)-(15) contain these requirements for facilities licensed at other times. The proposed amendment to (c)(1) removes the requirement that a facility provide at least one whirlpool tub unit as one of the required bathing units. The proposed amendment to (d) makes the requirement that a facility have a policy and procedure for the safe and sanitary disposal of special waste applicable to a facility licensed on or after September 1, 2003, and before April 2, Sections and contain this requirement for facilities licensed at other times. The proposed amendment to updates paragraph (3) and removes paragraphs (5) and (10). Paragraph (3) prevents this rule from being stricter than NFPA 101 regarding furniture and other items in ways of egress. Paragraph (5) is being moved to (d) to consolidate the requirements for building rehabilitation under Paragraph (10) is being removed because NFPA 101 covers these requirements and a facility licensed on or after September 1, 2003, and before April 2, 2018, is required to comply with NFPA 101 by (a)(1). The proposed amendment to (d)(1) updates the requirements for emergency electrical service. Subsection (d)(1)(a) clarifies that facilities constructed or receiving design approval or building permits before July 5, 2016, may comply with the emergency electrical system requirements for existing health care facilities in NFPA 99. All other facilities covered by this section must comply with the emergency electrical system requirements for new health care facilities in NFPA 99. The amendment to subsection (d)(1)(b) states that rehabilitation or modernization of an existing emergency power system must be based on the assessed risk category and according to the requirements of NFPA 99 for new health care facilities. The amendment to subsection (d)(1)(b)(i) clarifies which systems must be automatically connected to the alternate power source without a delay. The amendment to subsection (d)(1)(b)(i)(iii) deletes unnecessary and redundant language. All equipment used in a nursing facility, irrespective of its general external use, must meet applicable standards. The amendment to subsections (d)(1)(b)(i) and (ii) move provisions regarding egress lighting and stored fuel capacity to more appropriate locations. The proposed amendment to limits the section's subject matter to plan review. The section title is changed from "Plan Approvals, and Construction Procedures" to "Plan Review." Paragraph (2) clarifies the types of documents HHSC needs to conduct a prompt and thorough plan review. Paragraph (3) removes provisions regarding the construction phase, since covers construction procedures. The proposed amendment to changes cross-references from to Division 9, relating to Facilities Licensed On or After April 2, This change is necessary for the rearrangement of the rules and makes new small house or household facilities subject to the rules regarding facilities licensed on or after April 2, Section (g)(9) removes an unnecessary subsection. Nurse call system requirements for new facilities are in Proposed new consolidates the requirements related to building rehabilitation in one section. This new section incorporates the requirements from (d). This section is consistent with the 2012 editions of NFPA 101 and 99. Proposed new Division 9 in Subchapter D, , consolidates the requirements for facilities licensed on or after April 2, All of the provisions in this division are similar to the provisions applicable to facilities licensed on or after September 1, 2003, and before April 2, 2018, but include the requirements of the 2012 editions of NFPA 101 and NFPA 99 for new facilities. The proposed amendment to makes this section consistent with the amended requirements of Subchapter D and the requirements in the CFR. The section adds and removes language to bring the section current with the requirements in the 2012 editions of NFPA 101 and 99. Paragraph (4) limits the number of allowed residents in rooms depending on the date the facility receives approval of construction or reconstruction plans or when newly certified. Paragraph (5) requires a bathroom for each resident room in facilities approved for construction or newly certified on or after November 28, Paragraph (6) requires that a facility be equipped to allow residents to call for staff assistance through a communication system that relays the call directly to a staff member or to a centralized staff work area from each resident's room before November 28, Beginning November 28, 2019, communication from each resident's bedside and from toilet and bathing facilities must be established. Paragraph (8)(E) requires a facility to establish policies regarding smoking, smoking areas, and smoking safety that also take into account non-smoking residents. The new requirements in make the section consistent with 42 CFR The proposed amendment to , makes this section consistent with NFPA 101 and NFPA 99. FISCAL NOTE David Cook, HHSC Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments, new sections, and repeals are in effect, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state or local governments. GOVERNMENT GROWTH IMPACT STATEMENT HHSC has determined that during the first five years the sections will be in effect: (1) the proposed rules will not create or eliminate a government program; (2) implementation of the proposed rules will not create or eliminate employee positions; PROPOSED RULES December 22, TexReg 7313

76 (3) implementation of the proposed rules will not require an increase or decrease in future legislative appropriations; (4) the proposed rules will not increase or decrease fees paid to the agency; (5) the proposed rules create a new rule; (6) the proposed rules expand an existing rule; (7) the proposed rules will not change the number of individuals subject to the rule's applicability; and (8) the proposed rules do not affect the state's economy. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS Mr. Cook has determined that the amendments, new sections, and repeals will not have an adverse economic effect on small businesses, micro-businesses, or rural communities, because the rules do not impose any economic requirements on small businesses, micro-businesses, or rural communities. They will be required to comply with the 2012 edition of the NFPA 101 and NFPA 99, which may be an increased cost for those that construct new facilities or facilities that undergo rehabilitation. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT There are no anticipated economic costs to persons who are required to comply with the rules as proposed, as they will not be required to retrofit any approved existing system. However, those that construct new facilities or facilities that undergo rehabilitation may have increased costs, as they will be required to comply with the 2012 edition of the NFPA 101 and NFPA 99. There is no anticipated negative impact on local employment. COSTS TO REGULATED PERSONS Texas Government Code, does not apply to these rules because the rules are necessary to receive a source of federal funds or comply with federal law, and necessary to protect the health, safety, and welfare of the residents of Texas. PUBLIC BENEFIT Mary T. Henderson, HHSC Associate Commissioner for Regulatory Services, has determined that, for each year of the first five years the rules are in effect, the public will benefit from the adoption of the rules. The anticipated public benefit is that nursing facility residents will have safe and appropriate physical surroundings. TAKINGS IMPACT ASSESSMENT HHSC has determined that this proposal does not restrict or limit an owner's right to his or her property that would otherwise exist in the absence of government action and, therefore, does not constitute a taking under Texas Government Code, PUBLIC COMMENT Questions about the content of this proposal may be directed to Robert Ochoa at (512) in the Policy, Rules, Curriculum, and Training section. Written comments on the proposal may be submitted to the Rules Coordination Office, P. O. Box , Mail Code H600, Austin, Texas ; street address 4900 North Lamar Boulevard, Mail Code H600, Austin, Texas 78751; or ed to HHSRulesCoordinationOffice@hhsc.state.tx.us. To be considered, comments must be submitted no later than 30 days after the date of this issue of the Texas Register. The last day to submit comments falls on a Sunday; therefore, comments must be: (1) postmarked or shipped before the last day of the comment period; (2) hand-delivered to HHSC before 5:00 p.m. on HHSC last working day of the comment period; or (3) faxed or ed by midnight on the last day of the comment period. When ing comments, please indicate "Comments on Proposed Rule 40R058" in the subject line. SUBCHAPTER B. DEFINITIONS 40 TAC STATUTORY AUTHORITY The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment implements Texas Government Code, and Texas Health and Safety Code, Definitions. The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise. (1) Abuse--Negligent or willful infliction of injury, unreasonable confinement, intimidation, or punishment with resulting physical or emotional harm or pain to a resident; or sexual abuse, including involuntary or nonconsensual sexual conduct that would constitute an offense under Penal Code (indecent exposure) or Penal Code Chapter 22 (assaultive offenses), sexual harassment, sexual coercion, or sexual assault. (2) Act--Chapter 242 of the Texas Health and Safety Code. (3) Activities assessment--see Comprehensive Assessment and Comprehensive Care Plan. (4) Activities director--the qualified individual appointed by the facility to direct the activities program as described in of this chapter (relating to Activities). (5) Addition--The addition of floor space to an institution. (6) Administrator--Licensed nursing facility administrator. (7) Admission MDS assessment--an MDS assessment that determines a recipient's initial determination of eligibility for medical necessity for admission into the Texas Medicaid Nursing Facility Program. (8) Advanced practice registered nurse--a person licensed by the Texas Board of Nursing as an advanced practice registered nurse. (9) Affiliate--With respect to a: (A) partnership, each partner thereof; (B) corporation, each officer, director, principal stockholder, and subsidiary; and each person with a disclosable interest; (C) natural person, which includes each: (i) person's spouse; (ii) partnership and each partner thereof of which said person or any affiliate of said person is a partner; and (iii) corporation in which said person is an officer, director, principal stockholder, or person with a disclosable interest. 42 TexReg 7314 December 22, 2017 Texas Register

77 (10) Agent--An adult to whom authority to make health care decisions is delegated under a durable power of attorney for health care. (11) Alzheimer's disease and related disorders-- Alzheimer's disease and any other irreversible dementia described by the Centers for Disease Control and Prevention or the most current edition of the Diagnostic and Statistical Manual of Mental Disorders. (12) Applicant--A person or governmental unit, as those terms are defined in the Texas Health and Safety Code, Chapter 242, applying for a license under that chapter. (13) APA--The Administrative Procedure Act, Texas Government Code, Chapter (14) Attending physician--a physician, currently licensed by the Texas Medical Board, who is designated by the resident or responsible party as having primary responsibility for the treatment and care of the resident. (15) Authorized electronic monitoring--the placement of an electronic monitoring device in a resident's room and using the device to make tapes or recordings after making a request to the facility to allow electronic monitoring. (16) Barrier precautions--precautions including the use of gloves, masks, gowns, resuscitation equipment, eye protectors, aprons, face shields, and protective clothing for purposes of infection control. (17) Care and treatment--services required to maximize resident independence, personal choice, participation, health, self-care, psychosocial functioning and reasonable safety, all consistent with the preferences of the resident. (18) Certification--The determination by HHSC [DADS] that a nursing facility meets all the requirements of the Medicaid or Medicare programs. (19) Change of ownership--an event that results in a change to the federal taxpayer identification number of the license holder of a facility. The substitution of a personal representative for a deceased license holder is not a change of ownership. (20) CFR--Code of Federal Regulations. (21) CMS--Centers for Medicare & Medicaid Services[, formerly the Health Care Financing Administration (HCFA)]. (22) Complaint--Any allegation received by HHSC [DADS] other than an incident reported by the facility. Such allegations include, but are not limited to, abuse, neglect, exploitation, or violation of state or federal standards. (23) Completion date--the date an RN assessment coordinator signs an MDS assessment as complete. (24) Comprehensive assessment--an interdisciplinary description of a resident's needs and capabilities including daily life functions and significant impairments of functional capacity, as described in (2) of this chapter (relating to Resident Assessment). (25) Comprehensive care plan--a plan of care prepared by an interdisciplinary team that includes measurable short-term and longterm objectives and timetables to meet the resident's needs developed for each resident after admission. The plan addresses at least the following needs: medical, nursing, rehabilitative, psychosocial, dietary, activity, and resident's rights. The plan includes strategies developed by the team, as described in (b)(2) of this chapter (relating to Comprehensive Care Plans), consistent with the physician's prescribed plan of care, to assist the resident in eliminating, managing, or alleviating health or psychosocial problems identified through assessment. Planning includes: (A) goal setting; (B) establishing priorities for management of care; (C) making decisions about specific measures to be used to resolve the resident's problems; and (D) mechanisms. assisting in the development of appropriate coping (26) Controlled substance--a drug, substance, or immediate precursor as defined in the Texas Controlled Substance Act, Texas Health and Safety Code, Chapter 481, or the Federal Controlled Substance Act of 1970, Public Law (27) Controlling person--a person with the ability, acting alone or in concert with others, to directly or indirectly, influence, direct, or cause the direction of the management, expenditure of money, or policies of a nursing facility or other person. A controlling person does not include a person, such as an employee, lender, secured creditor, or landlord, who does not exercise any influence or control, whether formal or actual, over the operation of a facility. A controlling person includes: (A) a management company, landlord, or other business entity that operates or contracts with others for the operation of a nursing facility; (B) any person who is a controlling person of a management company or other business entity that operates a nursing facility or that contracts with another person for the operation of a nursing facility; (C) an officer or director of a publicly traded corporation that is, or that controls, a facility, management company, or other business entity described in subparagraph (A) of this paragraph but does not include a shareholder or lender of the publicly traded corporation; and (D) any other individual who, because of a personal, familial, or other relationship with the owner, manager, landlord, tenant, or provider of a nursing facility, is in a position of actual control or authority with respect to the nursing facility, without regard to whether the individual is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the facility. (28) Covert electronic monitoring--the placement and use of an electronic monitoring device that is not open and obvious, and the facility and HHSC [DADS] have not been informed about the device by the resident, by a person who placed the device in the room, or by a person who uses the device. (29) DADS--The term referred to the Department of Aging and Disability Services; it now refers to HHSC [or the Health and Human Services Commission, as its successor agency]. (30) Dangerous drugs--any drug as defined in the Texas Health and Safety Code, Chapter 483. (31) Dentist--A practitioner licensed by the Texas State Board of Dental Examiners. (32) Department--The [Department of Aging and Disability Services or the] Health and Human Services Commission[, as its successor agency]. (33) DHS--This term referred to the Texas Department of Human Services; it now refers to HHSC [DADS], unless the context concerns an administrative hearing. Administrative hearings were for- PROPOSED RULES December 22, TexReg 7315

78 merly the responsibility of DHS; they now are the responsibility of the [Texas Health and Human Services Commission (]HHSC[)]. (34) Dietitian--A qualified dietitian is one who is qualified based upon either: (A) registration by the Commission on Dietetic Registration of the Academy of Nutrition and Dietetics; or (B) licensure, or provisional licensure, by the Texas State Board of Examiners of Dietitians. These individuals must have one year of supervisory experience in dietetic service of a health care facility. (35) Direct care by licensed nurses--direct care consonant with the physician's planned regimen of total resident care includes: (A) assessment of the resident's health care status; (B) planning for the resident's care; (C) assignment of duties to achieve the resident's care; (D) nursing intervention; and (E) evaluation and change of approaches as necessary. (36) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (37) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (38) Distinct part--that portion of a facility certified to participate in the Medicaid Nursing Facility program. (39) Drug (also referred to as medication)--any of the following: (A) any substance recognized as a drug in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; (B) any substance intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man; (C) any substance (other than food) intended to affect the structure or any function of the body of man; and (D) any substance intended for use as a component of any substance specified in subparagraphs (A) - (C) of this paragraph. It does not include devices or their components, parts, or accessories. (40) Electronic monitoring device--video surveillance cameras and audio devices installed in a resident's room, designed to acquire communications or other sounds that occur in the room. An electronic, mechanical, or other device used specifically for the nonconsensual interception of wire or electronic communication is excluded from this definition. (41) Emergency--A sudden change in a resident's condition requiring immediate medical intervention. (42) Executive Commissioner--The executive commissioner of the Health and Human Services Commission. (43) Exploitation--The illegal or improper act or process of a caregiver, family member, or other individual who has an ongoing relationship with a resident using the resources of the resident for monetary or personal benefit, profit, or gain without the informed consent of the resident. (44) Exposure (infections)--the direct contact of blood or other potentially infectious materials of one person with the skin or mucous membranes of another person. Other potentially infectious materials include the following human body fluids: semen, vaginal secretions, cerebrospinal fluid, peritoneal fluid, amniotic fluid, saliva in dental procedures, and body fluid that is visibly contaminated with blood and all body fluids when it is difficult or impossible to differentiate between body fluids. (45) Facility--Unless otherwise indicated, a facility is an institution that provides organized and structured nursing care and service and is subject to licensure under Texas Health and Safety Code, Chapter 242. (A) For Medicaid, a facility is a nursing facility which meets the requirements of 1919(a) - (d) of the Social Security Act. A facility may not include any institution that is for the care and treatment of mental diseases except for services furnished to individuals age 65 and over and who are eligible as defined in Chapter 17 of this title (relating to Preadmission Screening and Resident Review (PASRR)). (B) For Medicare and Medicaid purposes (including eligibility, coverage, certification, and payment), the "facility" is always the entity which participates in the program, whether that entity is comprised of all of, or a distinct part of, a larger institution. (C) "Facility" is also referred to as a nursing home or nursing facility. Depending on context, these terms are used to represent the management, administrator, or other persons or groups involved in the provision of care of the resident; or to represent the physical building, which may consist of one or more floors or one or more units, or which may be a distinct part of a licensed hospital. (46) Family council--a group of family members, friends, or legal guardians of residents, who organize and meet privately or openly. (47) Family representative--an individual appointed by the resident to represent the resident and other family members, by formal or informal arrangement. (48) Fiduciary agent--an individual who holds in trust another's monies. (49) Free choice--unrestricted right to choose a qualified provider of services. (50) Goals--Long-term: general statements of desired outcomes. Short-term: measurable time-limited, expected results that provide the means to evaluate the resident's progress toward achieving long-term goals. (51) Governmental unit--a state or a political subdivision of the state, including a county or municipality. [(52) HCFA--Health Care Financing Administration, now the Centers for Medicare & Medicaid Services (CMS).] (52) [(53)] Health care provider--an individual, including a physician, or facility licensed, certified, or otherwise authorized to administer health care, in the ordinary course of business or professional practice. (53) [(54)] Hearing--A contested case hearing held in accordance with the Administrative Procedure Act, Texas Government Code, Chapter 2001, and the formal hearing procedures in 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act) and Chapter 91 of this title (relating to Hearings Under the Administrative Procedure Act). 42 TexReg 7316 December 22, 2017 Texas Register

79 (54) HHSC--The Texas Health and Human Services Commission. (55) HIV--Human Immunodeficiency Virus. (56) Incident--An abnormal event, including accidents or injury to staff or residents, which is documented in facility reports. An occurrence in which a resident may have been subject to abuse, neglect, or exploitation must also be reported to HHSC [DADS]. (57) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (58) Infection control--a program designed to prevent the transmission of disease and infection in order to provide a safe and sanitary environment. (59) Inspection--Any on-site visit to or survey of an institution by HHSC [DADS] for the purpose of licensing, monitoring, complaint investigation, architectural review, or similar purpose. (60) Interdisciplinary care plan--see the definition of "comprehensive care plan." (61) Involuntary seclusion--separation of a resident from others or from the resident's room or confinement to the resident's room, against the resident's will or the will of a person who is legally authorized to act on behalf of the resident. Monitored separation from other residents is not involuntary seclusion if the separation is a therapeutic intervention that uses the least restrictive approach for the minimum amount of time, not exceed to 24 hours, until professional staff can develop a plan of care to meet the resident's needs. (62) IV--Intravenous. (63) Legend drug or prescription drug--any drug that requires a written or telephonic order of a practitioner before it may be dispensed by a pharmacist, or that may be delivered to a particular resident by a practitioner in the course of the practitioner's practice. (64) License holder--a person that holds a license to operate a facility. (65) Licensed health professional--a physician; physician assistant; advanced practice registered nurse; physical, speech, or occupational therapist; pharmacist; physical or occupational therapy assistant; registered professional nurse; licensed vocational nurse; licensed dietitian; or licensed social worker. (66) Licensed nursing home (facility) administrator--a person currently licensed by HHSC [DADS] in accordance with Chapter 18 of this title (relating to Nursing Facility Administrators). (67) Licensed vocational nurse (LVN)--A nurse who is currently licensed by the Texas Board of Nursing as a licensed vocational nurse. (68) Life Safety Code [(also referred to as the Code or NFPA 101)]--NFPA 101. [The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA).] (69) Life safety features--fire safety components required by NFPA 101 [the Life Safety Code], including[, but not limited to,] building construction, fire alarm systems, smoke detection systems, interior finishes, sizes and thicknesses of doors, exits, emergency electrical systems, and sprinkler systems. (70) Life support--use of any technique, therapy, or device to assist in sustaining life. (See of this chapter (relating to Advance Directives)). (71) Local authorities--persons, including, but not limited to, local health authority, fire marshal, and building inspector, who may be authorized by state law, county order, or municipal ordinance to perform certain inspections or certifications. (72) Local health authority--the physician appointed by the governing body of a municipality or the commissioner's court of the county to administer state and local laws relating to public health in the municipality's or county's jurisdiction as defined in Texas Health and Safety Code, (73) Long-term care-regulatory--hhsc [DADS] Regulatory Services Division, which is responsible for surveying nursing facilities to determine compliance with regulations for licensure and certification for Title XIX participation. (74) Major injury--an injury that qualifies as a major injury under NFPA 99. (75) [(74)] Manager--A person, other than a licensed nursing home administrator, having a contractual relationship to provide management services to a facility. (76) [(75)] Management services--services provided under contract between the owner of a facility and a person to provide for the operation of a facility, including administration, staffing, maintenance, or delivery of resident services. Management services do not include contracts solely for maintenance, laundry, or food service. (77) [ (76)] MDS--Minimum data set. See Resident Assessment Instrument (RAI). (78) [(77)] MDS nurse reviewer--a registered nurse employed by HHSC to monitor the accuracy of the MDS assessment submitted by a Medicaid-certified nursing facility. (79) [(78)] Medicaid applicant--a person who requests the determination of eligibility to become a Medicaid recipient. (80) [ (79)] Medicaid nursing facility vendor payment system--electronic billing and payment system for reimbursement to nursing facilities for services provided to eligible Medicaid recipients. (81) [(80)] Medicaid recipient--a person who meets the eligibility requirements of the Title XIX Medicaid program, is eligible for nursing facility services, and resides in a Medicaid-participating facility. (82) [(81)] Medical director--a physician licensed by the Texas Medical Board, who is engaged by the nursing home to assist in and advise regarding the provision of nursing and health care. (83) [ (82)] Medical power of attorney--the legal document that designates an agent to make treatment decisions if the individual designator becomes incapable. (84) [ (83)] Medical-social care plan--see Interdisciplinary Care Plan. (85) [(84)] Medically related condition--an organic, debilitating disease or health disorder that requires services provided in a nursing facility, under the supervision of licensed nurses. (86) [(85)] Medication aide--a person who holds a current permit issued under the Medication Aide Training Program as described in Chapter 95 of this title (relating to Medication Aides--Program Requirements) and acts under the authority of a person who holds a current license under state law which authorizes the licensee to administer medication. (87) [ (86)] Misappropriation of funds--the taking, secretion, misapplication, deprivation, transfer, or attempted transfer to any PROPOSED RULES December 22, TexReg 7317

80 person not entitled to receive any property, real or personal, or anything of value belonging to or under the legal control of a resident without the effective consent of the resident or other appropriate legal authority, or the taking of any action contrary to any duty imposed by federal or state law prescribing conduct relating to the custody or disposition of property of a resident. (88) [ (87)] MN--Medical necessity. A determination, made by physicians and registered nurses who are employed by or contract with the state Medicaid claims administrator, that a recipient requires the services of a licensed nurse in an institutional setting to carry out a physician's planned regimen for total care. A recipient's need for custodial care in a 24-hour institutional setting does not constitute medical necessity. (89) [ (88)] Neglect--The failure to provide goods or services, including medical services that are necessary to avoid physical or emotional harm, pain, or mental illness. (90) NFPA--National Fire Protection Association. (91) NFPA 99--NFPA 99, Health Care Facilities Code, 2012 Edition. tion. (92) NFPA 101--NFPA 101, Life Safety Code, 2012 Edi- (93) [(89)] NHIC--This term referred to the National Heritage Insurance Corporation. It now refers to the state Medicaid claims administrator. (94) [(90)] Nonnursing personnel--persons not assigned to give direct personal care to residents; including administrators, secretaries, activities directors, bookkeepers, cooks, janitors, maids, laundry workers, and yard maintenance workers. (95) [(91)] Nurse aide--an individual who provides nursing or nursing-related services to residents in a facility under the supervision of a licensed nurse. This definition does not include an individual who is a licensed health professional, a registered dietitian, or someone who volunteers such services without pay. A nurse aide is not authorized to provide nursing or nursing-related services for which a license or registration is required under state law. Nurse aides do not include those individuals who furnish services to residents only as paid feeding assistants. (96) [(92)] Nurse aide trainee--an individual who is attending a program teaching nurse aide skills. (97) [(93)] Nurse practitioner--an advanced practice registered nurse. (98) [(94)] Nursing assessment--see definition of "comprehensive assessment" and "comprehensive care plan." (99) [(95)] Nursing care--services provided by nursing personnel which include, but are not limited to, observation; promotion and maintenance of health; prevention of illness and disability; management of health care during acute and chronic phases of illness; guidance and counseling of individuals and families; and referral to physicians, other health care providers, and community resources when appropriate. (100) [(96)] Nursing facility/home--an institution that provides organized and structured nursing care and service, and is subject to licensure under Texas Health and Safety Code, Chapter 242. The nursing facility may also be certified to participate in the Medicaid Title XIX program. Depending on context, these terms are used to represent the management, administrator, or other persons or groups involved in the provision of care to the residents; or to represent the physical building, which may consist of one or more floors or one or more units, or which may be a distinct part of a licensed hospital. (101) [(97)] Nursing facility/home administrator--see the definition of "licensed nursing home (facility) administrator." (102) [(98)] Nursing personnel--persons assigned to give direct personal and nursing services to residents, including registered nurses, licensed vocational nurses, nurse aides, and medication aides. Unlicensed personnel function under the authority of licensed personnel. (103) [(99)] Objectives--See definition of "goals." (104) [(100)] OBRA--Omnibus Budget Reconciliation Act of 1987, which includes provisions relating to nursing home reform, as amended. (105) [(101)] Ombudsman--An advocate who is a certified representative, staff member, or volunteer of the HHSC [DADS] Office of the State Long Term Care Ombudsman. (106) [(102)] Optometrist--An individual with the profession of examining the eyes for defects of refraction and prescribing lenses for correction who is licensed by the Texas Optometry Board. (107) [(103)] Paid feeding assistant--an individual who meets the requirements of of this chapter (relating to Paid Feeding Assistants) and who is paid to feed residents by a facility or who is used under an arrangement with another agency or organization. (108) [(104)] PASARR or PASRR--Preadmission Screening and Resident Review. (109) [(105)] Palliative Plan of Care--Appropriate medical and nursing care for residents with advanced and progressive diseases for whom the focus of care is controlling pain and symptoms while maintaining optimum quality of life. (110) [(106)] Patient care-related electrical appliance--an electrical appliance that is intended to be used for diagnostic, therapeutic, or monitoring purposes in a patient care area, as defined in Standard 99 of the National Fire Protection Association. (111) [(107)] Person--An individual, firm, partnership, corporation, association, joint stock company, limited partnership, limited liability company, or any other legal entity, including a legal successor of those entities. (112) [(108)] Pharmacist--An individual, licensed by the Texas State Board of Pharmacy to practice pharmacy, who prepares and dispenses medications prescribed by a practitioner. (113) [(109)] Physical restraint--see Restraints (physical). (114) [(110)] Physician--A doctor of medicine or osteopathy currently licensed by the Texas Medical Board. (115) [(111)] Physician assistant (PA)-- (A) A graduate of a physician assistant training program who is accredited by the Committee on Allied Health Education and Accreditation of the Council on Medical Education of the American Medical Association; (B) A person who has passed the examination given by the National Commission on Certification of Physician Assistants. According to federal requirements (42 CFR 491.2) a physician assistant is a person who meets the applicable state requirements governing the qualifications for assistant to primary care physicians, and who meets at least one of the following conditions: 42 TexReg 7318 December 22, 2017 Texas Register

81 (i) is currently certified by the National Commission on Certification of Physician Assistants to assist primary care physicians; or (ii) has satisfactorily completed a program for preparing physician assistants that: (I) was at least one academic year in length; (II) consisted of supervised clinical practice and at least four months (in the aggregate) of classroom instruction directed toward preparing students to deliver health care; and (III) was accredited by the American Medical Association's Committee on Allied Health Education and Accreditation; or (C) A person who has satisfactorily completed a formal educational program for preparing physician assistants who does not meet the requirements of paragraph (d)(2), 42 CFR 491.2, and has been assisting primary care physicians for a total of 12 months during the 18-month period immediately preceding July 14, (116) [(112)] Podiatrist--A practitioner whose profession encompasses the care and treatment of feet who is licensed by the Texas State Board of Podiatric Medical Examiners. (117) [(113)] Poison--Any substance that federal or state regulations require the manufacturer to label as a poison and is to be used externally by the consumer from the original manufacturer's container. Drugs to be taken internally that contain the manufacturer's poison label, but are dispensed by a pharmacist only by or on the prescription order of a practitioner, are not considered a poison, unless regulations specifically require poison labeling by the pharmacist. (118) [(114)] Practitioner--A physician, podiatrist, dentist, or an advanced practice registered nurse or physician assistant to whom a physician has delegated authority to sign a prescription order, when relating to pharmacy services. (119) [(115)] PRN (pro re nata)--as needed. (120) [(116)] Provider--The individual or legal business entity that is contractually responsible for providing Medicaid services under an agreement with HHSC [DADS]. (121) [(117)] Psychoactive drugs--drugs prescribed to control mood, mental status, or behavior. (122) [(118)] Qualified mental health professional - community services--has the meaning given in 25 TAC (relating to Definitions). (123) [(119)] Qualified surveyor--an employee of HHSC [DADS] who has completed state and federal training on the survey process and passed a federal standardized exam. (124) [(120)] Quality assessment and assurance committee--a group of health care professionals in a facility who develop and implement appropriate action to identify and rectify substandard care and deficient facility practice. (125) [(121)] Quality-of-care monitor--a registered nurse, pharmacist, or dietitian employed by HHSC [DADS] who is trained and experienced in long-term care facility regulation, standards of practice in long-term care, and evaluation of resident care, and functions independently of HHSC [DADS] Regulatory Services Division. (126) [(122)] Quality measure report--a report that provides information derived from an MDS that provides a numeric value to quality indicators. This data is available to the public as part of the Nursing Home Quality Initiative (NHQI), and is intended to provide objective measures for consumers to make informed decisions about the quality of care in a nursing facility. (127) [(123)] Recipient--Any individual residing in a Medicaid certified facility or a Medicaid certified distinct part of a facility whose daily vendor rate is paid by Medicaid. (128) [(124)] Rehabilitative services--rehabilitative therapies and devices provided to help a person regain, maintain, or prevent deterioration of a skill or function that has been acquired but then lost or impaired due to illness, injury, or disabling condition. The term includes physical and occupational therapy, speech-language pathology, and psychiatric rehabilitation services. (129) [(125)] Reimbursement methodology--the method by which HHSC determines nursing facility per diem rates. [(126) Remodeling--The construction, removal, or relocation of walls and partitions, the construction of foundations, floors, or ceiling-roof assemblies, the expanding or altering of safety systems (including, but not limited to, sprinkler, fire alarm, and emergency systems) or the conversion of space in a facility to a different use.] [(127) Renovation--The restoration to a former better state by cleaning, repairing, or rebuilding, including, but not limited to, routine maintenance, repairs, equipment replacement, painting.] (130) [(128)] Representative payee--a person designated by the Social Security Administration to receive and disburse benefits, act in the best interest of the beneficiary, and ensure that benefits will be used according to the beneficiary's needs. (131) [(129)] Resident--Any individual residing in a nursing facility. (132) [(130)] Resident group--a group or council of residents who meet regularly to: (A) discuss and offer suggestions about the facility policies and procedures affecting residents' care, treatment, and quality of life; (B) plan resident activities; (C) participate in educational activities; or (D) for any other purpose. (133) [(131)] Responsible party--an individual authorized by the resident to act for him as an official delegate or agent. Responsible party is usually a family member or relative, but may be a legal guardian or other individual. Authorization may be in writing or may be given orally. (134) [(132)] Restraint hold-- (A) A manual method, except for physical guidance or prompting of brief duration, used to restrict: (i) free movement or normal functioning of all or a portion of a resident's body; or (ii) resident's body. normal access by a resident to a portion of the (B) Physical guidance or prompting of brief duration becomes a restraint if the resident resists the guidance or prompting. (135) [(133)] Restraints (chemical)--psychoactive drugs administered for the purposes of discipline, or convenience, and not required to treat the resident's medical symptoms. (136) [(134)] Restraints (physical)--any manual method, or physical or mechanical device, material or equipment attached, or PROPOSED RULES December 22, TexReg 7319

82 adjacent to the resident's body, that the individual cannot remove easily which restricts freedom of movement or normal access to one's body. The term includes a restraint hold. (137) [(135)] RN--Registered nurse. An individual currently licensed by the Texas Board of Nursing as a registered nurse. (138) [(136)] RN assessment coordinator--a registered nurse who signs and certifies a comprehensive assessment of a resident's needs, using the RAI, including the MDS, as specified by HHSC [DADS]. (139) [(137)] RUG--Resource Utilization Group. A categorization method, consisting of 34 categories based on the MDS, that is used to determine a recipient's service and care requirements and to determine the daily rate HHSC [DADS] pays a nursing facility for services provided to the recipient. (140) [(138)] Secretary--Secretary of the U.S. Department of Health and Human Services. (141) [(139)] Services required on a regular basis--services which are provided at fixed or recurring intervals and are needed so frequently that it would be impractical to provide the services in a home or family setting. Services required on a regular basis include continuous or periodic nursing observation, assessment, and intervention in all areas of resident care. (142) [(140)] SNF--A skilled nursing facility or distinct part of a facility that participates in the Medicare program. SNF requirements apply when a certified facility is billing Medicare for a resident's per diem rate. (143) [(141)] Social Security Administration--Federal agency for administration of social security benefits. Local social security administration offices take applications for Medicare, assist beneficiaries file claims, and provide information about the Medicare program. (144) [(142)] Social worker--a qualified social worker is an individual who is licensed, or provisionally licensed, by the Texas State Board of Social Work Examiners as prescribed by the Texas Occupations Code, Chapter 505, and who has at least: (A) a bachelor's degree in social work; or (B) similar professional qualifications, which include a minimum educational requirement of a bachelor's degree and one year experience met by employment providing social services in a health care setting. (145) [(143)] Standards--The minimum conditions, requirements, and criteria established in this chapter with which an institution must comply to be licensed under this chapter. (146) [(144)] State Medicaid claims administrator--the entity under contract with HHSC to process Medicaid claims in Texas. (147) [(145)] State plan--a formal plan for the medical assistance program, submitted to CMS, in which the State of Texas agrees to administer the program in accordance with the provisions of the State Plan, the requirements of Titles XVIII and XIX, and all applicable federal regulations and other official issuances of the U.S. Department of Health and Human Services. (148) [(146)] State survey agency--hhsc [DADS] is the agency, which through contractual agreement with CMS is responsible for Title XIX (Medicaid) survey and certification of nursing facilities. (149) [(147)] Stay agreement--an agreement between a license holder and the executive commissioner that sets forth all requirements necessary to lift a stay and rescind a license revocation proposed under of this chapter (relating to Revocation of a License by the Executive Commissioner). (150) [(148)] Substandard quality of care violation--one or more violations of of this chapter (relating to Resident Behavior and Facility Practices), of this chapter (relating to Quality of Life), or of this chapter (relating to Quality of Care) that constitute: threat; or (A) an immediate threat to resident health or safety; (B) a pattern of or actual harm that is not an immediate (C) a widespread potential for more than minimal harm, but less than an immediate threat, with no actual harm. (151) [(149)] Supervising physician--a physician who assumes responsibility and legal liability for services rendered by a physician assistant (PA) and has been approved by the Texas Medical Board to supervise services rendered by specific PAs. A supervising physician may also be a physician who provides general supervision of an advanced practice registered nurse providing services in a nursing facility. (152) [(150)] Supervision--General supervision, unless otherwise identified. (153) [(151)] Supervision (direct)--authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence. If the person being supervised does not meet assistant-level qualifications specified in this chapter and in federal regulations, the supervisor must be on the premises and directly supervising. (154) [(152)] Supervision (general)--authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence. The person being supervised must have access to the qualified person providing the supervision. (155) [(153)] Supervision (intermittent)--authoritative procedural guidance by a qualified person for the accomplishment of a function or activity within his sphere of competence, with initial direction and periodic inspection of the actual act of accomplishing the function or activity. The person being supervised must have access to the qualified person providing the supervision. (156) [(154)] Texas Register--A publication of the Texas Register Publications Section of the Office of the Secretary of State that contains emergency, proposed, withdrawn, and adopted rules issued by Texas state agencies. The Texas Register was established by the Administrative Procedure and Texas Register Act of (157) [(155)] Therapeutic diet--a diet ordered by a physician as part of treatment for a disease or clinical condition, in order to eliminate, decrease, or increase certain substances in the diet or to provide food which has been altered to make it easier for the resident to eat. (158) [(156)] Therapy week--a seven-day period beginning the first day rehabilitation therapy or restorative nursing care is given. All subsequent therapy weeks for a particular individual will begin on that day of the week. (159) [(157)] Threatened violation--a situation that, unless immediate steps are taken to correct, may cause injury or harm to a resident's health and safety. (160) [(158)] Title II--Federal Old-Age, Survivors, and Disability Insurance Benefits of the Social Security Act. 42 TexReg 7320 December 22, 2017 Texas Register

83 (161) [(159)] Title XVI--Supplemental Security Income (SSI) of the Social Security Act. (162) [(160)] Title XVIII--Medicare provisions of the Social Security Act. (163) [(161)] Title XIX--Medicaid provisions of the Social Security Act. (164) [(162)] Total health status--includes functional status, medical care, nursing care, nutritional status, rehabilitation and restorative potential, activities potential, cognitive status, oral health status, psychosocial status, and sensory and physical impairments. (165) [(163)] UAR--HHSC's Utilization and Assessment Review Section. (166) [(164)] Uniform data set--see RAI (Resident Assessment Instrument). (167) [(165)] Universal precautions--the use of barrier and other precautions to prevent the spread of blood-borne diseases. (168) [(166)] Unreasonable confinement--involuntary seclusion. (169) [(167)] Vaccine preventable diseases--the diseases included in the most current recommendations of the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention. (170) [(168)] Vendor payment--payment made by HHSC [DADS] on a daily-rate basis for services delivered to recipients in Medicaid-certified nursing facilities. Vendor payment is based on the nursing facility's approved-to-pay claim processed by the state Medicaid claims administrator. The Nursing Facility Billing Statement, subject to adjustments and corrections, is prepared from information submitted by the nursing facility, which is currently on file in the computer system as of the billing date. Vendor payment is made at periodic intervals, but not less than once per month for services rendered during the previous billing cycle. (171) [(169)] Widespread--When the problem causing a violation is pervasive in a facility or represents systemic failure that affected or has the potential to affect a large portion or all of a facility's residents. (172) [(170)] Working day--any 24-hour period, Monday through Friday, excluding state and federal holidays. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER D. FACILITY CONSTRUCTION DIVISION 1. GENERAL PROVISIONS 40 TAC , The amendment and new section are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment and new section implement Texas Government Code, and Texas Health and Safety Code, General Requirements. (a) The facility must be designed, constructed, equipped, and maintained to protect the health and ensure the safety of residents, personnel, and the public. (b) If children are admitted to the facility, accommodations, furnishings, and equipment appropriate to children must be provided, including the following;[.] (1) The facility must provide indoor and outdoor recreation areas designed to encourage exploration within the children's capabilities. (2) The facility must provide pediatric equipment and supplies in appropriate sizes for the age and development level of the children. Pediatric emergency supplies and equipment must be readily available for use. (3) The environment must be the least restrictive allowable while remaining within the parameters of safety. All areas of the facility accessible to children must be "child proof" for safety hazards. This type of safety proofing is above the normal level of hazard control maintained for adult residents and includes the addition of safety covers on electrical outlets not in use that are accessible to children. (4) Pediatric resident's rooms must be decorated and furnished in accordance with the age and developmental level of the children and as an expression of their individual preferences. (c) HHSC may grant a waiver for certain provisions regarding the physical plant and environment that, in the opinion of HHSC, would be impractical for the facility to meet. In granting the waiver, HHSC must determine that granting the waiver has no adverse effect on resident health and safety and the requirement, if not waived, would impose an unreasonable hardship on the facility. HHSC may require offsetting or equivalent provisions in granting a waiver. (d) [(b)] The requirements of this subchapter are applicable to [new and existing] nursing facilities as follows: (1) All nursing facilities must comply with division 3 of this subchapter (relating to Provisions Applicable to All Facilities). (2) A nursing facility licensed before September 11, 2003, must comply with division 2 of this subchapter (relating to Facilities Licensed Before September 11, 2003). (3) A nursing facility licensed on or after September 11, 2003, but before April 2, 2018, must comply with division 5 of this subchapter (relating to Facilities Licensed On or After September 11, 2003 and Before April 2, 2018). (4) A nursing facility licensed on or after April 2, 2018, must comply with division 9 of this subchapter (relating to Facilities Licensed On or After April 2, 2018). (5) A small house or household facility is a facility that is designed to provide a non-institutional environment to promote resident-centered care and that meets the requirements of of this subchapter (relating to Small House and Household Facilities). New construction of a small house or household facility must meet the re- PROPOSED RULES December 22, TexReg 7321

84 quirements of of this subchapter. [unless otherwise stated. Refer to of this title (relating to Facility Construction) for additional requirements for new construction, conversions of existing unlicensed buildings, remodeling, and additions. An existing unlicensed building is defined as any building (or portion thereof) which is not presently licensed as a nursing home.] (e) A facility must comply with NFPA 101; NFPA 99, except Chapters 7, 8, 12, and 13; and a Tentative Interim Amendment (TIA) issued by NFPA, including the TIAs listed in paragraphs (1) and (2) of this subsection. A facility must also comply with other NFPA publications referenced in NFPA 101 or in this chapter, unless otherwise approved by HHSC. (1) The following TIAs have been issued for NFPA 101: (A) TIA 12-1, issued August 11, 2011; (B) TIA 12-2, issued October 30, 2012; (C) TIA 12-3, issued October 22, 2013; and (D) TIA 12-4, issued October 22, (2) The following TIAs have been issued for NFPA 99: (A) TIA 12-2, issued August 11, 2011; (B) TIA 12-3, issued August 9, 2012; (C) TIA 12-4, issued March 7, 2013; (D) TIA 12-5, issued August 1, 2013; and (E) TIA 12-6, issued March 3, (f) Building rehabilitation on existing buildings shall be classified in accordance with NFPA 101 and shall comply with NFPA 101 and of this subchapter (relating to Building Rehabilitation). (g) Buildings, or portions of buildings, may be occupied during construction, repair, alterations, or additions only when required means of egress and required fire protection features are in place and continuously maintained for the portion occupied, or when alternative life safety measures acceptable to HHSC are in place. (h) No existing life safety feature shall be removed or reduced when the feature is a requirement for new construction. Life safety features and equipment that have been installed in existing buildings, if not required by NFPA 101, must continue to be maintained or may be completely removed if prior approval is obtained from HHSC. (i) The facility must perform a risk assessment in accordance with NFPA 99. (1) The risk assessment must follow and document the defined risk assessment procedure used. (2) The results of the assessment procedure must be documented and records retained. (3) A building system required by NFPA 99 shall be designed to meet the risk categories determined for each system as part of this assessment. At a minimum, any new systems or equipment must be designed to meet the requirements for Category 2 risk, as defined in NFPA 99. (4) The assessment must be reviewed and a new assessment performed, if necessary, on an annual basis and when the facility identifies changes in resident care needs that cannot be met by the currently installed systems and equipment. (5) In addition to the requirements of NFPA 99 based on the risk assessment, a facility must also meet all applicable requirements of this subchapter. (j) A wing or area that is separated from the rest of the facility by locked doors, or a facility that is locked in its entirety, for the purpose of securing residents must meet the requirements of (a)(6) and (c)(1)-(10) of this chapter (relating to Standards for Certified Alzheimer's Facilities) Definitions. The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise. The definitions listed in of this chapter (relating to Definitions) also apply to this subchapter. (1) Alarm Planning Superintendent--Fire Alarm Planning Superintendent. A person licensed by the State Fire Marshal's Office to plan, install, certify, inspect, test, service, monitor, and maintain fire alarm or fire detection devices. (2) ANSI--American National Standards Institute. (3) ASHRAE--Formerly American Society of Heating, Refrigerating and Air-Conditioning Engineers. A global society focusing on building systems, energy efficiency, indoor air quality, refrigeration, and sustainability. (4) ASME--The American Society of Mechanical Engineers, a developer of codes and standards associated with the art, science, and practice of mechanical engineering. (5) ASME A17.1--Safety Code for Elevators and Escalators, published by ASME. (6) ASTM--ASTM International, a not-for-profit, voluntary standards developing organization that develops and publishes international voluntary consensus standards for materials, products, systems, and services. (7) ASTM E84--Standard Test Method for Surface Burning Characteristics of Building Materials, 2010, published by ASTM. (8) ASTM E90--Standard Test Method for Laboratory Measurement of Airborne Sound Transmission Loss of Building Partitions and Elements, published by ASTM. (9) ASTM E108--Standard Test Methods for Fire Tests of Roof Coverings, published by ASTM. (10) ASTM E662--Standard Test Method for Specific Optical Density of Smoke Generated by Solid Materials, 2017, published by ASTM. (11) Building Rehabilitation--Any construction activity involving repair, modernization, reconfiguration, renovation, changes in occupancy or use, or installation of new fixed equipment, including, the following: (A) the replacement of finishes, such as new flooring or wall finishes or the painting of walls and ceilings; (B) the construction, removal, or relocation of walls, partitions, floors, ceilings, doors, or windows; (C) the replacement of doors, windows, or roofing; (D) changes to the appearance of the exterior of a building, including new finish materials; (E) the repair, replacement, or extension of fire protection systems, including fire sprinkler systems, fire alarm system, and fire suppression systems at cooking operations; (F) the replacement of door hardware, plumbing fixtures, handrails in corridors, or grab rails in bathrooms and restrooms; 42 TexReg 7322 December 22, 2017 Texas Register

85 systems; (G) the repair, replacement, or extension of nurse call (H) the repair or replacement of emergency electrical system equipment and components, including generator sets, transfer switches, distribution panel boards, receptacles, switches, and light fixtures; unit; (J) the change of a secured wing or unit to ordinary resident-use; (I) the change of a wing or area to a secured wing or (K) a change in the use of space, including the change of resident bedrooms to other uses, such as offices, storage, or living or dining spaces; and, (L) changes in locking arrangements, such as the installation of access control systems or the installation or removal of electronic locking devices, including electromagnetic locks, and other delayed-egress locking devices. (12) NFPA 13--Standard for the Installation of Sprinkler Systems, 2010 edition. (13) NFPA 25--Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems, 2011 edition. (14) NFPA 37--Standard for the Installation and Use of Stationary Combustion Engines and Gas Turbines, 2010 edition. (15) NFPA 54--National Fuel Gas Code, 2012 edition. (16) NFPA 55--Compressed Gases and Cryogenic Fluids Code, 2010 edition. (17) NFPA 58--Liquefied Petroleum Gas Code, 2011 edition. (18) NFPA 70--National Electrical Code, 2011 edition. (19) NFPA 72--National Fire Alarm and Signaling Code, 2010 edition. (20) NFPA 90A--Standard for the Installation of Air-Conditioning and Ventilating Systems, 2012 edition. (21) NFPA 96--Standard for Ventilation Control and Fire Protection of Commercial Cooking Operations, 2011 edition. (22) NFPA 110--Standard for Emergency and Standby Power Systems, 2010 edition. (23) NFPA 220--Standard on Types of Building Construction, 2012 edition. (24) NFPA 255--Standard Method of Test of Surface Burning Characteristics of Building Materials. This document was withdrawn by NFPA in 2009 in lieu of ASTM E84 and UL 723. (25) NFPA 258--Recommended Practice for Determining Smoke Generation of Solid Materials. This document was withdrawn by NFPA in 2006 in lieu of ASTM E662. (26) Patient care vicinity--a space extending 6 ft. (1.8 m) horizontally in all directions around the resident bed and extending vertically to 7 ft. 6 in. (2.3 m) above the floor. If the dimension between the bed and a wall or partition is less than 6 ft. (1.8 m), the limit of the patient care vicinity is at the wall or partition. (27) RME--Responsible Managing Employee. A person licensed by the State Fire Marshal's Office who is designated by a registered fire sprinkler firm to ensure that any fire protection sprinkler system, as planned, installed, maintained, or serviced, meets the standards provided by law. The type of RME license issued determines the type of fire sprinkler services the fire sprinkler firm may perform. (28) TAS--Texas Accessibility Standards. (29) Texas Natural Resource Conservation Commission-- The predecessor agency to TCEQ (30) TCEQ--Texas Commission on Environmental Quality. (31) UL--UL LLC, formerly Underwriters' Laboratory. (32) UL 723--Standard for Test for Surface Burnings Characteristics of Building Materials. (33) UL 790--Standard Test Methods for Fire Tests of Roof Coverings. (34) UL Standard for Hospital Signaling and Nurse Call Equipment. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TAC , , The repeals are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The repeals implement Texas Government Code, and Texas Health and Safety Code, Applicable Codes and Standards Waivers Means of Egress. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) PROPOSED RULES December 22, TexReg 7323

86 DIVISION 2. FACILITIES LICENSED BEFORE SEPTEMBER 11, TAC , , The amendments and new section are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendments and new section implement Texas Government Code, and Texas Health and Safety Code, Applicable Codes and Standards. (a) The facility must meet the provisions of the Existing Health Care Occupancies chapter of NFPA 101. (b) The following codes, standards, or guidelines govern their subject areas for existing construction: (1) If the municipality has a building code and a plumbing code, those codes govern. (2) In the absence of municipal codes, nationally recognized codes must be used. To ensure continuity, all nationally recognized codes, when used, must be publications of the same group or organization. (3) Heating, ventilating, and air-conditioning systems must be designed and installed in accordance with NFPA 90A and the ASHRAE Handbook, except as may be modified in this subchapter. (4) Electrical and illumination systems must be designed and installed in accordance with NFPA 70 and the Lighting Handbook of the Illuminating Engineering Society of North America, except as may be modified in this subchapter. (5) The facility must comply with accessibility requirements for individuals with disabilities in the revised regulations for Title II and III of the Americans with Disabilities Act at 28 CFR Part 35 and Part 36, also known as the 2010 ADA Standards for Accessible Design, and the TAS adopted by the Texas Department of Licensing and Regulation (TDLR) at 16 TAC Chapter 68. A facility must register plans for new construction, substantial renovations, modifications, and alterations with TDLR, Attn: Elimination of Architectural Barriers Program, and comply with TAS. (6) Every building and portion of a building must be capable of sustaining all dead and live loads in accordance with accepted engineering practices and standards. (7) Each building must be classified as to building construction type for fire resistance rating purposes in accordance with NFPA 220 and NFPA 101. (8) Building insulation materials, unless sealed on all sides and edges in an approved manner with noncombustible material, must have a flame-spread rating of 25 or less when tested in accordance with ASTM E84, UL723, or ASTM E662. (9) A facility with a boiler must meet all applicable requirements of Texas Health and Safety Code, Chapter Emergency Power. (a) Emergency power systems must meet the requirements of NFPA 99 applicable to existing facilities, for the risk category determined by the requirements of (i) of this subchapter (relating to General Requirements), and the requirements of this section. Rehabilitation or modernization of an existing emergency power system must be based on the assessed risk category and according to the requirements of NFPA 99 for new health care facilities. (b) [(a)] An emergency electrical power system must supply power adequate at least for lighting all entrances and exits, equipment to maintain the fire detection, alarm, and extinguishing systems, and any systems or equipment whose failure is likely to cause major injury or death to a resident [life-support systems] if the normal electrical supply is interrupted. Emergency electrical services by generator or battery must be provided to comply with the provisions of NFPA [the National Fire Protection Association (NFPA)] 70. Battery systems must be capable of sustaining power for a duration of at least one and one-half hours. (1) The emergency electrical power system must supply the following systems [Life Support must include]: (A) illumination for means of egress, nurses' [nurse] stations, medication rooms, dining and living rooms, and areas immediately outside of exit doors; (B) exit signs and exit directional signs required by NFPA 101 [the Life Safety Code]; (C) alarm systems, including fire alarms activated by manual stations, water flow alarm devices of sprinkler systems, fire and smoke detecting systems, and alarms required for nonflammable medical gas systems if installed [(where hospital-type functions are included in the nursing home facility, applicable standards apply)]; (D) task illumination and selected receptacles at any required or provided generator set location; (E) selected duplex receptacles, including receptacles in resident corridors, each resident-bed location where systems or equipment is used whose failure is likely to cause major injury or death to a resident, nurses' [life-support electrical appliances are utilized, nurse] stations, medication rooms, including biological refrigerator, if a generator is required or provided; (F) nurse call [calling] systems; (G) resident room night lights when provided [where required]; (H) elevator cab lighting, control, and communication systems; (I) all facility telephone equipment; and (J) those paging or speaker systems that are necessary for the communication plan for an emergency. Radio transceivers that are necessary for emergency use must be capable of operating for at least one hour upon total failure of both normal and emergency power. (2) If the emergency electrical power system supplies other [Where critical] systems the facility considers critical to operation, the transfer to the emergency power source must be by [are provided, there must be a] delayed automatic connection. (3) The emergency lighting must be automatically in operation within 10 seconds after the interruption of normal electrical [electric] power supply. Emergency service to receptacles and equipment may be a delayed automatic connection. Receptacles connected to emergency power must be of a uniform and distinctive color. Stored fuel capacity must be sufficient for not less than four hours [four-hour] of required generator operation. 42 TexReg 7324 December 22, 2017 Texas Register

87 (4) An emergency [Emergency] motor generator, if [required or] provided, must meet the following standards: (A) any emergency generator must be installed in accordance with NFPA 37, NFPA 110 and NFPA 99; (B) generators located on the exterior of the building must be provided with a noncombustible protective cover or be protected as per manufacturer's recommendations; and (C) motor generators fueled by public utility natural gas must have the capacity to be manually or automatically switched to an alternate fuel source, as specified in NFPA 70. (5) Wiring for the emergency system must be in accordance with NFPA 70. (c) [(b)] When the failure of [life support] systems or equipment is likely to cause major injury or death to a resident, such as the failure of a mechanical ventilator used to support or completely control breathing, [are used,] the facility must provide emergency electrical power with an emergency generator as, defined in NFPA 99, [(as defined in NFPA 99, Health Care Facilities)] located on the premises Space and Equipment. [(a)] The facility must: (1) provide sufficient space and equipment in dining, health services, recreation, and program areas to enable staff to provide residents with needed services as required by these standards and as identified in each resident's plan of care; and (2) maintain all essential mechanical, electrical, and resident [patient] care equipment in safe operating condition. [(b) A wing or area which is separated from the rest of the facility by locked doors for the purpose of securing residents must meet the requirements of (a)(6) and (c)(1)-(10) of this title (relating to Standards for Certified Alzheimer's Facilities).] [(c) If children are residents of the facility, the facility must provide:] [(1) indoor and outdoor recreation areas designed to encourage exploration within the children's capabilities; and] [(2) pediatric equipment and supplies in appropriate size for the age and development level of the children. Pediatric emergency supplies and equipment must be readily available for use.] Resident Rooms. Resident rooms must be designed and equipped for adequate nursing care, comfort, and privacy of residents. (1) Bedrooms must: (A) accommodate no more than four residents. The total number of beds in ward rooms with three or more beds must not exceed 50% of the total facility capacity in existing facilities unless approved by HHSC [the Texas Department of Human Services (DHS)]. (B) measure at least 80 square feet per resident in multiple resident bedrooms and at least 100 square feet in single resident rooms. (C) have direct access to an exit corridor. (D) be designed or equipped to ensure [assure] full visual privacy for each resident. A facility must take appropriate measures to protect the privacy and dignity of the residents [Appropriate measures must be taken] through the use of cubicle curtains, screens, or procedures [to protect the privacy and dignity of the residents]. Curtains and screens must be rendered and maintained flame-retardant. (E) in facilities initially certified after March 31, 1992, except in private rooms, have ceiling-suspended curtains for each bed, which extend around the bed to provide total visual privacy, in combination with adjacent walls and curtain (see paragraph (4) of this section). (F) have at least one operable window to the outside which can readily be opened from the inside without the use of tools. The height of the window sill [(opening)] must not exceed 36 inches above the floor. The minimum area of windows in each bedroom must equal at least 8.0% of the room area. Operable window sections may be restricted to not more than six nor less than four inches for security or safety reasons [if approved in writing by DHS]. Each window must be provided with a flame-retardant shade, curtain, or blind. (G) have a floor at or above grade level. (2) The facility must provide each resident with: (A) a separate bed of proper size and height for the convenience of the resident. The bed will be a minimum of 36 inches wide with a headboard of sturdy construction. The facility must provide each bed [Each bed must be provided] with suitable bedspreads and blankets to ensure [assure] the comfort and warmth of each resident, and must not pass bedspreads and blankets [be passed] from resident to resident without first being laundered. The bed of each resident with physician's orders for bedrails must have bedrails affixed to both sides of the bed; (B) a clean, comfortable mattress with a moisture-proof cover, and a comfortable pillow; (C) bedding appropriate to the weather and climate; and (D) functional furniture appropriate to the resident's needs including a comfortable chair, bedside cabinet, and individual closet space in the resident bedroom with at least 16 inches of hanging space, shelves for personal belongings accessible to the resident, and closeable doors [door(s)]. Each bedroom must be provided with at least one noncombustible wastebasket. (3) HHSC [DHS] may permit variations in requirements specified in paragraph (1)(A) and (B) of this section relating to rooms in individual cases when the facility demonstrates in writing that the variations: (A) are required by the special needs of the residents; and (B) will not adversely affect residents' health and safety. (4) The width and length of bedrooms and the arrangement of furniture must ensure [assure] appropriate resident circulation, especially in relation to emergency evacuation and to usual wheelchair movement. Bedrooms should not be less than 10 feet in the smallest dimension. There must be at least 36 inches between beds and should be at least 18 inches between any bed and the adjacent parallel wall that restricts access by the resident, [(]that is, bed sides should not have to be placed against a wall to meet other spacing requirements[)]. Beds must not extend into the bedroom door opening, nor must any other piece of furnishing or equipment be located where it might preclude or inhibit the removal of any bed or closing and latching of the bedroom door in an emergency. (5) Each bed must have access to a nurse call [nurse-call] device that is part of an electrical nurse call [nurse-call] system. (6) Each bed must be provided with an appropriate, safe, durable, non-glare [nonglare], permanently bed-mounted or wall-mounted reading-light fixture. The fixture must be wired in accordance with NFPA [National Fire Protection Association (NFPA)] 70. These fixtures should be mounted at least five feet, six inches PROPOSED RULES December 22, TexReg 7325

88 above the floor. The switch must be within reach of a resident in the bed. (7) At least one duplex receptacle must be provided for each bed. Other duplex receptacles must be provided as needed or [and/or] as required by NFPA 70. (8) Each bedroom must be ensured [assured] of having general lighting, either by means of appropriate combination reading light or by means of separate fixture. (9) For emergency separation from fire and smoke, bedroom doors must be maintained to close completely without dragging or binding, to latch securely, and to fit reasonably tight in the frame. The gap between the floor and the bottom of the closed door must not exceed 3/4 inch. (10) Vacant bedrooms may not be used for hazardous activities or hazardous storage, unless specifically approved by HHSC [DHS] in writing. (11) Bedrooms must be identified with a raised or recessed unique number placed on or near the door. Refer to (c) of this title (relating to Provisions for Persons with Disabilities) and (b)(5) [ (c)(5)] of this title (relating to Applicable Codes and Standards). (12) Residents must be permitted and encouraged to have personal possessions in their rooms that do not interfere with their care, treatment, or well-being, or that of other residents. [Pediatric resident's rooms should be decorated and furnished in accordance with the age and developmental level of the children and as an expression of their individual preferences.] (13) Locks on bedroom doors are permitted when they meet definite resident [patient] needs, including the following situations: (A) married couples whose rights of privacy could be infringed upon unless bedroom door locks are permitted; (B) residents for whom the attending physician wants bedroom door locks to enhance their sense of security; and (C) residents for whom restraint through confinement to their own rooms is necessary for their own or [and/or] other persons' safety. (14) In situations such as those listed in paragraph (13) of this section, the following guidelines must be met: (A) bedroom door locks for other than restraining purposes must be of the type which the occupant can unlock at will from inside the room; (B) all bedroom door locks must be of the type which can be unlocked from the corridor side; (C) attendants must carry keys which will permit ready accessibility to the locked bedrooms when entrance becomes necessary; (D) bedroom doors which are locked for resident restraining purposes must be dutch doors [dutch-doors], with only the lower section locked. The upper part of the doorway must be open to permit visual supervision of the residents from the corridor. The dutch door must [should] be easily unlocked by nurses and attendants. Resident restraints of any nature cannot be applied without orders from the attending physician. [See of this title (relating to Resident Behavior and Facility Practice).] (E) locking of bedroom doors by residents for privacy or security or by nursing facility staff for restraint [(dutch door)] will not be permitted except when specifically included in the attending physician's written orders or authorized by the nursing facility administrator Other Environmental Conditions. The facility must provide a safe, functional, sanitary, and comfortable environment for residents, staff, and the public. (1) The facility must: (A) establish procedures to ensure that water is available to essential areas when there is a loss of normal water supply; (B) have adequate outside ventilation by means of windows, mechanical ventilation, or a combination of the two; (C) maintain an effective pest control program so that the facility is free of pests and rodents; and (D) equip corridors with firmly secured handrails on each side on all wall segments [walls] 18 inches in length or longer [greater]. These rails must be substantially anchored to withstand downward force and must be mounted 33 to 36 inches from the floor. (2) No occupancies or activities undesirable to the health, safety, or well-being of residents will be located in the facility. [(3) For pediatric residents, the environment must be the least restrictive allowable while remaining within the parameters of safety. All areas of the facility accessible to children must be "child proof" for safety hazards. This type of safety proofing is above the normal level of hazard control maintained for adult residents and includes the addition of safety covers on electrical outlets not in use which are accessible to children.] [(4) In operations where there is a chance of cross-contamination, clean and soiled operations must be separated to lessen the chance of cross-contamination by facility employees, residents, and others. This separation must be in relation to traffic flow, air currents, air exhaust, water flow, vapors, and other conditions.] (3) [(5)] An electric water cooler or water fountain must be accessible to residents. When new drinking fountains are provided, at least one must be installed to be accessible to persons in wheelchairs. (4) [(6)] Public toilets [toilet(s)] with sanitary hand-washing [handwashing] and drying provisions must be provided or designated. (5) [(7)] If deodorant is used for air-freshening purposes, the following procedures must apply: (A) deodorants or air fresheners are permitted provided the dispensing device is located where it is inaccessible to residents [and patients]; (B) these products are not used to cover odors resulting from poor housekeeping practices or unsanitary conditions; (C) these products are not used in excess; (D) there is no contra-indication on the label of the product indicating that the product should not be used in the presence of [aged or ill] persons who are older or ill; and (E) devices, such as ozone generators, ultra-violet generators, and smoke eliminators, must be approved by HHSC [the Texas Department of Human Services]. 42 TexReg 7326 December 22, 2017 Texas Register

89 (6) Permanently mounted hold-open devices to expedite emergency egress and prevent accidental lock-out must be provided for exterior doors Other Rooms and Areas. (a) Nurses' [Nurses] station. A nurses' [nurses] station is an area designated as the focal point on all shifts for the administration and supervision of resident-care activities for a designated number of resident bedrooms. (1) All resident bedroom corridors must be observable by direct line of sight or by mechanical means from a designated nurses' [nurses] station or auxiliary station. There must be at least one nurses' [nurses] station per floor in multi-story [multi-storied] buildings. (2) If all resident bedroom corridors are observable by direct line of sight from inside the nurses' [nurses] station or from within 24 inches of the counter or hall of the nurses' [nurses] station, no auxiliary stations are required, even if resident bedrooms are more than 150 feet from the nurses' [nurses] station. (3) When resident bedrooms are more than 150 feet from the nurses' [nurses] station and the adjacent corridors are not observable from the station by direct line of sight, an auxiliary station must be established and used. (4) All corridors adjacent to resident bedrooms that are more than 150 feet from a designated nurses' [nurses] station or auxiliary station must be observable by direct line of sight from the designated nurses' [nurses] station or auxiliary station. Corridors located in the service area of an auxiliary station must be observable, as described in paragraphs (2) and (3) of this subsection, at the auxiliary station. (5) The 150-foot limitation described in paragraphs (2)-(4) of this subsection may be increased to 165 feet in facilities or additions to facilities completed before August 10, (6) In addition to the required normal and emergency illumination, the facility must keep on hand and readily available to night staff no less than one working flashlight at each nurses' station. (b) Auxiliary station. Each auxiliary station must include a work area in which nursing personnel can document and maintain resident data, even if the facility's initial decision is to maintain clinical records at the nurses' [nurses] station. (1) Auxiliary stations must be staffed by nursing personnel during all shifts. (2) More than one auxiliary station may be assigned to a designated nurses' [nurses] station, regardless of the distance between stations. More than one corridor may be observed by mechanical means from a designated nurses' [nurses] station or auxiliary station. (3) A nurse call system for resident corridors monitored by an auxiliary station[, located in the service area or a designated auxiliary station,] must register calls at the auxiliary station [nurses station to which it is assigned]. (4) Each auxiliary station must have an emergency electrical source adequate to power lights at the station. (5) Medications and clinical records may be maintained at an auxiliary station. (6) If a required auxiliary station does not already exist and the facility must establish a new auxiliary station, all applicable standards, particularly those pertaining to the physical plant [plan] and NFPA 101 [the Life Safety Code], must be observed. All renovations and structural changes require prior approval from HHSC [the Texas Department of Human Services (DHS)]. (7) All new construction completed after August 10, 1983, must allow direct line-of-sight observation of all resident bedroom corridors from the nurses' [nurse] station or auxiliary station. (c) Mechanical means for resident observation. (1) The nursing facility may use [mechanical means, such as] closed-circuit television or [and] mirrors[,] to observe residents in the facility. (2) Closed-circuit television monitoring systems must meet the following criteria: (A) The camera [camera(s)] must be placed to view the entire corridor length, without any "blind spots." (B) The camera [camera(s)] must be capable of providing recognizable images, in minimum and maximum light levels, for the complete viewing area. (C) The monitor [monitor(s)] must be installed and be clearly visible to persons in the nurses' [nurses] station or auxiliary station who are assigned to the area monitored by the camera. (D) The system must be supplied with emergency power that enables the system to function during electrical service failures. (E) Each camera must have its own separate monitor. (F) If the system performs [they perform] the minimum basic functions specified in subparagraphs (A)-(D) of this paragraph, television monitoring systems installed before March 1984 may remain in service until the equipment is replaced or the system is expanded. Replacement systems or new component equipment must satisfy subparagraphs (A)-(E) of this paragraph. (3) Mirrors must meet the following criteria: (A) The mounting height of the mirror must be no less than six feet and eight inches from the floor to the bottom of the mirror. (B) The mirror [mirror(s)] must not extend more than 3-1/2 inches from the face of the corridor wall, unless the bottom of the mirror is more than seven feet and six inches above the floor. (C) The mirror image must be clear enough that individuals can be recognized, in minimum and maximum light levels, throughout the viewing area. (4) The monitoring systems described in this section must not be used to deny privacy to staff or residents. (d) Nurse [Resident] call system. Each nurses' [nurses] station must be equipped to register residents' calls through a communication system from resident areas. [See of this subchapter (relating to Resident Call System) for specific requirements.] (e) Medication storage area. A medication storage area must include a [There must be] sufficient, lockable, enclosed medicine storage spaces, medicine room, or medication cart. The medication storage area must be furnished with a refrigerator. There must be sufficient space available for a medication preparation area equipped with a sink having hot and cold water. When not in use, a [the] medication cart must be secured in a designated area. Only authorized personnel must have access to the lockable, enclosed medicine storage area, medication room, or [medication storage area] and the medication cart. Medication storage areas and preparation areas must be adequately ventilated and temperature controlled. [See of this chapter (relating to Pharmacy Services).] PROPOSED RULES December 22, TexReg 7327

90 (f) Clean utility room. A clean utility room must be provided and must contain a sink with hot and cold water. It must be part of a system for storage and distribution of clean and sterile supply materials and equipment. (g) Soiled utility room. A soiled utility room must be provided and contain a flushing fixture and a sink with hot and cold water. It must be part of a system for collection and cleaning or disposal of soiled utensils or materials. (h) Soiled linen room. A soiled linen room [Soiled linen rooms] must be provided as needed commensurate with the type of laundry system used. In relation to adjacent areas, a negative air pressure must be provided with air exhausted through ducts to the exterior. Air must be exhausted continually whenever there are soiled linens in the room. A soiled linen room may be combined with a soiled utility room. (i) Clean linen storage. Clean linen storage must be provided, conveniently located to resident bedroom areas. (j) Kitchens. (1) Nursing facility kitchens will be evaluated on the basis of their performance in the sanitary and efficient preparation and serving of meals. Consideration will be given to planning for the type of meals served, the overall building design, the food service equipment, arrangement, and the work flow involved in the preparation and delivery of food. Evaluation will be based on the number of meals served. (2) Kitchen temperature, at peak load, must not exceed a temperature of 85 degrees Fahrenheit measured [over the room] at the five foot level. The facility must provide sufficient heating [Sufficient heating must be provided] to maintain an average temperature of not less than 70 degrees Fahrenheit in winter, [(]with exhausts operating,[)] at the five-foot level. (3) The kitchen must have operational equipment for preparing and serving meals and for refrigerating and freezing of perishable foods, as well as equipment in, or [and/or] adjacent to, the kitchen or dining area for producing ice. (4) The kitchen must have facilities for washing and sanitizing dishes and cooking utensils. These facilities must be adequate for the number of meals served and the method of serving, [(]such as use of permanent or disposable dishes[)]. The kitchen must contain a multi-compartment sink large enough to immerse pots and pans. In all facilities, a mechanical dishwasher is required for sanitizing dishes. The facility must maintain separation [Separation] of soiled and clean dish areas, [must be maintained,] including air flow and traffic flow. (5) The kitchen must have an adequate supply of hot and cold water. Hot water for sanitizing purposes must be 180 degrees Fahrenheit or the manufacturer's suggested temperature for chemical sanitizers, as specified for the system in use. For mechanical dishwashers, the temperature measurement is at the manifold. Hot water for general kitchen use must be 140 degrees Fahrenheit. (6) A kitchen must have at least one hand-washing [handwashing] lavatory in the food-preparation area. The dish washing area must have ready access to a hand-washing [handwashing] lavatory or hand sanitizing device. Hand-washing [Handwashing] lavatories must be provided with hot and cold running water, a sanitary soap dispenser, and paper towel dispenser [(]or hot air dryer[)]. (7) Nonabsorbent smooth finishes or surfaces must be used on kitchen floors, walls, and ceilings. These surfaces must be capable of being routinely sanitized to maintain a healthful environment. (8) A janitor's closet with service sink must be easily and readily accessible to the kitchen. (9) The kitchen [Kitchen] exhaust hood at cooking equipment and its attached automatic chemical extinguisher must comply with NFPA 96. HHSC [National Fire Prevention Association (NFPA) 96. DHS] may waive certain details of NFPA 96 for existing kitchen exhausts at cooking equipment provided that basic function and safety are not compromised. (k) Food storage areas. (1) Food storage areas must provide for storage of a sevenday minimum supply of nonperishable staple foods and a two-day supply of perishable foods at all times. (2) Shelves and pallets must be moveable wire, metal, or sealed lumber, and walls must be finished with a nonabsorbent finish to provide a cleanable surface. (3) Dry food storage must have a venting system to provide for reliable positive air circulation. (4) The maximum room temperature for food storage must not exceed 85 degrees Fahrenheit [at all times]. The measurement must be taken at the five-foot level. (5) Foods must not be stored on the floor. Dunnage carts or pallets may be used to elevate foods not stored on shelving. (6) Sealed containers must be provided for storing dry foods after the package seal has been broken. (7) Food storage areas may be located apart from the food preparation area as long as there is space adjacent to the kitchen for necessary daily usage. (l) Auxiliary serving kitchens [(those] not contiguous to food preparation and serving areas[)]. (1) When [Where] service areas other than the kitchen are used to dispense foods, the facility must designate these service areas as food service areas [these must be designated as food service areas] and must have equipment for maintaining required food temperatures while serving. (2) Separate food service areas must have hand-washing [handwashing] facilities as a part of the food service area. (3) Finishes of all surfaces except ceilings must be the same as those required for dietary kitchens. (m) Administrative and public areas. Facilities must have administrative areas [area(s)] for normal business transactions and maintenance of records. (n) Laundry. (1) Laundry facilities must be located in areas separate from resident rooms. The laundry must be designed, constructed, and equipped and appropriate procedures must be utilized to ensure [assure] that laundry is handled, cleaned, and stored in a sanitary manner. (2) Laundry for general linen and clothing must be arranged so as to separate soiled and clean operations as they relate to traffic, handling, and air currents. Suitable exhaust and ventilation must be provided to prevent air flow from soiled to clean areas. (3) Floors, walls, and ceilings must be nonabsorbing and easily cleanable. (4) Soiled linen must be stored and [and/or] transported in closed or covered containers. Soiled linen storage or holding rooms 42 TexReg 7328 December 22, 2017 Texas Register

91 must have a negative air pressure in relation to adjacent areas with air exhausted through ducts to the exterior. (5) Laundry areas must have air supply and ventilation to minimize mildew and odors. Doors must not remain open, for sanitation and safety reasons. (6) Room size, and number and type of appliances must provide efficient, sanitary, and timely laundry processing to meet the needs of the facility. (7) The laundry, if located in the facility, must meet NFPA 101 [the Life Safety Code] requirements for separation and construction for hazardous areas. (o) Resident-use laundry. This service, if provided, must be limited to not more than one residential type washer and dryer per laundry room. This room must be classified as a hazardous area according to NFPA 101 [the Life Safety Code]. (p) Personal grooming area. Space and equipment must be provided for the hair care and grooming needs of the residents. Hair care and grooming service will be provided in resident bedrooms or in designated areas which are not in a way of egress. (q) Storage rooms. General and [and/or] specific storage areas must be provided as needed and required for safe and efficient operation of the facility. Items must not be stored in inappropriate places such as corridors or rooms which are not equipped for special hazard protection. (r) Janitor closets. In addition to the janitors' closet called for in certain departments, other janitors' closets must be provided throughout the facility to maintain a clean and sanitary environment. All janitor closets must have a negative air pressure in relation to adjacent areas with air exhausted through ducts to the exterior. (s) Disposal facilities. A policy and procedure for the safe and sanitary disposal of special waste must be provided. [The facility must comply with Texas Department of Health requirements as described in 25 TAC (Definitions and Treatment of Special Waste from Health Care Related Facilities). The facility must also comply with Texas Natural Resource Conservation Commission requirements for medical waste management, as specified in 30 TAC Chapter 330, Subchapter Y.] Space and facilities must be provided for the sanitary storage and disposal of waste, not classified as special, by incineration, mechanical destruction, compaction, containerization, removal, or contract with outside resources, or by a combination of these techniques (t) Maintenance, engineering service, and equipment areas. (1) The facility must provide storage for building equipment, supplies, tools, parts, and yard maintenance equipment. (2) Volatile liquids and supplies must not be kept within the main building housing residents. (3) All equipment requiring periodic maintenance, testing, and servicing must be reasonably accessible. Necessary equipment to conduct these services, [(]such as ladders, specific tools, and keys,[)] must be readily available on site. (u) Oxygen. (1) The facility must implement procedures that ensure [assure] the safe and sanitary use and storage of oxygen. Such procedures must be in compliance with all applicable NFPA standards, including NFPA 99. (2) Oxygen cylinders and containers must be in compliance with NFPA 99. Liquid oxygen containers must be certified by UL [Underwriters Laboratory (UL)] or another [other] approved testing laboratory for compliance with NFPA 55 [50] requirements. The storage, handling, assembly, and testing must be in compliance with all applicable NFPA standards, including NFPA 99 and NFPA 55 [50] requirements. The facility is responsible for defining all potential hazards both graphically and verbally to all persons involved in the use of liquid oxygen and ensuring that the liquid-oxygen provider does also. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 3. PROVISIONS APPLICABLE TO ALL FACILITIES 40 TAC The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment implements Texas Government Code, and Texas Health and Safety Code, Safety Operations. (a) The [A] facility must have a program to inspect, test, and maintain the fire alarm system and must execute the program at least once every three months. (1) The facility must contract with a company that is registered by the State Fire Marshal's Office to execute the program. (2) A [The] person who performs a service under the contract must be licensed by the State Fire Marshal's Office to perform the service and must complete, sign and date an inspection form similar to the inspection and testing form in NFPA [National Fire Protection Association (NFPA)] 72 for a service provided under the contract. (3) The facility must ensure fire alarm system components that require visual inspection are visually inspected in accordance with NFPA 72. (4) The facility must ensure fire alarm system components that require testing are tested in accordance with NFPA 72. (5) The facility must ensure fire alarm system components that require maintenance are maintained in accordance with NFPA 72. (6) The facility must ensure smoke dampers are inspected and tested in accordance with NFPA 101[, 2000 Edition]. (7) The facility must maintain onsite documentation of compliance with this subsection. PROPOSED RULES December 22, TexReg 7329

92 (b) A facility must have a program to inspect, test and maintain the sprinkler system and must execute the program at least once every three months. (1) The facility must contract with a company that is registered by the State Fire Marshal's Office to execute the program. (2) The person who performs a service under the contract must be licensed by the State Fire Marshal's Office to perform the service and must complete, sign and date an inspection form similar to the inspection and testing form in NFPA 25 for a service provided under the contract. (3) The facility must ensure sprinkler system components that require visual inspection are visually inspected in accordance with NFPA 13 and 25. (4) The facility must ensure sprinkler system components that require testing are tested in accordance with the NFPA 13 and 25. (5) The facility must ensure sprinkler system components that require maintenance are maintained in accordance with NFPA 13 and 25. (6) The facility must ensure that individual sprinkler heads are inspected and maintained in accordance with NFPA 13 and 25. (7) The facility must maintain onsite documentation of compliance with this subsection. (c) If facility staff verify or suspect a malfunction of the fire alarm, emergency electrical, or sprinkler system, the facility must immediately investigate and correct the condition. In addition, the facility must immediately report the failure of the fire alarm, emergency electrical, or sprinkler system to all facility staff and the local fire authority. (d) If emergency generators are required or provided, a facility must have a program to maintain, operate, and test all emergency generators, including all appurtenant components, and must execute the program at least once every week. (1) The facility must use a properly instructed person to oversee and execute the program. (2) The facility must ensure generator components are inspected, tested, and maintained in accordance with NFPA 37, 70, 99, and 110. (3) The facility must ensure all generators are operated, under load, for at least 30 minutes each week. (4) The person who executes the program must maintain a signed and dated record or log of inspections, tests and maintenance performed. (5) For each required operation of the generator under the program, the record or log must include the information necessary to verify: (A) the total time taken to transfer the load to emergency power; (B) the total time the generator operated under load; (C) the total time the facility's emergency system remained on generator power after restoration of normal utility power; and (D) the total time the generator operated [(]without load[)] after the facility's return to normal utility power. (6) The facility must ensure the condition and proper operation of all emergency lighting is inspected and tested at least once every week [under the program]. (7) The facility must maintain onsite documentation of compliance with this subsection. (e) Duplex receptacles powered through the emergency electrical system must be installed at each resident bed location where resident-care-related [patient-care-related] electrical appliances are in use, unless a facility can demonstrate that it can provide the diagnostic, therapeutic, or monitoring benefits of the resident-care-related [patient-care-related] electrical appliances through acceptable alternative means in the event of a power outage. (f) A facility must conduct a functional test on every required battery emergency lighting system at 30-day intervals for a minimum of 30 seconds [1/2 hour]. The facility must also conduct an annual test for a minimum of 1 1/2 hours. The lighting system must be fully operational for the duration of the testing. The facility must maintain an onsite written record of all tests performed and make those records available to the authority having jurisdiction during an inspection. (g) A facility must ensure that a person licensed by the State Fire Marshal's Office [office] inspects and services automatic fixed fire extinguishment systems mounted in kitchen range hoods at least once every six months in accordance with NFPA 96. The facility must maintain, onsite, a written and signed report of the inspection and service performed. The facility must keep the hood, exhaust ducts, and filters clean and free of accumulated grease. (h) A facility must inspect and maintain portable fire extinguishers. (1) Facility staff must visually inspect portable fire extinguishers monthly. Facility staff conducting the monthly visual inspection must ensure portable extinguishers are protected from damage, kept on their mounting brackets or in cabinets at all times, and kept in the proper condition and working order. (2) A facility must ensure that a person licensed by the State Fire Marshal's Office [office] inspects and maintains portable fire extinguishers at least once every 12 months in accordance with NFPA 10. (3) The facility must maintain, onsite, a record of all fire extinguisher inspections and maintenance performed. (i) A facility using gas must have the gas piping lines between the meter and appliances tested for leaks annually by a person licensed by [with] the State Board of Plumbing Examiners. The facility must maintain, onsite, a written and signed report of these tests. The facility must note and correct any unsatisfactory conditions immediately. (j) A facility must formulate, adopt, and enforce [smoking] policies regarding smoking, smoking areas, and smoking safety that also take into account non-smoking residents. (1) The facility's policies must comply with all applicable federal, state, and local laws and regulations [codes, regulations, and standards, including local ordinances]. (2) The facility is responsible for informing residents, staff, visitors, and other affected parties of smoking policies through the distribution and posting of policies. (3) A facility must prohibit smoking in any room, ward, or compartment where flammable liquids, combustible gas, or oxygen are used or stored and in any other hazardous locations. These areas must be posted with "No Smoking" signs. (4) A facility must provide ashtrays of noncombustible material and safe design in all areas where smoking is permitted. 42 TexReg 7330 December 22, 2017 Texas Register

93 (5) A facility must provide a metal container with a selfclosing cover device into which ashtrays can be emptied in all areas where smoking is permitted. (k) A facility must not allow storage of combustible products in facility rooms with gas-fired equipment. (l) A facility must not allow storage of volatile or flammable liquids or materials anywhere within the facility building. (m) A facility may install alcohol-based hand rub dispensers if the dispensers are: (1) installed in a manner that: (A) does not conflict with any state or local codes that prohibit or otherwise restrict the placement of alcohol-based hand rub dispensers in health care facilities; (B) minimizes leaks and spills that could lead to falls; (C) adequately protects against access by vulnerable populations; and (D) complies with NFPA 101 [chapter or chapter of the 2000 edition of the Life Safety Code, as amended by NFPA Temporary Interim Amendment 00-1 (101) and the Code of Federal Regulations, Title 42, Part 483, Subpart B, Requirements for Long Term Care Facilities]; and (2) maintained in accordance with dispenser manufacturer guidelines. (n) A facility must not store or leave unattended medical equipment, carts, wheelchairs, tables, furniture, dispensing machines, or similar physical objects in corridors or other ways of egress, except as permitted by NFPA 101 [that reduce the required minimum clear width for a corridor in accordance with NFPA 101, 2000 Edition]. (o) A facility must keep smoke doors, fire doors, and doors to hazardous rooms in the facility closed and not prop or wedge a door open. The facility may use only approved devices to hold open a door, such as alarm-activated electromagnetic hold-open devices, as permitted by NFPA 101 [except a facility may not use any device to hold open a door to a room classified as a hazardous room]. (p) The facility must post building evacuation routes at prominent locations throughout the facility. (q) A facility must provide approved electrical receptacles in quantity and location for the normal use of appliances in the facility. (r) A facility must not use electrical extension cords or multireceptacle plug-in adaptors as a substitute for approved wiring methods in the facility. (s) A facility may use a listed and approved surge-protection device for equipment for which the manufacturer recommends surge protection, but in no case may the facility use a surge-protection device to increase the number of existing electrical outlets in a room. (t) A facility must remove all abandoned utilities, such as electrical wiring, ducts, and pipes, from the facility when no longer in use. The facility may, however, leave an existing damper that is no longer required by NFPA 101 in-place and inoperable, if the damper is in a duct penetration of a smoke barrier in a fully ducted heating, ventilating, and air conditioning system; the damper is permanently secured in the open position; and quick-response sprinklers have been provided for the smoke compartments on both sides of the smoke barrier. (u) In operations where there is a chance of cross-contamination, clean and soiled operations must be separated to lessen the chance of cross-contamination by facility employees, residents, and others. This separation must be in relation to traffic flow, air currents, air exhaust, water flow, vapors, and other conditions. (v) [(u)] A facility must have and implement as necessary a fire safety plan that: (1) includes the provisions described in the Operating Features section of [the] NFPA 101, Chapter 18 New Health Care Occupancies and Chapter 19, Existing Health Care Occupancies [Life Safety Code, 2000 Edition, Chapter 18 (for new healthcare occupancies) and Chapter 19 (for existing healthcare occupancies)] and concerning: ation; and (A) use of alarms; (B) transmission of alarms [alarm] to fire department; (C) emergency phone call to fire department; (D) (E) (F) (G) (H) (I) [(C)] response to alarms; [(D)] isolation of fire; [(E)] evacuation of immediate area; [(F)] evacuation of smoke compartment; [(G)] preparation of floors and building for evacu- [(H)] extinguishment of fire; (2) includes procedures for: (A) conducting a fire drill on each work shift at least once per quarter with at least one fire drill conducted each month; and (B) completing the most current version of the required HHSC form titled "Fire Drill Report" available on the HHSC website [form titled, "DADS Fire Drill Report"] for each fire drill conducted. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 4. CONSTRUCTION AND INITIAL SURVEY 40 TAC The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment implements Texas Government Code, and Texas Health and Safety Code, Construction Procedures and Initial Survey of Completed Construction. PROPOSED RULES December 22, TexReg 7331

94 (a) Construction phase. (1) Prior to the start of construction of a new facility or of building rehabilitation other than that classified as repair in of this subchapter (relating to Building Rehabilitation), a facility must notify HHSC in Austin, Texas, in writing. [DADS Regulatory Services Division in Austin, Texas, must be notified in writing of construction start.] (2) All construction must be done according to the [in accordance with] minimum licensing requirements in this subchapter. It is a facility's [the sponsor's] responsibility to employ qualified personnel to prepare the contract documents for construction of a new facility or rehabilitation [remodeling] of an existing facility. Contract documents for additions and rehabilitation other than that classified as repair or renovation in of this subchapter [remodeling] and for the construction of an entirely new facility must be prepared by an architect licensed by the Texas [State] Board of Architectural Examiners. Drawings must bear the seal of the architect. Certain parts of contract documents, [(]including final plans, designs, and specifications,[)] must bear the seal of a licensed professional engineer approved by the Texas Board of Professional Engineers to operate in Texas or, as permitted by subsections (b)(12) and (15) of this section, signed by a Responsible Managing Employee or Alarm Planning Superintendent licensed by the State Fire Marshal's Office. These certain parts include sheets and sections covering structural, electrical, mechanical, sanitary, and civil engineering. [(A) Remodeling is the construction, removal, or relocation of walls and partitions, the construction of foundations, floors, or ceiling-roof assemblies, the expanding or altering of safety systems (including, but not limited to, sprinkler, fire alarm, and emergency systems), or the conversion of space in a facility to a different use.] [(B) General maintenance and repairs of existing material and equipment, repainting, applications of new floor, wall, or ceiling finishes, or similar projects are not included as remodeling, unless as a part of new construction. DADS must be provided flame spread documentation for new materials applied as finishes.] (b) Contract documents. (1) Site plan documents must include grade contours; streets, [(]with names[)]; a north arrow; fire hydrant locations [hydrants]; fire lanes; utilities, public or private; fences; unusual site conditions, such as ditches, low water levels, and other buildings on-site; and indications of buildings located five feet or less beyond site property lines. Site plan documents for nursing facilities may include the developed landscaping plan for resident use [as called for in (f) of this subchapter (relating to Location and Site)]. (2) Foundation plan documents must include the general foundation design and details. (3) Floor plan documents must include room names, numbers, and usages; resident care areas; numbered doors, [(numbered)] including swing; windows; a legend or clarification of wall types; dimensions; fixed equipment; plumbing fixtures; [and] kitchen basic layout; and identification of all smoke barrier walls and fire walls, outside wall to outside wall. [(outside wall to outside wall) or fire walls.] (4) For [both] new construction, [and] additions to or rehabilitation of [remodeling to] an existing building [buildings], an overall plan of the entire building must be drawn or reduced to fit on an 8 1/2-inch [8 1/2 inch] by 11-inch [11 inch] sheet. (5) Schedules must include door materials, sizes [widths], and types; window materials, sizes, and types; room finishes; and special hardware. (6) Elevations [and roof plan] must include[, but is not limited to,] exterior elevations with[, including] material note indications, [and any roof top equipment, roof slopes, drains, and gas piping,] and interior elevations, where needed for special conditions. (7) Roof plans must include any roof top equipment, roof slopes, drain locations, and gas piping. (8) [(7)] Details must include wall sections as needed, [(]especially for special conditions[)]; cabinets [cabinet] and built-in work, basic design only; cross sections through buildings as needed; and miscellaneous details and enlargements as needed. (9) [(8)] Building structure documents must include structural framing layout and details, [(]primarily for columns, beams, joists, [column, beam, joist,] and structural frames [frame building)]; roof framing layout, [(]when this cannot be adequately shown on cross section[)]; cross sections in quantity and detail to show sufficient structural design; and structural details as necessary to ensure [assure] adequate structural design.[, also calculated design loads.] (10) [(9)] Electrical documents must include electrical layout, including lights, convenience outlets, equipment outlets, switches, and other electrical outlets and devices; service, circuiting, distribution, and panel diagrams; [exit light system (]exit signs and emergency egress lighting[)]; emergency electrical provisions, [(]such as generators and panelboards; fire alarms [panels);] and similar systems, [(]such as control panels [panel], devices, and alarms[)]; staff communication systems, including a nurse call system; and sizes and details sufficient to ensure [assure] safe and properly operating systems. (11) [(10)] Plumbing documents must include plumbing layout with pipe sizes and details sufficient to ensure [assure] safe and properly operating systems, water systems, sanitary systems, gas systems, other systems normally considered under the scope of plumbing, fixtures, and provisions for combustion air supply. (12) [(11)] Heating, ventilation, and air-conditioning (HVAC) documents must include sufficient details of HVAC systems and components to ensure [assure] a safe and properly operating installation including, heating, ventilating, and air-conditioning layout; ducts; protection of duct inlets and outlets; combustion air; piping; exhausts; duct smoke detectors; fire dampers; and equipment types, sizes, and locations. [but not limited to, heating, ventilating, and air-conditioning layout, ducts, protection of duct inlets and outlets, combustion air, piping, exhausts, and duct smoke and/or fire dampers; and equipment types, sizes, and locations.] (13) [(12)] Fire sprinkler system plans and hydraulic calculations[,] must be designed in accordance with the applicable sections of NFPA 13, [the National Fire Protection Association (NFPA) 13,] and signed by a Responsible Managing Employee, licensed by the State Fire Marshal's Office, or sealed by a licensed professional engineer. (14) [(13)] Other layouts, plans, or details that are [as may be] necessary to convey a [for a] clear understanding of the design and scope of the project,[;] including plans covering private water or sewer systems, which must be reviewed by the local health or wastewater authority having jurisdiction. (15) [(14)] Specifications must include installation techniques, quality standards, [and/or] manufacturers, references to specific codes and standards, design criteria, special equipment, hardware, finishes [painting], and any other information [others as] needed to amplify drawings and notes. (16) [(15)] Fire detection and alarm system working plans must be designed according to [in accordance with] the applicable sec- 42 TexReg 7332 December 22, 2017 Texas Register

95 tions of NFPA 72 and NFPA 70 [the National Fire Alarm and Signaling Code, NFPA 72 and the National Electric Code, NFPA 70,] and signed by an Alarm Planning Superintendent licensed by the State Fire Marshal's Office, or sealed by a licensed professional engineer. (c) Initial survey of completed construction. (1) Upon completion of construction of a new facility, or building rehabilitation other than that classified as repair or renovation in of this subchapter, [including grounds and basic equipment and furnishings,] a final construction inspection or [(]initial survey[)] of the facility, including grounds, basic equipment and furnishings, must [additions or remodeled areas, is required to] be performed by HHSC [DADS' architectural inspecting surveyor] prior to occupancy. The completed construction must have the written approval of the local authorities having jurisdiction, including the fire marshal and building official. When construction or building rehabilitation does not alter the licensed capacity of a facility, based on submitted documentation and the scope of the performed building rehabilitation, HHSC may permit a facility to use the rehabilitated portion of a facility pending a final construction inspection or may determine a final construction inspection is not required. [inspector.]. (2) An applicant may obtain the [The] inspection described in paragraph (1) of this subsection [may be obtained] on an expedited basis. An applicant may obtain a Life Safety Code inspection within 15 business days after HHSC [DADS] receives a written request if the applicant submits: (A) a complete application as required in (b) of this chapter (relating to Criteria for Licensing ) and of this chapter (relating to Application Requirements); and (B) the appropriate Life Safety Code fee listed in of this chapter (relating to Expedited Life Safety Code and Physical Plant Inspection Fees). (3) After the completed construction is [has been] surveyed and found acceptable by HHSC, [by a representative of DADS' architectural section and found acceptable,] this information is [will be] conveyed to the licensing officer as part of the information needed to issue a license to the facility. Additions to [In the case of additions] or rehabilitation [remodeling] of existing facilities may require[,] a revision or modification to an existing license [may be necessary]. The [Note that the] building, including basic furnishings and operational needs, grades, drives, parking, and grounds must be [essentially] 100% complete at the time of this initial survey visit for HHSC to approve occupancy and licensing. A facility may accept up to three residents between the time it receives initial approval from HHSC and the time the license is issued. [occupancy approval and licensing, including basic furnishings and operational needs.] (4) A copy of the following documents must be provided to HHSC [DADS' architectural inspecting surveyor] at the time of the survey of the completed building.[:] HHSC may request some or all of these documents prior to scheduling the initial survey: (A) written approval of local authorities as called for in paragraph (1) of this subsection; (B) record drawings of the fire detection and alarm system as installed, signed by an Alarm Planning Superintendent licensed by the State Fire Marshal's Office or sealed by a licensed professional engineer, including a sequence of operation, the owner's manuals and the manufacturer's published instructions covering all system equipment, a signed copy of the State Fire Marshal's Office Fire Alarm Installation Certificate, and, for software-based systems, a record copy of the site-specific software, [(]excluding the system executive software or external programmer software,[)] in a non-volatile, non-erasable, non-rewritable memory; (C) documentation of materials used in the building that [which] are required to have a specific limited fire resistance or flame spread rating, including[, but not limited to,] special wall finishes or floor coverings;[,] flame retardant curtains, [(]including cubicle curtains;[),] and fire resistance-rated [rated] ceilings. This documentation must include a signed letter from the installer verifying [that] the material installed, such as carpeting, is the same material named in the documented fire test [laboratory test document]; (D) record drawings of the fire sprinkler system as installed, signed by a Responsible Managing Employee licensed by the State Fire Marshal's Office, or sealed by a licensed professional engineer, including the hydraulic calculations, alarm configuration, [aboveground and underground] Contractor's Material and Test Certificates for Aboveground and Underground Piping, and [Certificate,] all literature and instructions provided by the manufacturer describing the proper operation and maintenance of all equipment and devices in accordance with [Standard for the Inspection, Testing, and Maintenance of Water-Based Fire Protection Systems,] NFPA 25; (E) service contracts for maintenance and testing of systems, including[, but not limited to,] alarm systems and sprinkler systems; (F) a copy of gas pressure test results of all facility [the facility's] gas lines from the meter to gas-fired equipment and appliances; (G) a written statement from an architect or [and/or] engineer certifying [stating that he certifies that] the building was constructed to meet NFPA 101[, Life Safety Code, and] all locally applicable codes, and that the facility substantially conforms to the [is in substantial conformance with] minimum licensing requirements; and (H) the contract documents specified in subsection (b) of this section. (d) Non-approval [Nonapproval] of new construction. (1) If, during the survey of completed construction, the surveyor finds [certain] basic requirements not met, HHSC [DADS] will not license the facility or approve it for occupancy. Such basic items may include the following: (A) construction that [which] does not meet minimum code or licensure standards for basic requirements such as corridor widths that are [being] less than eight feet clear width, ceilings installed at less than the minimum seven feet six inches height above the floor, resident bedroom dimensions less than the required minimum dimensions, [required width,] and other similar features that [which] would disrupt or otherwise adversely affect the residents and staff if corrected after occupancy; (B) absence of [no] written approval by local authorities; (C) fire protection systems that are not completely installed or not functioning properly, including[, but not limited to,] fire alarm systems, emergency power and lighting, and sprinkler systems; (D) required exits that are not [all] usable according to NFPA 101 [Life Safety Code] requirements; (E) telephones that are [telephone] not installed or not working properly [working]; (F) sufficient basic furnishings, essential appliances and equipment that are not installed or are not functioning; and PROPOSED RULES December 22, TexReg 7333

96 (G) any other basic operational or safety feature that [which] the surveyor, as the authority having jurisdiction, encounters that [which] in his judgment would preclude safe and normal occupancy by residents on that day. (2) If the surveyor encounters deficiencies that do not affect the health and safety of the residents, licensure may be recommended based on an approved written plan of correction by the facility's administrator. (3) A facility must submit copies [Copies] of reduced size floor plans [plan] on [an] 8 1/2 inch by 11 inch sheets to HHSC [sheet must be submitted in duplicate to DADS] for record and [and/or] file use and for the facility to use in evacuation planning and fire alarm zone identification. Plans [The plan] must contain basic legible information such as overall dimensions, room usage names, actual bedroom numbers, doors, windows, and any other pertinent information. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 5. FACILITIES LICENSED ON OR BEFORE SEPTEMBER 11, 2003 AND BEFORE APRIL 2, TAC , , The amendments are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendments implement Texas Government Code, and Texas Health and Safety Code, Construction Standards [for Additions, Remodeling, and New Nursing Facilities]. (a) This section [subchapter is written for, and] applies to a facility constructed or licensed on or after September 11, 2003, but prior to April 2, 2018.[, new construction, including conversions, additions, and remodelings.] The requirements of NFPA 101 [the Life Safety Code, Standard 101 of the National Fire Protection Association (NFPA), as required under Health and Safety Code, ,] and other applicable NFPA codes and standards referenced in NFPA 101 will apply unless otherwise noted or modified in this section: [subchapter. The provisions of the chapter or subchapter and the provisions of the New Health Care Occupancies of the Life Safety Code are applicable.] (1) Buildings that were constructed or that received design approval or building permits before July 5, 2016, must comply with the Existing Health Care Occupancies chapter of NFPA 101. All other buildings covered by this section must comply with the New Health Care Occupancies chapter of NFPA 101. [Life Safety Code, NFPA 101, is a registered trademark of the National Fire Protection Association, Inc., Quincy, Massachusetts ] [(2) The definitions listed in of this title (relating to Definitions) also apply to this subchapter.] (2) [(3)] In addition to NFPA 101 [the Life Safety Code] and the standards referenced therein, a facility covered by this division [subchapter] is subject to the codes, standards, and requirements established by the following: UL; ASHRAE; and ASTM. [Underwriters Laboratories, Inc.; the American National Standards Institute, Inc. (ANSI); the National Electrical Code (NFPA 7O); the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) and the American Society for Testing Materials (ASTM). Various references to these entities will be made throughout these sections.] (b) All applicable local, state, or national codes and ordinances must be met as determined by the authority having jurisdiction for those codes and ordinances and by HHSC [the Texas Department of Human Services (DHS)]. Any conflicts must be made known to HHSC [DHS Long Term Care-Regulatory office] for appropriate resolution. (c) The design of structural systems must be done by or under the direction of a professional engineer who is currently licensed [registered] by the Texas [State] Board of [Registration For] Professional Engineers. [(d) If an existing licensed facility plans building additions or remodeling which includes construction of additional resident beds, then the ratio of bathing units must be reevaluated to meet minimum standards and the square footage of dining and living areas must be reevaluated by DHS at a minimum of 19 square feet per bed. Conversion of existing living, dining, or activity areas to resident bedrooms must not reduce these functions to a total area of less than 19 square feet per bed. The dietary department must be evaluated by the facility's registered or licensed dietitian or architect having knowledge in the design of food service operations. This evaluation must be provided to DHS.] [(e) No building may be occupied by residents prior to inspection and approval to occupy by DHS.] [(f) The words "shall" or "must" are requirements. The word "should" is a recommendation which is expected to be followed unless there is valid reason not to do so.] (d) [(g)] Nothing in this division [ of this subchapter ((relating to Location and Site, General Considerations, Architectural Space Planning and Utilization, Exit Provisions, Smoke Compartmentation (Subdivision of Building Spaces), Fire Protection Systems, Hazardous Areas, Structural Requirements, Mechanical Requirements, Electrical Requirements, Miscellaneous Details, and Elevators))] may be construed as prohibiting a better type of building or construction, more space, services, features, or greater degree of safety than the minimum requirements Location and Site. (a) [Site approval is normally required of the local building department and fire marshal having jurisdiction.] Any conditions considered to be a fire, safety, or health hazard will be grounds for disapproval of a [the] site by HHSC. [the Texas Department of Human Services (DHS).] New facilities may not be built in an area designated as a floodplain of 100 years or less. (b) Site grades must provide for positive surface water drainage so that there will be no ponding or standing water on the 42 TexReg 7334 December 22, 2017 Texas Register

97 designated site. This does not apply to local government requirements for engineered controlled run-off holding ponds. [(c) A new building (or addition) must be set back at least 10 feet from the property lines except as otherwise approved by DHS.] (c) [(d)] Exit doors from the building must not open directly onto a drive for vehicular traffic, but must be set back at least six feet from the edge of the drive, [(]measured from the end of the building wall in the case of a recessed door,[)] to prevent accidents due to lack of visual warning. (d) [(e)] Walks must be provided as required from all exits and must be of non-slip surfaces free of hazards. Walks must be at least 48 inches wide except as otherwise approved. Ramps should be used in lieu of steps where possible for individuals with a disability [the handicapped] and to facilitate bed or wheelchair removal in an emergency. (e) [(f)] Outdoor activity, recreational, and sitting spaces must be provided and appropriately designed, landscaped, and equipped. Some shaded or [and/or] covered outside areas are needed. These areas must be designed to accommodate residents in wheelchairs. (f) [(g)] Each facility must have parking space to satisfy the needs of residents, employees, staff, and visitors. In the absence of a formal parking study, each facility must provide for a ratio of at least one parking space for every four beds in the facility. This ratio may be reduced slightly in areas convenient to public parking facilities. Space must be provided for emergency and delivery vehicles. No parking space may block or inhibit egress from the outside exit doors. Parking spaces and drives must be at least ten feet away from windows in bedrooms, dining, and living areas. (g) [(h)] Barriers must be provided for resident safety from traffic or other site hazards by the use of appropriate methods such as fences, hedges, retaining walls, railings, or other landscaping. These barriers must not inhibit the free emergency egress to a safe distance away from the building. [(i) Open or enclosed courts with resident rooms or living areas opening upon them must not be less than 20 feet in the smallest dimension unless otherwise approved by DHS. Exceptions would be as follows:] [(1) Nonparallel wings forming an acute angle may have a maximum of two windows each side less than 20 feet but not less than ten feet.] [(2) Windows may be separated by a distance equal to the depth of the court but not less than ten feet.] [(3) For unusual or unique site conditions, courts with resident rooms opening upon them on one side only must be not less than ten feet in the smallest dimension, provided that the opposite wing does not contain a hazardous area, and the wall has no openings which could permit fire to reach the resident room side.] (h) [(j)] Auxiliary buildings located within 20 feet of the main building [and which contain hazardous areas such as laundry and storage buildings] must meet the applicable NFPA 101 [Life Safety Code] requirements for separation and construction. (i) [(k)] Other buildings on the site must meet the appropriate occupancy section or separation requirements of NFPA 101 [the Life Safety Code]. (j) [(l)] Fire service and access must be as follows: (1) The facility must be served by a paid or volunteer fire department. The fire department must provide written assurance to HHSC [DHS] that the fire department can respond to an emergency at the facility within an appropriately prompt time for the travel conditions involved. (2) The facility must be served by an adequate water supply that is satisfactory and accessible for fire department use as determined by the fire department serving the facility and by HHSC [DHS]. (3) There must be at least one readily accessible fire hydrant located within 300 feet of the building. The hydrant must be on a minimum six inch service line, or else there must be an approved equivalent, such as a storage tank. The hydrant, its location, and service line, or equivalent must be as approved by the local fire department and HHSC [DHS]. (4) The building must have suitable all-weather fire lanes for access as required by local fire authorities and HHSC [DHS]. As a minimum, there must be access to two sides of the building by an all-weather lane [at least ten feet wide. Fire lanes must have at least 14 feet in clearance width above grade (two feet each side of the ten-foot roadbed,) and be kept free of obstructions at all times. All-weather access lanes must be no less than a properly constructed gravel lane]. (k) Enclosed exterior spaces, such as fenced areas, that are in a means of egress to a public way must meet the requirements of (a)(6) of this chapter (relating to Standards for Certified Alzheimer's Facilities) General Considerations. (a) Services. Nursing facilities must either contain the elements described in this section or the facility [provider] must indicate the manner in which the needed services are to be made available. [Each element provided in the facility must comply with the requirements of this subchapter.] Appropriate modifications or deletions in space requirements may be made when services are shared or purchased. (b) Sizes. The sizes of the various departments will depend upon program requirements and organization of services within the facility. Some functions requiring separate spaces or rooms in these minimum requirements may be combined provided that the resulting plan will not compromise the best standards of safety and of medical and nursing practices. (c) Shared or combined services. Nursing facilities may be operated together with hospitals and may share administration, food service, recreation, janitor service, and physical therapy facilities, but must [otherwise] have clearly identifiable physical separations such as a separate wing or floor. Nursing facilities with different levels of care will require identifiable physical separations. Combined attendant or nurses' [nurse] stations and medication room areas will require some separating construction features. (d) Exterior finishes. Unless otherwise approved by HHSC [the Texas Department of Human Services (DHS)], the exterior finish material of buildings classified [(per the National Fire Protection Association (NFPA 220))] as fire resistive or protected noncombustible construction, per NFPA 220, must have a flame spread index no greater than 25 and a smoke developed index no greater than 450, when tested in accordance with ASTM E84 or UL 723. All other exterior materials must have a flame spread index no greater than 75 and a smoke developed index no greater than 450. [must be Class A in the Life Safety Code. All others must be Class A or B in the Life Safety Code.] Items of trim may be of combustible material subject to approval by HHSC. Roof covering assemblies must have a Class A or Class B rating, when tested in accordance with ASTM E108 or UL 790. [DHS. Roofing must be Underwriter Laboratories listed as Class A or B.] [(e) Interior finishes.] PROPOSED RULES December 22, TexReg 7335

98 [(1) Interior finish of walls, ceilings, and floors must meet the Life Safety Code] requirements for new construction.] [(2) Documentation of finishes, including, but not limited to, copies of lab test reports and material labels is required.] [(f) Corridor travel distance. Corridor travel from the nurse station to the farthest resident room must assure prompt service to the resident. The normal travel for nursing efficiency is considered to be not over 85 feet and must not exceed 150 feet.] (e) [(g)] Accessibility for individuals with disabilities. The facility must comply with accessibility requirements [meet the provisions and requirements concerning accessibility] for individuals with disabilities in the revised regulations for Title II and III of [following laws:] the Americans with Disabilities Act at CFR Part 35 and Part 36, also known as the 2010 ADA Standards for Accessible Design and the TAS adopted by the Texas Department of Licensing and Regulation (TDLR) rules at 16 TAC Chapter 68. A facility must register plans [of 1990 (Public Law ; Title 42, United States Code, Chapter 126); Title 28, Code of Federal Regulations, Part 35 Texas Civil Statutes, Article 9102; and Title 16, Texas Administrative Code, Chapter 68. Plans] for new construction, substantial renovations, modifications, and alterations with TDLR, Attn: Elimination of Architectural Barriers Program, and comply with TAS. [must be submitted to the Texas Department of Licensing and Regulation (Attn: Elimination of Architectural Barriers Program) for accessibility approval under Texas Civil Statutes, Article 9102.] [(h) Handrails. Handrails must be provided on each side of all resident-use corridors. Handrails for other areas should be provided as needed to facilitate resident movement or egress. Design of handrails must be in accordance with the American National Standards Institute (ANSI) A These handrails may extend into the minimum required corridor width without widening the corridor (that is, in an eight-foot-wide corridor, handrails may project up to 3 1/2 inches on each side). Reference (a)(8) and (9) of this title (relating to Miscellaneous Details) for handrail details.] Architectural Space Planning and Utilization. (a) Resident bedrooms. Each resident bedroom must meet the following requirements: (1) The maximum room capacity must be four residents. (2) No more than 25% of the total licensed beds may be in bedrooms with more than two beds each. (3) Minimum bedroom area, excluding toilet rooms, closets, lockers, wardrobes, alcoves, or vestibules, must be 100 square feet in single occupancy rooms and 80 square feet per bed in multi-bed rooms. (4) The minimum allowable room dimension is ten feet. The room must be designed to provide at least 36 inches between beds and 24 inches between any bed and the adjacent [(parallel)] wall. (5) Each room must have at least one operable outside window arranged and located so that it can be easily opened from the inside without the use of tools or keys. The maximum allowable sill height [(to opening)] must not exceed 36 inches above the floor. All operable [operative] windows must have insect screens. The minimum area of a window [window(s)] in each bedroom must equal at least 16 square feet or 8.0% of the room area, whichever is larger. Operable window sections may be restricted to not more than six nor less than four inches for security or safety reasons. (6) Each room must have general lighting, wall-mounted bed reading lights, and night lighting. The night light must be switched just inside the entrance to each resident room with a silent type switch unless otherwise approved by HHSC [the Texas Department of Human Services (DHS)]. The light providing general illumination must be switchable at the door of the resident room for use of staff and residents. A durable non-glare [nonglare (opaque front panel)] reading light with an opaque front panel securely anchored to the wall, integrally wired, must be provided for each resident bed. The switch must be within reach of a resident in the bed. (7) Two duplex or a fourplex grounding type receptacles must be provided beside the head of each bed. Other walls must have duplex receptacles to accommodate items such as [needed for] TV, radio, razors, hairdryers, clocks, and [and/or] as required by NFPA 70 [the National Electrical Code, National Fire Protection Association (NFPA 70), which is a registered trademark of the National Fire Protection Association, Inc., Quincy, Massachusetts 02269]. (8) Each resident must have access to a toilet room without entering the general corridor area. One toilet room must serve no more than two resident rooms. The toilet room must contain a water closet and a lavatory. The lavatory may be omitted from a toilet room which serves two bedrooms if each resident room contains a lavatory. [See subsection (c)(1) of this section for baths and other toilet facility requirements.] (9) Each resident must have a bed with a comfortable mattress, a bedside stand with at least two enclosed storage spaces, a dresser, and closet or wardrobe space providing privacy for clothing and personal belongings. Clothes storage space must provide at least 22 inches of lineal hanging space per bed and have closable doors. Chairs and space must be provided for use by residents and [and/or] visitors. (10) Each room must open onto an exit corridor and must be arranged for convenient resident access to dining, living, and bathing areas. (11) Visual privacy [(]such as cubicle curtains[)] must be available for each resident in multi-bed rooms. Design for privacy must not restrict resident access to entry, lavatory, or toilet, nor may it restrict bed evacuation or obstruct sprinkler flow coverage. (12) At least one noncombustible wastebasket must be provided in each bedroom. (13) See the requirements in (d)(4) of this subchapter (relating to Electrical Requirements) for nurse call systems. (14) Bedrooms must be identified with a raised or recessed unique number placed on or near the door. Refer to (g) of this subchapter (relating to General Considerations). (15) Locks on bedroom doors are permitted when they meet definite resident needs. (A) Situations in which locking may be necessary include the following: (i) married couples whose rights of privacy could be infringed upon unless bedroom door locks are permitted; (ii) residents for whom the attending physician wants bedroom door locks to enhance the residents' sense of security; and (iii) residents for whom restraint through confinement to their own rooms is necessary for their own or other persons' safety. (B) In situations such as those listed in subparagraph (A) of this paragraph, the following guidelines must be met: 42 TexReg 7336 December 22, 2017 Texas Register

99 (i) bedroom door locks for other than restraining purposes must be of the type which the occupant can unlock at will from inside the room; (ii) all bedroom door locks must be of the type which can be unlocked from the corridor side; (iii) attendants must carry keys which will permit ready access to the locked bedrooms when entrance becomes necessary; (iv) bedroom doors which are locked for resident restraining purposes must be dutch doors, with only the lower section locked. The upper part of the doorway must be open to permit visual supervision of the residents from the corridor. The dutch door must be easily unlocked by nurses and attendants. Resident restraints of any nature cannot be applied without orders from the attending physician. (v) locking of bedroom doors by residents for privacy or security or by nursing facility staff for restraint will not be permitted except when specifically included in the attending physician's written orders or authorized by the nursing facility administrator. (16) Vacant bedrooms must not be used for hazardous activities or hazardous storage, unless specifically approved by HHSC in writing. (b) Nursing service areas. The service areas described in this subsection must be located in or readily available to each nursing unit. The size and disposition of each service area will depend upon the number and types of beds to be served. Each service area may be arranged and located to serve more than one nursing unit, but at least one service area must be provided on each nursing floor. The maximum allowable distance from a resident room door to a nurses' [nurse] station is 150 feet. The following requirements are applicable to services areas: (1) Nurses' [Nurse] stations must be provided with space for nurses' charting, doctors' charting, and storage for administrative supplies. Nurses' [Nurses] stations must be located to provide a direct view of resident corridors. A direct view of resident corridors is acceptable if a person can see down the corridors from a point within 24 inches of the outside of the nurses' [nurse] station counter or wall. When a nurses' station does not provide a direct view of resident corridors, an auxiliary station complying with the following guidelines must be provided. (A) The auxiliary station must be staffed by nursing personnel during all shifts. (i) More than one auxiliary station may be assigned to a designated nurses' station, regardless of the distance between stations. (ii) The nurse call system for resident corridors monitored by the auxiliary station must report to the auxiliary station. (iii) Each auxiliary station must meet the emergency electrical requirements for a nurses' station, including electrical receptacles and emergency lighting. (iv) If a required auxiliary station does not already exist and the facility must establish a new auxiliary station, all applicable standards, particularly those pertaining to the physical plant and NFPA 101, must be observed. (B) In addition to the required normal and emergency illumination, the facility must keep on hand and readily available to night staff no less than one working flashlight at each nurses' station. (2) Lounge and toilet room [room(s)] must be provided for nursing staff. (3) Lockers or [and/or] security compartments must be provided for the safekeeping of personal effects of staff. These must be located convenient to the duty station of personnel or in a central location. (4) Clean utility room [room(s)] must contain a work counter, sink with high-neck faucet with lever controls, and storage facilities and must be part of a system for storage and distribution of clean and sterile supply materials. (5) Soiled utility room [room(s)] must contain a water closet or equivalent flushing rim fixture, a sink large enough to submerge a bedpan with spray hose and high-neck faucet with lever controls, work counter, waste receptacle, and linen receptacle. These utility rooms must be part of a system for collection and cleaning or disposal of soiled utensils or materials. A separate hand-wash [handwash] sink must be provided if the bedpan disinfecting sink cannot normally be used for hand-washing [handwashing]. (6) Provision must be made for convenient and prompt 24-hour distribution of medication to residents. The medication preparation room must be under the nursing staff's visual control and contain a work counter, refrigerator, sink with hot and cold water, and locked storage for biologicals and drugs and must have a minimum area of 50 square feet. The minimum dimension allowed is five feet six inches. An appropriate air supply must be provided to maintain adequate temperature and ventilation for safe storage of medications. For purposes of storage of unrefrigerated medications, the room temperature must be maintained between 59 degrees and 86 degrees Fahrenheit [F]. (7) Provision must be made for separate closets or room for clean linens. Corridors must not be used for folding or cart storage. Storage rooms must be located and distributed in the building for efficient access to bedrooms. (8) Soiled linen rooms must be provided as required in subsection (l) of this section. (9) Nourishment stations are [A nourishment station(s) is] usually required in all but the smaller facilities and must contain a sink equipped for hand-washing [handwashing], equipment for serving nourishment between scheduled meals, refrigerator, and storage cabinets. Ice for residents' service and treatment must be provided only by icemaker units. This station may be furnished in a clean utility room. (10) An equipment storage room must be provided for equipment such as intravenous stands, inhalators, air mattresses, and walkers. (11) Parking spaces for stretchers and wheelchairs must be located out of the path of normal traffic. (c) Residents' bathing and toilet facilities. The following requirements are applicable to bathing and toilet facilities: (1) Bathtubs or showers must be provided at the rate of one for each 20 beds which are not otherwise served by bathing facilities within residents' rooms. At least one bathing unit must be provided in each nursing unit. Each tub or shower must be in an individual room or enclosure which provides space for the private use of the bathing fixture, for drying and dressing, and for a wheelchair and an attendant. Each general-use bathing room [(those not directly serving adjoining bedrooms)] must be provided with at least one water closet, [(]in a stall, room, or area for privacy,[)] and one lavatory. A [These] bathing room [room(s)] must be located conveniently to the bedroom area it serves and must not be more than 100 feet from the farthest bedroom. See requirements in subsection (a)(8) of this section for resident toilets at PROPOSED RULES December 22, TexReg 7337

100 bedrooms. [Each facility must provide at least one whirlpool tub unit as one of the required bathing units.] (2) At least 50% of bathrooms and toilet rooms, fixtures, and accessories must be designed and provided to meet criteria under the Americans with Disabilities Act of 1990 for individuals with disabilities unless otherwise approved by HHSC [DHS]. (3) All rooms containing bathtubs, sitz baths, showers, and water closets, subject to occupancy by residents, must be equipped with swinging doors and hardware which will permit access from the outside in any emergency. (4) Bathing areas must be provided with safe and effective auxiliary or supplementary heating. Bathing areas must be free of drafts and must have adequate exhaust ducted to the outside to minimize excess moisture retention and resulting mold and mildew problems. (5) Tubs and showers must be provided with slip-proof bottoms. (6) Lavatories and hand-washing [handwashing] facilities must be securely anchored to withstand an applied downward load of not less than 250 pounds on the front of the fixtures. (7) Provision must be made for sanitary hand drying and toothbrush storage at lavatories. There must be paper towel dispensers or separate towel racks and separate toothbrush holders. (8) Mirrors must be arranged for convenient use by residents in wheelchairs as well as by residents in a standing position, and the minimum size must be 15 inches in width by 30 inches in height, or tilt type. (9) Rooms with toilets must be provided with effective forced air exhaust ducted to the exterior to help remove odors. Ducted manifold systems are recommended for some multiple-type installations. (10) Floors, walls, and ceilings must have nonabsorbent surfaces, be smooth, and easily cleanable. (d) Disposal facilities. A policy and procedure for the safe and sanitary disposal of special waste must be provided. Space and facilities must be provided for the sanitary storage of waste by incineration, mechanical destruction, compaction, containerization, removal, or by a combination of these techniques. (e) Resident living areas. The following requirements are applicable to resident living areas: (1) Social-diversional spaces such as living rooms, dayrooms, lounges, sunrooms, must be provided on a sliding scale as follows: Figure: 40 TAC (e)(1)(No change.) (2) Where a required way of exit [(]or a service way[)] is through a living [(]or dining[)] area, a pathway equal to the corridor width will normally be deducted for calculation purposes and discounted from that area. These exit pathways must be kept clear of obstructions. (3) Each resident living room and dining room must have at least one outside window. The window area must be equal to at least 8.0% of the total room floor area. Sky-lighting [Skylighting] may be used to fulfill one-half of the 8.0% minimum area. [(4) See (d) of this subchapter (relating to Construction Standards for Additions, Remodeling, and New Nursing Facilities) for capacity increases to existing facilities.] (4) [(5)] Open or enclosed seating space must be provided within view of the main nurse station that will allow furniture or wheelchair parking that does not obstruct the corridor way of egress. (f) Dining space. Dining space must be adequate for the number of residents served, but not [no] less than ten square feet per resident bed. [See (d) of this subchapter (relating to Construction Standards for Additions, Remodeling, and New Nursing Facilities) for bed capacity increases to existing facilities.] (g) Dietary facilities. The following requirements are applicable to dietary facilities: (1) Main or dietary kitchens [(main/dietary)] must be as follows: (A) Kitchens will be evaluated on the basis of their performance in the sanitary and efficient preparation and serving of meals to residents. Consideration will be given to planning for the type of meals served, the overall building design, the food service equipment, arrangement, and the work flow involved in the preparation and delivery of food. Plans must include a large-scale detailed kitchen layout designed by a registered or licensed dietitian or architect having knowledge in the design of food service operations. (B) Kitchens must be designed so that room temperature at summertime peak load [(summertime)] will not exceed a temperature of 85 degrees Fahrenheit measured over the room at the fivefoot level. The amount of supply air must take into account the large quantities of air that may be exhausted at the range hood and dishwashing area. (C) Operational equipment must be provided as planned and scheduled by the facility consultants for preparing and serving meals and for refrigerating and freezing of perishable foods, as well as equipment in, or [and/or] adjacent to, the kitchen or dining area for producing ice. (D) Facilities for washing and sanitizing dishes and cooking utensils must be provided. These facilities must be designed based on the number of meals served and the method of serving, that is, use of permanent or disposable dishes. As a minimum, the kitchen must contain a multi-compartment sink large enough to immerse pots and pans. In all facilities, a mechanical dishwasher is required for washing and sanitizing dishes. Separation of soiled and clean dish areas must be maintained, including air flow. (E) A vegetable preparation sink must be provided, and it must be separate from the pot sinks. (F) A supply of hot and cold water must be provided. Hot water for sanitizing purposes must be 180 degrees Fahrenheit or the manufacturer's suggested temperature for chemical sanitizers. For mechanical dishwashers the temperature measurement is at the manifold. (G) A kitchen must be provided with a hand-washing lavatory in the food preparation area with hot and cold water, soap, paper towel dispenser, and waste receptacle. The dish room area must have ready access to a hand-washing [handwashing] lavatory. (H) Staff rest room facilities with lavatory must be directly accessible to kitchen staff without traversing resident use areas. The rest room door must not open directly into the kitchen, [(]that is, provide a vestibule[)]. (I) Janitorial facilities must be provided exclusively for the kitchen and must be located in the kitchen area. (J) Nonabsorbent smooth finishes or surfaces must be used on kitchen floors, walls, and ceilings. These surfaces must be 42 TexReg 7338 December 22, 2017 Texas Register

101 capable of being routinely cleaned and sanitized to maintain a healthful environment. Counter and cabinet surfaces, inside and outside, must also have smooth, cleanable, relatively nonporous finishes. vided. (K) Operable windows must have insect screens pro- (L) Doors between kitchen and dining or serving areas must have a safety glass view panel. (M) A garbage can or cart washing area with drain and hot water must be provided. (N) Floor drains must be provided in the kitchen and dishwashing areas. (O) Vapor removal from cooking equipment must be designed and installed in accordance with NFPA 96. (P) Grease traps must be provided in compliance with local plumbing code or other nationally recognized plumbing code. [(Q) See (d) of this subchapter (relating to Construction Standards for Additions, Remodeling, and New Nursing Facilities) for bed capacity increases to existing facilities.] (2) Food storage areas must be as follows: (A) Food storage areas must provide for storage of a seven-day minimum supply of nonperishable foods at all times. (B) Shelves must be adjustable wire type. Walls and floors must have a nonabsorbent finish to provide a cleanable surface. No foods may be stored on the floor; dollies, racks, or pallets may be used to elevate foods not stored on shelving. (C) Dry foods storage must have an effective venting system to provide for positive air circulation. (D) The maximum room temperature for food storage must not exceed 85 degrees F at any time. The measurement must be taken at the highest food storage level but not less than five feet from the floor. (E) Food storage areas may be located apart from the food preparation area as long as there is space adjacent to the kitchen for necessary daily usage. (3) Auxiliary serving kitchens [(]not contiguous to food preparation or serving [food preparation/serving] area[)] must be as follows: (A) Where service areas other than the kitchen are used to dispense foods, these must be designated as food service areas and must have equipment for maintaining required food temperatures while serving. (B) Separate food service areas must have hand-washing facilities as a part of the food service area. (C) Finishes of all surfaces, except ceilings, must be the same as those required for dietary kitchens or comparable areas. See paragraph (1)(J) of this subsection. area: (h) Administrative and public areas. (1) The following elements must be provided in the public (A) The entrance must be at grade level, sheltered from the weather, and able to accommodate wheelchairs. A drive-under canopy must be provided for the protection of residents or visitors entering or leaving a vehicle. The latter may be a secondary entrance. (B) The lobby must include: (i) is kept available[)]; storage space for wheelchairs [(]if more than one (ii) a reception or [and/or] information area, which may be adjacent to the lobby if location is obvious [(may be obviously adjacent to lobby)]; (iii) waiting space [space(s)]; (iv) public toilet facilities for individuals with disabilities, which [(]may be adjacent to lobby[)]; (v) at least one public access telephone [telephone(s)], installed to meet standards under the Americans with Disabilities Act; and (vi) drinking fountains [fountain(s)]. These may be provided in a common public area and at least one must be installed to meet standards under the Americans with Disabilities Act; and (C) A lobby may also be use-designed to satisfy a portion of the minimum area required for resident living room space. area: (2) The following must be provided in the administrative (A) General or individual offices [office(s)] for business transactions, medical and financial records, administrative and professional staff, and for private interviews relating to social service, credit, and admissions. (B) A multipurpose room for conferences, meetings, and health education purposes including facilities for showing visual aids. (C) Storage and work area for office equipment and supplies must be provided and accessible to the staff using such items. (3) Toilet facilities for the disabled must be available in the building. (i) Physical therapy facilities. (1) Physical therapy facilities must be provided if required by the treatment program. The facilities stated in subparagraph (B) of this paragraph and paragraph (2)(C)-(E) of this subsection may be planned and arranged for shared use by occupational therapy residents and staff if the treatment program reflects this sharing concept. Physical therapy facilities must include the following: (A) Provision for privacy at [cubicle curtains around] each individual treatment area.[;] (B) Hand-washing facilities and [handwashing facility(ies) (]one lavatory or sink may serve more than one cubicle.[); and] (C) Facilities [facilities] for the collection of soiled linen and other material that may be used in the therapy. (D) [(B)] Residents' dressing areas, showers, lockers, and toilet rooms, if the therapy is such that these would be needed at the area. (2) Physical therapy facilities may also include the following: (A) treatment areas [area(s)] with space and equipment for the therapies provided [thermotherapy, diathermy, ultrasonics, and hydrotherapy]; (B) an exercise area; (C) storage for clean linen, supplies, and equipment used in therapy; PROPOSED RULES December 22, TexReg 7339

102 (D) service sink located near therapy area; and (E) wheelchair and stretcher storage. (j) Occupational therapy. Occupational therapy facilities must be provided if required by the treatment program. (1) An activities area with a sink or lavatory and facilities for collection of waste products prior to disposal must be provided. (2) Storage for supplies and equipment used in the therapy must be provided. (k) Personal grooming area, such as a barber or beauty [(barber/beauty] shop[)]. A separate room with appropriate equipment must be provided for hair care and grooming needs of residents in facilities with over 60 beds. (l) Laundry and linen services. (1) On-site processing must be as follows: (A) Because of the high incidence of fires in laundries, it is highly recommended that the laundry be in a separate building 20 feet or more from the main building. If the laundry is located within the main building it must be separated by minimum one-hour fire construction to structure above, and sprinklered, and must be located in a remote area away from resident sleeping areas. Access doors must be from an [the exterior or] interior nonresident use area, such as a service corridor, that [(not required exit) which] is separated from the resident area, or from the exterior. (B) If linen is to be processed on the site, the following must be provided: (i) A soiled linen receiving, holding, and sorting room with a rinse sink. This area must have a floor drain and forced exhaust to the exterior which must operate at all times there is soiled linen being held in the area. (ii) A laundry processing room with equipment which can process seven days needs within a regularly scheduled work week. Hand-washing facilities must be provided. The washer area must have: (I) a floor drain; (II) storage for laundry supplies; (III) a clean linen inspection and mending room or area and a folding area; room or area; (IV) a clean linen storage, issuing, or holding (V) a janitors' closet containing a floor receptor or service sink and storage space for housekeeping equipment and supplies; and (VI) sanitizing and [(]washing[)] facilities and a storage area for carts. (C) Soiled and clean operations must be planned to maintain sanitary flow of functions as well as air flow. If carts containing soiled linens from resident rooms are not taken directly to the laundry area, intermediate holding rooms must be provided and located convenient to resident bedroom areas. (D) Laundry areas must have adequate air supply and ventilation for staff comfort without having to rely on opening a door that is part of the fire wall separation. (E) Provisions must be made to exhaust heat from dryers and to separate dryer make-up air from the habitable work areas of the laundry. (2) For off-site linen processing, the following must be provided on the premises: (A) a soiled linen holding room [(]provided with adequate forced exhaust ducted to the exterior[)]; (B) clean linen receiving, holding, inspection, sorting or folding, and storage rooms [room(s)]; and (C) sanitizing facilities and storage area for carts. (3) Resident-use laundry, if provided, must be limited to not more than one residential type washer and dryer per laundry room. This room must be classified as a hazardous area according to NFPA 101 [as in accordance with the Life Safety Code]. (m) General storage. The following requirements are applicable to general storage facilities: (1) A general storage room [room(s)] must be provided as needed to accommodate the facility's needs. It is recommended that a general storage area provide at least two square feet per resident bed. This area would be for items such as extra beds, mattresses, appliances, and other furnishing and supplies. (2) Storage space with provisions for locking and security control should be provided for residents' personal effects which are not kept in their rooms. (n) Janitors' closet. In addition to the janitors' closet called for in certain departments, a sufficient number of janitors' closets must be provided throughout the facility to maintain a clean and sanitary environment. These must contain a floor receptor or service sink and storage space for housekeeping equipment and supplies. (o) Maintenance, engineering service, and equipment areas. Space and facilities for adequate preventive maintenance and repair service must be provided. The following spaces are needed and it is suggested that these be part of a separate laundry building or area: (1) A storage area for building and equipment maintenance supplies, tools, and parts must be provided. (2) A space for storage of yard maintenance equipment and supplies, including flammable liquids bulk storage, must be provided separate from the resident-occupied facility. (3) A maintenance and [and/or] repair workshop of at least 120 square feet and equipment to support usual functions is recommended. (4) A suitable office or desk space for the maintenance staff [person(s)] is recommended, [(]possibly located within the repair shop area,[)] with space for catalogs, files, and records. (p) Oxygen. The storage and use of oxygen and equipment must meet applicable NFPA standards for oxygen, including NFPA Exit Provisions. Exit provisions, including doors, corridors, stairways, and other exitways [exitways], locks, and other applicable items must conform to the requirements of NFPA 101 [the Life Safety Code] concerning means of egress and of this section in order to ensure [assure] that residents can be rapidly and easily evacuated from the building at all times, or from one part of the building to a safe area of refuge in another part of the building. Exit provisions are as follows: 42 TexReg 7340 December 22, 2017 Texas Register

103 (1) Bedroom space arrangement and doors and corridors must be designed for evacuation of bedfast residents by means of rolling the bed to a safe place in the building or to the outside. (2) Public assembly, common living rooms, dining rooms, and other rooms with a capacity of 50 or more persons or greater than 1,000 square feet must have two means of exit remote from each other. Out-swinging [Outswinging] doors with panic hardware must be provided for these exits. (3) Exit doors and ways of egress must be maintained clear and free for use at all times, except as permitted by NPFA 101. Furnishings, equipment, carts, and other obstacles must not be left to block egress at any time. (4) Steps in interior ways of egress are prohibited. If changes of elevation are necessary within ways of egress, approved ramps with maximum slope of [1:12 (]one unit of rise to 12 units of run[)] must be used. [(5) Any remodeling of, construction on, and/or additions to occupied buildings which involve exitways and exit doors must be accomplished without compromising the exits or creating a dead end situation at any time. Acceptable alternate temporary exits may be approved, or resident(s) in the area involved may have to be relocated until construction blocking the exit is completed. Other basic safety features such as fire alarms, sprinkler systems, and emergency power must also remain operational.] (5) [(6)] Doors in means of egress must be as follows: (A) Locking hardware or devices which are capable of preventing or inhibiting immediate egress must not be used in any room or area that can be occupied. (B) A latch or other fastening device on an exit door must be provided with a knob, handle, panic bar, or similar releasing device. The method of operation must be obvious in the dark, without use of a key, and operable by a well known one-action operation that will easily operate with normal pressure applied to the door or to the device toward the exterior. Locking hardware which prevents unauthorized entry from the outside [(only)] is permissible. Self-closing devices and permanently mounted hold-open devices to expedite emergency egress and prevent accidental lock-out must be provided for exterior exit doors. [Permanently mounted hold-open devices to expedite emergency egress and prevent accidental lock-out must be provided for exterior exit doors as well as self-closing devices.] (C) No screen or storm door may swing against the direction of exit travel where main doors are required to swing out. (D) To aid in control of wandering residents, buzzers or other sounding devices may be used to announce the unauthorized use of an exit door. Other methods include approved emergency exit door locks or fencing with a gate outside of exit doors which enclose a space large enough to allow the space to be an exterior area of egress and refuge away from the building. (E) Inactive leaves of double doors may have easily accessible and easily operable bolts if the active leaf is 44 inches wide, where permitted by NFPA 101. Center mullions are prohibited. (F) Resident baths or toilets having privacy locks will require that keys or devices for opening the doors are kept readily available to the staff. (G) Folding [accordion or sliding] doors must not be used in exit corridors or exit-ways [exitways]. Sliding [glass] doors, where permitted by NFPA 101, may be used as secondary doors from residents' bedrooms to grade or to a balcony, or [as secondary doors] in certain other areas, where permitted by NFPA 101 [where the primary designated exit door requirements are met. Doors to bathroom and other resident-use areas must be the side-hinged swinging type]. Corridor doors to rooms must swing into the room or be recessed so as not to extend into the corridor when open; however, doors ordinarily kept closed may be excepted. [Corridor door frames must be steel in accordance with Life Safety Code.] (6) [(7)] Horizontal exits, if provided, must be according to NFPA 101 [the Life Safety Code]. (7) [(8)] Areas outside of exterior exit doors [(exit discharge)] must be as follows: (A) Provision must be made to accommodate and facilitate continuation of emergency egress away from a building for a reasonable distance beyond the outside exit door, especially for movement of non-ambulatory [nonambulatory] residents in wheelchairs and beds. Any condition which may retard or halt free movement and progress outside the exit doors will not be allowed. Ramps must be used outside the exit doors in lieu of steps whenever possible. (B) The landing outside of each exit door must be essentially the same elevation as the interior floor and level for a distance equal to the door width plus at least four feet. Generally, the difference in floor elevation at an exterior door must not be over 1/2 inch with the outside slope not to exceed 1/4 inch per foot sloping away from the door for drainage on the exterior. In locations north of the +20 Fahrenheit Isothermal Line as defined in the [American Society of Heating, Refrigerating, and Air-Conditioning Engineers (]ASHRAE[)] Handbook of Fundamentals, the landing outside of all exit doors must be protected from ice build-up which would prohibit the door from opening or would [and] be a slip hazard. (C) Emergency egress lighting immediately outside of exit doors is required as a part of the building emergency lighting system. Photocell devices may be used to turn lights off during daylight hours. (8) [(9)] The requirements of an emergency lighting system must be in accordance with of this division [subchapter] (relating to Electrical Requirements). [(10) Requirements for interior finishes of ways of egress (flame spread of floor, walls, and ceiling finishes) must be in accordance with the Life Safety Code. The interior finishes of other areas must be in accordance with (e) of this title (relating to General Considerations).] Hazardous Areas. (a) Protection from hazardous areas must be as required in NFPA 101 [the Life Safety Code], except as required or modified in this section. Gas-fired [Gas fired] equipment must not be located in attic spaces, except under the following conditions: (1) the area around the units must be constructed to be onehour fire rated; (2) the enclosure must have sprinkler protection; and (3) combustion and venting air must be ducted from the exterior in properly sized metal ducts. (b) Laboratories must be protected according to NFPA 99 [in accordance with the National Fire Protection Association (NFPA) 99]. (c) Cooking equipment must be protected according to NFPA 101 [have exhaust systems designed and installed in accordance with NFPA 96]. PROPOSED RULES December 22, TexReg 7341

104 (d) Doors to hazardous areas must have closers and be kept closed unless provided with an approved hold-open device such as an alarm activated magnetic hold-open device, as permitted by NFPA 101. Doors must be single-swing type with positive latching hardware. View panels at laundry entrances must be provided and be of materials adequate to maintain the integrity of the door as allowed by NFPA 101 [the Life Safety Code] Electrical Requirements. (a) The design of the electrical systems must be done by or under the direction of a licensed [registered] professional electrical engineer approved by the Texas [State] Board of [Registration for] Professional Engineers to operate in Texas, and the parts of the plans and specifications covering electrical design must bear the legible seal of the engineer. Utilities; [Requirements pertaining to utilities,] heating, ventilating, and air-conditioning systems;[,] vertical conveyors, and chutes must meet the requirements of NFPA 101, [be in accordance with the Life Safety Code,] Chapter 9, Building Service and Fire Protection Equipment. (b) Fire [Requirements for fire] protection systems must meet the requirements of [be in accordance with] of this division [subchapter] (relating to Fire Protection Systems). (c) Electrical systems must meet the requirements of [the] NFPA 70. (d) Specific requirements for lighting and outlets at resident bedrooms must meet the requirements of [be in accordance with] of this division [subchapter] (relating to Architectural Space Planning and Utilization). (1) Emergency electrical service. (A) To provide electricity during an interruption of the normal electric supply, an emergency source of electricity must be provided and connected to certain circuits for lighting and power. Facilities that were constructed or received design approval or building permits before July 5, 2016, may comply with the emergency electrical system requirements for existing health care facilities in NFPA 99. All other facilities covered by this section must comply with the emergency electrical system requirements for new health care facilities in NFPA 99. (B) Emergency electrical connection service must be provided to the distribution systems as required by NPFA 101 [the Life Safety Code] and NFPA 99. Rehabilitation or modernization of an existing emergency power system must be based on the assessed risk category and according to the requirements of NFPA 99 for new health care facilities. (i) The following [Emergency] systems must be arranged for automatic connection to the alternate power source, without delay [include the following]: (I) illumination for means of egress, nurse stations' [stations], medication rooms, dining and living rooms, group bathing rooms [(those] not directly connected to resident bedrooms[)], and areas immediately outside of exit doors [door (egress lighting must not be switched)]; (II) exit signs and exit directional signs as required by NFPA 101 [the Life Safety Code]; (III) alarm systems including fire alarms activated by manual stations, water flow alarm devices of sprinkler systems, fire and smoke detecting systems, and alarms required for nonflammable medical gas systems, if installed [(where hospital-type functions are included in the nursing home facility, applicable standards will apply)]; (IV) task illumination and selected receptacles at the generator set location; (V) selected duplex receptacles including such areas as resident corridors, each bed location where patient care-related electrical appliances are utilized, nurse stations, and medication rooms including biologicals refrigerator; (VI) (VII) nurse call [calling] systems; resident room night lights; (VIII) a light and receptacle in an [the] electrical room or a [and/or] boiler room; nication systems; (IX) (X) elevator cab lighting, control, and commu- all facility telephone equipment; and (XI) paging or speaker systems, if intended for communication during emergency. Radio transceivers where installed for emergency use must be capable of operating for at least one hour upon total failure of both normal and emergency power. (ii) The following [Critical] systems must be arranged for [(]delayed automatic or manual connection [connections] to the alternate power source [critical systems) must include the following]: (I) Heating equipment must provide heating for general resident rooms. This will not be required if: (-a-) the outside design temperature is higher than 20 degrees Fahrenheit (-6.7 [-6] degrees Celsius); (-b-) the outside design temperature is lower than 20 degrees Fahrenheit (-6.7 [-6] degrees Celsius) and, when [where] selected rooms are provided for the needs of all confined residents, then only those rooms need to be heated; or (-c-) the facility is served by a dual source of normal power.[; and] (II) In instances when interruptions of power would result in elevators stopping between floors, throw-over facilities must be provided to allow the temporary operation of any elevator for the release of passengers. (C) The emergency lighting must be automatically in operation within ten seconds after the interruption of normal electric power supply. Emergency egress lighting must not be switched. (D) Emergency service to receptacles and equipment may be delayed automatic or manually connected. Receptacles connected to emergency power must have red faceplates. [Stored fuel capacity must be sufficient for not less than four-hour operation of required generator.] (E) [(D)] The design and installation of emergency motor generators must be in accordance with NFPA 37, NFPA 99, and NFPA 110. (i) Generators must be located a minimum of three feet from a [the] combustible exterior building finish and a minimum of five feet from a building opening, if located on the exterior of the building. (ii) Generators located on the exterior of the building must be provided with a noncombustible protective cover or be protected as per manufacturer's recommendations. (iii) Motor generators fueled by public utility natural gas must have the capability to be switched to an alternate fuel source in accordance with NFPA TexReg 7342 December 22, 2017 Texas Register

105 (iv) Stored fuel capacity must be sufficient for not less than four hours of required generator operation. (F) [(E)] The normal wiring circuits [circuit(s)] for the emergency system must be kept entirely independent of all other wiring and must not enter the same race-ways, boxes, or cabinets according to [in accordance with] NFPA 70. (2) General Lighting Requirements. General lighting requirements are as follows: (A) All spaces occupied by people, machinery, equipment, approaches to buildings, and parking lots must have lighting. (B) All quality, intensity, and type of lighting must be adequate and appropriate to the space and all functions within the space. (C) Minimum lighting levels can be found in the Illuminating Engineering Society (IES) Lighting Handbook, latest edition. Minimum illumination must be 20-foot candles in resident rooms, corridors, nurses' stations, dining rooms, lobbies, toilets, bathing facilities, laundries, stairways, and elevators. Illumination requirements for these areas apply to lighting throughout the space and are [should be] measured at approximately 30 inches above the floor anywhere in the room. Minimum illumination for over-bed [overbed] reading lamps, medication-preparation or storage areas [area], kitchens, and nurses' [nurse's] station desks must be 50 foot candles. Illumination requirements for these areas apply to the task performed and are [should be] measured on the task. (D) Nursing unit corridors must have general illumination with provisions for reduction of light levels at night. (E) Exposed incandescent light bulbs [(]or other high heat generating lamps[)] in closets or other similar spaces must be provided with basket wire guards or other suitable shield to prevent contact of combustible materials with the hot bulb and to help prevent breakage. (F) Exposed incandescent or fluorescent bulbs are not [will not be] permitted in food service or other areas where glass fragments from breakage may get into food, medications, linens, or utensils. All fluorescent bulbs will be protected with a shield or catcher to prevent bulb drop-out. (3) Receptacles or [(]convenience outlets[)]. (A) Receptacles at bedrooms must be according to [in accordance with] (a)(7) of this division [subchapter] (relating to Architectural Space Planning and Utilization). (B) Duplex receptacles for general use must be installed in corridors spaced not more than 50 feet apart and within 25 feet of ends of corridors. At least one duplex receptacle in each resident corridor must be provided with emergency electrical service. (C) Receptacles must be provided for essential needs such as medication refrigerators and [life support] systems or equipment whose failure is likely to cause major injury or death to a resident. [At least one outlet in each resident corridor must be provided with emergency electrical service.] All receptacles on emergency circuits must be clearly, distinctly, and permanently identified, such as using a red faceplate or [and/or] a small label that says "Emergency." (D) Receptacles in the remainder of the building must be sufficient to serve the present and future needs of the residents and equipment. (E) Location of receptacles, [(]horizontally and vertically,[)] should be carefully planned and coordinated with the expected designed use of furnishings and equipment to maximize their accessibility and to minimize conditions such as beds or furniture [chests] being jammed against plugs used in the outlets. proof type. (F) Exterior receptacles must be an approved water- (G) Ground fault interruption protection must be provided at appropriate locations such as at whirlpools and other wet areas according to [in accordance with] the NFPA 70 [National Electrical Code]. (4) Nurse call systems. (A) A nurse call system consists of power units, annunciator control units, corridor dome stations, emergency call stations, bedside call stations, and activating devices. The units must be compatible and [laboratory] listed by a nationally recognized testing laboratory for the system and use intended. (B) Each resident bedroom must be served by at least one call [calling] station and each bed must be provided with a call switch. Two call switches serving adjacent beds may be served by one calling station. Each call entered into the system must activate a corridor dome light above the bedroom, bathroom, or toilet corridor door, a visual signal at the nurses' [nurses] station which indicates the room from which the call was placed, and a continuous or intermittent continuous audible signal of sufficient amplitude to be clearly heard by nursing staff. The amplitude or pitch of the audible signal must not be such that it is irritating to residents or visitors. The system must be designed so that calls entered into the system may be canceled only at the call [calling] station. Intercom-type systems which meet this requirement are acceptable. (C) A nurse call system that provides [Nurse calling systems which provide] two-way voice communication must be equipped with an indicating light at each call [calling] station which lights and remains lighted as long as the voice circuit is operating. (D) A nurse call emergency switch [switch(es)] must be provided for resident use at each resident's toilet, bath, and shower. These switches must be usable by residents using the fixtures and by a collapsed resident lying on the floor. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 6. PLAN REVIEW 40 TAC The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. PROPOSED RULES December 22, TexReg 7343

106 The amendment implements Texas Government Code, and Texas Health and Safety Code, Plan Review [Plans, Approvals, and Construction Procedures]. At the option of the applicant, HHSC [the Texas Department of Human Services (DHS)] will review plans for a new building, an addition to a building, a [buildings, additions,] conversion of a building [buildings] not licensed by HHSC, [DHS,] or rehabilitation [remodeling] of an existing licensed facility. HHSC [facilities. DHS] will, within 30 days, inform the applicant in writing of the results of the review. If the plans comply with HHSC's [DHS's] architectural requirements, HHSC [DHS] may not subsequently change the architectural requirement applicable to the project unless the change is required by federal law or the applicant fails to complete the project within two years. HHSC [DHS] may grant a waiver of this two-year period for delays due to unusual circumstances. There is no time limit to complete a project, only a time limit for completing a project using requirements that have been revised after the project was reviewed. (1) Submittal of plans. (A) For review of plans, submit one copy of contract documents described in paragraph (2) of this subsection [working drawings and specifications (contract documents)] before construction begins. Documents must be in sufficient detail to demonstrate [interpret] compliance with this subchapter [these standards] and ensure [assure] proper construction. Documents must be prepared according to accepted architectural practice and must include general construction, special conditions, and schedules. (B) Final copies of plans must include [have (in the reproduction process by which plans are reproduced)] a title block that shows name of facility, person, or organization preparing the sheet, sheet numbers, facility address, and drawing date. Sheets and sections covering structural, electrical, mechanical, and sanitary engineering final plans, designs, and specifications must bear the seal of a licensed [registered] professional engineer approved by the Texas [State] Board of [Registration for] Professional Engineers to operate in Texas. Contract documents for additions, rehabilitation of, or [remodeling, and] construction of an entirely new facility must be prepared by an architect licensed by the Texas [State] Board of Architectural Examiners. Drawings must bear the seal of the architect. (C) A final plan for a major addition to a facility must include a basic layout to scale of the entire building onto which the addition will connect. North direction must be shown. The entire basic layout may [usually can] be to a scale such as 1/16 inch per foot or 1/32 inch per foot for very large buildings. (D) Plans and specifications for the conversion of a building not licensed by HHSC [conversions] or rehabilitation of an existing building [remodeling] must be complete for all parts and features involved. (E) The facility [sponsor] is responsible for employing qualified personnel to prepare the contract documents for construction. If the contract documents contain [have] errors or omissions to the extent that conformance with standards cannot be reasonably ensured [assured] or determined, HHSC may request a revised set of documents for review [may be requested]. (F) The review of plans and specifications by HHSC [DHS] is based on general utility, the minimum licensing standards, and conformance with NFPA 101. This review must[, of the Life Safety Code, and is] not to be construed as an all-inclusive approval of the structural, electrical, or mechanical components, nor does it constitute the [include a] review of required building plans for compliance with TAS [the Texas Accessibility Standards] as administered and enforced by the Texas Department of Licensing and Regulation. (G) Fees for plan review will be required according to [in accordance with] of this chapter (relating to Plan Review Fees). (2) Contract documents. (A) Code compliance documents must include: (i) A life safety floor plan that includes the following information: (I) a building layout, depicted at an identified drawing scale; (II) the location of any changes in construction type; (III) occupant loads, according to NFPA 101; (IV) egress capacity, according to NFPA 101; (V) egress routes from spaces in the building to the public way, including travel distances; (VI) areas in buildings which use provisions for suites, per NFPA 101; (VII) provisions for the protection of vertical openings; (VIII) the locations of doors that use special locking arrangements; (IX) the relationship of the subject building to any adjacent buildings on the same property, including dimensions between buildings; (X) the size and location of smoke compartments, and the tested fire resistance-rated assemblies proposed for the construction of smoke barriers defining the compartments; (XI) the location of any fire barriers or fire walls, and the tested fire resistance-rated assemblies proposed for the construction of those barriers or walls; and (XII) the location of egress signage. (ii) documentation, published by a nationally recognized testing laboratory, describing any proposed fire resistance-rated assemblies, including the following: (I) fire resistance-rated wall assemblies; (II) fire resistance-rated floor-ceiling assemblies; (III) fire resistance-rated roof-ceiling assemblies; (IV) fire resistance-rated joint systems; (V) fire resistance-rated systems for protection of penetrations into or through other fire resistance-rated construction and assemblies; and (VI) fire resistance-rated assemblies for protection of structural columns and beams. (iii) for projects involving building rehabilitation, provide a diagram outlining each area undergoing rehabilitation identifying the classification of the rehabilitation work according to of this subchapter (relating to Building Rehabilitation), and identifying the total floor area of each rehabilitation work area by rehabilitation classification. 42 TexReg 7344 December 22, 2017 Texas Register

107 (B) [(A)] Site plan documents must include: (i) grade contours; (ii) streets [(]with names[)]; (iii) a north arrow; (iv) fire hydrant locations [hydrants]; (v) fire lanes; (vi) utilities, public or private; (vii) fences; and (viii) unusual site conditions, such as (I) ditches; (II) low water levels; (III) other buildings on-site; and (IV) indications of buildings located five feet or less beyond site property lines. (C) [(B)] Foundation plan documents must include the general foundation design and details. (D) [(C)] Floor plan documents must include: (i) room names, numbers, and usages; (ii) numbered doors [(numbered)], including swing; (iii) windows; (iv) a legend or clarification of wall types; (v) dimensions; (vi) fixed equipment; (vii) plumbing fixtures; (viii) kitchen basic layout; and (ix) identification of all smoke barrier walls and fire walls, outside wall to outside wall [(outside wall to outside wall) or fire walls]. (E) [(D)] For [both] new construction, [and] additions to or [to] rehabilitation of [remodeling to] an existing building [buildings], an overall plan of the entire building must be drawn or reduced to fit on an 8 1/2-inch by 11-inch sheet. conditions. (F) [(E)] Schedules must include: (i) door materials, sizes [widths], and types; (ii) window materials, sizes, and types; (iii) room finishes; and (iv) special hardware. (G) [(F)] Elevations [and roof plan] must include: (i) exterior elevations with material note; and (ii) interior elevations, where needed for special [(i) exterior elevations, including] [(I) material note indications; and] [(II) any rooftop equipment;] [(ii) roof slopes;] [(iii) drains;] conditions. ] conditions; cabinets [cabinet] and built-in work, basic design only; needed. (H) (I) [(iv) gas piping, etc.; and] [(v) interior elevations where needed for special (i) (ii) (iii) (iv) (i) (ii) Roof plans must include: any roof top equipment; roof slopes; drain locations; and gas pipes. [(G)] Details must include: (iii) (iv) wall sections as needed, especially for special cross sections through buildings as needed; and miscellaneous details and enlargements as (J) [(H)] Building structure documents must include: (i) structural framing layouts [layout] and details [(primarily for column, beam, joist, and structural building)]; (ii) roof framing layout, [(]when this [it] cannot be adequately shown on cross section[)]; [and] (iii) cross sections in quantity and detail to show sufficient structural design; and (iv) structural details as necessary to ensure [assure] adequate structural design [and calculated design loads]. (K) [(I)] Electrical documents must include: (i) electrical layout, including lights, convenience outlets, equipment outlets, switches, and other electrical outlets and devices; service, circuiting, distribution, and panel diagrams; (ii) (iii) egress lighting[)]; [exit light system (]exit signs and emergency (iv) emergency electrical provisions, [(]such as generators and panelboards [panels)]; call system; (v) staff communication systems, including a nurse (vi) fire alarm and similar systems, [(]such as control panels [panel], devices, and alarms[)]; and (vii) sizes and details sufficient to ensure [assure] safe and properly operating systems. (L) [(J)] Plumbing documents must include: (i) plumbing layout with pipe sizes and details sufficient to ensure [assure] safe and properly operating systems; (ii) water systems; (iii) sanitary systems; (iv) gas systems; and (v) other systems normally considered under the scope of plumbing, fixtures, and provisions for combustion air supply. PROPOSED RULES December 22, TexReg 7345

108 (M) [(K)] Heating, ventilating, and air-conditioning systems (HVAC) documents must include: (i) sufficient details of HVAC systems and components to ensure [assure] a safe and properly operating installation, including heating, ventilating, and air-conditioning layout; ducts; protection of duct inlets and outlets; combustion air; piping; exhausts; duct smoke detectors; and fire dampers[, but not limited to, heating, ventilating, and air-conditioning layout, ducts, protection of duct inlets and outlets, combustion air, piping, exhausts, and duct smoke and/or fire dampers]; and (ii) equipment types, sizes, and locations. (N) [(L)] Sprinkler system documents must include: (i) plans and details of systems designed according to NPFA 13; and [National Fire Protection Association (NFPA) designed systems;] [(ii) plans and details of partial systems provided only for hazardous areas; and] alarm system. (ii) [(iii)] electrical devices interconnected to the (O) [(M)] Specifications must include: (i) installation techniques; (ii) quality standards; [and/or] (iii) manufacturers; (iv) [(iii)] references to specific codes and standards; (v) [(iv)] design criteria; (vi) [(v)] special equipment; (vii) [(vi)] hardware; (viii) [(vii)] finishes; and (ix) [(viii)] any other [others] information as needed to amplify drawings and notes. (P) [(N)] Other layouts, plans, or details that are [as may be] necessary to convey [for] a clear understanding of the design and scope of the project, including plans covering private water or sewer systems, which must be reviewed by the local health or wastewater authority having jurisdiction. tion starts.] [(3) Construction phase.] [(A) DHS must be notified in writing before construc- [(B) All construction not done in accordance with the completed plans and specifications as submitted for review and as modified in accordance with review requirements will require additional drawings if the change is significant.] [(4) Initial survey of completed construction.] [(A) Upon completion of construction, including grounds and basic equipment and furnishings, a final construction inspection (initial survey) of the facility must be performed by DHS before admitting residents. An initial architectural inspection will be scheduled after DHS receives a notarized licensure application, required fee, fire marshal approval, and a letter from an architect or engineer stating that to the best of their knowledge the facility meets the architectural requirements for licensure.] [(B) After the completed construction has been surveyed by DHS and found acceptable, this information will be forwarded to the DHS Facility Enrollment Section as part of the information needed to issue a license to the facility. In the case of additions or remodeling of existing facilities, a revision or modification to an existing license may be necessary. The building, including basic furnishings and operational needs, grades, drives, and parking, must essentially be 100% complete at the time of this initial visit for occupancy approval and licensing. A facility may accept up to three residents between the time it receives initial approval from DHS and the time the license is issued.] [(C) The following documents must be available to DHS's architectural inspecting surveyor at the time of the survey of the completed building:] [(i) written approval of local authorities as required in subparagraph (A) of this paragraph;] [(ii) written certification of the fire alarm system by the installing agency (the Texas State Fire Marshal's Fire Alarm Installation Certificate);] [(iii) documentation of materials used in the building that are required to have a specific limited fire or flame spread rating, including special wall finishes or floor coverings, flame retardant curtains (including cubicle curtains), rated ceilings, etc., and, in the case of carpeting, a signed letter from the installer verifying that the carpeting installed is named in the laboratory test document;] [(iv) approval of the completed sprinkler system installation by the Texas Department of Insurance or designing engineer. A copy of the material list and test certification must be available;] [(v) service contracts for maintenance and testing of alarm systems, sprinkler systems, etc.;] [(vi) a copy of gas test results of the facility's gas lines from the meter;] [(vii) a written statement from an architect/engineer stating, to the best of his knowledge, the building was constructed in substantial compliance with the construction documents, the Life Safety Code, DHS licensure standards, and local codes; and] [(viii) any other such documentation as needed.] [(5) Nonapproval of new construction.] [(A) If, during the initial on-site survey of completed construction, the surveyor finds certain basic requirements not met, DHS may recommend the facility not be licensed and approved for occupancy. Such items may include the following:] [(i) substantial changes made during construction that were not submitted to DHS for review and that may require revised "as-built" drawings to cover the changes. This may include architectural, structural, mechanical, and electrical items as specified in paragraph (3)(B) of this section;] [(ii) construction that does not meet minimum code or licensure standards, such as corridors that are less than required width, ceilings installed at less than the minimum seven-foot, six-inch height, resident bedroom dimensions less than required, and other such features that would disrupt or otherwise adversely affect the residents and staff if corrected after occupancy;] [(iii) no written approval by local authorities;] [(iv) fire protection systems, including, but not limited to, fire alarm systems, emergency power and lighting, and sprinkler systems, not completely installed or not functioning properly;] 42 TexReg 7346 December 22, 2017 Texas Register

109 [(v) required exits not all usable according to National Fire Protection Association (NFPA) 101 requirements;] ing;] [(vi) telephone not installed or not properly work- [(vii) sufficient basic furnishings, essential appliances, and equipment not installed or not functioning; and] [(viii) any other basic operational or safety feature that would preclude safe and normal occupancy by residents on that day.] [(B) If the surveyor encounters only minor deficiencies, licensure may be recommended based on an approved written plan of correction from the facility's administrator.] [(C) Copies of reduced-size floor plans on an 8 1/2-inch by 11-inch sheet must be submitted in duplicate to DHS for record/file use and for the facility's use for evacuation plan, fire alarm zone identification, etc. The plan must contain basic legible information such as scale, room usage names, actual bedroom numbers, doors, windows, and any other pertinent information.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 7. SMALL HOUSE AND HOUSEHOLD FACILITIES 40 TAC The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment implements Texas Government Code, and Texas Health and Safety Code, Small House and Household Facilities. (a) This section applies to a [A] small house or household facility [is a facility] that is designed to provide a non-institutional environment to promote resident-centered care [and that meets the requirements of this section]. New construction of [to] a small house or household facility, including a conversion of an existing facility, an addition to an existing facility, or rehabilitation of an existing facility [remodeling], must meet the requirements of this section. (b) A small house or household facility must comply with this chapter, except it is not required to comply with a requirement in division 9 of this subchapter (relating to Facilities Licensed On or After April 2, 2018) [ of this subchapter (relating to Construction and Initial Survey of Completed Construction; Construction Standards for Additions, Remodeling, and New Nursing Facilities; Location and Site; General Considerations; Architectural Space Planning and Utilization; Exit Provisions; Smoke Compartmentation (Subdivision of Building Spaces); Fire Protection Systems; Hazardous Areas; Structural Requirements; Mechanical Requirements; Electrical Requirements; Miscellaneous Details; and Elevators)] if HHSC [DADS] waives the requirement in accordance with subsection (c) of this section or if the requirement is modified by subsection (g) of this section. (c) HHSC [DADS] may waive a requirement in division 9 [ ] of this subchapter if HHSC [DADS] determines a waiver of the requirement would facilitate the implementation of resident-centered care. To request a waiver of a requirement, a facility must submit plans to HHSC according to [DADS in accordance with] of this subchapter (relating to Plan Review [Plans, Approvals, and Construction Procedures]). The plans must include a statement from an architect identifying which requirements the facility is requesting to be waived and explaining how the waiver would contribute to the goals of resident-centered care. (d) A small house or household facility must be designed and equipped to provide a homelike environment that promotes residentcentered care. (e) A small house or a household within a facility must: (1) have no more than 16 bedrooms as described in subsection (g)(3) of this section; (2) have living, dining, social, and staffing areas exclusively within and for the house or household; and (3) have a kitchen that meets the requirements in (g)(1) [ (g)(1)] of this subchapter (relating to Architectural Space Planning and Utilization for New Facilities) or a food service area that meets the requirements of an auxiliary serving kitchen in (g)(3) [ (g)(3)] of this subchapter, exclusively within and for the house or household. (f) A small house or household facility must be: (1) a single small house model, which is a single licensed building having no more than 16 residents that meets the licensing requirements for architectural spaces provided within the same licensed building; (2) a multiple small house model, which is a single licensed group of two or more small houses located in close proximity to each other on a single contiguous property that meets the licensing requirements for architectural spaces in each house and that may include a stand-alone central building that provides social-diversional space, a treatment area, or an administrative area; or (3) a household model, which is a single licensed building that contains one or more [multiple] households having no more than 16 residents each; that may include a central area that provides socialdiversional space, a treatment area, or an administrative area; and that must be arranged to avoid travel through the household by persons who are not residing in, visiting, or providing services for the household. (g) A small house or household facility must comply with the requirements in this section and is not required to request a waiver for an exception described in this subsection. [(1) The interior finish requirements in (e) of this subchapter must be met, except combustible decorations on walls, doors, and ceilings may be installed as permitted by the 2012 edition of the Life Safety Code.] PROPOSED RULES December 22, TexReg 7347

110 (1) [(2)] The outdoor activity, recreational, and sitting spaces required in (f) [ (f)] of this subchapter (relating to Location and Site for New Facilities) must include a porch area under a roof with suitable furniture for sitting and space for wheelchairs. (2) [(3)] The resident bedroom requirements in (a) [ (a)] of this subchapter must be met, except: (A) a bedroom must be occupied: (i) by only one resident; or (ii) by two residents, if they are members of the same family and the bedroom size, furniture, and headboard wall requirements for double occupancy are met; (B) the toilet requirements in (a)(7) [ (a)(8)] of this subchapter must be met, except a bathroom must serve no more than one resident room and must include a lavatory, toilet, and a shower or bathing unit; (C) the night lighting requirement in (a)(5) [ (a)(6)] of this subchapter must be met, except it must be a recessed wall mounted fixture just inside the entry door to the room and must not be obstructed by the door or furniture; and (D) the electrical receptacle requirements in (a)(6) [ (a)(7)] of this subchapter must be met and additional receptacles must be provided to meet the requirements for Dwelling Unit Receptacle Outlets [dwelling units] in NFPA 70 [210-54]. (3) [(4)] The nursing service area requirements in (b) [ (b)] of this subchapter must be met, except: (A) a nursing staff lounge is not required in a small house facility; room for: (B) the nursing staff toilet room may also be a toilet (i) kitchen staff; (ii) the public; or (iii) a general bathing room, if the toilet room opens into the general bathing room and common areas; and (C) the nourishment station may be part of the residential kitchen area. (4) [(5)] Resident bathing and toilet facility requirements in (c) [ (c)] of this subchapter must be met, except the door between a bathroom and a resident bedroom: (A) is not required to be a side-hinged swinging door; (B) may be an externally mounted by-pass door; (C) must have substantial hardware; (D) must not be equipped with a bottom door track that is a tripping hazard; and (E) if it swings open into the bedroom, must not interfere with the swing of any other door that opens into the bedroom. (5) [(6)] The living area requirements in (e) [ (e)] of this subchapter and dining room requirements in (f) [ (f)] of this subchapter must be met, except the distance between the floor and the window sill of a window in the living or dining room must not exceed 36 inches, to allow a view to the outside from a seated position. (6) [(7)] The dietary facility requirements in (g) [ (g)] of this subchapter must be met, except a kitchen serving 16 or fewer non-employees per meal: (A) may be open to the facility in compliance with NFPA 101 [the 2012 edition of the Life Safety Code]; idents; (B) must meet the general food service needs of the res- (C) must provide for the storage, refrigeration, preparation, and serving of food; for dish and utensil cleaning; and for refuse storage and removal; (D) must contain a multi-compartment sink, vegetable sink, and hand washing sink; (E) must provide a supply of hot water that, if used for sanitizing purposes is 180 degrees Fahrenheit or at the manufacturer's suggested temperature for chemical sanitizers; (F) must provide a supply of cold water; (G) must have janitorial facilities exclusively for the kitchen and located in close proximity to the kitchen; (H) must have kitchen floors, walls, and ceilings with nonabsorbent smooth finishes or surfaces that are capable of being routinely cleaned and sanitized to maintain a healthful environment; (I) must have counter and cabinet surfaces, inside and outside, with smooth, cleanable, relatively nonporous finishes; and (J) must have a toilet for the kitchen staff that is in close proximity to the kitchen and that may also be a toilet room for the public or the general bathing room. (7) [(8)] The exit requirements in (3) [ (3)] of this subchapter must be met except for fixed furniture and wheeled equipment as permitted by NFPA 101 [the 2012 edition of the Life Safety Code]. [(9) The nurse call system requirements in (d)(4) of this subchapter must be met, and the system:] [(A) must meet UL 1069 for the core system of power units, annunciator control units, corridor dome lights, emergency calling stations, bedside call stations, and activating devices; and] [(B) is not required to meet UL 1069 for ancillary or supplementary devices, including pocket pagers and other portable devices.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 8. BUILDING REHABILITATION 40 TAC TexReg 7348 December 22, 2017 Texas Register

111 The new section is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The new section implements Texas Government Code, and Texas Health and Safety Code, Building Rehabilitation. (a) This section applies to facilities undergoing rehabilitation. (b) Rehabilitation work is classified as follows: (1) The patching, restoration, or painting of materials, elements, equipment, or fixtures for the purpose of maintaining such materials, elements, equipment, or fixtures in good or sound condition must be classified as repair and must meet the following requirements: (A) A repair must meet the applicable requirements of (d) of this subchapter (relating to General Requirements); (B) A repair must be done using like materials, unless such materials are prohibited by NFPA 101; and (C) A repair must not make a building less conforming with NFPA 101 or the applicable sections of this subchapter, or with any alternative arrangements previously approved by HHSC, than it was before the repair was undertaken, unless approved by HHSC. (2) The replacement in kind, strengthening, or upgrading of building elements, materials, equipment, or fixtures, that does not result in a reconfiguration of the building spaces within, must be classified as renovation and must meet the following requirements: (A) Any new work that is part of a renovation must comply with the applicable requirements of (d) of this subchapter; (B) Any new interior or exterior finishes must meet the requirements of division 9 of this subchapter (relating to Facilities Licensed On or After April 2, 2018). (C) A renovation must not make a building less conforming with NFPA 101 or the applicable sections of this subchapter, or with any alternative arrangements previously approved by HHSC, than it was before the renovation was undertaken, unless approved by HHSC; and (D) The reconfiguration or extension of any system, or the installation of any additional equipment, must be classified as modification according to paragraph (3) of this subsection. (3) The reconfiguration of any space; the addition, relocation, or elimination of any door or window; the addition or elimination of load-bearing elements; the reconfiguration or extension of any system; or the installation of any additional equipment, must be classified as modification and must meet the following requirements: (A) A newly constructed element, component, or system must comply with division 9 of this subchapter; (B) All other work in a modification must meet, at a minimum, the requirements for a renovation according to paragraph (2) of this subsection; and, (C) If the total rehabilitation work area classified as modification exceeds 50 percent of the total building area, the work must be classified as reconstruction according to paragraph (4) of this subsection. (4) The reconfiguration of a space that affects an exit or a corridor shared by more than one occupant space; or the reconfiguration of a space such that the rehabilitation work area is not permitted to be occupied because existing means of egress and fire protection systems, or their equivalent, are not in place or continuously maintained, must be classified as reconstruction and must meet the following requirements: (A) Any reconstruction of components of the means of egress must comply with the applicable requirements of (d) of this subchapter, except for the following components, which must comply with division 9 of this subchapter. signs. (i) (ii) (iii) illumination of means of egress; emergency lighting of means of egress; or marking of means of egress, including exit (B) If the total rehabilitation work area classified as reconstruction on any one floor exceeds 50 percent of the total area of the floor, all means of egress components on that floor identified in paragraph (4)(A)(1)-(3) of this subsection must comply with division 9 of this subchapter. (C) If the total rehabilitation work area classified as reconstruction exceeds 50 percent of the total building area, all means of egress components in the building identified in paragraph (4)(A)(1)-(3) of this subsection must comply with division 9 of this subchapter. (D) All other work classified as reconstruction must meet, at a minimum, the requirements for modification according to paragraph (3) of this subsection and renovation according to paragraph (2) of this subsection. (5) A change in the purpose or level of activity within a facility that involves a change in application of the requirements of this subchapter must be classified as a change of use and must comply with division 9 of this subchapter. (6) A change in the use of a structure or portion of a structure must comply with division 9 of this subchapter. (7) An increase in the building area, aggregate floor area, building height, or number of stories of a structure must be classified as an addition and must comply with division 9 of this subchapter. (c) If an existing licensed facility plans a building rehabilitation that includes a change in the facility capacity, HHSC must reevaluate the ratio of bathing units to meet minimum standards and the square footage of dining and living areas to meet a minimum of 19 square feet per bed. Conversion of existing living, dining, or activity areas to resident bedrooms must not reduce these functions to a total area of less than 19 square feet per bed. The facility's registered or licensed dietitian or architect having knowledge in the design of food service operations must reevaluate the dietary department. This reevaluation must be provided to HHSC. (d) A rehabilitation to an occupied building that involves exitways or exit doors must be accomplished without compromising the exits or creating a dead end situation at any time. HHSC may approve temporary exits, or the facility must relocate residents until construction blocking the exit is completed. The facility must maintain other basic safety features such as fire alarms, sprinkler systems, and emergency power. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. PROPOSED RULES December 22, TexReg 7349

112 Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) DIVISION 9. FACILITIES LICENSED ON OR AFTER APRIL 2, TAC The new sections are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The new sections implement Texas Government Code, and Texas Health and Safety Code, Construction Standards for New Nursing Facilities. (a) This section applies to a facility licensed on or after April 2, The requirements of NFPA 101 and other applicable NFPA codes and standards referenced in NFPA 101 will apply unless otherwise noted or modified in this section: (1) Buildings covered by this section must comply with the New Health Care Occupancies chapter of NFPA 101. (2) In addition to NFPA 101 and the standards referenced therein, a facility covered by this division is subject to the codes, standards, and requirements established by the following: UL; ASHRAE; and ASTM. (b) All applicable local, state, or national codes and ordinances must be met as determined by the authority having jurisdiction for those codes and ordinances and by HHSC. Any conflicts must be made known to HHSC for appropriate resolution. (c) The design of structural systems must be done by or under the direction of a professional engineer who is currently licensed by the Texas Board of Professional Engineers. (d) Nothing in this division may be construed as prohibiting a better type of building or construction, more space, services, features, or greater degree of safety than the minimum requirements Location and Site for New Facilities. (a) Any conditions considered to be a fire, safety, or health hazard will be grounds for disapproval of a site by HHSC. A new facility may not be built in an area designated as a floodplain of 100 years or less. (b) Site grades must provide for positive surface water drainage so that there will be no ponding or standing water on the designated site. This does not apply to local government requirements for engineered controlled run-off holding ponds. (c) A new building or addition must be set back at least 10 feet from the property lines except as otherwise approved by HHSC. (d) Exit doors from the building must not open directly onto a drive for vehicular traffic, but must be set back at least six feet from the edge of the drive, measured from the end of the building wall in the case of a recessed door, to prevent accidents due to lack of visual warning. (e) Walks must be provided as required from all exits and must be of non-slip surfaces free of hazards. Walks must be at least 48 inches wide except as otherwise approved. Ramps must be used in lieu of steps where possible for the individuals with a disability and to facilitate bed or wheelchair removal in an emergency. (f) Outdoor activity, recreational, and sitting spaces must be provided and appropriately designed, landscaped, and equipped. Some shaded or covered outside areas are needed. These areas must be designed to accommodate residents in wheelchairs. (g) Each facility must have parking space to satisfy the needs of residents, employees, staff, and visitors. In the absence of a formal parking study, each facility must provide for a ratio of at least one parking space for every four beds in the facility. This ratio may be reduced slightly in areas convenient to public parking facilities. Space must be provided for emergency and delivery vehicles. A parking space must not block or inhibit egress from the outside exit doors. Parking spaces and drives must be at least ten feet away from windows in bedrooms, dining areas, and living areas. (h) Barriers must be provided for resident safety from traffic or other site hazards by the use of appropriate methods such as fences, hedges, retaining walls, railings, or other landscaping. These barriers must not inhibit emergency egress to a safe distance away from the building. (i) Open or enclosed courts with resident rooms or living areas opening upon them must not be less than 20 feet in the smallest dimension unless otherwise approved by HHSC. Nonparallel wings forming an acute angle may have a maximum of two windows in each wing that are separated by a distance less than 20 feet, but not less than ten feet, when measured between the nearest edges of the opposing openings. (j) Auxiliary buildings located within 20 feet of the main building must meet the applicable requirements in NFPA 101 for separation and construction. (k) Other buildings on the site must meet the appropriate occupancy section or separation requirements in NFPA 101. (l) Fire service and access must be as follows: (1) The facility must be served by a paid or volunteer fire department. The fire department must provide written assurance to HHSC that the fire department can respond to an emergency at the facility within an appropriately prompt time for the travel conditions involved. (2) The facility must be served by an adequate water supply that is satisfactory and accessible for fire department use as determined by the fire department serving the facility and by HHSC. (3) There must be at least one readily accessible fire hydrant located within 300 feet of the building. The hydrant must be on a minimum six inch service line. The hydrant, its location, and service line, or equivalent must be as approved by the local fire department and HHSC. (4) The building must have suitable all-weather fire lanes as required by local fire authorities or, if no local fire authority has jurisdiction, by HHSC. As a minimum, the fire department must be able to access two sides of the building. (m) Enclosed exterior spaces, such as fenced areas, that are in a means of egress to a public way must meet the requirements 42 TexReg 7350 December 22, 2017 Texas Register

113 of (a)(6) of this chapter (relating to Standards for Certified Alzheimer's Facilities) General Considerations for New Facilities. (a) Services. A nursing facility must either contain the elements described in this section or the facility must indicate the manner in which the needed services are to be made available. (b) Sizes. The sizes of the various departments will depend upon program requirements and the organization of services within the facility. Some functions requiring separate spaces or rooms in these minimum requirements may be combined, provided that the resulting plan will not compromise the best standards of safety and of medical and nursing practices. (c) Shared or combined services. A nursing facility may be operated together with a hospital and may share administration, food service, recreation, janitor service, and physical therapy facilities, but must have clearly identifiable physical separations, such as a separate wing or floor. A nursing facility with different levels of care will require identifiable physical separations. Combined attendant or nurses' stations and medication room areas will require some separating construction features. An assisted living facility may be operated together with a nursing facility and may share food and laundry service, but must have clearly identifiable physical separations such as a separate wing, or floor, and each facility must independently meet all other requirements within their licensed areas. (d) Exterior finishes. Unless otherwise approved by HHSC, the exterior finish material of a building classified as fire resistive or protected noncombustible construction, per NFPA 220, must have a flame spread index no greater than 25 and a smoke developed index no greater than 450, when tested according to ASTM E84 or UL 723. All others exterior materials must have a flame spread index no greater than 75 and a smoke developed index no greater than 450. Items of trim may be of combustible material subject to approval by HHSC. Roof covering assemblies must have a Class A or Class B rating, when tested according to ASTM E108 or UL 790. (e) Accessibility requirements. The facility must comply with accessibility requirements for individuals with disabilities in the revised regulations for Title II and III of the Americans with Disabilities Act of 1990 at 28 CFR Part 35 and Part 36, also known as the 2010 ADA Standards for Accessible Design, and the TAS adopted by the Texas Department of Licensing and Regulation (TDLR) at 16 TAC Chapter 68. A facility must register plans for new construction, substantial renovations, modifications, and alterations with TDLR, Attn: Elimination of Architectural Barriers Program, and comply with the TAS Architectural Space Planning and Utilization for New Facilities. (a) Resident bedrooms. Each resident bedroom must meet the following requirements: (1) The maximum room capacity must be two residents. (2) Minimum bedroom area, excluding toilet rooms, closets, lockers, wardrobes, alcoves, or vestibules, must be 100 square feet in single occupancy rooms and 80 square feet per bed in multi-bed rooms. (3) The minimum allowable room dimension is ten feet. The room must be designed to provide at least 36 inches between beds and 24 inches between any bed and the adjacent wall. (4) Each room must have at least one operable outside window arranged and located so that it can be easily opened from the inside without the use of tools or keys. The maximum allowable sill height must not exceed 36 inches above the floor. All operable windows must have insect screens. The minimum area of window in each bedroom must equal at least 16 square feet or 8.0% of the gross floor area of the room, whichever is larger. Operable window sections may be restricted to not more than six nor less than four inches for security or safety reasons. (5) Each room must have general lighting, wall-mounted bed reading lights, and night lighting. The night light must be switched just inside the entrance to each resident room with a silent type switch, must be a recessed wall mounted fixture just inside the entry door to the room and must not be obstructed by the door or furniture, unless otherwise approved by HHSC. The light providing general illumination must be switchable at the door of the resident room for use of staff and residents. A durable non-glare reading light with an opaque front panel securely anchored to the wall, integrally wired, must be provided above each resident bed. The switch for this reading light must be within reach of a resident in the bed. (6) The minimum number of power receptacles at a resident bed location shall be determined based on the risk assessment required by NFPA 99 and (i) of this subchapter (relating to General Requirements), as follows: (A) All receptacles must be listed and identified as "hospital grade"; (B) Four of the required receptacles must be provided beside the head of each bed; (C) No fewer than eight receptacles must be provided within the patient care vicinity, as defined in NFPA 99; (D) If the failure of patient-care-related electrical equipment is likely to cause major injury or death to a resident, no fewer than fourteen receptacles must be provided within the patient care vicinity. (E) Additional receptacles, beyond the minimum quantities above, must be provided to ensure the electrical needs of all residents living in the bedroom are met, including power for TV, radio, razors, hairdryers, clocks, or as required by NFPA 99 and NFPA 70. (7) Each resident bedroom must have direct access to a bathroom without entering the general corridor area. The bathroom must serve no more than one resident room and must include, at least, a lavatory and toilet. (8) Each resident must have a bed with a comfortable mattress, a bedside stand with at least two enclosed storage spaces, a dresser, and closet or wardrobe space providing privacy for clothing and personal belongings. Private clothes storage space must provide at least 22 inches of lineal hanging space per bed and have closable doors. Chairs and space must be provided for use by residents and visitors. (9) Each room must open onto an exit corridor and must be arranged for convenient resident access to dining, living, and bathing areas. To ensure a direct view from nurses' stations, resident room doors must not be recessed into the corridor wall more than four feet. Alcoves must meet applicable accessibility standards for a front approach to the door, and handrails must be provided in the alcove. If an alcove exceeds four feet in depth, it is a corridor and must meet all requirements for corridors, including direct view from a nurses' station, minimum width of the corridor, and provisions for handrails. (10) Visual privacy, such as cubicle curtains, must be available for each resident in multi-bed bedrooms. Design for privacy must not restrict resident access to the entry, lavatory, or toilet, nor may it restrict bed evacuation or obstruct sprinkler flow coverage. PROPOSED RULES December 22, TexReg 7351

114 (11) At least one noncombustible wastebasket must be provided in each bedroom. (12) See the requirements in (d)(4) of this subchapter (relating to Electrical Requirements for New Facilities) for nurse call systems. (13) Bedrooms must be identified with a raised or recessed unique number placed on or near the door. Refer to TAS for information about signs. (14) Locks on bedroom doors are permitted when they meet definite resident needs. (A) Situations in which locks may be necessary include the following: (i) married couples whose rights of privacy could be infringed upon unless bedroom door locks are permitted; (ii) residents for whom the attending physician wants bedroom door locks to enhance the residents' sense of security; and (iii) residents for whom restraint through confinement to their own rooms is necessary for their own or other persons' safety. (B) In situations such as those listed in paragraph (14)(A) of this subsection, the following guidelines must be met: (i) bedroom door locks for other than restraining purposes must be of the type which the occupant can unlock at will from inside the room; (ii) all bedroom door locks must be of the type which can be unlocked from the corridor side; (iii) attendants must carry keys which will permit ready access to the locked bedrooms when entrance becomes necessary; (iv) bedroom doors which are locked for resident restraining purposes must be dutch doors, with only the lower section locked. The upper part of the doorway must be open to permit visual supervision of the residents from the corridor. The dutch door must be easily unlocked by nurses and attendants. Resident restraints of any nature cannot be applied without orders from the attending physician. (v) locking of bedroom doors by residents for privacy or security or by nursing facility staff for restraint will not be permitted except when specifically included in the attending physician's written orders or authorized by the nursing facility administrator. (15) Vacant bedrooms must not be used for hazardous activities or hazardous storage, unless specifically approved by HHSC in writing. (b) Nursing service areas. A nursing service area includes a nurses' station and other areas described in this subsection and must be located in or readily available to each nursing unit. The size and disposition of each service area will depend upon the number and types of beds to be served. Each service area may be arranged and located to serve more than one nursing unit, but at least one service area must be provided on each nursing floor. The maximum allowable distance from a resident room door to a nurses' station is 150 feet. The following requirements are applicable to services areas: (1) Nurses' stations must be provided with space for nurses' charting, doctors' charting, and storage for administrative supplies. Nurses' stations must be located to provide a direct view of resident corridors. A nurses' station has a direct view of a resident corridor if a person can see down the corridor from a point within 24 inches of the outside of the nurses' station counter or wall. When a nurses' station does not provide a direct view of a resident corridor, an auxiliary station complying with the following guidelines must be provided. (A) The auxiliary station must be staffed by nursing personnel during all shifts. (i) More than one auxiliary station may be assigned to a designated nurses' station, regardless of the distance between stations. (ii) The nurse call system for resident corridors monitored by the auxiliary station must report to the auxiliary station. (iii) Each auxiliary station must meet the emergency electrical requirements for a nurse's station, including electrical receptacles and emergency lighting. (iv) If a required auxiliary station does not already exist and the facility must establish a new auxiliary station, all applicable standards, particularly those pertaining to the physical plant and NFPA 101, must be observed. (B) In addition to the required normal and emergency illumination, the facility must keep on hand and readily available to night staff no less than one working flashlight at each nurses' station. staff. (2) Lounge and toilet room must be provided for nursing (3) Lockers or security compartments must be provided for the safekeeping of personal effects of staff. These must be located convenient to the duty station of personnel or in a central location. (4) A clean utility room must contain a work counter, sink with high-neck faucet with lever controls, and storage facilities and must be part of a system for storage and distribution of clean and sterile supply materials. (5) A soiled utility room must contain a water closet or equivalent flushing rim fixture, a sink large enough to submerge a bedpan with spray hose and high-neck faucet with lever controls, work counter, waste receptacle, and linen receptacle. A soiled utility room must be part of a system for collection and cleaning or disposal of soiled utensils or materials. A separate hand-washing sink must be provided if the bedpan disinfecting sink cannot normally be used for hand-washing. (6) Provision must be made for convenient and prompt 24-hour distribution of medication to residents. The medication preparation room must be under the nursing staff's visual control and contain a work counter, refrigerator, sink with hot and cold water, and locked storage for biologicals and drugs and must have a minimum area of 50 square feet. The minimum dimension allowed is five feet six inches. An appropriate air supply must be provided to maintain adequate temperature and ventilation for safe storage of medications. For purposes of storage of unrefrigerated medications, the room temperature must be maintained between 59 degrees and 86 degrees Fahrenheit. (7) Provision must be made for separate closets or room for clean linens. Corridors must not be used for folding or cart storage. Storage rooms must be located and distributed in the building for efficient access to bedrooms. (8) A soiled linen rooms must meet the requirements in subsection (l)(2)(a) of this section. (9) A nourishment station is required and must contain a sink equipped for hand-washing, equipment for serving nourishment 42 TexReg 7352 December 22, 2017 Texas Register

115 between scheduled meals, refrigerator, and storage cabinets. Ice for residents' service and treatment must be provided only by icemaker units. This station may be furnished in a clean utility room. (10) An equipment storage room must be provided for equipment such as intravenous stands, inhalators, air mattresses, and walkers. (11) Parking spaces for stretchers and wheelchairs must be located out of the path of normal traffic. (c) Residents' bathing and toilet facilities. The following requirements are applicable to bathing and toilet facilities: (1) Bathtubs or showers must be provided at the rate of one for each 20 beds which are not otherwise served by bathing facilities within residents' rooms. At least one bathing unit must be provided in each nursing unit. Each tub or shower must be in an individual room or enclosure which provides space for the private use of the bathing fixture, for drying and dressing, including an accessible dressing bench, and for a wheelchair and an attendant. Each general-use bathing room must be provided with at least one water closet in a stall, room, or area for privacy, and one lavatory. A bathing room must be located conveniently to the bedroom area it serves and must not be more than 100 feet from the farthest bedroom. (2) At least 50% of bathrooms and toilet rooms, fixtures, and accessories must be designed and provided to meet criteria under the Americans with Disabilities Act for individuals with disabilities, unless otherwise approved by HHSC. (3) All rooms containing bathtubs, sitz baths, showers, and water closets, used by residents must be equipped with doors and hardware that permits access from the outside in any emergency. (4) Bathing areas must be provided with safe and effective auxiliary or supplementary heating. Bathing areas must be free of drafts and must have adequate exhaust ducted to the outside to minimize excess moisture retention and resulting mold and mildew problems. (5) Tubs and showers must be provided with slip-proof bottoms. (6) Lavatories and hand-washing facilities must be securely anchored to withstand an applied downward load of not less than 250 pounds on the front of the fixtures. (7) Provision must be made for sanitary hand drying and toothbrush storage at lavatories. There must be paper towel dispensers or separate towel racks and separate toothbrush holders. (8) Mirrors must be arranged for convenient use by residents in wheelchairs as well as by residents in a standing position, and the minimum size must be 15 inches in width by 30 inches in height, or tilt type. (9) Rooms with toilets must be provided with effective forced air exhaust ducted to the exterior to remove odors. Ducted manifold systems are recommended. (10) Floors, walls, and ceilings must have nonabsorbent surfaces, be smooth, and be easily cleanable. (d) Disposal facilities. A policy and procedure for the safe and sanitary disposal of special waste must be provided. Space and facilities must be provided for the sanitary storage of waste by incineration, mechanical destruction, compaction, containerization, removal, or by a combination of these techniques. (e) Resident living areas. The following requirements are applicable to resident living areas: (1) Social-diversional spaces such as living rooms, dayrooms, lounges, and sunrooms, must be provided on a sliding scale as follows: Figure: 40 TAC (e)(1) (2) If a required way of exit, or a service way, is through a living or dining area, a pathway equal to the corridor width must be deducted for calculation purposes and discounted from that area. These exit pathways must be kept clear of obstructions. (3) Each resident living room and dining room must have at least one outside window. The window area must be equal to at least 8.0% of the total room floor area. Sky-lighting may be used to fulfill one-half of the 8.0% minimum area. (4) Open or enclosed seating space must be provided within view of the main nurses' station that will allow furniture or wheelchair parking that does not obstruct the corridor way of egress. (f) Dining space. Dining space must be adequate for the number of residents served, but no less than ten square feet per resident bed. (g) Dietary facilities. The following requirements are applicable to dietary facilities: (1) A main or dietary kitchen must be as follows: (A) A kitchen will be evaluated on the basis of its performance in the sanitary and efficient preparation and serving of meals to residents. Consideration will be given to planning for the type of meals served, the overall building design, the food service equipment, the arrangement, and the work flow involved in the preparation and delivery of food. Plans must include a large-scale detailed kitchen layout designed by a registered or licensed dietitian or architect having knowledge in the design of food service operations. (B) Kitchens must be designed so that room temperature at summertime peak load will not exceed a temperature of 85 degrees Fahrenheit measured at the five-foot level. The amount of supply air must take into account the large quantities of air that may be exhausted at the range hood and dishwashing area. (C) Operational equipment must be provided as planned and scheduled by the facility consultants for preparing and serving meals and for refrigerating and freezing of perishable foods, as well as equipment in, or adjacent to, the kitchen or dining area for producing ice. (D) Facilities for washing and sanitizing dishes and cooking utensils must be provided. These facilities must be designed based on the number of meals served and the method of serving, that is, use of permanent or disposable dishes. The kitchen must contain a multi-compartment sink large enough to immerse pots and pans. A mechanical dishwasher is required for washing and sanitizing dishes. Separation of soiled and clean dish areas must be maintained, including air flow. (E) A vegetable preparation sink must be provided, and it must be separate from the pot sinks. (F) A supply of hot and cold water must be provided. Hot water for sanitizing purposes must be 180 degrees Fahrenheit or the manufacturer's suggested temperature for chemical sanitizers. For mechanical dishwashers, the temperature measurement is at the manifold. (G) A kitchen must be provided with a hand-washing lavatory in the food preparation area with hot and cold water, soap, paper towel dispenser, and waste receptacle. The dish room area must have ready access to a hand-washing lavatory. PROPOSED RULES December 22, TexReg 7353

116 (H) Staff rest room facilities with lavatory must be directly accessible to kitchen staff without traversing resident use areas. A facility must provide a vestibule so the rest room door does not open directly into the kitchen. (I) Janitorial facilities must be provided exclusively for the kitchen and must be located in the kitchen area. (J) Nonabsorbent smooth finishes or surfaces must be used on kitchen floors, walls, and ceilings. These surfaces must be capable of being routinely cleaned and sanitized to maintain a healthful environment. Counter and cabinet surfaces, inside and outside, must also have smooth, cleanable, relatively nonporous finishes. (K) Operable windows must have insect screens provided. (L) Doors between kitchen and dining or serving areas must have a safety glass view panel. (M) A garbage can or cart washing area with drain and hot water must be provided. (N) Floor drains must be provided in the kitchen and dishwashing areas. (O) Vapor removal from cooking equipment must be designed and installed in accordance with NFPA 101. (P) Grease traps must be provided in compliance with local plumbing code or other nationally recognized plumbing code. (2) Food storage areas must be as follows: (A) Food storage areas must provide for storage of a seven-day minimum supply of nonperishable foods at all times. (B) Shelves must be adjustable wire type. Walls and floors must have a nonabsorbent finish to provide a cleanable surface. No foods may be stored on the floor; dollies, racks, or pallets may be used to elevate foods not stored on shelving. (C) Dry food storage must have an effective venting system to provide for positive air circulation. (D) The maximum room temperature for food storage must not exceed 85 degrees Fahrenheit at any time. The measurement must be taken at the highest food storage level but not less than five feet from the floor. (E) Food storage areas may be located apart from the food preparation area as long as there is space adjacent to the kitchen for necessary daily usage. (3) An auxiliary serving kitchen not contiguous to a food preparation or serving area must be as follows: (A) If a service area other than the kitchen is used to dispense food, it must be designated as a food service area and must have equipment for maintaining required food temperatures while serving. (B) Separate food service areas must have hand-washing facilities as a part of the food service area. (C) Finishes of all surfaces, except ceilings, must be the same as those required for dietary kitchens or comparable areas. See paragraph (1)(J) of this subsection. area: (h) Administrative and public areas. (1) The following elements must be provided in the public (A) The entrance must be at grade level, sheltered from the weather, and able to accommodate wheelchairs. A drive-under canopy must be provided for the protection of residents or visitors entering or leaving a vehicle. The drive-under canopy may be a secondary entrance. (B) The lobby, which may also be designed to satisfy a portion of the minimum area required for resident living room space, must include: kept available; (i) storage space for wheelchairs if more than one is (ii) a reception or information area, which may be adjacent to the lobby if the location is obvious; (iii) waiting space; (iv) public toilet facilities for individuals with disabilities, which may be adjacent to the lobby; (v) at least one public access telephone, installed to meet standards under the Americans with Disabilities Act; and (vi) a drinking fountain, which may be provided in a common public area and at least one of which must be installed to meet standards under the Americans with Disabilities Act. area: (2) The following must be provided in the administrative (A) General or individual offices must be provided for business transactions, medical and financial records, administrative and professional staff, and for private interviews relating to social service, credit, and admissions. (B) A multipurpose room must be provided for conferences, meetings, and health education purposes including facilities for showing visual aids. (C) Storage and work area for office equipment and supplies must be provided and accessible to the staff using such items. (3) Toilet facilities for the disabled must be available in the building. (i) Physical therapy facilities. (1) Physical therapy facilities must be provided if required by the treatment program. The facilities stated in subparagraph (B) of this paragraph and paragraph (2)(C)-(E) of this subsection may be planned and arranged for shared use by occupational therapy residents and staff if the treatment program reflects this sharing concept. Physical therapy facilities must include the following: (A) Provision for privacy at each individual treatment area; hand-washing facilities, one lavatory or sink may serve more than one cubicle; and facilities for the collection of soiled linen and other material that may be used in the therapy. (B) Residents' dressing areas with accessible benches, showers, lockers, and toilet rooms if the therapy is such that these would be needed at the area. (2) Physical therapy facilities may also include the following: (A) treatment areas with space and equipment for the therapies provided; (B) an exercise area; (C) storage for clean linen, supplies, and equipment used in therapy; (D) service sink located near therapy area; and 42 TexReg 7354 December 22, 2017 Texas Register

117 (E) wheelchair and stretcher storage. (j) Occupational therapy facilities. Occupational therapy facilities must be provided if required by the treatment program. (1) An activities area with a sink or lavatory and facilities for collection of waste products prior to disposal must be provided. (2) Storage for supplies and equipment used in the therapy must be provided. (k) Personal grooming area, such as a barber or beauty shop. A separate room with appropriate equipment must be provided for hair care and grooming needs of residents in facilities with over 60 beds. (l) Laundry and linen services. (1) On-site processing must be as follows: (A) Because of the high incidence of fires in laundries, it is highly recommended that the laundry be in a separate building 20 feet or more from the main building. If the laundry is located within the main building it must be separated by minimum one-hour fire resistance-rated construction to structure above, and sprinklered, and must be located in a remote area away from resident sleeping areas. Access doors must be from the exterior or interior nonresident use area, such as a service corridor, that is separated from the resident area. (B) If linen is to be processed on the site, the following must be provided: (i) A soiled linen receiving, holding, and sorting room with a rinse sink. This area must have a floor drain and forced exhaust to the exterior which must operate at all times there is soiled linen being held in the area. (ii) A laundry processing room with equipment which can process seven days' worth of laundry within a regularly scheduled work week. Hand-washing facilities must be provided. The washer area must have: (I) a floor drain; (II) storage for laundry supplies; (III) a clean linen inspection and mending room or area and a folding area; room or area; (IV) a clean linen storage, issuing, or holding (V) a janitors' closet containing a floor receptor or service sink and storage space for housekeeping equipment and supplies; and sanitizing and washing facilities and a storage area for carts. (VI) (C) Soiled and clean operations must be planned to maintain sanitary flow of functions as well as air flow. If carts containing soiled linens from resident rooms are not taken directly to the laundry area, intermediate holding rooms must be provided and located convenient to resident bedroom areas. (D) Laundry areas must have adequate air supply and ventilation for staff comfort without having to rely on opening a door that is part of the fire wall separation. (E) Provisions must be made to exhaust heat from dryers and to separate dryer make-up air from the habitable work areas of the laundry. (2) For off-site linen processing, the following must be provided on the premises: (A) a soiled linen holding room with adequate forced exhaust ducted to the exterior; (B) clean linen receiving, holding, inspection, sorting or folding, and storage rooms; and (C) sanitizing facilities and storage area for carts. (3) Resident-use laundry, if provided, must be limited to not more than one residential type washer and dryer per laundry room. This room must be classified as a hazardous area according to NFPA 101. (m) General storage. The following requirements are applicable to general storage facilities: (1) A general storage room must be provided as needed to accommodate the facility's needs. It is recommended that a general storage area provide at least two square feet per resident bed. This area would be for items such as extra beds, mattresses, appliances, and other furnishing and supplies. (2) Storage space with provisions for locking and security control must be provided for residents' personal effects which are not kept in their rooms. (n) Janitors' closet. In addition to the janitors' closet called for in certain departments, a sufficient number of janitors' closets must be provided throughout the facility to maintain a clean and sanitary environment. These must contain a floor receptor or service sink and storage space for housekeeping equipment and supplies. (o) Maintenance, engineering service, and equipment areas. Space and facilities for adequate preventive maintenance and repair service must be provided. The following spaces are needed and it is suggested that these be part of a separate laundry building or area: (1) A storage area for building and equipment maintenance supplies, tools, and parts must be provided. (2) A space for storage of yard maintenance equipment and supplies, including flammable liquids bulk storage, must be provided separate from the resident-occupied facility. (3) A maintenance and repair workshop of at least 120 square feet and equipment to support usual functions is recommended. (4) A suitable office or desk space for the maintenance staff is recommended. This space may be located within the repair shop area with space for catalogs, files, and records. (p) Oxygen. The storage and use of oxygen and oxygen equipment must meet applicable NFPA standards for gas equipment, including NFPA 99. Piped medical gas and vacuum systems must comply with (e) of this subchapter (relating to Mechanical Requirements for New Facilities) Exit Provisions for New Facilities. Exit provisions, including doors, corridors, stairways, other exit-ways, locks, and other applicable items must conform to the requirements of NFPA 101 concerning means of egress and to this section to ensure that residents can be rapidly and easily evacuated from the building at all times, or from one part of the building to a safe area of refuge in another part of the building. Exit provisions are as follows: (1) Bedroom space arrangement and doors and corridors must be designed for evacuation of bedfast residents by means of rolling the bed to a safe place in the building or to the outside. (2) Public assembly rooms, common living rooms, dining rooms, and other rooms with a capacity of 50 or more persons or greater than 1,000 square feet in area must have two means of egress remote PROPOSED RULES December 22, TexReg 7355

118 from each other. Out-swinging doors with panic hardware must be provided for these egress doors. (3) Exit doors and ways of egress must be maintained clear and free for use at all times, except as permitted by NFPA 101. Furnishings, equipment, carts, and other obstacles must not be left to block egress at any time, except as permitted by NFPA 101. (4) Steps in interior ways of egress are prohibited. If changes of elevation are necessary within ways of egress, approved ramps with a maximum slope of one unit of rise to 12 units of run must be provided. (5) Doors in means of egress must be as follows: (A) Locking hardware or devices which are capable of preventing or inhibiting immediate egress must not be used in any room or area that can be occupied. (B) A latch or other fastening device on an exit door must be provided with a knob, handle, panic bar, or similar releasing device. The method of operation must be obvious in the dark, without use of a key, and operable by a well-known, one-action operation that will easily operate with normal pressure applied to the door or to the device toward the exterior. Locking hardware which prevents unauthorized entry from the outside is permissible. Self-closing devices and permanently mounted hold-open devices to expedite emergency egress and prevent accidental lock-out must be provided for exterior exit doors. (C) No screen or storm door may swing against the direction of exit travel when main doors are required to swing out. (D) To aid in control of wandering residents, buzzers or other sounding devices may be used to announce the unauthorized use of an exit door. Other methods include approved emergency exit door locks or fencing with a gate outside of exit doors which enclose a space large enough to allow the space to be an exterior area of egress and refuge away from the building. (E) Inactive leaves of double doors may have easily accessible and easily operable bolts if the active leaf is 44 inches wide, where permitted by NFPA 101. Center mullions are prohibited. (F) Resident baths or toilets having privacy locks will require that keys or devices for opening the doors are kept readily available to the staff. (G) Folding doors must not be used in exit corridors or other means of egress. Sliding doors, when permitted by NFPA 101, may be used as secondary doors from residents' bedrooms to grade or to a balcony, or in certain other areas, when permitted by NFPA 101. Corridor doors to rooms must swing into the room or be recessed so as not to extend into the corridor when open; however, doors ordinarily kept closed may be excepted. (6) Horizontal exits, if provided, must be according to NFPA 101. (7) Areas outside of exterior exit or discharge doors must be as follows: (A) Provision must be made to facilitate continuation of emergency egress away from a building for a reasonable distance beyond the outside exit door, especially for movement of non-ambulatory residents in wheelchairs and beds. Any condition which may retard or halt free movement and progress outside the exit doors will not be allowed. Ramps must be used outside the exit doors in lieu of steps whenever possible. (B) The landing outside of each exit door must be essentially the same elevation as the interior floor and level for a distance equal to the door width plus at least four feet. Generally, the difference in floor elevation at an exterior door must not be over 1/2 inch with the outside slope not to exceed 1/4 inch per foot sloping away from the door for drainage on the exterior. In locations north of the +20 Fahrenheit Isothermal Line as defined in the ASHRAE Handbook of Fundamentals, the landing outside of all exit doors must be protected from ice build-up which would prohibit the door from opening or would be a slip hazard. (C) Emergency egress lighting immediately outside of exit doors is required as a part of the building emergency lighting system. Photocell devices may be used to turn lights off during daylight hours. (8) The requirements of an emergency lighting system must be in accordance with of this division (relating to Electrical Requirements for New Facilities) Smoke Compartments (Subdivision of Building Spaces) for New Facilities. (a) Smoke compartments must be as described in NFPA 101 and in this section. (b) A facility must provide an exit sign on each side of corridor smoke barrier doors, unless otherwise directed by HHSC. (c) The metal frame for a vision panel in a smoke barrier door must be steel, unless otherwise approved by HHSC. The bottom of a vision panel must be located no more than 43 inches above the floor. A facility must provide push or pull hardware on pairs of opposite swinging, double egress smoke barrier doors in corridors. Door leaves must align in the closed position. (d) A facility must provide prominent signs on each side of smoke barrier walls in concealed spaces such as attics. The signs must state: "Warning: Smoke/fire barrier. Properly seal all openings." (e) A facility must provide reasonable access to concealed smoke barrier walls for maintaining smoke dampers, where provided, so that walls and dampers can periodically be visually checked for conformance by facility staff, service personnel, and inspectors. A facility must provide access to both sides of the wall, and to all parts, end-to-end and top-to-bottom. A facility must provide prefabricated metal ceiling access panels, or their equivalent, that are at least 20 inches wide by 20 inches long. Ceiling access panels must be fire resistance-rated if required to maintain the fire resistance rating of a roof-ceiling or floor-ceiling assembly. (f) A facility should design air systems to avoid ducts that penetrate smoke barrier walls, thus eliminating the need for smoke dampers which are often a problem to maintain in proper working condition Fire Protection Systems for New Facilities. (a) Fire protection systems include detection, alarm, and communication systems; fixed automatic extinguishment systems; and portable extinguishers. These systems must meet the requirements of NFPA 101, and of this section. Components must be compatible and listed by a nationally recognized testing laboratory for the intended use. (b) Fire protection systems must meet the requirements of all applicable NFPA standards, such as NFPA 72 for alarm systems, as referenced in NFPA 101. Wiring and circuitry for alarm systems must meet the applicable requirements of NFPA standards, including NFPA TexReg 7356 December 22, 2017 Texas Register

119 (c) Emergency electrical systems must meet the requirements of this division. (d) A fire alarm system must be installed, maintained, and repaired by an agent having a current certificate of registration from the State Fire Marshal's Office, according to state law. The agent must provide a Fire Alarm Installation Certificate to the facility as required by the State Fire Marshal's Office. (f) A fire alarm system must be designed so that whenever a general alarm is sounded by activation of any device, such as a manual pull, smoke detector, fire sprinkler, or kitchen range hood extinguisher, the following must occur automatically: (1) smoke and fire doors which are held open by approved devices must be released to close; (2) air conditioning or heating distribution fans serving three or more rooms, or any means of egress, must shut down immediately; (3) smoke dampers must close; and (4) the location of an alarm-initiating device must be clearly indicated on the fire alarm control panel and all auxiliary panels. (g) Fire alarm bells or horns must be located throughout the building for audible coverage. Flashing visual alarm lights must be installed to be visible in corridors and public areas, including dining rooms and living rooms, in a manner that will identify exit routes. (h) A master control panel, or a fire alarm annunciator panel providing annunciation of all fire alarm signals, that annunciates the location of all alarm, trouble, and supervisory signals, by zone or device, must be visible at the main nurses' station. Fire alarm system components must be listed as compatible by a nationally recognized testing laboratory. In a zone-based fire alarm system alarm and trouble zones must align with smoke compartments and with floors in multi-story buildings. (i) A remote annunciator panel, indicating location of alarm initiation and trouble indication, by zone or device, must be located at auxiliary or secondary nurses' stations on each floor, and must indicate the alarm condition of adjacent zones and the alarm conditions at all other nurses' stations. (j) A manual pull station must be provided at all exits, in living rooms and dining rooms, and at or near a nurses' station. (k) The flow and tamper conditions of a sprinkler system must be monitored by the fire alarm system. (l) A kitchen range hood extinguisher, if required by NFPA 101 and this subchapter, must be interconnected with the fire alarm system. This interconnection may report as a separate zone on the fire alarm control panel or may be combined with other initiating devices located in the same zone as the range hood is located. (m) Portable fire extinguishers must be provided throughout the facility as required by NFPA 10 and as determined by the local fire department and HHSC. The following requirements are applicable to fire extinguishers: (1) Extinguishers in resident corridors must be located so the travel distance from any point to an extinguisher does not exceed 75 feet. Water-type extinguishers must have a capacity of at least 2 1/2 gallons. Dry chemical-type extinguishers must be at least 5 pound ABC extinguishers. (2) An extinguisher must be installed on a hanger or bracket supplied with the extinguisher or mounted in an approved cabinet. A recessed cabinet is required for an extinguisher located in a corridor. (3) An extinguisher must be protected from impact or dislodgement. (4) An extinguisher having a gross weight not exceeding 40 pounds must be installed so the top of the extinguisher is located no more than five feet above the floor. An extinguisher having a gross weight greater than 40 pounds must be installed so the top of the extinguisher is located no more than 3-1/2 feet above the floor. In no case may the clearance between the bottom of an extinguisher and the floor be less than four inches. (5) A portable extinguisher provided in a hazardous room must be located as close as possible to the exit door opening and on the latch side Hazardous Areas for New Facilities. (a) Protection from hazardous areas must be as required in NFPA 101, except as required or modified in this section. Gas-fired equipment must not be located in attic spaces, except under the following conditions: (1) the area around the units must have a one-hour fire resistance rating; (2) the enclosure must have sprinkler protection; and (3) combustion and venting air must be ducted from the exterior in properly sized metal ducts (b) Laboratories must be protected according to NFPA 99. (c) Cooking equipment must be protected according to NFPA (d) Doors to hazardous areas must have closers and must be kept closed unless provided with an approved hold-open device such as an alarm activated magnetic hold-open device, as permitted by NFPA 101. Doors must be single-swing type with positive latching hardware. View panels at laundry entrances must be provided and be of materials adequate to maintain the integrity of the door as allowed by NFPA Structural Requirements for New Facilities. (a) Every building and portion of a building must be capable of sustaining all dead and live loads in accordance with accepted engineering practices and standards. (b) Special provisions must be made in the design of buildings in regions where local experience shows loss of life or extensive damage to buildings resulting from hurricanes, tornadoes, earthquakes, or floods. (c) The facility is responsible for employing qualified personnel in the preparation of plan designs and engineering and in the construction of the facility to ensure that all structural components are adequate, safe, and meet the applicable construction requirements. (d) The design of the structural system must be done by or under the direction of a professional structural engineer who is currently licensed by the Texas Board of Professional Engineers according to state law. (e) The parts of the plans, details, and specifications covering the structural design must bear the legible seal of the engineer on the original drawings from which the prints are made. (f) A building must be constructed according to the locally adopted building code. NFPA 101 must be used for fire safety requirements. Discrepancies between the codes must be called to the attention of HHSC for resolution. PROPOSED RULES December 22, TexReg 7357

120 (g) In the absence of a locally-adopted building code, a building must meet the requirements of a nationally recognized model building code. NFPA 101 must be used for fire safety requirements. (h) Each building must be classified as to building construction type for fire resistance rating purposes according to NFPA 220 and NFPA 101. (i) Enclosures of vertical openings between floors must meet NFPA 101. (j) All interior walls, partitions, and roof structure in buildings of fire resistive and noncombustible construction must be according to NFPA 101. (k) Building insulation materials, unless sealed on all sides and edges in an approved manner, must have a flame spread rating of 25 or less when tested according to ASTM E84 or UL Mechanical Requirements for New Facilities. (a) The design of the mechanical systems must be done by or under the direction of a licensed professional mechanical engineer approved by the Texas Board of Professional Engineers to operate in Texas, and the parts of the plans and specifications covering mechanical design must bear the legible seal of the engineer. (1) Building services pertaining to utilities; heating, ventilating, and air-conditioning systems; vertical conveyors; and chutes must be according to NFPA 101. (2) Required plumbing fixtures must be according to NFPA 101 and of this division (relating to Architectural Space Planning and Utilization for New Facilities) in specific use areas. (b) Plumbing. (1) All plumbing systems must be designed and installed according to the requirements of the locally adopted plumbing code. In the absence of a locally-adopted plumbing code, a nationally recognized model plumbing code must be used. Any discrepancy between an applicable code and the requirements of this section must be called to the attention of HHSC for resolution. (2) Supply systems must ensure adequate hot and cold water. In addition to hot water for kitchen and laundry use, a rule-ofthumb for hot water for resident use at 110 degrees Fahrenheit is to provide 6-1/2 gallons per hour per resident. (3) Water must be supplied from a system approved by the Water Supply Division of TCEQ, or from a system regulated by an entity responsible for water quality in that jurisdiction as approved by the Water Supply Division of TCEQ. (4) The sewage system must connect to a system permitted by the Water Quality Division of TCEQ, or to a system regulated by an entity responsible for water quality in that jurisdiction as approved by the Water Quality Division of TCEQ. (5) The minimum ratio of fixtures to residents shall be as required in (c) of this division. (6) For design calculation purposes, resident-use hot water must not exceed 110 degrees Fahrenheit at the fixture. For purposes of conforming to licensure requirements, an operating system providing water from 100 degrees Fahrenheit to 115 degrees Fahrenheit is acceptable. Hot water for laundry and kitchen use must be normally 140 degrees Fahrenheit. Hot water for dish sanitizing must be 180 degrees Fahrenheit. (7) A facility must provide water closets with a seat height 17 inches to 19 inches from the floor for persons with disabilities. (8) Showers for wheelchair residents must not have curbs. Tub and shower bottoms must have a slip-resistant surface. Shower and tub enclosures, other than curtains, must be of tempered glass, plastic, or other safe material. (9) Drinking fountains must not extend into exit corridors. (10) A facility must provide fixture controls easily operable by residents, such as lever-type controls. (11) Plumbing fixtures for residents must be vitreous china or porcelain finished cast iron or steel unless otherwise approved by HHSC. Fiberglass bathing units are acceptable if they have a Class B flame spread rating when tested according to ASTM E84. (12) Hand-washing sinks for staff use must be according to of this division. A facility must provide lavatories adjacent to all water closets. (13) A soiled utility room must be provided with a flushing device, such as a water closet with bedpan lugs; a spray hose with a siphon breaker or similar device, such as a high neck faucet with lever controls; and a deep sink that is large enough to submerse a bedpan. A sterilizer may be used for sanitizing in place of a deep sink. (14) A facility must install a siphon breaker or back-flow preventer with any water supply fixture if the outlet or attachments may be submerged. (15) A facility must provide clean-outs for waste piping lines located so there is the least physical and sanitary hazard to residents. To avoid contamination, clean-outs must open to the exterior, where possible. (16) A facility with a boiler must meet all applicable requirements of Texas Health and Safety Code Chapter 755. (c) Heating, Ventilating, and Air-Conditioning (HVAC) and Exhaust Systems (1) General Requirements. (A) HVAC systems must be designed and installed in accordance with ASHRAE standards, except as may be modified by this section. (B) HVAC systems serving spaces or providing health functions covered by NFPA 99 must be commissioned as required by NFPA 99. (C) HVAC systems must meet the requirements of NFPA 90A and NFPA 99. (D) Mechanical plans must bear a statement verifying that the systems are designed according to NFPA 90A and NFPA 99. (E) All air-supply and air-exhaust systems must be mechanically-operated. (F) Ducts must be of metal or other approved noncombustible material. Cooling ducts must be insulated against condensation. (G) Static pressures of systems must be within limits recommended by ASHRAE and the equipment manufacturer, both upstream and downstream. (2) Heating and Cooling. (A) A facility must provide heating and cooling by a central air conditioning system, or a substantially similar air conditioning system. Air conditioning systems must be designed, installed and functioning to maintain temperatures suitable for resident comfort within all areas used by residents. 42 TexReg 7358 December 22, 2017 Texas Register

121 (B) Design temperatures for heating and cooling must be as required by NFPA 99. (C) A heating system must be able to maintain a temperature of at least 75 degrees Fahrenheit for all areas occupied by residents. For all other occupied areas, a heating system must be able to maintain a temperature of at least 72 degrees Fahrenheit. (D) A cooling system must be able to maintain a temperature of not more than 78 degrees Fahrenheit. (E) Occupied areas generating high heat, such as kitchens, must be provided with a sufficient cool air supply to maintain a temperature not exceeding 85 degrees Fahrenheit at the five-foot level. Supply air volume must be approximately equal to the air volume exhausted to the exterior for these areas. (F) The location and design of air diffusers, registers, and return air grilles must ensure that residents are not in harmful or excessive drafts in their normal usage of the room. (G) In geographic locations or interior room areas where extreme humidity levels are likely to occur for extended periods of time, apparatus for controlling humidity levels with automatic humidistat controls, preferably at 40-60% relative humidity, are recommended as part of central systems. (H) Unvented space heaters and portable heating units must not be used. Heating devices or appliances must not be a burn hazard to residents. (I) Gas-fired Heating Equipment. (i) Systems using liquefied petroleum gas fuel must meet the requirements of the Railroad Commission of Texas and NFPA 58. (ii) A combustion fresh air inlet must be provided to all gas or fossil fuel operated equipment in steel ducts or passages from outside the building according to NFPA 54. Combustion air must be provided through two permanent openings, one commencing within 12 inches of the floor and one commencing within 12 inches of the ceiling. (iii) A room where gas-fired heating equipment is located must be vented to the exterior to exhaust heated ambient air in the room. (3) Ventilation. (A) Air systems must provide for mixing at least 10% outside air for the supply distribution. Blowers for central heating and cooling systems must be designed so that they may run continuously. (B) A facility must locate an outdoor air intake according to NFPA 99 and as far as practical, but not less than 10 feet, from exhaust outlets or ventilating systems, combustion equipment stacks, medical vacuum systems, plumbing vent stacks, or areas which may collect vehicular exhaust and other noxious fumes. (C) Fresh air inlets must be appropriately screened to prevent entry of debris, rodents, and animals. A facility must provide access to such screens for periodic inspection and cleaning to eliminate clogging or air stoppage. (D) A facility must incorporate natural ventilation using windows or louvers, if possible and practical. Windows or louvers must have insect screens. (E) The design of ventilation systems must provide air movement that is from clean to less clean areas. The ventilation systems must be designed and balanced to provide the pressure relationships to adjacent spaces as required by NFPA 99. The installer must furnish and certify a final engineered system air balance report for the completed system. The report must demonstrate the pressure relationships required by NFPA 99. (F) Air supply to food preparation areas must not be from air that has circulated through places such as resident bedrooms and baths. (G) Ventilation rates for all areas of a facility must be as required by NFPA 99. These rates are the minimum acceptable rates, but do not preclude the use of higher ventilation rates. (H) The bottoms of ventilation openings must be at least three inches above the floor of any room. (I) A door protecting a corridor or way of egress must not include an air transfer grille or louver. A corridor must not be used to supply air to or exhaust air from any room except that air from a corridor may be used as make-up air to ventilate a small toilet room, a janitor's closet, or a small electrical or telephone closet opening directly on a corridor, provided the ventilation can be accomplished by door undercuts not exceeding 3/4 inches. (4) Exhaust. (A) A facility must provide forced air exhaust of all room air directly to the outdoors according to NFPA 99. (i) Areas such as laundries, kitchens, and dishwashing areas must exhaust all room air to the outdoors to remove excess heat and moisture and to maintain air flow in the direction of clean to soiled areas. (ii) Unsanitary areas, including janitor's closets, soiled linen areas, soiled workroom and utility areas, and soiled areas of laundry rooms, must exhaust all room air outdoors. (B) All exhaust must be continuously ducted to the exterior. Exhausting air into attics or other spaces is not permitted. Exhaust duct material must be metal. (C) Exhaust hoods, ducts, and automatic extinguishers for kitchen cooking equipment must be according to NFPA 96, when required by NFPA 101. (5) Integration with Building Construction. (A) Smoke compartmentation must meet the requirements of of this division (relating to Smoke Compartments (Subdivision of Building Spaces) for New Facilities). (B) An air system must be designed as much as possible to avoid having ducts passing through fire walls or smoke barrier walls. All openings or duct penetrations in these walls must be according to NFPA 101. (C) A smoke damper at a smoke barrier must close automatically upon activation of the fire alarm system to prevent the flow of air or smoke in either direction, when required by NFPA 101. (D) A duct with a smoke damper must have maintenance panels for inspection. A maintenance panel must be removable without tools. A facility must provide access in the ceiling or side wall to facilitate smoke damper inspection. A facility must identify the location of dampers on the wall or ceiling of the occupied area below. (E) A central air supply system or a system serving a means of egress must automatically and immediately shut down upon activation of the fire alarm system, except when such a system is part of an engineered smoke-removal system approved by HHSC. (6) All ventilation or air-conditioning systems must be equipped with filters as required by NFPA 99. Filters must be of suf- PROPOSED RULES December 22, TexReg 7359

122 ficient efficiency to minimize dust and lint accumulations throughout the system and building, including in supply and return plenums and ductwork. Filters must be easily accessible for routine changing or cleaning. (d) Sprinkler systems. The following requirements are applicable to sprinkler systems: (1) Sprinkler systems must be according to NFPA 13 and this subchapter. (2) The design and installation of sprinkler systems must meet any applicable state laws pertaining to these systems and one of the following criteria: (A) A sprinkler system must be designed by a qualified licensed professional engineer approved by the Texas Board of Professional Engineers to operate in Texas. The engineer must supervise the installation and provide written approval of the completed installation. (B) A sprinkler system must be planned and installed according to NFPA 13 by a firm with a certificate of registration issued by the State Fire Marshal's Office. The RME's license number and signature must be included on the prepared sprinkler drawings. (3) A facility must ensure all sprinkler piping is protected against freezing. The design of freeze protection must minimize the need for dependence on staff action or intervention to provide protection. (e) Piped gas and vacuum systems. A piped medical gas or medical vacuum system, including a piped oxygen system, a vacuum system, or a drive gas system such as a compressed air system, must be designed, installed, operated and managed according to the requirements of NFPA 99 for new health care facilities, and based on the risk category determined by the assessment required by (i) of this subchapter (relating to General Requirements) Electrical Requirements for New Facilities. (a) The design of the electrical systems must be done by or under the direction of a licensed professional electrical engineer approved by the Texas Board of Professional Engineers to operate in Texas, and the parts of the plans and specifications covering electrical design must bear the legible seal of the engineer. (1) Utilities; heating, ventilating, and air-conditioning systems; vertical conveyors; and chutes must meet the requirements of NFPA 101, Chapter 9, Building Service and Fire Protection Equipment. (2) Fire protection systems, including fire alarms, must meet the requirements of of this division (relating to Fire Protection Systems for New Facilities). (3) Lighting and outlets at resident bedrooms must meet the requirements of of this division (relating to Architectural Space Planning and Utilization for New Facilities). (b) Electrical systems. (1) Electrical systems must meet the installation requirements of NFPA 70. (2) Electrical systems must meet the performance requirements of NFPA 99. (3) Branch circuits serving resident bedrooms must meet the requirements of NFPA 99. (4) Essential Electrical System (EES). (A) To provide electricity during an interruption of the normal electric supply, an emergency source of electricity must be provided and connected to certain circuits for lighting and power. All facilities covered by this section must comply with the EES requirements for new health care facilities in NFPA 99, based on the risk category determined by the assessment required by (i) of this subchapter (relating to General Requirements). (i) If the determined risk category is Category 2, as defined in NFPA 99, the EES must meet the requirements for a Type II EES according to NFPA 99. (ii) If the determined risk category is Category 1, as defined in NFPA 99, the EES must meet the requirements for a Type I EES according to NFPA 99. (iii) A Type I EES serving a portion of a facility categorized as Category 1 risk is permitted to also serve a portion of the same facility categorized as Category 2 risk. (iv) Distribution requirements for Type I or Type II EES must be according to NFPA 99. (B) In addition to systems and devices required for the type of EES installed, the following systems and devices must be connected to the appropriate branches of the EES, according to NFPA 99: (i) illumination for the following areas: (I) means of egress, including areas immediately outside of exit doors; (II) nurses' stations; (III) medication rooms; (IV) dining, living, and recreation rooms, including activity rooms; (V) bathing rooms not directly connected to resident bedrooms; (ii) exit signs and exit directional signs as required by NFPA 101; (iii) alarm systems, including fire alarms and alarms required for nonflammable medical gas systems, if installed; (iv) task illumination and selected receptacles at the generator set location; (v) selected duplex receptacles including receptacles in such areas in resident corridors, at each resident bed location, in nurses' stations, and in medication rooms, including biologicals refrigerator; (vi) nurse call systems; (vii) resident room night lights; (viii) a light and receptacle in an electrical room or a boiler room; (ix) elevator cab lighting, control, and communication systems; (x) all facility telephone equipment; (xi) paging or speaker systems, if intended for communication during an emergency. Radio transceivers installed for emergency use must be capable of operating for at least one hour upon total failure of both normal and emergency power. (xii) Heating Equipment to Provide Heating for Resident Bedrooms. A facility must provide heating in resident bedrooms during disruption of the normal power source unless one of the following conditions applies: 42 TexReg 7360 December 22, 2017 Texas Register

123 (I) The outside design temperature is higher than 20 degrees Fahrenheit (-6.7 degrees Celsius); (II) The outside design temperature is lower than 20 degrees Fahrenheit (-6.7 degrees Celsius) and, when selected rooms are provided for the needs of all residents, then only such rooms need be heated. normal power. (III) The facility is served by a dual source of (xiii) A facility must provide throw-over facilities to allow the temporary operation of any elevator for the release of passengers in instances when an interruption of power would result in elevators stopping between floors. (C) The emergency lighting must be automatically in operation within ten seconds after the interruption of the normal power supply. Emergency egress lighting must not be switched. (D) Receptacles and switches connected to emergency power must have red faceplates. (E) The design and installation of emergency motor generators must be according to NFPA 37, NFPA 99, and NFPA 110. (i) Nursing facilities and contiguous or same-site facilities, such as hospitals and assisted living facilities, may be served by the same generating equipment so long as the integrity of the individual facilities' emergency or back-up power systems is not compromised. This permission applies only to the generating equipment and not to automatic or manual transfer switches or to distribution systems. (ii) Generators must be located a minimum of three feet from a combustible exterior building finish and a minimum of five feet from a building opening, if located on the exterior of the building. (iii) A facility must provide a noncombustible protective cover or the protection recommended by the manufacturer when a generator is located on the exterior of the building. (iv) Stored fuel capacity must be sufficient for not less than four hours of required generator operation. (v) Motor generators fueled by public utility natural gas must have the capability to be switched to an alternate fuel source according to NFPA 70. (F) The wiring circuits for the EES must be kept entirely independent of all other wiring and must not enter the same race-ways, boxes, or cabinets according to NFPA 70. (G) A facility must meet the requirements for the administration of the EES, including maintenance and testing of the EES, according to the requirements of NFPA 99 for the type of EES installed, and the requirements of (d) of this subchapter. (5) General Lighting Requirements. General lighting requirements are as follows: (A) All spaces occupied by people, machinery, equipment, approaches to buildings, and parking lots must have lighting. (B) All quality, intensity, and type of lighting must be adequate and appropriate to the space and all functions within the space. (C) Minimum lighting levels can be found in the Illuminating Engineering Society Lighting Handbook, latest edition, but must not be lower than the following. (i) Minimum illumination must be 20-foot candles in resident rooms, corridors, nurses' stations, dining rooms, lobbies, toilets, bathing facilities, laundries, stairways, and elevators. Illumination requirements for these areas apply to lighting throughout the space and are measured at approximately 30 inches above the floor anywhere in the room. (ii) Minimum illumination for over-bed reading lamps, medication-preparation or storage area, kitchens, and nurses' station desks must be 50 foot candles. Illumination requirements for these areas apply to the task performed and are measured on the task. (D) A facility must provide general illumination, with provisions for reduction of light levels at night, in a nursing unit corridor. (E) A facility must provide a basket wire guard or other suitable shield to prevent breakage or contact between combustible materials and exposed incandescent light bulbs, or other high-heat generating lamps, in closets or other similar spaces. (F) Exposed incandescent or fluorescent bulbs are not permitted in food service or other areas where glass fragments from breakage may get into food, medications, linens, or utensils. A facility must protect all fluorescent bulbs with a shield or catcher to prevent bulb drop-out. (6) Receptacles or convenience outlets. (A) Receptacles in bedrooms must meet the requirements in (a)(7) of this division (relating to Architectural Space Planning and Utilization for New Facilities). (B) Duplex receptacles for general use must be installed in corridors spaced not more than 50 feet apart and within 25 feet of ends of corridors. A facility must provide at least one duplex receptacle with emergency electrical service in each resident corridor. (C) Receptacles must be provided with emergency electrical service for essential needs such as medication refrigerators and systems or equipment whose failure is likely to result in major injury or death to a resident. (D) Receptacles in the remainder of the building must be sufficient to serve the present and future needs of residents and equipment. (E) Location of receptacles, horizontally and vertically, should be carefully planned and coordinated with the expected designed use of furnishings and equipment to maximize their accessibility and to minimize conditions such as beds or furniture being jammed against plugs used in the outlets. Exterior receptacles must be an approved waterproof type. (F) (G) A facility must provide ground fault interruption protection at appropriate locations such as at whirlpools and other wet areas according to the NFPA 70. (c) Nurse call systems. (1) A nurse call system consists of power units, annunciator control units, corridor dome stations, emergency call stations, bedside call stations, and activating devices. The units must be compatible and laboratory listed by a nationally recognized testing laboratory for the system and use intended. (2) Each resident bedroom must be served by at least one call station and each bed must be provided with a call switch. Two call switches serving adjacent beds may be served by one call station. Each call entered into the system must activate a corridor dome light above the bedroom, bathroom, or toilet room corridor door, a visual signal at the nurses' station which indicates the room from which the call was placed, and a continuous or intermittent continuous audible signal of PROPOSED RULES December 22, TexReg 7361

124 sufficient amplitude to be clearly heard by nursing staff. The amplitude or pitch of the audible signal must not be such that it is irritating to residents or visitors. The system must be designed so that calls entered into the system may be canceled only at the call station. Intercom-type systems which meet this requirement are acceptable. (3) A nurse call system that provides two-way voice communication must be equipped with an indicating light at each call station which lights and remains lighted as long as the voice circuit is operating. (4) A nurse call emergency switch must be provided for resident use at each resident's toilet, bath, and shower. These switches must be usable by residents using the fixtures and by a collapsed resident lying on the floor. (5) A nurse call system must meet UL 1069 for the core system of power units, annunciator control units, corridor dome lights, emergency call stations, bedside call stations, and activating devices; and (6) An ancillary or supplemental device, including a pocket pager or other portable device, is not required to meet UL Miscellaneous Details for New Facilities. (a) Safety related details. A high degree of safety for the occupants is needed to minimize accidents more apt to occur with the residents in a nursing facility. Consideration must be given to the fact that many have impaired vision, hearing, spatial perception, and ambulation. (1) Hazards such as sharp corners, edges, or unexpected steps must be avoided. (2) Drinking fountains, telephone booths, vending machines, and portable equipment must not restrict corridor traffic or reduce corridor width. (3) Windows must be designed to prevent residents from accidentally falling through the windows. (4) Doors that normally stay open or are frequently used must not swing out into the corridor unless required by NFPA 101 or another provision of this subchapter. Alcoves must be provided for doors that must swing outward toward a corridor or way of egress. (5) Safety glass must be used where required by local building codes or NFPA 101. (6) Thresholds and expansion joint covers must be flush with the floor surface to facilitate use of wheelchairs and carts. (7) A facility must provide grab bars at all residents' toilets, showers, tubs, and sitz baths. The bars must be 1-1/4 to 1-1/2 inches in diameter and must have 1-1/2 inch clearance to walls. Bars must have sufficient strength and anchorage to sustain a concentrated load of 250 pounds. Grab bar standards must comply with standards adopted under the Americans with Disabilities Act. (8) Handrails must be provided on both sides of corridors used by residents, and must meet the following: (A) A clear distance of 1-1/2 inches must be provided between the handrail and the wall; (B) Handrails must be securely mounted to withstand downward forces of 250 pounds; (C) Handrails may be omitted on wall segments less than 18 inches in length; (D) A window must be considered part of the wall segment in which it is installed and must not interrupt the continuity of the handrail; (E) Handrails must be mounted 33 inches to 36 inches above the floor, and must comply with standards adopted under the Americans with Disabilities Act and with TAS. (F) Where fixed furniture is provided in corridors, as permitted by NFPA 101 and (n) of this subchapter (relating to Safety Operations), the handrail may be omitted, provided the handrail terminates no more than 18 inches from the fixed furniture. (9) Ends of handrails and grab bars must be constructed with return ends to walls to prevent snagging the clothes of residents. (10) Ceiling fan blades must be at least seven feet above the floor and be located so as not to interfere with the operation of any ceiling-mounted smoke detectors. (b) General details. (1) Concrete floors, whether finished by sealant, or similar product, must not be used as the finished floor unless specifically approved in writing by HHSC. An exception is mechanical equipment rooms and maintenance or similar areas. (2) Sound separation must be provided in corridor walls and resident room party walls. Provide a minimum Sound Transmission Class of 30 per ASTM E90. (3) A facility must provide attic access for building maintenance and inspection. (4) A facility must provide illumination and a safe platform in the attic at all attic access locations Elevators for New Facilities. A facility providing resident-use areas, such as bedrooms, dining rooms, or recreation areas, or resident services, such as diagnostic services or therapy services, located on other than the main entrance floor must provide at least one elevator that complies with the requirements of ASME A17.1. (1) Number of elevators. (A) When one to 60 resident beds are located on any floor other than the main entrance floor, a facility must provide at least one hospital-type elevator. (B) When 61 to 200 resident beds are located on any floor other than the main entrance floor or when major inpatient services are located on a floor other than those containing resident beds, a facility must provide at least two elevators, one of which must be hospital-type. (C) When 201 to 350 resident beds are located on any floor other than the main entrance floor, or when major inpatient services are located on a floor other than those containing resident beds, a facility must provide at least three elevators, one of which must be hospital-type. (D) A facility with a capacity of more than 350 resident beds must determine the number of elevators required from a study of the facility plan and the estimated vertical transportation requirements. (E) Elevator service may be reduced, with the approval of HHSC, for those floors that provide only partial inpatient services. (2) Cars and platforms. Cars of hospital-type elevators must have inside dimensions that will accommodate a resident bed and attendants and must be at least five feet wide by seven feet six 42 TexReg 7362 December 22, 2017 Texas Register

125 inches deep. The car door must have a clear opening of not less than three feet eight inches. (3) Leveling. Elevators must be equipped with an automatic leveling device of the two-way automatic maintaining type with an accuracy of 1/2 inch. (4) Operation. Elevators, except freight elevators, must be equipped with a two-way special service switch to permit cars to bypass all landing button calls and be dispatched directly to any floor. (5) Accessibility provisions. Elevator controls, alarm buttons, and telephones must be accessible to and usable by individuals with disabilities as required by the Americans with Disabilities Act. (6) Protection from fire. Elevator call buttons, controls, and door safety stops must be of a type that will not be activated by heat or smoke. Door openings must meet the requirements of the NFPA 101 for protection of vertical openings. (7) Field inspection and tests. Inspections and tests must be made and the facility must be furnished written certification that the installation meets the requirements set forth in this section and all applicable safety regulations and codes. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER R. PHYSICAL PLANT AND ENVIRONMENT 40 TAC The amendments are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendments implement Texas Government Code, and Texas Health and Safety Code, Physical Environment. The facility must be designed, constructed, equipped, and maintained to protect the health and ensure the safety of residents, personnel, and the public. (1) Life safety from fire. (A) The facility must meet the applicable provisions of NFPA 101 as designated by the federal law and regulations. [the 1985 edition of the Life Safety Code of the National Fire Protection Association (NFPA) as designated by federal law and regulations. The Life Safety Code is available for inspection at the Office of the Federal Register Information Center, Washington, D.C. Copies may be obtained from the NFPA, Batterymarch Park, Quincy, Massachusetts The New Health Care Occupancies chapter of the Life Safety Code is applicable to new construction, conversions of existing unlicensed buildings, remodeling, and additions. The Existing Health Care Occupancies chapter of the Life Safety Code is applicable to existing nursing homes. is applicable to an existing nursing homes.] (B) After consideration of the findings of HHSC, CMS [the Texas Department of Human Services (DHS) for Medicare/Medicaid certified facilities, the Health Care Financing Administration (HCFA)] may waive specific provisions of NFPA 101 [the Life Safety Code] which, if rigidly applied, would result in unreasonable hardship on the facility, but only if the waiver does not adversely affect the health and safety of residents or personnel. (2) Emergency power. (A) An emergency electrical power system must supply power adequate at least for lighting all entrances and exits; equipment to maintain the fire detection, alarm, and extinguishing systems; and any systems or equipment whose failure is likely to cause major injury or death to a resident [life-support systems] if the normal electrical supply is interrupted. (B) When systems or equipment whose failure is likely to cause major injury or death to a resident [life support systems] are used, the facility must provide emergency electrical power with an emergency generator defined in NFPA 99 [(as defined in NFPA 99, Health Care Facilities)] located on the premises. (3) Space and equipment. The facility must: (A) provide sufficient space and equipment in dining, health services, recreation, living, and program areas to enable staff to provide residents with needed services as required by these standards and as identified in each resident's assessment and plan of care; [and] (B) maintain all essential mechanical, electrical, and patient care equipment in safe operating condition; and[.] (C) conduct regular inspections of all bed frames, mattresses, and bed rails, if any, as part of a regular maintenance program to identify areas of possible entrapment. When bed rails and mattresses are used and purchased separately from the bed frame, the facility must ensure that the bed rails, mattress, and bed frame are compatible. (4) Resident rooms. Resident rooms must be designed and equipped for adequate nursing care, comfort, and privacy of residents. (A) Bedrooms must: (i) accommodate no more than four residents for a facility that receives approval of construction or reconstruction plans by state and local authorities or are newly certified before November 28, 2016; (ii) accommodate no more than two residents for a facility that receives approval of construction or reconstruction plans by state and local authorities or are newly certified on or after November 28, 2016; (iii) [(ii)] measure at least 80 square feet per resident in multiple resident bedrooms and at least 100 square feet in single resident rooms; (iv) [(iii)] have direct access to an exit corridor; (v) [(iv)] be designed or equipped to ensure [assure] full visual privacy for each resident; (vi) [(v)] in facilities initially certified after March 31, 1992, except in private rooms, have ceiling-suspended curtains for PROPOSED RULES December 22, TexReg 7363

126 each bed, which extend around the bed to provide total visual privacy, in combination with adjacent walls and curtain; and (vii) [(vi)] have at least one window to the outside; (viii) [(vii)] have a floor at or above grade level. (B) The facility must provide each resident with: (i) a separate bed of proper size and height for the safety and convenience of the resident; and (ii) a clean, comfortable mattress; (iii) bedding appropriate to the weather and climate; (iv) functional furniture appropriate to the resident's needs and individual private closet space in the resident's bedroom with clothes racks and shelves accessible to the resident. (C) HHSC [DHS] may permit variations in requirements specified in paragraph (1)(A) and (B) of this section relating to rooms in individual cases when the facility demonstrates in writing that the variations: and safety. (i) are required by the special needs of the residents; (ii) will not adversely affect residents' health and (5) Bathroom [Toilet facilities]. Each resident room must be equipped with or located near toilet and bathing facilities. For a facility that receives approval of construction from state and local authorities or are newly certified on or after November 28, 2016, each resident room must have its own bathroom equipped with at least a commode and sink. (6) Nurse [Resident] call system. The facility [nurse's station] must be adequately equipped to allow residents to call for staff assistance [receive resident calls] through a communication system which relays the call directly to a staff member or to a centralized staff work area [from]: room; (A) before November 28, 2019, from each resident's (B) [(A)] beginning November 28, 2019, from each resident's beside [resident rooms]; and (C) [(B)] from toilet and bathing facilities. (7) Dining and resident activities. The facility must provide one or more rooms designated for resident dining and activities. These rooms must be: (A) well-lighted; (B) well ventilated, with nonsmoking areas identified; (C) adequately furnished; and (D) sufficiently spacious to accommodate all activities. (8) Other environmental conditions. The facility must provide a safe, functional, sanitary, and comfortable environment for residents, staff, and the public. The facility must: (A) establish procedures to ensure that water is available to essential areas when there is a loss of normal water supply; (B) have adequate outside ventilation by means of windows, mechanical ventilation, or a combination of the two; (C) equip corridors with firmly secured handrails on each side; and (D) maintain an effective pest control program so that the facility is free of pests and rodents. (E) establish policies, according to applicable federal, state, and local laws and regulations, regarding smoking, smoking areas, and smoking safety that also take into account non-smoking residents. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER W. CERTIFICATION OF FACILITIES FOR CARE OF PERSONS WITH ALZHEIMER'S DISEASE AND RELATED DISORDERS 40 TAC The amendment is proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of services by the health and human services agencies and Texas Health and Safety Code, , which authorizes licensing of nursing facilities. The amendment implement Texas Government Code, and Texas Health and Safety Code, Standards for Certified Alzheimer's Facilities. (a) General requirements. (1) Residents eligible for admission to Alzheimer's units will have a diagnosis of Alzheimer's disease or related dementing disorders. The need for admission to the Alzheimer's unit must be documented by the attending physician. (2) Security and safety measures are provided to prevent the residents from harming themselves or leaving designated indoor or outdoor areas without supervision by staff members or other responsible escort. Policies will also be provided to prevent abuse of the rights and property of other residents. (3) Understanding that security measures to prevent wandering may infringe on resident rights, care must be exercised in the use of physical restraint or barriers, or chemical restraint. The specific purpose and time-limited orders for any additional physical or chemical restraint must be written and renewed according to facility policy. The frequency of such renewal must not exceed 60 days. (4) Activity and recreational programs will be provided and utilized to the maximum extent possible for all residents in order to promote physical well being and help with behavior management. 42 TexReg 7364 December 22, 2017 Texas Register

127 The program must be tailored to the individual resident's needs, being appropriate for his specific impairment and stage of disease. (5) Residents are provided privacy in treatment and in care for his or her personal needs. (6) Access to outdoor areas must be provided and such areas must have suitable walls or fencing that do not allow climbing or present a hazard. [If the enclosed area involves exit doors from the building, the following must be met.] (A) The minimum distance of the fence from the building must be: (i) 8'-0" from the building if [exit if the fence is parallel to the building and] there are no window openings; or (ii) 20'-0" from a bedroom window [window(s)] if the fencing is solid and 15'-0" from a bedroom window [window(s)] if the fencing is open similar to chain-link [(parallel with building walls)]. (B) The minimum area of enclosure must be 800 square feet. Exception: If the enclosed space has an area of refuge which extends beyond a minimum of 20'-0" from the building and the area of refuge is equal to or greater than 15 square feet per resident for the wings [wing(s)] enclosed. (C) An exit gate [Exit gate(s)] from the enclosure to a public way must comply with the following criteria. (i) A minimum of two gates must be remotely located from each other if only one wing or exit is enclosed. If the enclosed space between the building and the fence is less than 10'-0", one of the remotely located exit gates must be directly in line with the building exit door. (ii) If doors into two or more smoke compartments [wings] are enclosed by the fencing and entry access can be made at each door, a minimum of one gate is required. (iii) The gates [gate(s)] must be located to provide a continuous path of travel from the building exit to a public way including walkways of concrete, asphalt, or other approved materials suitable for wheeled beds, chairs, and stretchers. Gates and walkways must be wide enough to accommodate beds and wheelchairs. (D) If gates are locked, the gate nearest the exit from the building must be locked with an electronic lock which operates the same as electronic locks on corridor control doors or [and/or] exit doors and is in compliance with the NFPA 70 [National Electrical Code] for exterior exposure. Additional gates may also have electronic locks or may have keyed locks provided staff carry the keys. A gate between two enclosed wings may have a keyed lock provided access can be gained into both wings from the exterior. (E) Fencing material must comply with the following: (i) Wood--no limit on height, should be constructed with posts and support members on the exterior to deter residents from climbing over fence. (ii) Wire--if chain-link type fence, provide protection on top of the fence to prevent resident injury from pointed wire. (7) Any security measures taken to provide for the safety of wandering patients should be as unobtrusive as possible. (8) Toxic garden plantings must be prohibited. (b) Staff. (1) All assigned staff members and consultants to the unit must have documented training in the care and handling of Alzheimer's residents, including at least: (A) (i) (ii) eight hours of orientation to cover the following: facility Alzheimer's policies; etiology and treatment of dementias; (iii) stages of Alzheimer's disease; (iv) (v) behavior management; and communication; and (B) four hours of the required annual continuing education must be in Alzheimer's disease or related disorders. (2) A social worker, licensed or temporarily licensed by the State of Texas, must be utilized as Community/Family Support Coordinator whose functions must include: mission; ings; and (A) evaluation of resident's initial social history on ad- (B) utilization of community resources; (C) conducting quarterly family support group meet- (D) identification and utilization of existing Alzheimer's network. (3) Specially trained staff will be maintained and assigned exclusively to the Alzheimer's unit. Although emergency scheduling may require substitution of staff, every effort should be made to provide residents with familiar staff members in order to minimize resident confusion. Staff training will meet at least the minimum requirements in subsection (a)(2) of this section. (4) Required overall minimum staffing ratios for direct care in certified Alzheimer's units in nursing facilities are as follows. Figure: 40 TAC (b)(4)(No change.) (c) Physical plant. Alzheimer's units must be segregated from other parts of a facility with appropriate security devices and [and/or] measures and must meet the following requirements. (1) Living rooms, day rooms, lounges, and sun rooms, must be provided on a sliding scale as follows. Figure: 40 TAC (c)(1)(No change.) (2) A dining area must provide a minimum of ten square feet per resident with at least one exterior window [window(s)]. (3) Bathtubs or showers must be provided at a minimum rate of one for each 20 beds in nursing facilities. (4) Water closets and lavatories must be provided at a minimum rate of: (B) one for each 15 clients in adult day health care facilities. (A) one for each eight beds in nursing facilities; and (5) In all facilities a lavatory must be provided in or adjacent to each area having a water closet. (6) A monitoring station for staff must be provided with the following: top; (A) (B) chair; writing surface such as a desk or built-in counter PROPOSED RULES December 22, TexReg 7365

128 (C) task illumination; (D) communication system such as a telephone or intercom to the main staff station of the facility; and (E) storage for resident records such as a lockable metal cabinet or storage closet. (7) Two remote exits must be provided in order to meet NFPA 101 [Life Safety Code] requirements. (8) Corridor control doors, if used for security of the residents, must be similar to smoke doors, that is, be 44 inches in width each leaf, and must swing in opposite directions. A latch or other fastening device on a door must be provided with a knob, handle, panic bar, or other simple type of releasing device, the method of operation of which is obvious, even in darkness. (9) Locking devices may be used on the control doors provided the following criteria are met. (A) The building must have a complete sprinkler system and [and/or] a complete fire alarm system including a corridor smoke detection system or smoke detectors located in each resident bedroom, which are interconnected into the fire alarm system. (B) The locking device must be electronic and must be released when the following occurs: (i) activation of the fire alarm or sprinkler systems; (ii) power failure to the facility; and (iii) pressing a button located at the main staff station and at the monitoring station. (C) Key pad or buttons may be located at the control doors for routine use by staff for service. (D) Upon loss of primary power, the control doors must not automatically reset on emergency power, but must be reset by manual means only. An exception is when the control doors are not in an exit access, they may automatically reset on emergency power. There must be at least two remote exits [(]on each side of the control doors[)] which meet all of the requirements for exits, such as proper width of egress and proper size of exterior doors, according to the NFPA 101. [1985 Life Safety Code.] (E) Staff must be trained in the methods of releasing the locking device. (10) The exit doors [door(s)] may be equipped with a locking device provided one of the following methods is met: (A) the locking arrangement meets the requirements for Delayed Egress Locking Systems in NFPA 101 [Section of the Life Safety Code], or (B) the following criteria which have been approved by CMS: [the Health Care Financing Administration (HCFA):] (i) The building must have a complete fire alarm system including a corridor smoke detection system or smoke detectors located in each resident bedroom and [and/or] a complete sprinkler system which are interconnected to the fire alarm system. (ii) The locking device must be electro-magnetic; that is, no type of throw-bolt is to be used. (iii) The device must release when the following occurs [occur(s)]: (I) activation of the fire alarm or sprinkler system; (II) power failure to the facility; and (III) activating a switch located at the main staff station and at the monitoring station. (iv) Upon loss of primary power, the exit doors [door(s)] must not automatically reset on emergency power, but must be reset by manual means only. (v) A manual fire alarm pull must be located within 5'0" of the exit door with a sign stating, "Pull to release door in an emergency." (vi) A key pad, card, control button, or other electronic device may be located at the exit door for routine use by staff. (vii) Staff must [are to] be trained in the methods of releasing the locking device. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TITLE 43. TRANSPORTATION PART 10. TEXAS DEPARTMENT OF MOTOR VEHICLES CHAPTER 215. MOTOR VEHICLE DISTRIBUTION SUBCHAPTER E. GENERAL DISTINGUISH- ING NUMBERS 43 TAC The Texas Department of Motor Vehicles (department) proposes amendments to Chapter 215, Motor Vehicle Distribution, Subchapter E, General Distinguishing Numbers, , Records. EXPLANATION OF PROPOSED AMENDMENTS Proposed amendments add an exception to the general requirement in (k) that a license holder may maintain records in electronic format. The exception, proposed (l), requires a license holder utilizing webdealer to comply with proposed (relating to Access to and Use of webdealer), which includes a requirement that a physical document be retained at least four calendar years from date of submission. The proposed amendment clarifies that original hard copy titles need not be maintained at the licensed location, but must be made available to the department on request. Proposed amendments also correct a punctuation error in (d). FISCAL NOTE 42 TexReg 7366 December 22, 2017 Texas Register

129 Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments as proposed are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. Corrie Thompson, Director of the Enforcement Division, has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed amendments. PUBLIC BENEFIT AND COST Ms. Thompson has also determined that for each year of the first five years the amendments are in effect, the public benefit anticipated as a result of enforcing or administering the amendment will be security in back-up documentation to support transactions processed through webdealer. There are no anticipated economic costs for persons required to comply with the proposed amendments. There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendment does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. SUBMITTAL OF COMMENTS Written comments on the proposed amendments may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and more specifically, Transportation Code, , which authorizes the department to adopt rules to administer Transportation Code, Chapter 501. CROSS REFERENCE TO STATUTE Transportation Code, Records. (a) Purchases and sales records. A dealer must maintain a complete record of all vehicle purchases and sales for a minimum period of 48 months and make the record available for inspection and copying by a representative of the department during business hours. (b) Independent mobility motor vehicle dealers. An independent mobility motor vehicle dealer must keep a complete written record of each vehicle purchase, vehicle sale, and any adaptive work performed on each vehicle for a minimum period of 36 months after the date the adaptive work is performed on the vehicle. (c) Location of records. A dealer's record reflecting purchases and sales for the preceding 13 months must be maintained at the dealer's licensed location. Original titles are not required to be kept at the licensed location, but must be made available to the agency upon reasonable request. A dealer's record for prior time periods may be kept off-site. (d) Request for records. Within 15 days of receipt of a request sent by mail or electronic document transfer from a representative of the department, a dealer must deliver a copy of the specified records to the address listed in the request. If a dealer has a concern about the origin of a records request, the dealer may verify that request with the division prior to submitting its records. (e) Content of records. A dealer's complete record for each vehicle purchase or vehicle sale must contain: (1) the date of the purchase; (2) the date of the sale; (3) the VIN; (4) the name and address of the person selling the vehicle to the dealer; (5) the name and address of the person purchasing the vehicle from the dealer; (6) the name and address of the consignor if the vehicle is offered for sale by consignment; (7) except for a purchase or sale where the Tax Code does not require payment of motor vehicle sales tax, a copy of the receipt, titled "Tax Collector's Receipt for Texas Title Application/Registration/Motor Vehicle Tax"; (8) a copy of all documents, forms, and agreements applicable to a particular sale, including a copy of: (A) the title application; (B) the work-up sheet; (C) the front and back of manufacturer's certificate of origin or manufacturer's statement of origin, unless the title is obtained through the electronic title system; (D) the front and back of the title, unless the title is obtained through the electronic title system; (E) the factory invoice; (F) the sales contract; (G) the retail installment agreement; (H) the buyer's order; (I) the bill of sale; (J) any waiver; (K) any other agreement between the seller and purchaser; and PROPOSED RULES December 22, TexReg 7367

130 (L) Form VTR-136, relating to County of Title Issuance, completed and signed by the buyer; (9) the original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for motor vehicles offered for sale by a dealer, and a properly stamped original manufacturer's certificate of origin, original manufacturer's statement of origin, or original title for motor vehicles sold by a dealer if the title transaction is entered into the electronic system by the dealer; (10) the dealer's monthly Motor Vehicle Seller Financed Sales Returns, if any; and (11) if the vehicle sold is a motor home or a towable recreational vehicle subject to inspection under Transportation Code, Chapter 548, a copy of the written notice provided to the buyer at the time of the sale, notifying the buyer that the vehicle is subject to inspection requirements. (f) Title assignments. (1) For each vehicle a dealer acquires or offers for sale, the dealer must properly take assignment in the dealer's name of any: (A) title; (B) manufacturer's statement of origin; (C) manufacturer's certificate of origin; or (D) other evidence of ownership. (2) A dealer must apply in the name of the purchaser of a vehicle for the registration of the vehicle with the appropriate county tax assessor-collector as selected by the purchaser. (3) To comply with Transportation Code, (f), a registration is considered filed within a reasonable time if the registration is filed within: (A) 20 working days of the date of sale of the vehicle for a vehicle registered in Texas; or (B) 45 days of the date of sale of the vehicle for a dealerfinanced transaction involving a vehicle that is registered in Texas. (4) The dealer is required to provide to the purchaser the receipt for the registration application. (5) The dealer is required to maintain a copy of the receipt for the registration application in the dealer's sales file. (g) Out of state sales. For a sales transaction involving a vehicle to be transferred out of state, the dealer must: (1) within 20 working days of the date of sale, either file the application for certificate of title on behalf of the purchaser or deliver the properly assigned evidence of ownership to the purchaser; and (2) maintain in the dealer's record at the dealer's licensed location a photocopy of the completed sales tax exemption form for out of state sales approved by the Texas Comptroller of Public Accounts. (h) Consignment sales. A dealer offering a vehicle for sale by consignment shall have a written consignment agreement or a power of attorney for the vehicle, and shall, after the sale of the vehicle, take assignment of the vehicle in the dealer's name and, pursuant to subsection (f), apply in the name of the purchaser for transfer of title and registration, if the vehicle is to be registered, with the appropriate county tax assessor-collector as selected by the purchaser. The dealer must, for a minimum of 48 months, maintain a record of each vehicle offered for sale by consignment, including the VIN and the name of the owner of the vehicle offered for sale by consignment. (i) Public motor vehicle auctions. (1) A GDN holder that acts as a public motor vehicle auction must comply with subsection (h) of this section. (2) A public motor vehicle auction: (A) is not required to take assignment of title of a vehicle it offers for sale; (B) must take assignment of title of a vehicle from a consignor prior to making application for title on behalf of the buyer; and (C) must make application for title on behalf of the purchaser and remit motor vehicle sales tax within 20 working days of the sale of the vehicle. (3) A GDN holder may not sell another GDN holder's vehicle at a public motor vehicle auction. (j) Wholesale motor vehicle auction records. A wholesale motor vehicle auction license holder must maintain, for a minimum of 48 months, a complete record of each vehicle purchase and sale occurring through the wholesale motor vehicle auction. The wholesale motor vehicle auction license holder shall make the record available for inspection and copying by a representative of the department during business hours. (1) A wholesale motor vehicle auction license holder must maintain at the licensed location a record reflecting each purchase and sale for at least the preceding 24 months. Records for prior time periods may be kept off-site. (2) Within 15 days of receipt of a request sent by mail or by electronic document transfer from a representative of the department, a wholesale motor vehicle auction license holder must deliver a copy of the specified records to the address listed in the request. (3) A wholesale motor vehicle auction license holder's complete record of each vehicle purchase and sale shall, at a minimum, contain: (A) the date of sale; (B) the VIN; (C) the name and address of the person selling the vehicle; (D) the name and address of the person purchasing the vehicle; (E) the dealer license number of both the selling dealer and the purchasing dealer, unless either is exempt from holding a license; (F) all information necessary to comply with the Truth in Mileage Act; (G) auction access documents, including the written authorization and revocation of authorization for an agent or employee, in accordance with of this title (relating to Dealer Agents); (H) invoices, bills of sale, checks, drafts, or other documents that identify the vehicle, the parties, or the purchase price; (I) any information regarding the prior status of the vehicle such as the Reacquired Vehicle Disclosure Statement or other lemon law disclosures; and (J) a copy of any written authorization allowing an agent of a dealer to enter the auction. 42 TexReg 7368 December 22, 2017 Texas Register

131 (k) Electronic records. A license holder may maintain a record in an electronic format if the license holder can print the record at the licensed location upon request by a representative of the department, except as provided by subsection (l) of this section. [A license holder does not have to maintain a copy of a vehicle title if the title is submitted through the electronic title system. Original hard copy titles are not required to be kept at the licensed location, but must be made available to the department upon request.] (l) Use of webdealer. A license holder utilizing the department's web-based title application known as webdealer, as defined in of this title (relating to Automated and Web-Based Vehicle Registration and Title Systems), must comply with of this title (relating to Access to and Use of webdealer). Original hard copy titles are not required to be kept at the licensed location, but must be made available to the department upon request. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) CHAPTER 217. VEHICLE TITLES AND REGISTRATION SUBCHAPTER A. MOTOR VEHICLE TITLES 43 TAC The Texas Department of Motor Vehicles (department) proposes amendments to 217.2, Definitions. EXPLANATION OF PROPOSED AMENDMENTS Proposed amendments to add the definitions for an all-terrain vehicle (ATV) and a recreational off-highway vehicle (ROV) by reference to Transportation Code, The amendments specify that an ATV and ROV are designed primarily for recreational use. Other amendments correct punctuation and rearrange the definitions to maintain alphabetical order. The paragraphs are renumbered accordingly. FISCAL NOTE Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments as proposed are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. Jeremiah Kuntz, Director of the Vehicle Titles and Registration Division, has determined that there will be no impact on local economies or overall employment as a result of enforcing or administering the proposed amendments. PUBLIC BENEFIT AND COST Mr. Kuntz has also determined that for each year of the first five years the amendments are in effect, the public benefit anticipated as a result of enforcing or administering the amendment will be greater clarity in the applicability of title requirements with respect to ATVs and ROVs. There are no anticipated economic costs for persons required to comply with the proposed amendments. There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendment does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. SUBMITTAL OF COMMENTS Written comments on the proposed amendments may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and more specifically, Transportation Code, , which provides the department may adopt rules to administer Chapter 501. CROSS REFERENCE TO STATUTE Transportation Code, , , and Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Alias--The name of a vehicle owner reflected on a title, when the name on the title is different from the name of the legal owner of the vehicle. (2) Alias title--a title document issued by the department for a vehicle that is used by an exempt law enforcement agency in covert criminal investigations. (3) All-terrain vehicle or ATV--A motor vehicle as defined by Transportation Code, , and designed primarily for recreational use. The term does not include a "utility vehicle" as defined by Transportation Code, , or a self-propelled, motor-driven vehi- PROPOSED RULES December 22, TexReg 7369

132 cle designed or marketed by the manufacturer primarily for non-recreational uses. (4) [(3)] Bond release letter--written notification from the United States Department of Transportation authorizing United States Customs to release the bond posted for a motor vehicle imported into the United States to ensure compliance with federal motor vehicle safety standards. [(4) Title application--a form prescribed by the division director that reflects the information required by the department to create a motor vehicle title record.] (5) Date of sale--the date of the transfer of possession of a specific vehicle from a seller to a purchaser. (6) Division director--the director of the department's Vehicle Titles and Registration Division. (7) Executive administrator--the director of a federal agency, the director of a Texas state agency, the sheriff of a Texas county, or the chief of police of a Texas city who by law possesses the authority to conduct covert criminal investigations. (8) Exempt agency--a governmental body exempt by law from paying title or registration fees for motor vehicles. (9) Federal motor vehicle safety standards--motor vehicle safety requirements promulgated by the United States Department of Transportation, National Highway Traffic Safety Administration, set forth in Title 49, Code of Federal Regulations. (10) House moving dolly--an apparatus consisting of metal beams and axles used to move houses. House moving dollies, by nature of their construction and use, actually form large semitrailers. (11) Identification certificate--a form issued by an inspector of an authorized safety inspection station in accordance with Transportation Code, Chapter 548. (12) Implements of husbandry--farm implements, machinery, and tools used in tilling the soil, including self-propelled machinery specifically designed or especially adapted for applying plant food materials or agricultural chemicals. This term does not include an implement unless it is designed or adapted for the sole purpose of transporting farm materials or chemicals. This term does not include any passenger car or truck. This term does include a towed vehicle that transports to the field and spreads fertilizer or agricultural chemicals; or a motor vehicle designed and adapted to deliver feed to livestock. (13) Manufacturer's certificate of origin--a form prescribed by the department showing the original transfer of a new motor vehicle from the manufacturer to the original purchaser, whether importer, distributor, dealer, or owner, and when presented with an application for title, showing, on appropriate forms prescribed by the department, each subsequent transfer between distributor and dealer, dealer and dealer, and dealer and owner. (14) Moped--A motor-driven [motor driven] cycle whose attainable speed is not more than 30 miles per hour and that is equipped with a motor that produces not more than two-brake horsepower. If an internal combustion engine is used, the piston displacement may not exceed 50 cubic centimeters and the power drive system may not require the operator to shift gears. (15) Motor vehicle importation form--a declaration form prescribed by the United States Department of Transportation and certified by United States Customs that relates to any motor vehicle being brought into the United States and the motor vehicle's compliance with federal motor vehicle safety standards. (16) Non United States standard motor vehicle--a motor vehicle not manufactured in compliance with federal motor vehicle safety standards. (17) Obligor--An individual who is required to make payments under the terms of a support order for a child. (18) Person--An individual, firm, corporation, company, partnership, or other entity. (19) Recreational off-highway vehicle or ROV--A motor vehicle as defined by Transportation Code, , and designed primarily for recreational use. The term does not include a "utility vehicle" as defined by Transportation Code, , or a self-propelled, motor-driven vehicle designed or marketed by the manufacturer primarily for non-recreational uses. (20) [(19)] Safety certification label--a label placed on a motor vehicle by a manufacturer certifying that the motor vehicle complies with all federal motor vehicle safety standards. (21) [(20)] Statement of fact--a written declaration that supports an application for a title, that is executed by an involved party to a transaction involving a motor vehicle, and that clarifies an error made on a title or other negotiable evidence of ownership. An involved party is the seller or an agent of the seller involved in the motor vehicle transaction. When a written declaration is necessary to correct an odometer disclosure error, the signatures of both the seller and buyer when the error occurred are required. (22) Title application--a form prescribed by the division director that reflects the information required by the department to create a motor vehicle title record. (23) [(21)] Verifiable proof--additional documentation required of a vehicle owner, lienholder, or agent executing an application for a certified copy of a title. (A) Individual applicant. If the applicant is an individual, verifiable proof consists of a copy of a current photo identification issued by this state or by the United States or foreign passport. (B) Business applicant. If the applicant is a business, verifiable proof consists of an original or copy of a letter of signature authority on letterhead, a business card, or employee identification and a copy of current photo identification issued by this state or by the United States or foreign passport. (C) Power of attorney. If the applicant is a person in whose favor a power of attorney has been executed by the owner or lienholder, verifiable proof consists of the documentation required under subparagraph (A) or (B) of this paragraph both for the owner or lienholder and for the person in whose favor the power of attorney is executed. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TexReg 7370 December 22, 2017 Texas Register

133 SUBCHAPTER B. MOTOR VEHICLE REGISTRATION 43 TAC The Texas Department of Motor Vehicles (department) proposes amendments to , Disabled Person License Plates and Identification Placards. EXPLANATION OF PROPOSED AMENDMENTS House Bill (HB) 1790, 85th Legislature, Regular Session, 2017, amended Transportation Code, (b), eliminating the requirement that the department conduct a hearing to determine whether the revocation of a disabled parking placard should continue or be rescinded. The amended statute allows a person from whom a placard has been seized to apply for a new application by submitting an application under Transportation Code, Amendments are necessary to implement the changes made by HB Specifically, amendments are proposed to to eliminate the requirement for a hearing and clarify that a person may apply for a new placard by submitting an application to the county tax assessor-collector of the county in which the person with the disability resides or is seeking medical treatment if the person is not a resident of this state. Amendments are also proposed to delete the requirement that a law enforcement officer who has seized and destroyed a placard must provide the department with a notice that the placard was destroyed, a copy of the citation issued, and a brief summary of events giving rise to the citation. Instead, the proposed amendment would require a law enforcement officer who seizes and destroys a placard to notify the department by . FISCAL NOTE Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments as proposed are in effect, there will be no significant fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. Jeremiah Kuntz, Director of the Title and Registration Division, has determined that there will be no impact on local economies or overall employment as a result of enforcing or administering the proposed amendments. PUBLIC BENEFIT AND COST Mr. Kuntz has also determined that for each year of the first five years the amendments are in effect, the public benefit anticipated as a result of enforcing or administering the amendments will be a simplified process for both law enforcement and persons seeking a replacement placard. There are no anticipated economic costs for persons required to comply with the proposed amendments. There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendment does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. SUBMITTAL OF COMMENTS Written comments on the proposed amendments may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles (board) with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department under the Transportation Code; and more specifically, Transportation Code, , which authorizes the board to adopt rules to implement and administer Transportation Code, Chapter 504; and Transportation Code, , which requires the department to provide for the issuance of a disabled parking placard to a person with a disability. CROSS REFERENCE TO STATUTE Transportation Code, Chapters 504 and Disabled Person License Plates and Identification Placards. (a) Purpose. Transportation Code, Chapters 504 and 681, charge the department with the responsibility for issuing specially designed license plates and identification placards for disabled persons. For the department to perform these duties efficiently and effectively, this section prescribes the policies and procedures for the application, issuance, and renewal of Disabled Person license plates and placards. (b) Issuance. (1) Disabled Person license plates. (A) Eligibility. In accordance with Transportation Code, , the department will issue specially designed license plates displaying the international symbol of access to permanently disabled persons or their transporters instead of regular motor vehicle license plates. (B) Specialty license plates. The department will issue Disabled Person insignia on those specialty license plates that can accommodate the identifying insignia and that are issued in accordance with of this title (relating to Specialty License Plates, Symbols, Tabs, and Other Devices). (C) License plate number. Disabled Person license plates will bear a license plate number assigned by the department or will bear a personalized license plate number issued in accordance with (2) Windshield identification placards. The department will issue removable windshield identification placards to temporarily PROPOSED RULES December 22, TexReg 7371

134 or permanently disabled persons and to the transporters of permanently disabled persons. A person who has been issued a windshield identification placard shall hang the placard from a vehicle's rearview mirror when the vehicle is parked in a disabled person parking space or shall display the placard on the center portion of the dashboard if the vehicle does not have a rearview mirror. (c) Renewal of Disabled Person license plates. Disabled Person license plates are valid for a period of 12 months from the date of issuance, and are renewable as specified in of this title (relating to Vehicle Registration Renewal). (d) Replacement. (1) License plates. If Disabled Person license plates are lost, stolen, or mutilated, the owner may obtain replacement license plates by applying with a county tax assessor-collector. (A) Accompanying documentation. To replace permanently Disabled Person license plates, the owner must present the current year's registration receipt and personal identification acceptable to the county tax assessor-collector. (B) Absence of accompanying documentation. If the current year's registration receipt is not available and the county cannot verify that the Disabled Person license plates were issued to the owner, the owner must reapply in accordance with this section. (2) Disabled Person identification placards. If a Disabled Person identification placard becomes lost, stolen, or mutilated, the owner may obtain a new identification placard in accordance with this section. (e) Transfer of Disabled Person license plates and identification placards. (1) License plates. (A) Transfer between persons. Disabled Person license plates may not be transferred between persons. An owner who sells or trades a vehicle to which Disabled Person license plates have been issued shall remove the Disabled Person license plates from the vehicle. The owner shall return the license plates to the department and shall obtain appropriate replacement license plates to place on the vehicle prior to any transfer of ownership. (B) Transfer between vehicles. Disabled Person license plates may be transferred between vehicles if the county or the department can verify the plate ownership and the owner of the vehicle is the disabled person or the vehicle is used to transport the disabled person. (I) a Registration and Title System (RTS) inquiry; (i) Plate ownership verification may include: (II) a copy of the department Application for Disabled Person license plates; or (III) the owner's current registration receipt. (ii) An owner who sells or trades a vehicle with Disabled Person license plates must remove the plates from the vehicle. (2) Identification placards. (A) Transfer between vehicles. Disabled Person identification placards may be displayed in any vehicle driven by the disabled person or in which the disabled person is a passenger. (B) Transfer between persons. Disabled Person identification placards may not be transferred between persons. (f) Seizure and revocation of placard. (1) If [After] a law enforcement officer seizes and destroys a placard under Transportation Code, , the officer shall notify the department by . [not later than the fifth day after the date of the seizure, the officer shall destroy the placard and provide the department with the following items:] [(A) a notice that the placard was destroyed;] [(B) a copy of the citation issued under Transportation Code, (a) or (d); and] citation.] [(C) a brief summary of the events giving rise to the (2) The person to whom the seized placard was issued may apply for a new placard by submitting an application to the county tax assessor-collector of the county in which the person with the disability resides or in which the applicant is seeking medical treatment if the applicant is not a resident of this state. [petition for a hearing under Chapter 206, Subchapter D of this title (relating to Procedures in Contested Cases).] [(A) If the department has not received the items specified in paragraph (1) of this subsection, the department will advise the petitioner to obtain a replacement placard from the county tax assessor-collector.] [(B) If the department determines from written evidence that the citation was dismissed or withdrawn, the department will advise the petitioner to obtain a replacement placard from the county tax assessor-collector.] [(C) If the department has received the items specified in paragraph (1) of this subsection and if the citation has not been dismissed or withdrawn, the department may negotiate a settlement providing for issuance of a replacement placard, including an agreement by the petitioner to abide by all laws regarding placards. If a settlement is not reached, the department will refer the matter to the State Office of Administrative Hearings for a hearing.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER C. REGISTRATION AND TITLE SYSTEMS 43 TAC The Texas Department of Motor Vehicles (department) proposes amendments to Chapter 217, Vehicle Titles and Registration, Subchapter C, Registration and Title System, , Automated Vehicle Registration and Title System; , Automated Equipment; and , Agreement. The department also proposes new , Access to and Use of webdealer. 42 TexReg 7372 December 22, 2017 Texas Register

135 EXPLANATION OF PROPOSED AMENDMENTS AND NEW SECTION Proposed amendments to Chapter 217, Subchapter C, amend the subchapter heading by changing "System" to "Systems." The proposed amendments will make clear that the subchapter applies to both the Registration and Title System (RTS) and web- DEALER. Proposed amendments to rename the section Automated and Web-Based Vehicle Registration and Title Systems. Proposed amendments to (a)(2) clarify the purpose of the subchapter, which is to prescribe the policies and procedures under which the department may make automated equipment for use of RTS available to a county tax assessor-collector and for users who opt to use webdealer. Proposed amendments to (b) add a definition for title application and webdealer and correct a grammatical error. Proposed amendments to rename the section Automated Equipment for the Registration and Title System and make a minor wording change in subsection (d)(2), clarifying that automated equipment may be located at sites other than the county tax assessor-collector's office at the discretion, as opposed to election, of a county tax assessor-collector. Proposed amendments to rename the section Agreement Related to Automated Equipment. Proposed new , Access to and Use of webdealer, and provide that at the discretion of a county tax assessor-collector, the county may request access to, and accept title applications submitted through, webdealer. The proposed new section provides that a person who wishes to become a user of web- DEALER must receive authorization from each entity to whom they submit title applications, that a deputy appointed by a county tax assessor-collector may be authorized to use webdealer, and that a person authorized to use webdealer may have their authorization revoked, rescinded, or cancelled at any time at the discretion of a county tax assessor-collector or the department. Finally, the proposed new section establishes the requirements for submitting a title application through webdealer, including a requirement that the user must retain the title document or other ownership evidence pertaining to the transaction for a minimum of four calendar years. Finally, proposed amendments add county to tax assessor-collector throughout. FISCAL NOTE Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments and new section as proposed are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments and new section. Jeremiah Kuntz, Director of the Vehicle Titles and Registration Division, has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed amendments and new section. PUBLIC BENEFIT AND COST Mr. Kuntz has also determined that for each year of the first five years the amendments and new section are in effect, the public benefit anticipated as a result of enforcing or administering the amendments and new section will be consistent use of the systems and decreased transaction processing time. There are no significant anticipated economic costs for persons required to comply with the proposed amendments and new section. There will be no adverse economic effect on small businesses, microbusinesses, or rural communities. GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments and new section are in effect, no government program would be created or eliminated. Implementation of the proposed amendments and new section would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments and new section do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendments and new section do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, SUBMITTAL OF COMMENTS Written comments on the proposed amendments and new section may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments and new section are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and more specifically, Transportation Code, , which authorizes the department to adopt rules to administer Transportation Code, Chapters 501; and , which authorizes the department to adopt rules to administer Transportation Code, Chapter 502. CROSS REFERENCE TO STATUTE Transportation Code, , , and Automated and Web-Based Vehicle Registration and Title Systems [System]. (a) Purpose. (1) Transportation Code, Chapters 501 and 502, charge the department with the responsibility for issuing titles and registering vehicles operating on the roads, streets, and highways of the state. (2) To provide a more efficient, cost-effective system for registering and titling vehicles, submitting title and registration records to county tax assessor-collectors and the department, maintaining records, improving inventory control of accountable items, and collecting and reporting of applicable fees consistent with those statutes, the department has designed: (A) an automated system known as the registration and title system. This system expedites registration and titling processes, PROPOSED RULES December 22, TexReg 7373

136 provides a superior level of customer service to the owners and operators of vehicles, and facilitates availability of the department's motor vehicle records for official law enforcement needs. Automated equipment compatible with the registration and title system is indispensable to the operational integrity of the system; and[.] (B) a web-based system known as webdealer. This system expedites registration and titling processes, provides a superior level of customer service to the owners and operators of vehicles, and facilitates availability of the department's motor vehicle records for official law enforcement needs. (3) This subchapter prescribes the policies and procedures under which the department may make the automated [that] equipment available to a county tax assessor-collector as designated agent of the state for processing title and vehicle registration documents and the policies and procedures for users who opt to use webdealer. (b) Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Automated equipment--equipment associated with the operation of the registration and titling system, including, but not limited to, microcomputers, printers, software, and cables. (2) Department--The Texas Department of Motor Vehicles. (3) Executive director--the executive director of the Texas Department of Motor Vehicles. (4) Fair share allocation--the amount of automated equipment determined by the department to be effective at providing a reasonable level of service to the public. This amount will be determined on transaction volumes, number of county substations, and other factors relating to a particular county's need. (5) RTS--The department's registration and title system. (6) Title application--a form as defined by of this title (relating to Definitions), and includes the electronic process provided by the department that captures the information required by the department to create a motor vehicle title record. (7) webdealer--the department's web-based titling and registration system used to submit title applications to county tax assessor-collectors and the department. This term includes any other web-based system which facilitates electronic submission of title applications, including websalvage and weblien Automated Equipment for the Registration and Title System. (a) Initial allocation of automated equipment. When requested by resolution of the commissioners court of a county, and subject to the terms and conditions specified in subsection (d) of this section, the department will: (1) make a fair share allocation of automated equipment available to that county to be used by its county tax assessor-collector in implementing and operating RTS; (2) provide the county tax assessor-collector with computer programs and personnel training; and (3) furnish official automated forms and, for the initial start-up of the system, automated equipment supplies. (b) Additional automated equipment. At the request of the county tax assessor-collector of a county, subject to the terms and conditions specified in subsection (d) of this section, and for an amount of consideration that will cover the department's costs, the department will enter into an agreement with the commissioners court of that county under which the department will lease automated equipment to that county in addition to the fair share allocation for that county. Leased equipment will remain the property of the department and will be used primarily for RTS. (c) Automated Registration and Titling System fee. The department will collect an additional fee of $.50 for each registration for the purposes set forth in Transportation Code, The fee shall be deposited into a subaccount in the Texas Department of Motor Vehicles fund. (d) Conditions of availability. (1) A county must: (A) meet electrical power supply criteria specified by the department prior to installation of the automated equipment; (B) bear all costs incurred for 24-hour per day electrical power consumption for operation of the equipment; (C) provide for the physical security and protection of the equipment and shall indemnify the department for any loss or damages to the equipment while in the custody and control of the county; (D) provide the department's maintenance personnel access to the equipment during business hours of the involved county office; and (E) notify the department not less than 30 working days prior to relocating or adding automation equipment, or of the closing or remodeling of an office, that may affect automated equipment operations. (2) At the discretion [election] of a county tax assessor-collector, automated equipment may be located at sites other than those of the county tax assessor-collector, including privately owned, for-profit enterprises performing registration and title functions for the county tax office. With regard to equipment located at sites other than those of the county tax assessor-collector, the department's responsibility will be limited to ensuring that the equipment remains operational. The county will be responsible for all training, user support, forms, supplies, user policy and procedures, and other support associated with this equipment. (3) Automated equipment made available to a county pursuant to this section shall remain the property of the department and must be used by the county tax assessor-collector for operation of RTS; provided, however, that while not in RTS usage, the equipment may be utilized for another statutory duty or function of that office Agreement Related to Automated Equipment. (a) Prior to receiving automated equipment pursuant to of this title (relating to Automated Equipment for the Registration and Title System), a county must enter a written agreement with the department. (b) The agreement shall: (1) be in a form prescribed by the department; (2) include at a minimum each of the terms and conditions specified in ; (3) be executed on behalf of the department by the executive director or the director's designee not below the level of Director of the Vehicle Titles and Registration Division; and (4) be approved by resolution or order of the commissioners court and executed on behalf of the county by the county judge and the county tax assessor-collector Access to and Use of webdealer. 42 TexReg 7374 December 22, 2017 Texas Register

137 (a) At the discretion of a county tax assessor-collector, the county may request access to, and accept title applications submitted through, webdealer. A county tax assessor-collector must utilize webdealer in order to accept a title application in the county as provided by subsection (b) of this section. (b) A person who wishes to become a user of webdealer must contact each entity to whom they submit title applications for authorization to utilize webdealer. A user must receive authorization from each entity, including each county tax assessor-collector, to whom the user submits title applications. Title applications submitted to the department require the authorization by the department. (c) A county tax assessor-collector may authorize a deputy appointed by the county tax assessor-collector in accordance with Subchapter H of this chapter (relating to Deputies) to utilize webdealer. (d) A person authorized under subsection (b) of this section may have their authorization to use webdealer revoked, rescinded, or cancelled at any time, with no notice, at the discretion of a county tax assessor-collector or the department. (e) When submitting a title application through webdealer, a user must: (1) stamp the word "SURRENDERED" across the front, face and the next open assignment or reassignment space of any secure title document or other acceptable ownership evidence as determined by the department in: (A) arial font; (B) black ink; and (C) a size of 1/4" height x 2 1/4" length; (2) retain the physical document described in paragraph (1) of this subsection for a minimum of four calendar years from the date of submitting a scanned copy of the stamped title document using the webdealer system; and (3) submit any documents required to be submitted with the title application with a scanned resolution of at least 200 dots per inch (DPI). The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) SUBCHAPTER F. MOTOR VEHICLE RECORD INFORMATION 43 TAC , The Texas Department of Motor Vehicles (department) proposes amendments to Chapter 217, Vehicle Titles and Registration, Subchapter F, Motor Vehicle Record Information, , Access to Motor Vehicle Records, and , Cost of Motor Vehicle Records. EXPLANATION OF PROPOSED AMENDMENTS Amendments are proposed to and to clarify procedures for and access to motor vehicle records and associated cost of records. The changes to add a requirement that law enforcement officers seeking to access personal information provide a copy of current law enforcement credentials. The changes expand the scope of public entities that are exempt from certain fees to include all Texas governmental entities and Texas toll project entities. Also, amendments throughout change "agency" to "Texas governmental entity" and renumber paragraphs as necessary. The amendments to provide for law enforcement access to certain records at no cost. In addition, deposit, minimum balance and fee information has been reorganized and simplified to better inform department customers. The amendments to add a new subsection (f) to address department reciprocity agreements with other governmental entities for records access. FISCAL NOTE Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments as proposed are in effect, there will be minor positive fiscal implications for state or local governments and toll project entities as a result of enforcing or administering the proposed amendments. Texas state and local governmental entities and toll entities that regularly access motor vehicle record information will have access to certain records at no cost resulting in savings for those entities. Jeremiah Kuntz, Director of the Vehicle Titles and Registration Division, has determined that there will be no impact on local economies or overall employment as a result of enforcing or administering the proposed amendments. PUBLIC BENEFIT AND COST Mr. Kuntz has also determined that for each year of the first five years the amendments are in effect, the public benefit anticipated as a result of enforcing or administering the amendments will be to clarify who has access to motor vehicle records and the associated costs for copies of the records. There are no anticipated economic costs for persons required to comply with the proposed amendments. There will be no adverse economic effect on small businesses, or micro-businesses, or rural communities. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future PROPOSED RULES December 22, TexReg 7375

138 legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendments do not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. SUBMITTAL OF COMMENTS Written comments on the proposed amendments may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles (board) with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department under the Transportation Code; and more specifically, Transportation Code, , which provides that the department may adopt rules to implement and administer Chapter 730, Motor Vehicle Records Disclosure Act. CROSS REFERENCE TO STATUTE Government Code, ; Transportation Code, Chapter 730; and 18 U.S.C et seq Access to Motor Vehicle Records. (a) Request for records. A person seeking motor vehicle record information shall submit a written request on the form required by the department. Information will be released in accordance with Title 18 U.S.C et seq., Transportation Code, Chapter 730, and Government Code, A completed and properly executed form must include, at a minimum: (1) the name and address of the requestor; (2) the Texas license number, title or document number, or vehicle identification number of the motor vehicle about which information is requested; (3) a photocopy of the requestor's identification; (4) a statement that the requested information may only be released if the requestor is the subject of the record, if the requestor has written authorization for release from the subject of the record, or if the intended use is for a permitted use as indicated on the form; (5) a certification that the statements made on the form are true and correct; and (6) the signature of the requestor. (b) Identification required. A person may not apply for receipt of personal information unless the person presents current photo identification containing a unique identification number. The identification document must be a: (1) driver's license or state identification certificate issued by a state or territory of the United States; (2) United States or foreign passport; (3) United States military identification card; (4) United States Department of Homeland Security, United States Citizenship and Immigration Services, or United States Department of State identification document; [or] (5) concealed handgun license or license to carry a handgun issued by the Texas Department of Public Safety under Government Code, Chapter 411, Subchapter H; or[.] (6) copy of current law enforcement credentials if the requestor is a law enforcement officer. (c) Electronic access. The department may make motor vehicle record information available under the terms of a written service agreement. (1) Agreement with business or individuals. The written service agreement with a business or individual must contain: (A) the specified purpose of the agreement; (B) an adjustable account, if applicable, in which an initial deposit and minimum balance is maintained in accordance with of this title (relating to Cost of Motor Vehicle Records); [the amount of:] [(i) $200 for an on-line access account; or] [(ii) $1,000 for a prepaid account for batch purchase of motor vehicle record information;] (C) termination and default provisions; [(D) service hours for access to motor vehicle records for on-line access;] (D) [(E)] the contractor's signature; (E) [(F)] a statement that the use of motor vehicle record information obtained by virtue of a service agreement is conditional upon its being used: (i) in accordance with 18 U.S.C et seq. and Transportation Code, Chapter 730; and and (F) this section. (ii) only for the purposes defined in the agreement; [(G)] the statements required by subsection (a) of (2) Agreements with Texas governmental entities [agencies]. (A) The written service agreement with a Texas governmental entity [an agency] must contain: (i) the specified purpose of the agreement; [(ii) method of payment;] [(iii) notification regarding the charges;] (ii) [(iv)] a statement that the use of motor vehicle record information obtained by virtue of a service agreement is conditional upon its being used in accordance with 18 U.S.C et seq. and Transportation Code, Chapter 730, and only for the purposes defined in the agreement; of this section; (iii) (iv) [(v)] the statements required by subsection (a) [(vi)] the signature of an authorized official; and (v) [(vii)] an attached statement citing the entity's [agency's] authority to obtain social security number information, if applicable. (B) Texas governmental entities, as defined in Government Code, , and including the Texas Law Enforcement Telecommunication System and toll project entities, as defined by 42 TexReg 7376 December 22, 2017 Texas Register

139 Transportation Code, , are [access is] exempt from the payment of fees, except as provided by (e) of this title. (d) Ineligibility to receive personal information. The department may prohibit a person, business, or Texas governmental entity [agency] from receiving personal information if the department finds a violation of a term or condition of the agreement entered into in accordance with subsection (c) of this section. (e) Initial deposits and minimum balances. Notwithstanding of this title, the department may modify initial deposit and minimum balance requirements on a case by case basis depending on customer usage Cost of Motor Vehicle Records. (a) Standard costs. The department will charge fees in accordance with Government Code, Chapter 552 and the cost rules promulgated by the Office of the Attorney General in 1 Texas Administrative Code, Chapter 70 (relating to Cost of Copies of Public Information). (b) Law enforcement. An employee of a state, federal or local law enforcement entity is exempt from the payment of fees for motor vehicle records in subsection (c)(1) - (4) of this section if the records are necessary to carry out lawful functions of the law enforcement agency. (c) Motor vehicle record costs. For new contracts and renewals, the costs are: $2.30; (1) Title history - $5.75; (2) Certified title history - $6.75; (3) Title and registration verification (record search) - (4) Certified title and registration verification (record search) - $3.30; and (5) Duplicate registration receipt for current registration period - $2. (d) Electronic motor vehicle records and files. (1) Master file of motor vehicle registration and title database - $5,000 plus $.38 per 1,000 records; (2) Weekly updates to motor vehicle registration and title database - deposit of $1,755 and $135 per week; (3) e-tag file - deposit of $845 and $65 per week; (4) Dealer supplemental file - deposit of $1,235 and $95 per week; (5) Special plates file - deposit of $1,235 and $95 per week; (6) Batch inquiry to motor vehicle registration and title database - deposit of $1,000, minimum balance of $750 and $23 per run plus $.12 per record; (7) Online motor vehicle inquiry (MVInet) access - deposit of $200, minimum balance of $150 and $23 per month plus $.12 per record; and (8) Scofflaw remarks (inquiry, addition or deletion) - deposit of $500, minimum balance of $350 and $23 per run plus $.12 per record. (e) Exemption applicability. The exemption granted in (c)(2)(B) of this title (relating to Access to Motor Vehicle Records) does not apply to subsection (d)(1), (6), or (8) of this section. (f) Reciprocity agreements. The department may enter into reciprocity agreements for records access with other governmental entities that may waive some or all of the fees established in this section. [(b) Motor vehicle record costs. The cost for motor vehicle information will be:] $2.30;] [(1) Title and registration verification (record search) - [(2) Title history - $5.75;] [(3) Online access to motor vehicle records database - $23 per month plus $.12 per record entry;] [(4) Motor vehicle registration and title database - $5,000 plus $.38 per 1,000 records copied to media;] [(5) Weekly updates to motor vehicle registration and title database, with media provided by the department - $135; and] [(6) Batch inquiry to motor vehicle records database - $23 per computer run plus $.12 per record searched.] The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) CHAPTER 221. SALVAGE VEHICLE DEALERS, SALVAGE POOL OPERATORS AND SALVAGE VEHICLE REBUILDERS SUBCHAPTER D. RECORDS 43 TAC The Texas Department of Motor Vehicles (department) proposes amendments to Chapter 221, Salvage Vehicle Dealers, Salvage Pool Operators and Salvage Vehicle Rebuilders, Subchapter D, Records, , Record Retention. EXPLANATION OF PROPOSED AMENDMENTS Proposed amendments to add new (c) requiring salvage vehicle dealers who use the department's web-based title application known as webdealer to comply with proposed of this title (relating to Access to and Use of webdealer), which includes a requirement that a physical document be retained at least four calendar years from date of submission. The proposed amendment clarifies that original hard copy titles need not be maintained at the licensed location, but must be made available to the department on request. Simultaneous with these proposed amendments, the department is also proposing related amendments in Chapter 217, Subchapter C, Registration and Title Systems. One proposed amendment is a proposed definition of webdealer, which includes any other web-based system which facilitates electronic submission of title applications, including websalvage. Other amendments correct the punctuation of "nonrepairable" motor vehicles to be consistent with statute by deleting the unnecessary hyphen. PROPOSED RULES December 22, TexReg 7377

140 FISCAL NOTE Linda M. Flores, Chief Financial Officer, has determined that for each of the first five years the amendments as proposed are in effect, there will be no fiscal implications for state or local governments as a result of enforcing or administering the proposed amendments. Corrie Thompson, Director of the Enforcement Division, has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed amendments. PUBLIC BENEFIT AND COST Ms. Thompson has also determined that for each year of the first five years the amendments are in effect, the public benefit anticipated as a result of enforcing or administering the amendment will be security in back-up documentation to support transactions processed through webdealer. In addition, since users will no longer be required to submit the physical document to the department, transaction processing time will be improved. There are no significant anticipated economic costs for persons required to comply with the proposed amendments. There will be no adverse economic effect on small businesses, micro-businesses, or rural communities. TAKINGS IMPACT ASSESSMENT The department has determined that this proposal affects no private real property interests and that this proposal does not restrict or limit an owner's right to property that would otherwise exist in the absence of government action, and so does not constitute a taking or require a takings impact assessment under Government Code, GOVERNMENT GROWTH IMPACT STATEMENT The department has determined that during the first five years the proposed amendments are in effect, no government program would be created or eliminated. Implementation of the proposed amendments would not require the creation of new employee positions or elimination of existing employee positions. Implementation would not require an increase or decrease in future legislative appropriations to the department or an increase or decrease of fees paid to the department. Additionally, the proposed amendments do not create a new regulation, or expand, limit, or repeal an existing regulation. The proposed amendment does not affect the number of individuals subject to the rule's applicability and will not affect this state's economy. SUBMITTAL OF COMMENTS Written comments on the proposed amendments may be submitted to David D. Duncan, General Counsel, Texas Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas or by to rules@txdmv.gov. The deadline for receipt of comments is 5:00 p.m. on January 22, STATUTORY AUTHORITY The amendments are proposed under Transportation Code, , which provides the board of the Texas Department of Motor Vehicles with the authority to adopt rules that are necessary and appropriate to implement the powers and the duties of the department; and more specifically, Transportation Code, , which authorizes the department to adopt rules to administer Transportation Code, Chapter 501. CROSS REFERENCE TO STATUTE Transportation Code, , , Record Retention. (a) A salvage vehicle dealer must retain at the licensed business location, or have electronic access at the licensed business location of records stored electronically, a complete record of all purchases and sales of salvage motor vehicles and nonrepairable [non-repairable] motor vehicles for a minimum period of 36 months from the date of the transaction. (b) A salvage vehicle dealer shall maintain at the licensed business location a record of each vehicle that is scrapped or destroyed, and a photocopy of the front and back of all salvage vehicle titles and nonrepairable [non-repairable] vehicle titles, or a photocopy or electronic copy of all salvage records of title, and nonrepairable [non-repairable] records of title, and, if applicable, a photocopy of any outof-state evidence of ownership surrendered to the department, until the fourth anniversary of the date the report was acknowledged as received by the department. (c) A salvage vehicle dealer utilizing the department's webbased title application known as webdealer, as defined in of this title (relating to Automated and Web-Based Vehicle Registration and Title Systems), must comply with of this title (relating to Access to and Use of webdealer). Original hard copy titles are not required to be kept at the licensed location, but must be made available to the department upon request. The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on December 8, TRD David D. Duncan General Counsel Texas Department of Motor Vehicles Earliest possible date of adoption: January 21, 2018 For further information, please call: (512) TexReg 7378 December 22, 2017 Texas Register

141 TITLE 13. CULTURAL RESOURCES PART 7. STATE PRESERVATION BOARD CHAPTER 111. RULES AND REGULATIONS OF THE BOARD 13 TAC Proposed new , published in the June 2, 2017, issue of the Texas Register (42 TexReg 2897), is automatically withdrawn. The agency failed to adopt the proposal within six months of publication. (See Government Code, , and 1 TAC 91.38(d).) Published by the Office of the Secretary of State on December 5, TRD WITHDRAWN RULES December 22, TexReg 7379

142

143 TITLE 1. ADMINISTRATION PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION CHAPTER 354. MEDICAID HEALTH SERVICES SUBCHAPTER A. PUCHASED HEALTH SERVICES The Texas Health and Human Services Commission (HHSC) adopts amendments to , concerning Definitions, without changes to the proposed text published in the September 1, 2017, issue of the Texas Register (42 TexReg 4375). HHSC adopts amendments to , concerning Authorized Dentists' Services, with changes to the proposed text published in the September 1, 2017, issue of the Texas Register (42 TexReg 4375). BACKGROUND AND JUSTIFICATION Current federal Medicaid rules allow Medicaid-enrolled physicians to arrange for a substitute Medicaid-enrolled physician to serve in the billing physician's practice on a short or long-term basis, known as a locum tenens arrangement. House Bill 1661, 84th Legislature, Regular Session, 2015, directed HHSC to adopt rules to allow this practice for dentists in Texas Medicaid. HHSC staff consulted with the Centers for Medicare & Medicaid Services (CMS) staff on the federal guidance related to substitute arrangements for dentists. CMS informed HHSC that locum tenens arrangements are not allowed for dentists as they are for physicians, because of the distinction drawn between "physician" and "dentist" in federal Medicaid law. Specifically, 1902(a)(32)(C) of the Social Security Act permits a locum tenens arrangement in the case of services provided by a physician, and the definition of "physicians' services" in 42 C.F.R does not include services provided by a dentist. While a locum tenens relationship is not permitted for dentists under federal law, a Medicaid-enrolled dentist may serve as a billing agent for a substitute dentist. The adopted rule amendments offer an alternate billing arrangement option to Texas Medicaid dentists. Under the billing arrangement, the substitute dentist is required to be enrolled in Medicaid. The arrangement is time-limited, to 90 consecutive days, unless the reason for the billing agent dentist's absence is active duty service as a member of a reserve component in the U.S. Armed Forces. In response to public comments, the adopted rule amendments to and lengthen the time period a dentist may use a substitute dentist, from 14 days to 90 days, to match the allocated days granted to physicians. COMMENTS The 30-day comment period ended October 2, During this period, HHSC received comments regarding the proposed rule amendments from four commenters, including the Texas Dental Association, South Texas Dental, State Representative Bobby Guerra, and Community Dental Partners. A summary of comments and HHSC's responses follows. Comment: One commenter expressed concern that the proposed language of does not meet the legislative intent of House Bill 1661, in that payments for dental services rendered are made directly to the substitute dentist, instead of the billing dentist. The commenter stated that payment for services provided by the substitute dentist should be paid to the billing dentist. Response: The total payment for the substitute dentist's work will be paid to the billing agent dentist, not the substitute dentist. Through contract, the billing agent dentist pays the substitute dentist his/her portion. Under 42 C.F.R , the billing agent dentist's compensation must be related to the cost of processing the billing, not related on a percentage or other basis to the amount that is billed or collected, and not dependent upon the collection of the payment. HHSC did not revise the rule in response to this comment. Comment: One commenter expressed concern regarding proposed changes to that both Dental Managed Care Organizations (DMOs) offer locum tenens arrangements as part of their administration of the Texas Dental Program, and that if the rule is adopted, the DMOs may interpret it to mean that they can no longer offer such arrangements to their credentialed dentists. Response: On July 17, 2017, HHSC sent a notice dictating that DMOs must, effective immediately, inform their providers that a locum tenens relationship with a substitute dentist is not an allowable arrangement under Texas Medicaid at this time. HHSC did not revise the rule in response to this comment. Comment: Several commenters expressed concern that in the proposed rule amendments to , the 14-day time limit for dentists is too short and does not take into account dentists who take time off for maternity leave, travel to their home countries, or have medical or personal issues that keep them away from their practice for more than 14 days. Additionally, a commenter mentioned that this is particularly pertinent to dentists in rural communities where there may only be one dentist who treats Medicaid patients. After the 14-day period ends, children with infections or tooth aches would simply have to wait for care until the credentialed dentist is able to return. Response: The intent of House Bill 1661 was to extend to dentists the same arrangement physicians receive, to the extent allowed by federal law. HHSC has reviewed all stakeholder com- ADOPTED RULES December 22, TexReg 7381

144 ments regarding the concern over the number of days a dentist may use a substitute dentist. HHSC revised the rule in response to these comments, lengthening the time frame from 14 to 90 consecutive days. Comment: One commenter expressed concern regarding proposed amendments to in respect to the CMS decision that the definition of "physicians' services" in 42 C.F.R does not include services provided by a dentist. The commenter suggested that federal law is ambiguous about the definition of "physician" and the inclusion of dentists in that definition. The commenter stated that 1861(r)(2) of the Social Security Act defines the term "physician" as including a doctor of dental surgery or of dental medicine. Response: HHSC respectfully declines to amend the rule as proposed based on this comment. The definition of "physician" cited by the commenter is located in 1861(r)(2) of the Social Security Act, and the text of that section limits the application of the definition to Title 18 of the Social Security Act. Title 19 of the Social Security Act governs this rule action. DIVISION 10. DEFINITIONS 1 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code , which provides the Executive Commissioner of HHSC with broad rulemaking authority; and Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal Medicaid program in Texas. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 31, 2017 Proposal publication date: September 1, 2017 For further information, please call: (512) DIVISION 14. DENTISTS' SERVICES 1 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code , which provides the Executive Commissioner of HHSC with broad rulemaking authority; and Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal Medicaid program in Texas Authorized Dentists' Services. (a) Dentists' services provided by a doctor of dentistry (DDS, DMD, or DDM), as defined in of this subchapter (relating to Definitions), are covered by the Texas Medicaid Program if the services: (1) are within the dentist's scope of practice, as defined by state law; and (2) would be covered by the Texas Medicaid Program when they are provided by a licensed physician (MD or DO). (b) Substitute dentist. A dentist may act as a billing agent, pursuant to 42 CFR , to submit claims. To qualify for reimbursement, the billing agent dentist and substitute dentist must comply with the following requirements: (1) The substitute dentist must be licensed to practice in the state of Texas. (2) Consistent with the requirements of and of this title (relating to Provider Responsibility and Mandatory Exclusion, respectively), the substitute dentist must be enrolled in Medicaid and not be on the Medicaid or Title XX provider exclusion list. (3) The substitute dentist's National Provider Identifier (NPI) must be entered on the dental claim form. (4) The billing agent dentist must submit the claims on behalf of the substitute dentist and may recover no more than the actual administrative cost of submitting the claim on behalf of the substitute dentist. This cost is not reimbursable by Medicaid. (5) The billing agent dentist may only bill for services furnished by a substitute dentist on a temporary basis, for no longer than a 90-day consecutive period. Except as provided in paragraph (6) of this subsection, the billing agent dentist may not submit a claim for services furnished by a substitute dentist to address long-term absences or vacancies in a dental practice. (6) A billing agent dentist may submit claims for the services of a substitute dentist for longer than 90 consecutive days, if the billing agent dentist has been called or ordered to active duty as a member of a reserve component of the Armed Forces. Medicaid accepts claims from the billing agent dentist for services provided by the substitute dentist for the duration of the billing agent dentist's active duty as a member of a reserve component of the Armed Forces. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 31, 2017 Proposal publication date: September 1, 2017 For further information, please call: (512) TITLE 13. CULTURAL RESOURCES PART 2. TEXAS HISTORICAL COMMISSION 42 TexReg 7382 December 22, 2017 Texas Register

145 CHAPTER 25. PROGRAM 13 TAC 25.1, 25.9 STATE ARCHEOLOGICAL The Texas Historical Commission (hereafter referred to as the commission) adopts amendments to 25.1, relating to Definitions, and adopts new 25.9, relating to Discovery and Evaluation of Unverified Cemeteries, Texas Administrative Code, Title 13, Part 2, Chapter 25, State Archeological Program. The amendment and new rule are adopted without changes to the proposed text, as published in the August 18, 2017, issue of the Texas Register (42 TexReg 4066). In the adoption of the amendment to 25.1, definitions are amended to clarify the commission's role in evaluating cemeteries in accordance with amendments to the Texas Health and Safety Code, , , , and The adoption of 25.9 will clarify procedures for reporting the discovery of unverified cemeteries and the commission's role in evaluating and verifying cemeteries in accordance with amendments to the Texas Health and Safety Code, and No comments were received regarding adoption of the amendment or the new rule. The amendments and new rule are adopted under (q) of the Texas Government Code which provides the Texas Historical Commission with the authority to promulgate rules to reasonably effect the purposes of the commission, of the Texas Government Code relating to the commission's authority to adopt rules related to abandoned cemeteries, and of the Texas Health and Safety Code which provides the commission with the authority to adopt rules to enforce and administer of the Texas Health and Safety Code. The amendment and new rule implement Texas Government Code, and Texas Health and Safety Code, No other statutes, articles or codes are affected by this adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Effective date: December 31, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) CHAPTER 26. PRACTICE AND PROCEDURE The Texas Historical Commission (hereafter referred to as the commission) adopts amendments, without changes, to the proposed text as published in the August 18, 2017, issue of the Texas Register (42 TexReg 4067) and will not be republished. The commission adopts amendments to 26.1 (Object), 26.2 (Scope), 26.3 (Definitions), 26.5 (Antiquities Advisory Board), 26.7 (Location and Discovery of Cultural Resources and Landmarks), (Criteria for Evaluating Archeological Sites), (Issuance and Restrictions of Archeological Permits), (Reports Relating to Archeological Permits), (Principal Investigator's Responsibilities for Disposition of Archeological Artifacts and Data), (Criteria for Evaluating Historic Buildings and Structures), (Application for Historic Buildings and Structures Permits), and (Reports Relating to Historic Buildings and Structures Permits) of Title 13, Part 2, Chapter 26 of the Texas Administrative Code (relating to Practice and Procedure) under the jurisdiction of the Antiquities Code of Texas (Title 9, Chapter 191, of the Texas Natural Resources Code) , and 26.5 are under Subchapter A; 26.7 is under Subchapter B; 26.10, 26.14, 26.16, and are under Subchapter C; and 26.19, 26.20, and are under Subchapter D. Section 26.1: Object is amended to add reference to the Health and Safety Code of Texas. Sections 26.2: Scope, 26.20: Application for Historic Buildings and Structures Permits, and 26.23: Reports Relating to Historic Buildings and Structures Permits are amended to update website addresses. Section 26.3: Definitions are amended to clarify the commission's role in evaluating unverified cemeteries, curation of artifacts, and review of work to historic buildings and structures. Section 26.5: Antiquities Advisory Board is amended to eliminate a reauthorization conflict with the Texas Government Code. Section 26.7: Location and Discovery of Cultural Resources and Landmarks is amended to clarify notification requirements and review procedures for political subdivisions of the state, as well as the commission's role in evaluating unverified cemeteries. Section 26.10: Criteria for Evaluating Archeological Sites is amended to also address verification of cemeteries. Section 26.14: Issuance and Restrictions of Archeological Permits is amended to address the potential need to censure investigative firms working under Antiquities Permits. Section 26.16: Reports Relating to Archeological Permits and 26.17: Principal Investigator's Responsibilities for Disposition of Archeological Artifacts and Data are amended to address the curation of artifacts. Section 26.19: Criteria for Evaluating Historic Buildings and Structures is amended to clarify when certain requirements apply. No comments were received regarding adoption of the amendments. SUBCHAPTER A. GENERAL PROVISIONS 13 TAC , 26.5 These amendments are adopted under the authority of Texas Government Code (q), which provides the Texas Historical Commission with the authority to promulgate rules to reasonably effect the purposes of the commission; of the Natural Resources Code, which provides the commission with the authority to promulgate rules for the implementation and administration of the Antiquities Code of Texas; of the Texas Government Code relating to the commission's authority to adopt rules related to abandoned cemeteries; and of the Texas Health and Safety Code which provides the commission with the authority to adopt rules to enforce and administer ADOPTED RULES December 22, TexReg 7383

146 and of the Texas Health and Safety Code. No other statutes, articles or codes are affected by these new rules. The Commission concurrently adopts amendments to the rules in Chapter 26 pursuant to Texas Government Code No other statutes, articles or codes are affected by this adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Effective date: December 31, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) SUBCHAPTER B. IDENTIFICATION AND DESIGNATION OF LANDMARKS 13 TAC 26.7 These amendments are adopted under the authority of Texas Government Code (q), which provides the Texas Historical Commission with the authority to promulgate rules to reasonably effect the purposes of the commission; of the Natural Resources Code, which provides the commission with the authority to promulgate rules for the implementation and administration of the Antiquities Code of Texas; of the Texas Government Code relating to the commission's authority to adopt rules related to abandoned cemeteries; and of the Texas Health and Safety Code which provides the commission with the authority to adopt rules to enforce and administer and of the Texas Health and Safety Code. No other statutes, articles or codes are affected by this adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Effective date: December 31, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) SUBCHAPTER C. ARCHEOLOGY 13 TAC 26.10, 26.14, 26.16, These amendments are adopted under the authority of Texas Government Code (q), which provides the Texas Historical Commission with the authority to promulgate rules to reasonably effect the purposes of the commission; of the Natural Resources Code, which provides the commission with the authority to promulgate rules for the implementation and administration of the Antiquities Code of Texas; of the Texas Government Code relating to the commission's authority to adopt rules related to abandoned cemeteries; and of the Texas Health and Safety Code which provides the commission with the authority to adopt rules to enforce and administer and of the Texas Health and Safety Code. No other statutes, articles or codes are affected by this adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Effective date: December 31, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) SUBCHAPTER D. HISTORIC BUILDINGS AND STRUCTURES 13 TAC 26.19, 26.20, These amendments are adopted under the authority of Texas Government Code (q), which provides the Texas Historical Commission with the authority to promulgate rules to reasonably effect the purposes of the commission; of the Natural Resources Code, which provides the commission with the authority to promulgate rules for the implementation and administration of the Antiquities Code of Texas; of the Texas Government Code relating to the commission's authority to adopt rules related to abandoned cemeteries; and of the Texas Health and Safety Code which provides the commission with the authority to adopt rules to enforce and administer and of the Texas Health and Safety Code. No other statutes, articles or codes are affected by this adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Mark Wolfe Executive Director Texas Historical Commission Effective date: December 31, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) TexReg 7384 December 22, 2017 Texas Register

147 TITLE 16. ECONOMIC REGULATION PART 1. TEXAS RAILROAD COMMISSION OF CHAPTER 12. COAL MINING REGULATIONS SUBCHAPTER G. SURFACE COAL MINING AND RECLAMATION OPERATIONS, PERMITS, AND COAL EXPLORATION PROCEDURES SYSTEMS DIVISION 2. GENERAL REQUIREMENTS FOR PERMITS AND PERMIT APPLICATIONS 16 TAC The Railroad Commission of Texas (Commission) adopts amendments to , relating to Permit Fees, without changes to the proposed text as published in the October 6, 2017, issue of the Texas Register (42 TexReg 5303). The adopted amendments implement provisions of Senate Bill 1, 85th Texas Legislature (Regular Session, 2017), and, specifically, Article VI, Railroad Commission Rider 5, which requires the amounts appropriated from general revenue for state fiscal years 2018 and 2019 to cover the cost of permitting and inspecting coal mining operations. This requirement is contingent upon the Commission assessing fees sufficient to generate, during the biennium, revenue to cover the general revenue appropriations. The Commission amends the fees set forth in subsection (b) by amending the calendar years to 2017 and The Commission amends paragraph (1) to decrease the annual fee for each acre of land within a permit area covered by a reclamation bond on December 31st of each year, as shown on the map required at (2)(C) of this chapter (relating to Operation Plan: Maps and Plans), from the current $13.05 to $ The Commission amends paragraph (2) to decrease the annual fee for each permit in effect on December 31st of a year to $6,170 from the current amount of $6,600. The Commission anticipates that annual fees in these new amounts will result in revenue of $2,556,180 in each year of the biennium. The Commission received no comments on the proposed amendments. The Commission adopts the amendments under Texas Natural Resources Code, , which authorizes the Commission to promulgate rules pertaining to surface coal mining operations and , which authorizes the Commission to collect annual fees. Statutory authority: Texas Natural Resources Code, and Cross-reference to statute: Texas Natural Resources Code, and Issued in Austin, Texas, on December 5, The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 5, TRD Haley Cochran Rules Attorney, Office of General Counsel Railroad Commission of Texas Effective date: December 25, 2017 Proposal publication date: October 6, 2017 For further information, please call: (512) PART 9. TEXAS LOTTERY COMMISSION CHAPTER 401. ADMINISTRATION OF STATE LOTTERY ACT The Texas Lottery Commission (Commission) adopts amendments to 16 TAC (Suspension or Revocation of License), (Standard Penalty Chart), (Scratch Ticket Game Rules), (Draw Game Rules (General)), ("Pick 3" Draw Game Rule), ("Cash Five" Draw Game Rule), ("Texas Two Step" Draw Game Rule), ("All or Nothing" Draw Game Rule), ("Texas Triple Chance" Draw Game Rule), (Retailer Settlements, Financial Obligations, and Commissions), (Required Purchases of Lottery Tickets), (Training), and (Retailer's Financial Responsibility for Lottery Tickets Received and Subsequently Stolen or Lost), without changes to the proposed text as published in the October 20, 2017, issue of the Texas Register (42 TexReg 5759) and will not be republished. The amendments to (General Definitions),and ("Daily 4" Draw Game Rule) are adopted with changes to the proposed text as published in the October 20, 2017, issue of the Texas Register (42 TexReg 5759). The adopted version of the rule adds a formal definition for third-party point-of-sale systems and corrects a typographical error in Figure 16 TAC (g)(16). There are two purposes for the rule amendments. The first purpose is to facilitate the potential future sale of lottery tickets using Commission-approved third-party point-of-sale systems. Specifically, these amendments change the way tickets are issued, including revising the definition of terminals, clarifying language on Quick Pick selection, and updating how tickets are printed on third-party point-of-sale systems. Certain retailer requirements are amended to facilitate these types of sales as well. Second, these amendments make conforming changes that match rule language to current Commission (and industry) practice and terminology. These amendments include changing the references to lottery games from "on-line" and "instant" to "draw" and "scratch." There are multiple other clarifications of meanings and terms, both to conform usage of those terms throughout the rules and to match current Commission practice. Some of these changes were identified in the most recent Commission rule review and are being implemented with these amendments. The Commission received written comments on the proposed amendments during the public comment period from a representative of the Kickapoo Traditional Tribe of Texas. ADOPTED RULES December 22, TexReg 7385

148 COMMENT SUMMARY: None of the proposed amendments define the phrase "Commission-approved third-party point-of-sale systems." Nor do they define "third party point of sale system" or "point of sale system" or any other part of this phrase that would tell the reader what the term entails and what exact devices would be captured under it. Third-party point-of-sale systems must be defined so the public understands the implications of the regulations. Furthermore, the phrase "otherwise issued in a manner approved by the commission" (used in reference to tickets issued by "Commission-approved third-party point-of-sale systems") provides no specificity at all about how a ticket may be issued by a third-party point-of-sale system. The Commission should be precise and specifically set forth the manner in which a third-party point-of-sale system will issue a ticket under these proposed regulations and clarify exactly how that ticket will be used. COMMISSION RESPONSE: As noted in the preamble to the rule proposal, one of the primary purposes of the proposed amendments is facilitate the potential future sale of lottery tickets on Commission-approved third-party point-of-sale systems. These sales would occur in-lane at traditional brick and mortar retail locations, such as grocery stores and chain retail stores, after those retailers obtained a Texas Lottery sales agent license. Third-party point-of-sale systems refers to the industry terminology used by these retailers to describe their self-contained equipment that performs sales-related tasks at the in-lane checkout counter, such as cash registers or self-checkout terminals, and will not include any gambling device. The proposed amendments differentiate the third-party point-ofsale systems from the Texas Lottery dedicated lottery terminals currently used to sell draw game tickets. However, the third-party point-of-sale systems will only perform lottery-related tasks currently performed on Texas Lottery dedicated lottery terminals; in other words, the third-party systems will never do more than what a dedicated lottery terminal can do. The proposed amendments also differentiate the draw game ticket printing process used by the dedicated lottery terminals from the process that may be used on a third-party system. Each retailer may have its own proprietary point-of-sale system, so the Commission cannot define with specificity the exact hardware or software on which these draw game tickets may be sold or printed. The proposed amendments therefore provide that any third-party system and its method of issuing tickets must have Commission approval before being used to print and/or sell Texas Lottery draw game tickets to ensure compliance with the Commission's lottery security and integrity requirements. To make the proposed amendments more clear on these points, the Commission will adopt the additional following definition in (50): Third-party point-of-sale systems-- Self-contained computerized equipment (not owned or operated by the commission or lottery operator) that performs sales-related tasks at a licensed lottery ticket retailer's checkout counter and that has the sole Texas Lottery-related purpose of selling draw game tickets printed on paper. Third-party point-of-sale systems will only perform the same lottery-related tasks as terminals owned or operated by the commission or lottery operator and may not issue electronic tickets or display outcomes for draw games using casino-style graphics of any kind. Third-party point-of-sale systems do not include any gambling device. COMMENT SUMMARY: The proposed amendments include certain changes to the existing definition of "On Line Game." Instead of stating that "the random number generator operated by the computer" as in the existing regulations, the proposed definition of "Draw Game" states "the random number generator approved by the commission." This change should be explained. Further, the regulations should be specific. COMMISSION RESPONSE: As noted above, the intent of the proposed amendments is to facilitate the potential future sale of lottery tickets at traditional brick and mortar retail locations. Currently, the random number generator used to select Quick Picks is part of the Texas Lottery dedicated lottery terminal. Once lottery tickets are sold on third-party point-of-sale systems, the Commission must retain control over the random number generator for lottery security and integrity purposes. The proposed amendments allow the Commission the flexibility to approve appropriate random number generator equipment on Commissionapproved vendor systems or to require that retailers obtain random numbers for lottery ticket purchases from the Commission's lottery gaming system remotely. The Commission declines to make changes to the proposed amendments in response to this comment. COMMENT SUMMARY: The proposed definition of "Draw game" adds "or other authorized entity" as an entity that will conduct a drawing. Who is the "other authorized entity"? When and how are they authorized for this purpose? This phrase should be more specific to identify who would fall into this category. COMMISSION RESPONSE: As noted in the preamble to the rule proposal, the other primary purpose of the proposed amendments was to make conforming changes that match rule language to current Commission practice. There are certain instances in which the Commission does not conduct a drawing itself. For example, in multijurisdiction lottery draw games such as Powerball and Mega Millions, a lottery other than the Commission conducts the drawing. Also, in certain promotional or second-chance lottery drawings, a Commission vendor may conduct the drawing. In both situations, the party conducting the drawing is specifically authorized to conduct the drawing on behalf of the Commission. The rule language was updated to reflect this practice. The Commission declines to make changes to the proposed amendments in response to this comment. SUBCHAPTER B. LICENSING OF SALES AGENTS 16 TAC , These amendments are adopted under Texas Government Code , which authorizes the Commission to adopt rules governing the operation of the lottery; and , which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction. This adoption is intended to implement Texas Government Code, Chapter 466. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD TexReg 7386 December 22, 2017 Texas Register

149 Bob Biard General Counsel Texas Lottery Commission Effective date: December 31, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) SUBCHAPTER D. LOTTERY GAME RULES 16 TAC , , , , , , , , The following amendments are adopted under Texas Government Code , which authorizes the Commission to adopt rules governing the operation of the lottery; and , which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction. This adoption is intended to implement Texas Government Code, Chapter General Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Caption--The letters appearing below the play symbols in the play area of a ticket that verify the correctness of the play symbols. (2) Certified drawing--a drawing in which a lottery drawing representative and an independent certified public accountant attest that the drawing equipment functioned properly and that a random selection of a winning combination occurred. (3) Claim center--a claims office of the commission at which a claimant may claim a prize. (4) Claim form--the printed form authorized and provided by the commission that a claimant shall complete and submit to the commission when claiming a prize. (5) Claimant--A player who has submitted a valid claim for payment within the required time frame. (6) Commission--The Texas Lottery Commission. Unless the context clearly requires otherwise, "commission" includes authorized Texas Lottery commission staff members/employees. (7) Current draw period--the period of time in which the player selections and Quick Pick selections are accumulated into a pool of plays eligible for winning in a drawing held at the end of the designated period. (8) Director--The Director of the Texas Lottery Commission, Lottery Operations. (9) Direct prize category contribution--a specified percentage of net sales allocated to the prize categories as described in the rules of the specific game being played. (10) Division--Lottery Operations of the Texas Lottery Commission. (11) Draw break--a period of time before a drawing for a draw game during which player selections for that drawing may not be entered into the lottery gaming system and during which no requests for Quick Pick selections for that drawing may be entered into the lottery gaming system. (12) Draw game--a lottery game which utilizes a computer system to administer plays, the type of game, and amount of play for a specified drawing date, and in which a player either selects a combination of numbers or allows number selection by a random number generator approved by the commission, referred to as Quick Pick. The commission, or other authorized entity, will conduct a drawing to determine the winning combination(s) in accordance with the rules of the specific game being played and the draw procedures for the specific game. Sometimes, draw games are called "on-line games." (13) Draw game ticket--a ticket issued to a player, by a retailer, and generated by a terminal provided by the commission or commission's vendor on official Texas Lottery paper stock, or, for thirdparty point-of-sale systems approved by the commission, printed on paper stock or otherwise issued in a manner approved by the commission to provide tangible evidence of participation in a lottery game. That ticket shall be the only acceptable evidence of the combination of digits, numbers, or symbols selected. Draw game tickets may be purchased only from retailers. (14) Drawing--The procedure by which the commission randomly selects winning combinations of digits, numbers, or symbols in accordance with the rules of the game as set forth in the rules of the specific game being played and the draw procedures for the specific game. (15) Drawing pool--the amount of money available for all prize categories for a specific drawing. (16) Draw procedures--the written document approved by the executive director that specifies the draw procedures for a particular game, if a drawing is designed as part of the game. (17) Duplicate ticket--a ticket produced by photograph, xerography, or any other method other than a ticket generated by a terminal. (18) Executive director--the executive director of the Texas Lottery Commission. (19) Game number--the number on the back of the scratch ticket which refers to the number associated with the particular scratch ticket game. (20) Game procedures--the written document approved by the director that includes, among other things, the game name, how a prize is won, game prize structure, play style, and eligibility for a drawing, if any. (21) High-tier prize--a prize of $600 or more. (22) Indirect prize category contribution--amounts allocated from the prize reserve fund, roll-over and prize breakage for a specific draw game drawing. (23) Invalid ticket--any ticket that fails to meet all validation requirements of the commission. (24) Lottery gaming system--the commission or commission's vendor's computer system consisting of terminals, central processing equipment, and a communication network. (25) Lottery retailer or retailer--a licensed sales agent, as contemplated by Chapter 466, Government Code. (26) Low-tier prize--a prize of less than $25. (27) Mid-tier prize--a prize of $25 or more but less than $600. (28) Minor--An individual younger than 18 years of age. ADOPTED RULES December 22, TexReg 7387

150 (29) Pack number--the unique number on the back of the scratch ticket that designates the number of the pack within a specific scratch ticket game. (30) Play area--the latex-covered area of a scratch ticket that when removed, reveals the ticket play symbols. (31) Play style--the method of play to determine a winner for an individual game. (32) Play symbol--the printed data under the latex on a scratch ticket that is used to determine eligibility for a prize. The symbols for individual games will be specified in individual scratch ticket game procedures. (33) Present at the terminal--a player remains physically present at the terminal from the time the player's order for the purchase of draw game tickets is paid for and accepted by the retailer until the processing of the order is completed and the tickets are delivered to the player at the retailer terminal location. (34) Prize amounts--the amount of money payable to each share in a prize category, the annuitized future value of each share in a prize category, or the net present cash value of each share in a prize category for each draw game drawing. Prize amounts are calculated by dividing the prize category contribution, the annuitized future value of the prize category contribution, or the net present cash value of the prize category contribution by the number of shares determined for the prize category. (35) Prize breakage--the money which is left over from the rounding down of the pari-mutuel prize levels to the next lowest whole dollar amount or money which is in excess of the amount needed to pay a prize. (36) Prize category--the matching combinations of numbers and their corresponding prize levels as described in rules for the specific game being played. (37) Prize category contributions--refers to contributions for each drawing to each prize category, including direct and indirect prize category contributions. (38) Prize fund--the monies allocated to be returned to players in winning tickets within a specific scratch ticket game. (39) Prize pool--in a draw game, the total amount of money available for prizes as a percentage of the total sales for the current draw period. (40) Prize structure--the number, value, prize pay out percentage, and odds of winning prizes for an individual game as approved by the executive director. (41) Promotion--One or more events coordinated or conducted by the commission at retail sites, fairs, festivals and other appropriate venues, or in conjunction with one or more particular Texas Lottery games, to educate players about Texas Lottery products and/or sell Texas Lottery games through a retailer in specific markets to maximize Texas Lottery sales and statewide awareness. (42) Promotional drawing--a drawing in which qualified contestants are awarded prizes in a random manner in accordance with the procedures set forth for a specific promotional event. (43) Quick Pick--A play option that generates random numbers in a manner approved by the commission. (44) Roll-over--The amount in a specific draw game prize pool category resulting from no matching combinations and/or prize breakage from the previous drawing. (45) Sales agent--a person licensed under the State Lottery Act to sell Texas Lottery tickets. (46) Scratch ticket--a scratch ticket lottery game, developed and offered for sale to the public in accordance with commission rules, that is played by removing the latex covered play area on a scratch ticket to reveal the ticket play symbols. Sometimes, scratch ticket games are called "instant games." (47) Shares--In a draw game, the total number of matching combinations within each prize category as determined for each drawing. (48) Sign-on slip--the receipt produced by a dedicated lottery ticket terminal when the retailer signs on to the lottery gaming system. (49) Terminal--A device authorized by the commission for the purpose of issuing draw game tickets and/or validating claims, including the commission or commission's vendor's computer hardware as well as commission-authorized third-party point-of-sale systems. (50) Third-party point-of-sale systems--self-contained computerized equipment (not owned or operated by the commission or lottery operator) that performs sales-related tasks at a licensed lottery ticket retailer's checkout counter and that has the sole Texas Lottery-related purpose of selling draw game tickets printed on paper. Third-party point-of-sale systems will only perform the same lottery-related tasks as terminals owned or operated by the commission or lottery operator and may not issue electronic tickets or display outcomes for draw games using casino-style graphics of any kind. Third-party point-of-sale systems do not include any gambling device. (51) Ticket--Any tangible evidence issued to provide participation in a lottery game or activity authorized by the State Lottery Act. (52) Ticket bearer--the person who has signed the ticket or who has possession of an unsigned ticket. (53) Ticket number--the number on the back of the scratch ticket that refers to the ticket sequence within a specific pack of a scratch ticket game. (54) Validation number--the unique number sequence printed on a ticket that provides for the verification of the ticket as a valid winner. (55) Valid ticket--a ticket which meets all specifications and validation requirements and entitles the holder to a specific prize amount. (56) Void ticket--any ticket that is stolen, unissued, illegible, mutilated, altered, counterfeit in whole or part, misregistered, defective, incomplete, printed or produced in error, multiply printed, fails any of the commission's confidential validation tests, or is a ticket produced by or for the commission for education and training purposes. (57) Winning combination--one or more digits, numbers, or symbols randomly selected by the commission in a drawing which has been certified "Daily 4" Draw Game Rule. (a) Daily 4. The executive director is authorized to conduct a game known as "Daily 4." The executive director may issue further directives and procedures for the conduct of Daily 4 that are consistent with this rule. In the case of conflict, this rule takes precedence over of this title (relating to Draw Game Rules (General)). 42 TexReg 7388 December 22, 2017 Texas Register

151 (b) Definitions. In addition to the definitions provided in of this title (relating to General Definitions), and unless the context in this rule otherwise requires, the following definitions apply. (1) Play--A Daily 4 play other than a Sum It Up play consists of: (A) the selection of a play type; (B) the selection of a Daily 4 base play amount of $.50, $1, $2, $3, $4 or $5; (C) the selection of a draw date and time; (D) the selection of numbers in accordance with subsection (d) of this section; and (E) the purchase of a ticket evidencing those selections. (2) Sum It Up Play--A Sum It Up play consists of: (A) the selection of the Sum It Up play type in connection with a straight play, a box play, a straight/box play, a combo play, a front-pair play, a mid-pair play, or a back-pair play; (B) the selection of a Sum It Up base play amount of $.50, $1, $2, $3, $4 or $5; and (C) the purchase of a ticket evidencing those selections. (3) Playboard--A panel on a playslip containing four fields of numbers for use in selecting numbers for a Daily 4 play, with each field of numbers containing the numbers 0, 1, 2, 3, 4, 5, 6, 7, 8 and 9. (4) Playslip--An optically readable card issued by the commission for use in making selections for one or more Daily 4 plays. (c) Play types. (1) Daily 4 may include the following play types: straight, box, straight/box, combo, front-pair, mid-pair, back-pair, and Sum It Up. (A) A "straight" play is a winning play if the player's four single-digit numbers match in exact order the four single-digit numbers drawn in the applicable drawing. (B) A "box" play is a winning play if the player's four single-digit numbers match in any order the four single-digit numbers drawn in the applicable drawing. (i) A box play may be a 4-way box play, a 6-way box play, a 12-way box play, or a 24-way box play. (I) A box play is a 4-way box play when box play is selected as the play type in connection with a set of four single-digit numbers that includes three occurrences of one single-digit number and one occurrence of one other single-digit number. A 4-way box play involves four possible winning combinations. (II) A box play is a 6-way box play when box play is selected as the play type in connection with a set of four singledigit numbers that includes two occurrences of one single-digit number and two occurrences of another single-digit number. A 6-way box play involves six possible winning combinations. (III) A box play is a 12-way box play when box play is selected as the play type in connection with a set of four singledigit numbers that includes two occurrences of one single-digit number and one occurrence of two other single-digit numbers. A 12-way box play involves 12 possible winning combinations. (IV) A box play is a 24-way box play when box play is selected as the play type in connection with a set of four single-digit numbers that includes a single occurrence of four different single-digit numbers. A 24-way box play involves 24 possible winning combinations. (ii) Box play is not permitted in connection with a set of numbers that includes four occurrences of one single-digit number. (C) A "straight/box" play is a winning play either if the player's four single-digit numbers match in exact order the numbers drawn in the applicable drawing or if the player's four single-digit numbers match in any order the numbers drawn in the applicable drawing. The prize amount is greater if the player's four single-digit numbers match in exact order the numbers drawn in the applicable drawing. (i) A straight/box play may be a 4-way straight/box play, a 6-way straight/box play, a 12-way straight/box play, or a 24-way straight/box play. (I) A straight/box play is a 4-way straight/box play when straight/box play is selected in connection with a set of four single-digit numbers that includes three occurrences of one single-digit number and one occurrence of one other single-digit number. A 4-way straight/box play involves four possible winning combinations. (II) A straight/box play is a 6-way straight/box play when straight/box play is selected in connection with a set of four single-digit numbers that includes two occurrences of one single-digit number and two occurrences of another single-digit number. A 6-way straight/box play involves six possible winning combinations. (III) A straight/box play is a 12-way straight/box play when straight/box play is selected in connection with a set of four single-digit numbers that includes two occurrences of one single-digit number and one occurrence of two other single-digit numbers. A 12-way straight/box play involves 12 possible winning combinations. (IV) A straight/box play is a 24-way straight/box play when straight/box play is selected in connection with a set of four single-digit numbers that includes a single occurrence of four different single-digit numbers. A 24-way straight/box play involves 24 possible winning combinations. (ii) Straight/box play is not permitted in connection with a set of numbers that includes four occurrences of one single-digit number. (D) A "combo" play combines into a single play all of the possible straight plays that can be played with the four single-digit numbers selected for the play. (i) A combo play may be a 4-way combo play, a 6-way combo play, a 12-way combo play, or a 24-way combo play. (I) 4-way combo play is a combo play in connection with a set of four single-digit numbers that includes three occurrences of one single-digit number and one occurrence of one other single-digit number. A four-way combo play involves four possible winning combinations. (II) 6-way combo play is a combo play in connection with a set of four single-digit numbers that includes two occurrences of one single-digit number and two occurrences of another single-digit number. A six-way combo play involves six possible winning combinations. (III) 12-way combo play is a combo play in connection with a set of four single-digit numbers that includes two occurrences of one single-digit number and one occurrence of two other single-digit numbers. A 12-way combo play involves 12 possible winning combinations. ADOPTED RULES December 22, TexReg 7389

152 (IV) 24-way combo play is a combo play in connection with a set of four single-digit numbers that includes a single occurrence of four different single-digit numbers. A 24-way combo play involves 24 possible winning combinations. (ii) Combo play is not permitted in connection with a set of numbers that includes four occurrences of one single-digit number. (E) Pair play. (i) A "front-pair" play is a winning play if the player's two single-digit numbers match in exact order the first two single-digit numbers drawn in the applicable drawing. (ii) A "mid-pair" play is a winning play if the player's two single-digit numbers match in exact order the second and third single-digit numbers drawn in the applicable drawing. (iii) A "back-pair" play is a winning play if the player's two single-digit numbers match in exact order the last two single-digit numbers drawn in the applicable drawing. (F) A Sum It Up play is a winning play if the sum of the player's two or four single-digit numbers, as applicable, is the same as the sum of the four single-digit numbers drawn in the applicable drawing. A Sum It Up play must occur in connection with a play of some other play type. (2) The executive director may allow or disallow any type of play described in this subsection. (d) Plays and tickets. (1) A ticket may be sold only by a retailer and only at the location listed on the retailer's license. A ticket sold by a person other than a retailer is not valid. (2) The selection of numbers for a straight play, a box play, a straight/box play, or a combo play involves the selection of four single-digit numbers, with each selected from the numbers 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9. (3) The selection of numbers for a front-pair play, a midpair play, or a back-pair play involves the selection of two single-digit numbers, with each selected from the numbers 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9. (4) The cost of a play varies according to the play type selected for the play and the base play amount selected for the play. (A) The cost of a straight play is the same as the base play amount selected for the play. (B) The cost of a box play is the same as the base play amount selected for the play. is $.50; is $1; is $2; is $3; is $4; or (C) The cost of a straight/box play is: (i) $1 if the base play amount selected for the play (ii) $2 if the base play amount selected for the play (iii) $4 if the base play amount selected for the play (iv) $6 if the base play amount selected for the play (v) $8 if the base play amount selected for the play is $5. (vi) $10 if the base play amount selected for the play (D) The cost of a combo play is determined by multiplying the base play amount selected for the play by the number of winning combinations possible with the four single-digit numbers selected for the play. (E) The cost of a front-pair, mid-pair, or back-pair play is the same as the base play amount selected for the play. (F) The cost of a Sum It Up play is the same as the Sum It Up base play amount selected for the Sum It Up play. The cost of a Sum It Up play is in addition to the cost of the Daily 4 play with which the Sum It Up play is connected. (5) The cost of a ticket is determined by the total cost of the plays evidenced by the ticket. playslip. include: (6) A player may complete up to five playboards on a single (7) Acceptable methods to select numbers for a play may (A) using a self-service terminal; (B) using a playslip; (C) requesting a retailer to use Quick Pick; (D) requesting a retailer to manually enter numbers; (E) using a previously-generated "Daily 4" ticket provided by the player; or (F) using a QR code generated through a Texas Lottery Mobile Application offered and approved by the commission. (8) Acceptable methods to select the play type, base play amount, and draw date and time for a play may include: (C) requesting a retailer to manually enter the selections; (A) using a self-service terminal; (B) using a playslip; (D) using a previously-generated "Daily 4" ticket provided by the player; or (E) using a QR code generated through a Texas Lottery Mobile Application offered and approved by the commission. (9) Playslips must be completed manually. A ticket generated from a playslip that was not completed manually, or using a selection method that is not approved by the commission, is not valid. (10) A retailer may only accept a request for a play using a commission-approved method of play, and if the request is made in person. (11) A player may purchase one or more plays for any one or more of the next 24 drawings after the purchase and may purchase up to 24 consecutive plays for a drawing time. (12) A retailer shall issue a ticket as evidence of one or more plays. A ticket must show the numbers, play type and base play amount selected for each play; the number of plays, the draw date(s) for which the plays were purchased; and the security and transaction serial numbers. Tickets must be printed on official Texas Lottery paper stock, or, for third-party point-of-sale systems approved by the commission, printed on paper stock or otherwise issued in a manner approved by the 42 TexReg 7390 December 22, 2017 Texas Register

153 commission to provide tangible evidence of participation in a lottery game. (13) A playslip has no monetary value and is not evidence of a play. (14) The purchaser is responsible for verifying the accuracy of the numbers and other selections shown on a ticket. (15) An unsigned winning ticket is payable to the holder or bearer of the ticket if the ticket meets all applicable validation requirements. (e) Cancellation of plays. A retailer may cancel a Daily 4 play only in accordance with the following provisions: (1) The ticket evidencing the play must have been sold at the retail location at which it is cancelled; (2) The retailer must have possession of the ticket evidencing the play; (3) All Daily 4 plays evidenced by a single ticket must be cancelled; (4) Cancellation must occur no later than 60 minutes after sale of the ticket evidencing the play; (5) Cancellation must occur before the beginning of the next draw break after the sale of the ticket evidencing the play; and (6) Cancellation must occur before midnight on the day the ticket evidencing the play was sold. (f) Drawings. (1) Daily 4 drawings shall be held four times a day, Monday through Saturday, at 10:00 a.m., 12:27 p.m., 6:00 p.m., and 10:12 p.m. Central Time. The executive director may change the drawing schedule, if necessary. (2) At each Daily 4 drawing, four single-digit numbers shall be drawn. Each single-digit number will be drawn from a set that includes a single occurrence of all ten single-digit numbers (0, 1, 2, 3, 4, 5, 6, 7, 8, and 9). (3) Numbers drawn and the order in which the numbers are drawn must be certified by the commission in accordance with the commission's draw procedures. (4) The numbers selected in a drawing and the order of the numbers selected in the drawing shall be used to determine all winners for that drawing. (5) Each drawing shall be witnessed by an independent certified public accountant. All drawing equipment used shall be examined by a lottery drawing representative and the independent certified public accountant immediately before each drawing and immediately after each drawing. (g) Prizes. (1) Prize payments shall be made upon completion of commission validation procedures. (2) A person may win only one prize per play per drawing. A player who holds a valid ticket for a winning play is entitled to the highest prize for that play. (3) A Sum It Up play is a separate play from the play with which it is connected. (4) The executive director may temporarily increase any prize set out in this subsection for promotional or marketing purposes. (5) A person who holds a valid ticket for a winning straight play is entitled to a prize as shown. Figure: 16 TAC (g)(5) (No change.) (6) A person who holds a valid ticket for a winning 4-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(6) (No change.) (7) A person who holds a valid ticket for a winning 6-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(7) (No change.) (8) A person who holds a valid ticket for a winning 12-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(8) (No change.) (9) A person who holds a valid ticket for a winning 24-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(9) (No change.) (10) A person who holds a valid ticket for a winning straight/4-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(10) (No change.) (11) A person who holds a valid ticket for a winning straight/6-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(11) (No change.) (12) A person who holds a valid ticket for a winning straight/12-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(12) (No change.) (13) A person who holds a valid ticket for a winning straight/24-way box play is entitled to a prize as shown. Figure: 16 TAC (g)(13) (No change.) (14) A person who holds a valid ticket for a winning combo play is entitled to a prize as shown. Figure: 16 TAC (g)(14) (No change.) (15) A person who holds a valid ticket for a winning frontpair, mid-pair, or back-pair play is entitled to a prize as shown. Figure: 16 TAC (g)(15) (No change.) (16) A person who holds a valid ticket for a winning Sum It Up play is entitled to a prize as shown. A Sum It Up prize is in addition to a prize, if any, for a straight play, a box play, a straight/box play, or a combo play. Figure: 16 TAC (g)(16) (h) The executive director may authorize promotions in connection with Daily 4. (i) Announcement of incentive or bonus program. The executive director shall announce each incentive or bonus program prior to its commencement. The announcement shall specify the beginning and ending time, if applicable, of the incentive or bonus program and the value for the award. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD ADOPTED RULES December 22, TexReg 7391

154 Bob Biard General Counsel Texas Lottery Commission Effective date: December 31, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) SUBCHAPTER E. RETAILER RULES 16 TAC , , , The following amendments are adopted under Texas Government Code , which authorizes the Commission to adopt rules governing the operation of the lottery; and , which authorizes the Commission to adopt rules for the enforcement and administration of the laws under the Commission's jurisdiction. This adoption is intended to implement Texas Government Code, Chapter 466. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Bob Biard General Counsel Texas Lottery Commission Effective date: December 31, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) CHAPTER 402. CHARITABLE BINGO OPERATIONS DIVISION It is the Order of the Texas Lottery Commission (Commission) that amendments to 16 TAC (General Licensing Provisions), (Temporary License), (Registry of Bingo Workers), (License and Registry Fees), (Temporary Authorization), (Unit Manager), (Amendment of a License- General Provisions), (License Renewal), (Military Service Members, Military Veterans, and Military Spouses), (Qualifications and Requirements for Conductor's License), (Amendment to a Regular License to Conduct Charitable Bingo), (Amendment of a License by Electronic Mail, Telephone or Facsimile), and (Bond or Other Security) are adopted with changes to the proposed text as published in the October 20, 2017, issue of the Texas Register (42 TexReg 5786). The adopted version of the rule conforms language in (d)(3) regarding renewal fees to match the license language in (a)(2)(A), and corrects a rule reference in (b). The purpose of the rule amendments is to implement statutory changes required by newly-enacted HB 2578, SB 549, and SB 2065 from the Regular Session of the 85th Texas Legislature. The amendments remove all references to bingo conductor and worker fees, while revising the license application and renewal process. In addition, the amendments facilitate the HB 2578 requirement that the Commission retain a portion of the bingo prize fees otherwise allocable to counties and municipalities to fund the administration of the charitable bingo regulatory program. Further, the amendments allow commercial lessors, distributors, and manufacturers to recover up to half of their application fee if they withdraw their application before a license is issued or if their application is denied. The amendments also remove the licensing requirements for bingo unit managers while maintaining those managers' reporting and notification requirements. Last, the amendments correct typographical errors and make non-substantive conforming changes to the rules. A public comment hearing was held on Wednesday, November 8, 2017, at 10:00 a.m., at 611 E. 6th Street, Austin, Texas The Department of Texas, Veterans of Foreign Wars (Texas VFW), and Texas Charity Advocates (TCA) provided comments at the hearing. The Commission also received written follow-up comments on the proposed amendments from the Texas VFW. The public comments and the Commission's responses are summarized below: COMMENT SUMMARY: Regarding the language in , both commenters stated that a general reference to "supplemental forms" or "accompanying supplements" does not cover, going forward, new forms or revisions to existing forms that impose new requirements on a license holder. COMMISSION RESPONSE: The proposed amendments to the language in regarding "supplemental forms" and "accompanying supplements" is a conforming change to the rule language and is not intended to be a substantive change to any requirement or form. Previously, the rule referenced "applicable schedules," which was changed to match current Commission terminology, and "accompanying supplements," which was moved from the now-deleted (n) to the proposed (f). Any additional forms or revisions to forms in the future will meet all applicable legal requirements. The Commission declines to make changes to the proposed amendments in response to these comments. COMMENT SUMMARY: Both commenters requested changes to (f)(2), which relates to a step in an optional eligibility process. The commenters requested that a specific timeline be included for the documents to be filed. And the commenters requested that organizations should not be forced to purchase a bond until the last step of this application process. COMMISSION RESPONSE: The optional eligibility process outlined in (f) offers an organization a different pathway to receive a license to conduct bingo, and specifically references the submission of an application without a bond or other security among the items that could be initially excluded from the submission of an application for review. Upon review of that submitted application, an organization would receive a determination of licensure eligibility. If eligible for a license, the remaining items needed for license issuance would be a bond or other security in addition to the intended playing location, days, times and starting date of the bingo occasions. Because the facts of each applicant present different issues, the rule language was drafted to give the organization and the Commission flexibility throughout this process; a specific timeline could limit organizations' ability to become eligible and then have to restart their application. The optional process may in many cases take longer than the typical application process, but already allows the organization flexibility in submitting its bond later than it would under the normal application process. Furthermore, an organization would already know whether it is eligible before being required to sub- 42 TexReg 7392 December 22, 2017 Texas Register

155 mit a bond, unlike with the typical application process. Section (f)(2) is, for most purposes, the last possible step in an application. The Commission declines to make changes to the proposed amendments in response to these comments. COMMENT SUMMARY: The Texas VFW commenter asked why (f)(3) requires an organization that had previously submitted certified meeting minutes stating that the organization voted to conduct bingo at the licensed location to repeat the task. COMMISSION RESPONSE: The optional eligibility process outlined in (f) offers an organization a different pathway to receive a license to conduct bingo. The optional process may, in many cases, take longer than the typical application process. The Commission requires updated meeting minutes, current as of the supplemental submission, to ensure that the application requirements are still met and all required information is up to date. The Commission declines to make changes to the proposed amendments in response to this comment. COMMENT SUMMARY: The TCA commenter requested that language in (n) be changed to allow a licensed attorney to represent an applicant or licensee by filing a letter with the Commission. COMMISSION RESPONSE: As noted in the preamble, the primary purpose of the proposed amendments is to enact statutory changes required by newly-enacted HB 2578, SB 549, and SB The requested change is outside the scope of the proposed amendments. The Commission declines to make changes to the proposed amendments in response to this comment, but will take this comment under advisement as it considers future process changes. COMMENT SUMMARY: The Texas VFW commenter stated that a proposed sentence in (s) (stating that payment for the employment of a non-registered worker is not an authorized bingo expense) is outside the scope of the current rulemaking. COMMISSION RESPONSE: This sentence was moved from (g) as a non-substantive conforming change as outlined in the scope of rulemaking in the preamble. In revising to remove all references to fees, this language was moved to make the rule more clear about its applicability. There is no substantive change. The Commission declines to make changes to the proposed amendments in response to this comment. COMMENT SUMMARY: Both commenters stated that the references to conductor license classes by gross receipts identified in (a)(2)(A) are unnecessary given the absence of any license fee for conductors. While license classes for conductors are needed for bond purposes, the gross receipts attributed to conductor license classes should be removed from Specifically, HB 2578 repealed the license fees for conductors. The license classes in Subsection (a)(2)(a) have nothing to do with the calculation of prize fees for which Commission staff has indicated that they will use this license class information. The Commission should use internal accounting to track this information and not require the organizations to provide the information. COMMISSION RESPONSE: As both commenters noted, the Commission has indicated that the information contained in (a)(2)(A) is necessary for calculations related to the Bingo Division's operating budget. While the license-class-related information is not directly relevant to conductors after the changes in HB 2578, the amounts that the Commission is using to determine the Bingo Division's operating budget are relevant to the cities and counties that will have their prize fee share reduced. The Commission believes it is more transparent, and will provide fair and reasonable notice to affected persons, including local jurisdictions whose prize fee allocations are affected by HB 2578, to retain these totals in the rules. In addition, as at least one commenter acknowledged, this information is still required from the conductors for bond purposes. By keeping the information where it was already located, in , the proposed amendments are more understandable and smaller in scope. The commenters' suggested changes would require larger revisions to more rules. The Commission declines to make changes to the proposed amendments in response to these comments. SUBCHAPTER D. LICENSING REQUIRE- MENTS 16 TAC , , , , , , , , , The rule amendments are adopted under the Texas Occupations Code , which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act; Texas Government Code , which authorizes the Commission to adopt rules for the laws under the Commission's jurisdiction; and Section 13 of HB 2578 from the Regular Session of the 85th Texas Legislature, which required the Commission to adopt rules for its implementation. The adopted amendments implement the Texas Occupations Code, Chapter General Licensing Provisions. (a) Any person who wants to engage in a bingo related activity shall apply to the Commission for a license. The application must be on a form prescribed by the Commission and all required information must be legible, correct and complete. The initial submittal of an application is incomplete if the following information is not provided: (1) All information requested on the application form and supplemental forms; (2) All supplemental information requested during the prelicensing investigation period; (3) The applicable license fee for a lessor, distributor, or manufacturer; and (4) Authorized signatures as required by the Commission. (b) Information submitted by an applicant on an applicable form shall be considered to be part of the application. Supplemental information should be submitted on a form prescribed by the Commission and all information required must be correct and complete. (c) Information submitted by an applicant in a format other than an applicable form must be legible and must include the following: (1) the name and address of the organization as it appears on the application; (2) the Texas taxpayer identification number; or, if sole owner, the individual's social security number; (3) a statement identifying the information submitted; (4) the signature, printed name and telephone number of the person authorized to submit the information; and ADOPTED RULES December 22, TexReg 7393

156 (5) all supplemental information requested during the prelicensing investigation period. (d) Within 21 calendar days after the Commission has received an original application, the Commission will review the application and notify the applicant if additional information is required. (e) If an application is incomplete, the Commission will notify the applicant. The applicant must provide the requested information within 21 calendar days of such notification. Failure to provide the requested information within the 21 calendar day time line or providing incomplete information may result in the denial of the license application. (f) For an application to conduct bingo, an organization may choose to submit the application form without including a bond or other security; information regarding previously held licenses; justice precinct, city or county certification; and information on intended playing location, days, times, and starting date. (1) All other information requested on the application and the accompanying supplements must be complete and in compliance with all other requirements of the Bingo Enabling Act and the Charitable Bingo Administrative Rules. (2) Within a number of calendar days required by the Commission on the applicable forms, the organization must remit the required bond or other security to the Commission and inform the Commission on the applicable supplemental forms of the intended playing location, days, times, and starting date of the occasions. If the organization fails to provide the required bond or other security as well as complete and accurate supplement forms within the required timeframe, the Commission will deny the application. (3) An organization that has submitted the appropriate bond or other security and a complete application, including all applicable supplemental forms, must also submit updated, certified meeting minutes, current as of the submission of the applicable supplemental information, stating that the organization voted to conduct bingo at the licensed location. (g) Prior to the issuance of a license, the Commission may require an applicant to attend a pre-licensing interview. The Commission will identify the person or persons for the applicant who must attend the pre-licensing interview. The pre-licensing interview will consist of, at a minimum, the following: (1) review of the Bingo Enabling Act; (2) review of the Charitable Bingo Administrative Rules; (3) licensee responsibilities; (4) process pertaining to the different types of license application; (5) bookkeeping and record keeping requirements as it involves bingo; and (6) a statement from the person or persons attending the pre-licensing interview that they are aware of and will comply with the provisions of the Bingo Enabling Act and the Charitable Bingo Administrative Rules. (h) The Commission may deny an application based on information obtained that indicates non-compliance with the provisions of the Bingo Enabling Act and/or the Charitable Bingo Administrative Rules in connection with a pre-licensing interview and/or location inspection. (i) Each licensed authorized organization issued a temporary authorization is required to file timely and complete required reports, as applicable to the type of licensing activity requested. (j) A license applicant may withdraw an application at any time prior to the approval or denial of the application. Once the written request for withdrawal is received by the Commission, all processing of the application will cease and the withdrawal is considered final. License application fees for withdrawn license applications will be refunded, as provided for in the Bingo Enabling Act. If the organization wants to reapply for a license, a complete new application and new license fee, if applicable, are required. (k) Voluntary surrender of a license. (1) A licensee may surrender its license for cancellation provided it has completed and submitted to the Commission the prescribed form. (2) If surrendering a license to conduct bingo, the prescribed form must be signed by the bingo chairperson. (3) If surrendering any other type of license, the prescribed form must be signed by the sole owner, or by two officers, directors, limited liability corporation members, or partners of the organization. (4) The cancellation of the license shall be final and effective upon receipt by the Charitable Bingo Operations Division of a copy of the resolution, or other authoritative statement of the licensee, requesting cancellation of the license and providing a requested effective date. (A) The cancellation is effective as of the date identified in the letter provided that the date has not passed. (B) If no date is identified in the letter, or the date has passed, the effective date shall be the date the Commission receives the letter. (5) Notwithstanding cancellation of the license, the licensee must file all reports, returns and remittances required by law. (6) The licensee shall surrender the license to the Commission on the effective date of the surrender. (7) The Commission will send the licensee a letter confirming the surrender and resulting cancellation of the license. (l) Administrative Hold. A licensed authorized organization or commercial lessor, other than an association of licensed authorized organizations, may request to place its regular license in administrative hold, but only at the time of license renewal, as provided in of this Chapter. (1) The placement of a license in administrative hold shall be effective on the first day of the license period for which the administrative hold is requested. (2) The licensee shall submit the license in administrative hold, or a certified statement that the license is not available, to the Commission no later than seven (7) calendar days after the effective date of the placement of the license in administrative hold. (3) Once the license has been placed in administrative hold, all bingo activity (i.e. leasing, conducting bingo) must cease until the licensee files an amendment and the amended license is issued by the Commission and received by the licensee. A licensed authorized organization with its regular license in administrative hold may not conduct bingo under a temporary license. (4) Notwithstanding placement of the license in administrative hold, the licensee must file with the Commission: 42 TexReg 7394 December 22, 2017 Texas Register

157 (A) all applicable reports, returns and remittances required by law; and (B) a timely and complete application for renewal of the license each time the license is ripe for renewal. (5) If at the time of license renewal a licensed authorized organization does not have a designated playing location, that license will be placed in administrative hold. (6) Except for licensed commercial lessors subject to (b) of the Occupation Code, a license may not be in administrative hold for more than twelve (12) consecutive quarters. (7) The fee for a license in administrative hold is set in (d)(3) of this Chapter. (8) A license may be removed from administrative hold at any time during a license period. To remove a license from administrative hold, the licensee must file a license amendment application as provided in of the Occupations Code and of this Chapter. (m) Each person required to be named in an application for license under the Bingo Enabling Act other than a temporary license will have a criminal record history inquiry at state and/or national level conducted. Such inquiry may require submission of fingerprint card(s). FBI fingerprint cards are required for an individual listed in an application for a distributor or manufacturer's license and for an individual listed on an application who is not a Texas resident. A criminal record history inquiry at the state and/or national level may be conducted on the operator and officer or director required to be named in an application for a non-annual temporary license under the Bingo Enabling Act. (n) Representation; personal receipt of documents. For purposes of this subsection, an individual shall be recognized by the Commission as an applicant or licensee's authorized representative only if the applicant or licensee has filed with the Commission a form prescribed by the Commission identifying the individuals currently listed as directors, officers, or operators, or if they are identified on the completed Authorization of Representation for Bingo Licenses form. A person is not an authorized representative of the applicant or licensee unless specifically named on a form prescribed by the Commission as part of the application, or on the Authorization of Representation for Bingo Licenses form that is on file with the Commission. Only those persons specifically named on a form prescribed by the Commission or on the Authorization of Representation for Bingo Licenses form as an authorized representative shall be recognized by the Commission concerning any matter relating to the licensing process or license. Only the applicant or licensee or its authorized representative may receive from the Commission documents relating to the application or license without being required to submit a request under the Public Information Act Temporary License. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise: (1) Bingo liability--includes, but is not limited to, any applicable license fee, late license renewal fee, prize fee, penalty, interest, or administrative penalty. (2) Regular license--a license to conduct bingo that is effective for a period of one year unless revoked or suspended by the Commission. A regular license may be referred to as an annual license. (3) Temporary license--a license to conduct bingo that is in effect for a single bingo occasion. (b) General. (1) Requirements. The Commission may not issue a temporary license if the applicant has failed to file a required report, failed to pay a bingo liability, has not distributed the proceeds calculated on the quarterly report for a charitable purpose, or has a regular license in administrative hold. (2) Duration. A temporary license is valid for no more than four consecutive hours during any day. (3) Display. The licensed authorized organization must conspicuously display during a temporary bingo occasion at the licensed bingo premises a temporary license, and, if applicable, verification of notification as referred to in subsection (d)(3)(d) of this section. (4) Voluntary surrender of regular license. (A) An authorized organization that no longer holds a regular license to conduct bingo may conduct any remaining designated temporary occasions so long as the total number of occasions does not exceed six per calendar year. If over six previously specified occasions remain, the licensed authorized organization must provide to the Commission written notification of no more than six of the dates of the temporary licenses that will be utilized. This notification must be provided within ten days of surrender of the regular license. The Commission will automatically revoke all temporary licenses in excess of the six per year. (B) If the Commission denies or revokes a regular license by final and unappealable order, any temporary license held by the regular license holder that stated the specific date and time of any bingo occasion will likewise be denied or revoked. (5) All records that are required to be maintained under a regular license must be maintained for a temporary bingo license. (c) The playing time of a temporary bingo occasion may not conflict with the playing time of any other license at the bingo premises on that date unless otherwise provided by law. (d) Regular license holder. (1) A regular license holder must apply for a temporary license at least seven calendar days prior to the bingo occasion. (2) Quarterly reports filed by a regular license holder must include proceeds from all licensed temporary occasions held during the quarter. (3) The Commission may issue a temporary license to a regular license holder without listing the specific date or time of a bingo occasion. The temporary bingo occasion must be conducted at the same location as shown on the organization's regular license. (A) The regular license holder must submit an application on the prescribed form that indicates the number of temporary licenses requested for the license period. (B) The regular license holder must notify the Commission of the date and time the temporary license will be used by submitting a form prescribed by the Commission. (C) Any temporary license issued without the specific date or time identified must be used prior to the expiration date of the regular license in effect at the time the temporary license application was filed. (D) The Commission shall provide a verification of receipt of notification that must be posted adjacent to the applicable temporary license during the bingo occasion. ADOPTED RULES December 22, TexReg 7395

158 (4) In accordance with Occupations Code, (e), the Commission may issue to a regular license holder additional temporary licenses in excess of the number of temporary licenses specified under Occupations Code, (e) if the following conditions are met: (A) The regular license holder submits a completed application on the form prescribed by the Commission; (B) The date and times stated on the application are consistent with the day and times licensed to the organization that has ceased or will cease to conduct bingo as provided in Occupations Code, ; and (C) The Commission has not acted on an amendment application filed under Occupations Code, (a). (5) If the organization is issued the amendment license filed under Occupations Code, prior to being issued the temporary license, the temporary license application shall be discontinued. (e) Non-regular license holder. A non-regular license holder that wishes to conduct a bingo occasion must file a complete application for a temporary license on a form prescribed by the Commission at least 30 calendar days prior to the bingo occasion. (1) If an organization has never received a temporary license or 3 years have elapsed since the organization last held a temporary bingo occasion, the organization must submit a Texas Application for Temporary Bingo Occasions for Non-Licensed Organization - Section 2. (2) Organizations who have held a temporary license occasion in the past three years may submit Texas Application for a Temporary Bingo Occasions for Non-Licensed Organization - Section 1 to apply for a temporary license Registry of Bingo Workers. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise: (1) Bingo Chairperson--an individual named in accordance with Texas Occupations Code (4-a) and (b)(6). (2) Bookkeeper--an individual ultimately responsible for the preparation of any financial records for information reported on the Texas Bingo Conductor's Quarterly Report or for preparation and maintenance of bingo inventory records for a licensed authorized organization. (3) Caller--an individual who operates the bingo ball selection device and announces the balls selected. (4) Cashier--an individual who sells and records bingo card and pull-tab sales to bingo players and/or pays winners the appropriate prize. (5) Completed Application--A registry application or renewal form prescribed by the Commission which is legible and lists at a minimum the applicant's complete legal name, address, social security number or registry number, date of birth, race, gender and signature. (6) Manager--an individual who oversees the day-to-day operation of the bingo premises. (7) Operator--means an active bona fide member of a licensed authorized organization that has been designated on a form prescribed by the Commission prior to acting in the capacity as the organization's operator. (8) Provisional Employee--an individual who is employed by a licensed authorized organization as an operator, manager, cashier, usher, caller, or salesperson while awaiting the results of a background check, whether paid or not. (9) Salesperson--an individual who monitors bingo players, sells bingo cards and pull-tabs, verifies winning cards and pull-tabs and/or delivers the prize money to the winners; may be referred to as an usher, floor worker, or runner. (10) Usher--an individual who monitors bingo players, sells bingo cards and pull-tabs, verifies winning cards and pull-tabs and/or delivers the prize money to the winners; may be referred to as a salesperson, floor worker or runner. (b) Who must be listed on the Registry of Approved Bingo Workers. Any individual who carries out or performs the functions of a caller, cashier, manager, operator, usher, salesperson, bookkeeper, or bingo chairperson as defined in subsection (a) of this section must be listed on the Registry of Approved Bingo Workers prior to being involved in the conduct of bingo. (c) Each individual must submit a completed Texas Application for Registry of Approved Bingo Workers as prescribed by the Commission to remain on the Registry of Approved Bingo Workers. (d) The registrant will be added to the registry as soon as possible after the Commission has determined that the individual is eligible to be involved in the conduct of bingo or act as an operator. (e) For purposes of the Registry of Approved Bingo Workers, each operator, bookkeeper, and bingo chairperson must be designated on the licensed authorized organization's license to conduct bingo application. (f) A licensed authorized organization must submit the name of a registered operator, bookkeeper, or bingo chairperson on a form prescribed by the Commission prior to the individual's acting in that capacity. (g) A registered worker who fails to timely submit the prescribed form to renew listing on the registry may not be involved in the conduct of bingo until the individual is again added to the registry. It is the responsibility of the licensed authorized organization to review the registry to confirm that the individual's registration is current. (h) How to be listed on the Registry of Approved Bingo Workers. For an individual to be listed on the Registry of Approved Bingo Workers, an individual must: (1) submit a completed Texas Application for Registry of Approved Bingo Workers form as prescribed by the Commission; (2) submit a verifiable FBI or DPS fingerprint card if at the time of registration: (A) the individual is residing outside of Texas; or (B) the individual maintains a driver's license or registration in another state; and (3) be determined by the Commission to not be ineligible under Texas Occupations Code, (a)(6) or the Commission's Rules. (i) Incomplete Applications. The Commission will notify the applicant at the address provided if the registry application or renewal form submitted is not complete and will identify what is missing. The original application will be returned to the applicant for correction and resubmission. It is the responsibility of the registry applicant to resubmit a completed application before it may be processed. Failure to 42 TexReg 7396 December 22, 2017 Texas Register

159 submit an FBI or DPS fingerprint card, if required, is grounds for denial or removal of the registration. (j) An individual listed on the registry must notify the Commission of any changes to information contained on the Texas Application for Registry of Approved Bingo Workers on file with the Commission within 30 days of the change in information. Such notification shall be in writing or other approved electronic means. (k) Identification Card for Approved Bingo Worker. (1) The Commission will issue an identification card indicating that the individual is listed on the registry. A registered worker and operator must wear his/her identification card while on duty. (2) The identification card worn by the registered worker or operator while on duty must be visible. (3) The identification card shall list the individual's name, unique registration number and registry expiration date as issued by the Commission. An individual may obtain the unique registration number and registry expiration date from the Registry of Approved Bingo Workers on the Commission's website or by requesting the registration number and registry expiration date from the Commission. (4) An identification card is not transferable and may be worn only by the individual identified on the card. (5) Upon request by a Commission employee, an individual described in subsection (a) of this section shall present personal photo identification in order to verify the identification card is that individual's card. (l) How to Obtain Additional Approved Identification Cards. (1) A completed identification card may be obtained from the Commission by submitting the required form. (2) An individual who has been approved to work in charitable bingo may complete an identification card form provided by the Commission for use while on duty. Blank identification card forms may be obtained from the Commission. The individual requesting the identification card form(s) must submit any required fee and the required form for the blank identification card form. (3) The identification card prepared by the individual may only be on a prescribed Commission card form and must be legible and include the individual's name, unique registration number, and registry expiration date. (m) A licensed authorized organization which is reporting conduct where there is a substantial basis for believing that the conduct would constitute grounds for removal or refusal to list on the registry shall make the report in writing to: Bingo Registry, Texas Lottery Commission, P.O. Box 16630, Austin, Texas (n) The provisions of the Texas Occupations Code , related to the registry of bingo workers, do not apply to an authorized organization that does not have a regular license to conduct bingo who receives a temporary license to conduct bingo. (o) If the Commission proposes to refuse to add or proposes to remove the individual from the Registry of Approved Bingo Workers consistent with Texas Occupations Code , the Commission will give notice of the proposed action as provided by Government Code, Chapter (p) An individual receiving notice that the Commission intends to refuse to add to or intends to remove the individual from the Registry of Approved Bingo Workers may request a hearing. Failure to submit a written request for a hearing within 30 calendar days of the date of the notice will result in the denial of the application or removal of the registered worker from the registry. (q) An individual who has been denied or removed from the registry because of a conviction for an offense listed under Occupations Code (b) will not be eligible to reapply to be listed. An individual who has been denied or removed from the registry because of a disqualifying criminal conviction not listed under Occupations Code (b) may reapply to be listed no earlier than five years after the commission of the offense, or as otherwise allowed under the Commission's Rules. (r) A provisional employee must: (1) indicate the playing location(s) where the individual is provisionally employed on the Texas Application for Registry of Approved Bingo Workers form submitted to the Commission. (2) immediately stop working: (A) after 14 days if the individual is not listed on the registry and is a resident of this state. (B) after 45 days if the individual is not listed on the registry, not a resident of this state, and submitted a fingerprint card for a background investigation. If the fingerprint cards are returned by the law enforcement agency as unclassifiable, the Commission will notify the individual, and the individual may continue to be provisionally employed by submitting a written request and new fingerprint cards within 14 days of the notification. (C) if found to be ineligible on the basis of the background investigation. (3) wear an identification card while on duty with the registry applicant's name, "Provisional Employment" as the unique registration number, and the submission date of the registry application as the expiration date. (s) A licensed authorized organization who employs a provisional employee must maintain a copy of the registry applicant's completed Texas Application for Registry of Approved Bingo Workers form submitted to the Commission until the individual is listed on the registry or the licensed authorized organization is notified that the individual is not eligible to be listed. Payment for the employment of a provisional employee as outlined in subsection (a)(8) of this section is an authorized bingo expense; however, payment for non-registered workers is not an authorized bingo expense License Classes and Fees. (a) Definitions. (1) License period--for purposes of Texas Occupations Code and , the term "license period" means the four full calendar quarters immediately preceding the license end date. (2) Regular License Classes and Applicable Fee Amount: (A) There is no annual fee for a license to conduct bingo. The license-class-related amount used solely by the Commission to estimate the pro rata local share of prize fees related to licenses to conduct bingo shall be as follows: (i) Class A (annual gross receipts of $25,000 or less) - $132; (ii) Class B (annual gross receipts of more than $25,000 but not more than $50,000) - $264; (iii) Class C (annual gross receipts of more than $50,000 but not more than $75,000) - $396; ADOPTED RULES December 22, TexReg 7397

160 (iv) Class D (annual gross receipts of more than $75,000 but not more than $100,000) - $528; (v) Class E (annual gross receipts of more than $100,000 but not more than $150,000) - $792; (vi) Class F (annual gross receipts of more than $150,000 but not more than $200,000) - $1,188; (vii) Class G (annual gross receipts of more than $200,000 but not more than $250,000) - $1,584; (viii) Class H (annual gross receipts of more than $250,000 but not more than $300,000) - $1,980; (ix) Class I (annual gross receipts of more than $300,000 but not more than $400,000) - $2,640; (x) Class J (annual gross receipts of more than $400,000) - $3,300. (B) The annual fee for a commercial lessor license shall be as follows: (i) Class A (annual gross rentals from licensed organizations of not more than $12,000) - $132; (ii) Class B (annual gross rentals from licensed organizations of more than $12,000 but not more than $20,000) - $264; (iii) Class C (annual gross rentals from licensed organizations of more than $20,000 but not more than $30,000) - $396; (iv) Class D (annual gross rentals from licensed organizations of more than $30,000 but not more than $40,000) - $528; (v) Class E (annual gross rentals from licensed organizations of more than $40,000 but not more than $50,000) - $792; (vi) Class F (annual gross rentals from licensed organizations of more than $50,000 but not more than $60,000) - $1,188; (vii) Class G (annual gross rentals from licensed organizations of more than $60,000 but not more than $70,000) - $1,584; (viii) Class H (annual gross rentals from licensed organizations of more than $70,000 but not more than $80,000) - $1,980; (ix) Class I (annual gross rentals from licensed organizations of more than $80,000 but not more than $90,000) - $2,640; (x) Class J (annual gross rentals from licensed organizations of more than $90,000) - $3,300. (C) Manufacturer's License. The annual fee for a manufacturer's license shall be $3,000. (D) Distributor's License. The annual fee for a distributor's license shall be $1,000. (b) Original License Application. (1) Commercial License to Lease Bingo Premises. (A) License fees for an original license to lease bingo premises submitted by an authorized organization licensed to conduct bingo must be paid from the organization's bingo bank account. (B) An applicant may be required to submit additional license fees if the estimated gross rental income used to calculate the license fee is not reasonable when compared to the gross rental income at similarly situated bingo premises. These comparative amounts are used to establish the gross rental income amount upon which the applicant's license fee is based and must be submitted. (2) Understating the anticipated gross receipts or rental income from a licensed activity for any purpose by an applicant or licensed entity may be grounds for administrative disciplinary action against the licensee. (c) An organization shall re-estimate its annual gross rental income and submit any balance due in license fee amount if there is an increase within six months of the issuance of the original lessor license in: (1) the number of organizations conducting bingo at a licensed location; and (2) the number of bingo occasions conducted at the licensed location. (d) License Renewal Fee. (1) The amount of license fee to be paid upon renewal of a license to lease bingo premises is the recalculated license fee amount calculated for the preceding license period. (2) If the recalculation of the license fee amount for the previous license period reflects an underpayment of the license fee amount for that license period, the incremental difference must be submitted by the organization within 30 days of the license expiration date and before the license may be renewed. (3) Upon written request by an organization to renew its license to lease bingo premises that is in or going in administrative hold, the organization shall pay a Class A license renewal fee, plus any amount due under paragraph (2) of this subsection, in lieu of the recalculated fee amount from the preceding license period. There is no renewal license fee for an organization renewing its license to conduct bingo that is in or going in administrative hold, but the license-classrelated amount used solely by the Commission to estimate the pro rata local share of prize fees related to a license to conduct bingo for such an organization is a Class A fee amount. (4) The Commission may require an amount of license fee in addition to the recalculated fee at renewal if there is a change in: (A) playing location; or (B) rental amount per occasion. (5) If a commercial lessor or a licensed authorized organization which leases bingo premises requests its license be placed in administrative hold upon the renewal of its lessor license and submits the requisite fee as set in paragraph (3) of this subsection, the Commission may require the commercial lessor to submit an additional license fee when it files the application to amend a commercial license to lease bingo premises, if the commercial lessor amends its license to begin leasing bingo premises within the first six months of the license term. (e) Two-Year License Fee Payments. An applicant for a commercial lessor license that is effective for two years must pay an amount equal to two times the amount of the annual license fee, as set in (a)(2). (f) Regular License Class Recalculation. (1) For the purpose of determining the license class recalculation for a license to conduct bingo or license to lease bingo premises, the annual gross receipts or gross rental income, as applicable, shall be based on the four consecutive quarterly returns due immediately prior to the license expiration date. (2) For the purposes of determining the license class recalculation for a two year license to lease bingo premises, each year of the license period shall be recalculated separately. The final recalculated fee will be the total of the yearly license classes and their associated 42 TexReg 7398 December 22, 2017 Texas Register

161 fees. The annual gross rental income shall be based on the four consecutive quarterly returns due immediately prior to the first year period and the four consecutive quarterly returns due immediately prior to the license expiration date of the second year period. (3) For accounting units, gross receipts used to recalculate the license class apportioned to a unit member will be calculated by dividing the unit's gross receipts by the total number of members during the quarter. (4) If an organization fails to file a report for one or more quarter(s) of the license period, or if there are not four quarters available for any other reason, the Commission shall average the quarterly gross receipts or gross rental income for the quarter(s) reported to determine the organization's license class. (5) License no longer exists. (A) Notwithstanding the fact that an organization which leased bingo premises under a license that ceased to exist for whatever reason, the organization must submit the recalculated license fee for the period that the organization leased the premises and collected gross rental income. (B) If an organization ceases to be licensed for whatever reason, all gross receipts or gross rental income collected (from the period after the last quarterly return used to recalculate the license class for the prior year) is used to recalculate the final license class, and if appropriate, any fee due. If the organization fails to file a return for any required period(s), an estimated return will be used. The organization shall submit any balance due after license class recalculation. (6) The Commission may recalculate license classes for up to four consecutive immediately preceding license periods if a change in an organization's reported gross receipts or gross rental income occurs as a result of an audit, or if the original recalculation was determined by using estimated gross receipts or gross rental income. (7) If there is a change in an organization's reported gross receipts or gross rental income, the organization may submit a written request to the Charitable Bingo Operations Division to recalculate its license class for up to four immediately preceding license periods. (g) Overpayment of License Fee. (1) An overpayment of a commercial lessor's annual license fee may occur either through a recalculation of the license fee pursuant to subsection (f) of this section, or if a licensee mistakenly submits more money than is actually required for the license fee(s). An overpayment of a manufacturer's or distributor's annual license fee occurs if a licensee mistakenly submits more money than is actually required for the license fee(s). The Commission will determine whether an overpayment has occurred on a case by case basis. (2) Upon a determination that an overpayment of an annual license fee has occurred, the Charitable Bingo Operations Division shall credit the overpayment to the licensee. Overpayments credited to a licensee may be used for the licensee's outstanding bingo liabilities, including subsequent license fees, but the credits must be used within four years of the latest date on which the annual license fee was due. Overpayments credited to a licensee remain eligible for refund under subsection (h) of this section until the credits are used or the four year refund period expires, whichever comes first. (3) Overpayments of annual license fees must either be used as credit or claimed for refund within four years of the latest date on which the annual license fees were due. If a licensee fails to use the credits or request a refund within this time period, the overpayments will be retained by the Commission. (h) Refunds. (1) An applicant or licensee may request a refund of the fee for an initial or renewal commercial lessor's license, initial or renewal distributor's license, or initial or renewal manufacturer's license if they request withdrawal of the application before the license is issued. Upon such a request, the Commission will retain the lesser of 50 percent of the fee or $150 and refund the rest of the fee within 30 days of receiving the request. (2) If the Commission denies an initial or renewal commercial lessor license application, initial or renewal distributor's license application, or initial or renewal manufacturer's license application, it will retain the lesser of 50 percent of the fee or $150 and refund the rest of the fee within 30 days of denying the application. (3) A current or former licensee that submits an overpayment of a regular license fee may be eligible to receive a refund of that overpayment, provided that the licensee or former licensee: (A) submits a complete written request for a refund to the Commission within four years of the latest date the regular license fees were due; (B) does not have any other outstanding bingo liabilities to the State; and (C) if applicable, files all necessary quarterly reports. (4) Upon the receipt and review of a timely and sufficient refund request, the Commission may either deny the refund request or certify to the Comptroller of Public Accounts that a refund is warranted. Pursuant to Government Code , if the Commission certifies to the Comptroller of Public Accounts that a refund is warranted, the ultimate decision on whether to grant the refund will still be made by the Comptroller of Public Accounts. (i) Transfer of Commercial License to Lease Bingo Premises. (1) All gross rental income collected in connection with a license to lease bingo premises that has been transferred during the term of the license shall be used to recalculate the license fee. (2) A license fee credit in connection with a license to lease bingo premises that was transferred during the term of the license shall be credited to the current license holder at the time of license renewal. (3) A license fee balance due for a license to lease bingo premises that was transferred during the term of the license shall be the liability of the current license holder at the time of license renewal. (j) Temporary Authorization to Conduct Bingo. (1) The amount of gross receipts collected in connection with a temporary authorization is used to calculate the regular license class. (2) An organization conducting bingo pursuant to a temporary authorization must comply with the same statutory and administrative rule requirements and quarterly return filing requirements as an organization which has a regular license to conduct bingo Temporary Authorization. (a) A temporary authorization shall be issued only to a person who is not licensed by the Commission but who has filed a complete application for an original license to conduct a charitable bingo activity. (b) Upon the applicant's request, the Commission will issue a temporary authorization for the activity requested on the license application by the 31st calendar day after the Commission's receipt of an application that is complete in accordance with (a) of this chapter if the following are in compliance with the Act and the Rules. ADOPTED RULES December 22, TexReg 7399

162 (1) For all licenses: eligibility of all persons listed on the application requiring criminal background investigations. (2) For a commercial lessor license: eligibility of applicant as provided by Texas Occupations Code, (3) If an applicant asserts in writing that its application is complete, the Commission will grant or deny the application, or make a determination on temporary authorization. (c) A temporary authorization to conduct a bingo-related activity may only be issued to a person who will conduct a bingo-related activity at the same location for which the person has a pending original application to conduct a bingo-related activity. (d) A temporary authorization shall be issued for a stated period of time not to exceed 60 days. A temporary authorization may be extended upon written request by the person to whom the temporary authorization was issued. Such request must be filed with the Commission at least seven working days prior to the time the temporary authorization expires. Extensions shall be for a period of time not to exceed 60 days. No more than two extensions may be issued. (e) A request for an extension shall include: (1) the complete name of the organization requesting the extension; (2) the Texas taxpayer identification number of the organization requesting the extension; (4) the specific reason(s) supporting the need for an extension. (3) a complete explanation of the basis for the request; and (f) An organization that is not in compliance with the Bingo Enabling Act and the Charitable Bingo Administrative Rules will not be granted an extension unless the organization becomes compliant during the period of the original temporary authorization. (g) An organization conducting bingo under a temporary authorization that desires to obtain a temporary license shall be subject to the same requirements in (e) of this chapter regarding an organization not holding a regular license to conduct bingo. (h) A temporary authorization is not a license. (i) A temporary authorization may not be amended. (j) A regular license that has been issued to an applicant shall expire one year from the date of the first issuance of any temporary authorization under this section. (k) For the purposes of Texas Occupations Code, (a), an application for an activity is considered issued or denied on the date the Commission issues a license or notice of denial to the applicant Unit Manager. Notification. (1) An individual shall not provide services as a unit manager to licensed authorized organizations that have formed a unit until the following occurs: (A) the Commission receives the unit accounting agreement executed by all members of the unit with the name of the unit manager designated therein; and (B) the individual provides information to the Commission relating to the location where the unit manager services will be performed and where the records will be maintained. (2) A unit manager shall provide written notification to the Commission of any change in the information in the unit manager's most recent notification to the Commission. The unit manager shall notify the Commission of the change in the information not later than the 15th day after the date of the change Amendment of a License- General Provisions. (a) The Commission will not approve a license amendment application with an effective date that is not within the licensed authorized organization's or commercial lessor's current license period. (b) A licensee may amend a license renewal application prior to its approval. (c) The term "effective date", when used in this section, means the first day that the amended changes are to begin. (d) A licensee may not begin activities under the amended license until the following have occurred: (1) the effective date; and (2) licensee's receipt and display at the playing location of official written notification or the amended license authorizing the change. (e) The fee to amend any commercial lessor, manufacturer, or distributor license issued under the Bingo Enabling Act shall be $10. The fee to amend a license to conduct bingo is $0. (f) A licensee may request a refund of any license amendment fee paid if the licensee requests withdrawal of the amendment application before an amended license is issued. Upon such a request, the Commission will refund half of any fee paid within 30 days of receiving the request. If the Commission denies an amendment application, it will refund half of any fee paid within 30 days of that denial License Renewal. (a) Any license issued under the Bingo Enabling Act expires one calendar year or two calendar years from the first date of the license period, as specified on the license. (b) In order to renew a license issued under the Bingo Enabling Act, a licensee must timely file an application for renewal with the Commission. The renewal application must be on a form prescribed by the Commission. The Commission will not approve a renewal application until the application is complete and the licensee submits the requisite fee pursuant to of this title (relating to License Classes and Fees). A licensee is solely responsible for the timely filing of an application for renewal of its regular license. (c) The Commission may notify licensees regarding the expiration of their license(s) and the potential for renewal. Failure of the licensee to receive the renewal notice(s) mailed by the Commission is not a mitigating circumstance for untimely filing of a renewal application. (d) To be timely filed: (1) the renewal application and payment, if applicable, of the estimated license fee must be received by the Commission no later than the license expiration date; or (2) the renewal application's envelope postmarked date must clearly show a date that is no later than the license expiration date, unless the expiration date is a Saturday, Sunday, or legal holiday, in which event the application is due the next day which is not a Saturday, Sunday, or legal holiday; or (3) an application bearing no legible postmark, postal meter date, or date of delivery to the common carrier shall be considered 42 TexReg 7400 December 22, 2017 Texas Register

163 to have been sent seven calendar days before receipt by the Agency, or on the date of the document if the document date is less than seven days earlier than the date of receipt. (e) Notwithstanding subsection (b) of this section, if a renewal application is not timely filed, a licensee may renew their license by filing a complete application for renewal with the Commission and, if applicable, submitting the requisite license fee and late license renewal fee. The late license renewal fee is based on the estimated license fee for the renewal period. Penalty amounts are calculated as follows: Figure: 16 TAC (e) (f) Any required late license renewal fee is due within 14 calendar days of the date of the written notification by the Commission of the amount due. (g) The Commission will not issue a temporary license to a licensed authorized organization that has not filed its renewal application. (h) A late license renewal fee is not refundable. (i) License renewal applications received more than 60 days after the license expiration date will be returned unprocessed by the Commission to the sender. (j) To be complete, an application for renewal must contain all information that is required to be provided in or with the initial license application, as well as any other information required by the Commission. (1) All information submitted to the Commission must be legible, correct, and complete. (2) If any information previously submitted to the Commission with the licensee's initial license application or a previous renewal application has not changed since the information was last submitted to the Commission, the renewal applicant need not provide that information again. The applicant must certify on the renewal application that no changes have been made to the specific information since it was last submitted to the Commission. (k) Unless otherwise provided by law or rule, the general licensing provisions in of this title (relating to General Licensing Provisions) shall govern the license renewal process, including the submission and review of the renewal application, as if the renewal application was an initial license application. (l) Except as authorized by the Charitable Bingo Operations Director, or their designee, license renewal applications received by the Commission more than 60 days prior to the current license expiration date will be returned unprocessed by the Commission to the sender Military Service Members, Military Veterans, and Military Spouses. (a) The following terms used in this section are defined in of the Occupations Code as follows: (1) "Active duty" means current full-time military service in the armed forces of the United States or active duty military service as a member of the Texas military forces, as defined by , Government Code, or similar military service of another state. (2) "Armed forces of the United States" means the army, navy, air force, coast guard, or marine corps of the United States or a reserve unit of one of those branches of the armed forces. (3) "Military service member" means a person who is on active duty. (4) "Military spouse" means a person who is married to a military service member. (5) "Military veteran" means a person who has served on active duty and who was discharged or released from active duty. (b) As soon as practicable after a military service member, military veteran, or military spouse applies in his or her individual capacity for a commercial lessor license, distributor license, manufacturer license, or listing on the bingo worker registry, the Commission will process the application and, if warranted, issue the license or list the applicant on the bingo worker registry. A military service member or military veteran must provide the Commission with definitive proof of his or her current or prior military service. A military spouse must provide the Commission with: (1) definitive proof of his or her spouse's current military service; and (2) his or her official marriage certificate or other definitive proof of his or her marriage to a military service member. (c) The Commission will waive the license fee for a military service member or military veteran that applies in his or her individual capacity for a commercial lessor license, distributor license, or manufacturer license. The applicant must provide the Commission with definitive proof of the applicant's current or prior military service. (d) The Commission will waive the license fee for a military spouse that applies in his or her individual capacity for a commercial lessor license, distributor license, or manufacturer license, provided that the applicant holds a current license issued by another state or jurisdiction that is substantially equivalent to the license for which the applicant is applying. The applicant must provide the Commission with: service; (1) definitive proof of his or her spouse's current military (2) his or her official marriage certificate or other definitive proof of his or her marriage to a military service member; and (3) a photocopy of his or her current out-of-state license that is substantially equivalent to the license for which the applicant is applying. (e) An individual licensed in his or her individual capacity as a commercial lessor, distributor, or manufacturer is exempt from the late license renewal fee provided for in (e) of this chapter if the individual can demonstrate, to the satisfaction of the Commission, that the individual failed to renew his or her license in a timely manner because the individual was serving as a military service member Qualifications and Requirements for Conductor's License. An applicant must provide with its application documentation demonstrating that it meets all qualifications and requirements for a license to conduct bingo based on the type of organization it is. The qualifications, requirements, and necessary documentation for different types of organizations are shown in the chart below. Figure: 16 TAC Amendment to a Regular License to Conduct Charitable Bingo. (a) A licensed authorized organization must file a form prescribed by the Commission to amend its licensed: (1) playing days; (2) playing times; (3) playing location; (4) bingo chairperson; (5) organization name; or (6) primary business office. ADOPTED RULES December 22, TexReg 7401

164 (b) Playing days or playing times. (1) An organization amending its playing day(s) or playing time(s) must specify on the form each playing occasion day and time that the organization intends to conduct bingo at the location. not: (2) The playing day(s) or time(s) specified on the form may (A) conflict with the playing day(s) or time(s) of any other application or license issued for that location; (B) exceed the maximum number of bingo occasions per day allowed under Texas Occupations Code, (c) and (d); or (C) exceed three occasions during a calendar week or four hours per occasion. (1) An organization amending its playing location must return: (c) Playing location. (A) its current bingo license if available, or a certified statement signed by the bingo chairperson indicating that the license is not available, unless the license is currently in administrative hold status or its renewal application is pending; and (B) a copy of the meeting minutes recording that the organization voted to move the bingo playing location and indicating the exact playing location address and name of the location, if applicable. (2) A licensee shall display a copy of its license at the current playing location if the license was surrendered upon application for an amendment. (d) Organization name. An organization amending its organization name must submit a copy of the following: change; (1) all amended organizing instruments reflecting the name (2) written notice sent to the Internal Revenue Service updating the organization's record if the organization is required to maintain a 501(c) exemption; (3) meeting minutes recording that the organization voted to change its name; and (4) letter approving the name change from the parent organization, if applicable. (e) Primary business office location. (1) An organization may not relocate its primary business office to a different county solely for the purpose of relocating its bingo playing location. If the new location is not adjacent to the current county of its primary business office, the organization must have at least 20 percent of its members' residences located in the county to which the organization is moving. (2) An organization changing its primary business office location must submit a copy of the following: (A) meeting minutes recording that the licensed authorized organization voted to move its primary business office to the proposed location and the reason for the move; (B) if moving to a non-adjacent county, the licensed authorized organization's membership list showing names and county of residence with at least 20 percent of the members' residences located in the non-adjacent county to which the organization is moving; and (C) letter approving the organization's primary business office relocation to another county from the parent organization, if applicable. (f) Meeting minutes submitted in accordance with subsections (c)(1)(b), (d)(3), and (e)(2)(a) of this section must be signed and certified as true and correct by an officer of the organization Amendment of a License by Electronic Mail, Telephone or Facsimile. (a) The term "effective date," when used in this section, shall mean the first day that the changes to the day(s) or time(s) bingo is conducted by the organization are to begin. (b) A licensed authorized organization may change the day(s) or time(s) it conducts bingo by electronic mail, telephone or facsimile. The request should be received no later than noon the business day before the requested effective date of the amended license. (1) To change by telephone the day(s) or time(s) the organization conducts bingo, an authorized requestor must speak directly to a License and Permit Specialist in the Licensing Services Department of the Charitable Bingo Operations Division, who will verify the caller's authority to request an amendment. (2) To change by facsimile the day(s) or time(s) the organization conducts bingo, the Commission must receive a complete application at the facsimile number provided on the prescribed application form. (3) To change by electronic mail the day(s) or time(s) the organization conducts bingo, the Commission must receive a complete application at the bingo service electronic mail address provided on the prescribed application form. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 11, TRD Bob Biard General Counsel Texas Lottery Commission Effective date: December 31, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) SUBCHAPTER F. PAYMENT OF TAXES, PRIZE FEES AND BONDS 16 TAC The following rule amendments are adopted under the Texas Occupations Code , which authorizes the Commission to adopt rules to enforce and administer the Bingo Enabling Act; Texas Government Code , which authorizes the Commission to adopt rules for the laws under the Commission's jurisdiction; and Section 13 of HB 2578 from the Regular Session of the 85th Texas Legislature, which required the Commission to adopt rules for its implementation. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. 42 TexReg 7402 December 22, 2017 Texas Register

165 Filed with the Office of the Secretary of State on December 11, TRD Bob Biard General Counsel Texas Lottery Commission Effective date: December 31, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) TITLE 22. EXAMINING BOARDS PART 1. TEXAS BOARD OF ARCHITECTURAL EXAMINERS CHAPTER 5. REGISTERED INTERIOR DESIGNERS Introduction. The Texas Board of Architectural Examiners (Board) adopts amendments to 5.5 (Terms Defined Herein), 5.31 (Registration of Interior Designers by Examination), 5.32 (Registration by Reciprocal Transfer), 5.33 (Application Process), 5.35 (Pending Applications), 5.36 (Preliminary Evaluation of Criminal History), 5.37 (Provisional Licensure), 5.51 (Requirements), 5.52 (Examination Administration and Scoring), 5.53 (Scheduling of Examinations), and 5.55 (Special Accommodations). Additionally, the Board repeals 5.54 (Transfer of Passing Scores), (Description of Approved Education for Registration by Examination), (Description of Approved Experience for Registration by Examination), and (Other Education and Experience). The amendments and repealed rules are adopted without changes to the proposed text published in the October 6, 2017, issue of the Texas Register (42 TexReg 5333). Reasoned Justification. This rulemaking action implements Senate Bill 1932 (85th Regular Session, 2017), which amended the educational and professional experience requirements for registration as a registered interior designer (RID). Prior to the enactment of SB 1932, the Board was authorized under Tex. Occ. Code to adopt rules establishing the educational and professional experience standards required to become registered. However, under SB 1932, the legislature eliminated this rulemaking authority, and instead adopted a requirement that applicants for registration must meet the educational and professional experience standards for the registration examination adopted by the Board under authority of Tex. Occ. Code This exam, the NCIDQ, is administered by the Council for Interior Design Qualification (CIDQ), and the eligibility requirements for the exam are set by that organization. Therefore, it is necessary for the Board to repeal the educational and professional experience requirements that were previously adopted by rule, and substitute the educational and professional experience requirements required by CIDQ to sit for the NCIDQ examination. Additionally, the Board amends its applications and testing processes to assist the Board in implementing changes to the eligibility requirements. Adopted 5.5 includes revised definitions which are necessary to implement the rule changes required by SB Adopted 5.31 directly implements the legislative directive contained in SB 1932 by requiring an applicant for registration satisfy "the educational and professional experience eligibility requirements adopted by the Council for Interior Design Qualification (CIDQ) to sit for the NCIDQ examination." Additionally, the adopted rule includes a grandfathering provision under subsection (c), which applies to individuals who have been approved by the Board to take the examination prior to January 1, 2018 (the expected effective date of the proposed rules). Under this provision, such applicants would be eligible to qualify for registration as an RID by satisfying either the educational and professional experience required by CIDQ to sit for its examination, or the educational and professional experience requirements adopted by the Board and in effect at the time the application was filed. Though the Board notes that the CIDQ eligibility requirements are generally less stringent, and are thus not expected to result in the loss of eligibility of any applicant, this provision is intended to act as an additional safeguard to ensure the continued eligibility of any currently-approved applicant for examination. Adopted 5.32 includes non-substantive amendments that update defined terms and provide for consistency with corresponding provisions in 5.31 and 5.51 regarding predecessors to the NCIDQ examination. Adopted 5.33 outlines the process to be followed in filing an application for registration by examination. Under this provision, an applicant is required to satisfy the educational and professional experience requirements adopted by CIDQ to sit for the NCIDQ examination, and be approved by CIDQ to sit for the examination, prior to filing an application with the Board. Upon filing an application with the Board, an applicant will be required to provide a verified statement of the applicant's education, a detailed summary of interior design work experience, and proof of acceptance by CIDQ to sit for the examination. By requiring the applicant to provide the Board, at the time of application, with proof of acceptance by CIDQ to sit for the NCIDQ examination, the rule implements Tex. Occ. Code , which requires an applicant for registration to demonstrate that he or she has satisfied the educational and professional experience requirements for the examination adopted by the Board (the NCIDQ). Adopted 5.35 substitutes the term "applicant" for "candidate." Under the revised definitions in 5.5, an applicant is defined in part as a person who has submitted an application to the Board, while a candidate is a person who may not have completed the application process. Since 5.35 describes a person who has completed the application process (and is required to pay record maintenance fee), the appropriate term is "applicant." Likewise, "applicant" is substituted for "candidate" in 5.37, which authorizes the issuance of a certificate of registration or a provisional certificate of registration to an individual who has been convicted of certain criminal offenses. Since the Board would only issue a registration to a person who has completed an application, the use of the term "applicant" is appropriate here. Board rule 5.36 describes the process for certain individuals, including those enrolled in or planning to enroll in interior design educational programs, to request a preliminary determination of eligibility for registration based on the individual's criminal history. The amendment to 5.36 substitutes the term "qualifying interior design educational program" for "accredited program." Under the Board's previously adopted educational standards, an applicant was required to graduate from an accredited interior design program. However, under the CIDQ standards, graduation from an accredited program is not required. As such, the ADOPTED RULES December 22, TexReg 7403

166 rule has been extended to cover individuals who are enrolled in or planning to enroll in a "qualifying" educational program, which the Board interprets to mean an educational program that meets the CIDQ educational standards for examination qualification. Adopted 5.51(a) states that an applicant for interior design registration by examination must meet the eligibility and application requirements contained in 5.33(b) and (c). Additionally, 5.51(a) is amended to provide for consistency with corresponding provisions in 5.31 and 5.51 regarding predecessors to the NCIDQ examination. Additionally, a provision under 5.51(b), which authorized an applicant to begin testing after completing six months of full time work experience, has been repealed. This provision conflicted with recently amended Tex. Occ. Code , which states that an application for admission to the examination must be accompanied by evidence that the applicant has satisfied the professional experience requirements for the examination adopted by the Board. Depending on educational background, CIDQ requires prospective examinees to complete at least 3,520 hours (approximately two years) and up to 7,040 hours of work experience prior to taking the final sections of the examination. As such, an applicant with only six months of professional experience would not meet the "professional experience requirements" of CIDQ to take all sections of the examination, and thus it would be inappropriate for the Board to approve the applicant to do so under Tex. Occ. Code Therefore, 5.51(b) has been repealed, and instead the Board has adopted 5.53(a), which requires an Applicant to schedule and pass all sections of the NCIDQ within the time period required by CIDQ. In addition to bringing the rules into mandatory compliance with Occ. Code , this change will simplify the process for applicants and decrease the potential for confusion by eliminating unnecessary differences between Board and CIDQ requirements for examination scheduling and passage. Section 5.51(c) and 5.52 have been amended to eliminate unnecessary requirements relating to examination administration and scoring. Formerly, 5.51(c) addressed the acceptable location at which the examination could be taken. Similarly, 5.52 included provisions relating to examination administration, addressing the timing of examination administrations and the information required to be given to examinees, and imposed requirements on examinees regarding the identification required of examinees in order to enter the examination and the tools to bring to the examination. However, as the independent administrator of the examination, CIDQ is responsible for developing and enforcing examination administration procedures, and the adopted amendments recognize this role by repealing 5.51(c) and adopting 5.52, which states that, unless otherwise noted in the Board's rules, the administration and scoring of the NCIDQ examination is governed by the procedures adopted by CIDQ. This adoption will simplify the Board's rules and decrease the possibility of contradiction between the Board's rules and CIDQ's procedures in administering the NCIDQ examination. Adopted 5.53 amends the Board's rules relating to scheduling of examinations by adopting CIDQ's requirements on the matter. Previously, 5.53(a) required an applicant to pass all sections of the examination within five years of passing the first section. If a candidate did not pass all sections within five years, credit for any examination passed more than five years prior would be forfeited, and the section would have to be passed again. Comparatively, under CIDQ's requirements, an examinee is required to pass the first section of the NCIDQ examination (IDFX) within four examination windows of approval (two years), and the other two sections within ten examinations windows (five years). In order to simplify the Board's rules and minimize conflicting information for examinees, the Board has amended 5.53(a), which states that an applicant must schedule and pass all sections of the administration within the time period required by CIDQ. Additionally, in order to minimize any disruption to the testing schedule of individuals with pending, approved applications, the Board has adopted 5.53(b), which provides a grandfathering mechanism which allows those applicants to complete the test within the time period in effect at the time the application was filed. The Board has repealed 5.54, relating to transfer of passing scores. The process described in previous 5.54, in which examination scores are "transferred" from one state to another, is not consistent with any process used by CIDQ to administer examinations. CIDQ is responsible for maintaining and distributing examination scores to TBAE and other registration boards. Because the "transfer" of scores is not the responsibility of the Board, this rule was inconsistent with practice and unnecessary. Therefore, repeal is appropriate. Adopted amendments to 5.55 substitute the term "examinee" with "applicant" relating to the consideration of special accommodations for examination administration. Since many individuals pursuing registration in Texas begin testing with CIDQ prior to submitting an application with the Board, it is possible that such an individual would request special testing accommodations through the Board. This amendment will allow the Board to address such testing accommodations with CIDQ, as necessary. Subchapter J, 5.201, 5.202, and 5.203, has been repealed. These rules previously identified the amounts and types of educational and professional experience required to qualify for registration. The repeal of these rules is required to implement amended Tex. Occ. Code , which eliminated the Board's authority to adopt rules establishing standards for the recognition and approval of interior design educational programs and the amounts and types of professional experience necessary for registration examination eligibility. Summary of Comments and Agency Response. The Board did not receive any comments on the proposed rules. SUBCHAPTER A. SCOPE; DEFINITIONS 22 TAC 5.5 Statutory Authority. The amendment to 5.5 is adopted under Tex. Occ. Code , which authorizes the Board to adopt reasonable rules as necessary to regulate the practice of interior design; , which requires the Board to establish the qualifications for the issuance or renewal of an interior design registration, including the passage of an examination, payment of required fees, and other qualifications as determined by the Board; , which requires an applicant for interior design registration to pass the examination adopted by the board, and authorizes the Board to adopt the NCIDQ examination or a comparable examination; and , which requires an applicant for admission to the registration examination to provide evidence satisfactory to the Board that the applicant has satisfied the educational and professional experience requirements for the examination adopted by the board under In part, the definitions in 5.5 provide guidance in understanding the Board's rules relating to the application and examination processes, and the adopted rule will provide additional clarity to the definitions. 42 TexReg 7404 December 22, 2017 Texas Register

167 The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Effective date: January 1, 2018 Proposal publication date: October 6, 2017 For further information, please call: (512) SUBCHAPTER B. ELIGIBILITY FOR REGISTRATION 22 TAC , The amendments to and are adopted under Tex. Occ. Code , which authorizes the Board to suspend or revoke a license, disqualify a person from receiving a license, or deny to a person the opportunity to take a licensing examination on the grounds that the person has been convicted of certain criminal offenses; , which authorizes the Board to issue a provisional license for a term of six months to an applicant who has been convicted of a criminal offense; , which authorizes a person to request that the Board issue a criminal history evaluation letter regarding the person's eligibility for a registration with the Board; , which authorizes the Board to adopt reasonable rules as necessary to regulate the practice of interior design; , which directs the Board to adopt rules as necessary to comply with Occupations Code Chapter 53; , which authorizes the Board to grant a registration by reciprocity to certain applicants registered in other jurisdictions; , which requires the Board to establish the qualifications for the issuance or renewal of an interior design registration, including the passage of an examination, payment of required fees, and other qualifications as determined by the Board; , which requires an applicant for interior design registration to pass the examination adopted by the board, and authorizes the Board to adopt the NCIDQ examination or a comparable examination; and , which requires an applicant for admission to the registration examination to provide evidence satisfactory to the Board that the applicant has satisfied the educational and professional experience requirements for the examination adopted by the board under The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Effective date: January 1, 2018 Proposal publication date: October 6, 2017 For further information, please call: (512) SUBCHAPTER C. EXAMINATION 22 TAC , 5.55 Statutory Authority The amendments to and 5.55 are adopted under Tex. Occ. Code , which authorizes the Board to adopt reasonable rules as necessary to regulate the practice of interior design; , which requires the Board to adopt rules to ensure that an examination is administered to applicants with disabilities in compliance with the Americans with Disabilities Act of 1990 (42 U.S.C. Section et seq.) and its subsequent amendments; , which requires the Board to establish the qualifications for the issuance or renewal of an interior design registration, including the passage of an examination, payment of required fees, and other qualifications as determined by the Board; , which requires an applicant for interior design registration to pass the examination adopted by the board, and authorizes the Board to adopt the NCIDQ examination or a comparable examination; and , which requires an applicant for admission to the registration examination to provide evidence satisfactory to the Board that the applicant has satisfied the educational and professional experience requirements for the examination adopted by the board under The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Effective date: January 1, 2018 Proposal publication date: October 6, 2017 For further information, please call: (512) TAC 5.54 Statutory Authority The repeal of 5.54 is adopted under Tex. Occ. Code , which authorizes the Board to adopt reasonable rules as necessary to regulate the practice of interior design; , which requires the Board to establish the qualifications for the issuance or renewal of an interior design registration, including the passage of an examination, payment of required fees, and other qualifications as determined by the Board; , which requires an applicant for interior design registration to pass the examination adopted by the board, and authorizes the Board to adopt the NCIDQ examination or a comparable examination; and , which requires ADOPTED RULES December 22, TexReg 7405

168 an applicant for admission to the registration examination to provide evidence satisfactory to the Board that the applicant has satisfied the educational and professional experience requirements for the examination adopted by the board under The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Effective date: January 1, 2018 Proposal publication date: October 6, 2017 For further information, please call: (512) SUBCHAPTER J. TABLE OF EQUIVALENTS FOR EDUCATION AND EXPERIENCE IN INTERIOR DESIGN 22 TAC STATUTORY AUTHORITY The repeal of is adopted under Tex. Occ. Code , which authorizes the Board to adopt reasonable rules as necessary to regulate the practice of interior design; , which requires the Board to establish the qualifications for the issuance or renewal of an interior design registration, including the passage of an examination, payment of required fees, and other qualifications as determined by the Board; , which requires an applicant for interior design registration to pass the examination adopted by the board, and authorizes the Board to adopt the NCIDQ examination or a comparable examination; and , which requires an applicant for admission to the registration examination to provide evidence satisfactory to the Board that the applicant has satisfied the educational and professional experience requirements for the examination adopted by the board under The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Effective date: January 1, 2018 Proposal publication date: October 6, 2017 For further information, please call: (512) PART 24. TEXAS BOARD OF VETERINARY MEDICAL EXAMINERS CHAPTER 577. GENERAL ADMINISTRATIVE DUTIES SUBCHAPTER B. STAFF 22 TAC The Texas Board of Veterinary Medical Examiners (Board) adopts this amendment to , concerning the Fee Schedule. The amendment is adopted without changes to the proposed text published in the November 3, 2017, issue of the Texas Register (42 TexReg 6119) and will not be republished. Reasoned Justification and Factual Basis The purpose of the proposed amendment is to increase license renewal fees to cover increased costs for administering Chapter 801, Occupations Code, in fiscal years 2018 and There are three necessary increased costs that the agency must cover. First, increased vendor costs for the Prescription Monitoring Program (PMP) require the agency to contribute an additional $35,402 annually for operation and maintenance of the program. Additionally, the agency's contract with the Board's peer assistance program, Professional Recovery Network (PRN), requires an additional $15,000 annually for fiscal years 2018 and Finally, the agency is required to increase fees to generate $148,910 during the biennium to compensate for an additional staff member approved by the legislature. Summary of Comments and Agency Response The agency did not receive any public comments that concerned the proposed amendment to this rule. Statutory Authority The amendment is adopted under the authority of (a), Occupations Code, which states that the Board may adopt rules necessary to administer the chapter, and the authority of , Occupations Code, which states that the Board by rule shall set fees in amounts that are reasonable and necessary so that the fees, in the aggregate, cover the costs of administering Chapter 801, Occupations Code. No other statutes, articles, or codes are affected by the adoption. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 7, TRD Michelle Griffin Interim General Counsel Texas Board of Veterinary Medical Examiners Effective date: January 1, 2018 Proposal publication date: November 3, 2017 For further information, please call: (512) PART 39. TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS 42 TexReg 7406 December 22, 2017 Texas Register

169 CHAPTER 851. TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS LICENSING AND ENFORCEMENT RULES SUBCHAPTER B. P.G. LICENSING, FIRM REGISTRATION, AND GIT CERTIFICATION 22 TAC The Texas Board of Professional Geoscientists (TBPG) adopts an amendment to 22 TAC , concerning the licensure and regulation of Professional Geoscientists. This amendment is adopted without changes to the proposed text as published in the October 6, 2017, issue of the Texas Register (42 TexReg 5367), and will not be republished. TBPG adopts an amendment to 22 TAC to establish guidelines for applicants requesting to sit for a licensing examination. Adopted changes add language to provide that an applicant who does not fully meet the education requirement for licensure may sit for a licensing examination as long as the applicant has submitted certain documents and has acknowledged that the applicant does not meet the education requirement. The applicant will then need to resolve the education deficit once the applicant has received passing scores on the licensing examination in order to obtain a Professional Geoscientist license. Resolving the education deficit may include obtaining a waiver of the education requirement, obtaining a substitution of experience for education, or by the Board's determination that the education requirement was met with "equivalent education," as provided by (a)(2)(B). An applicant may choose to sit for the examination knowing that the education deficit will not be reviewed by the Board until after the applicant has passed the required examination(s) for licensure, and that the resolution the applicant presents may not be approved. Adopted amendment to adds new subsection (h) that specifies that "an individual who plans to apply for licensure as a Professional Geoscientist in the discipline of geology who does not fully meet the education requirement for licensure may take the ASBOG Fundamentals of Geology examination as long as the applicant: (1) Submits two acceptable personal references; (2) Has submitted any other necessary forms, documents, and fees; and (3) Has acknowledged that the Appointed Board must approve an education waiver request or approve the substitution of experience for education before the applicant may be licensed as a Professional Geoscientist and that the Appointed Board will not consider an education waiver or a request to substitute experience for education until after both the ASBOG Fundamentals of Geology and Practice of Geology examinations have been passed." New subsection (i) adds that "an applicant for licensure as a Professional Geoscientist in the discipline of geology who does not fully meet the education requirement for licensure may take the ASBOG Practice of Geology examination as long as the applicant: (1) Meets or is within six months of meeting the qualifying experience requirement for licensure; (2) Submits the required number/type of acceptable references required for licensure verifying the qualifying work experience claimed (or has verified qualifying work experience claimed through an alternate means, as provided by TBPG rules); (3) Has submitted a request for an education waiver or a substitution of experience for education; (4) Has submitted any other necessary forms, documents, and fees; and, (5) Has acknowledged that the Appointed Board must approve the education waiver request or a request to substitute experience for education before the applicant may be licensed as a Professional Geoscientist and that the Appointed Board will not consider an education waiver or a request for substitution of experience for education until after both the ASBOG Fundamentals of Geology and Practice of Geology examinations have been passed." New subsection (j) adds that "an applicant for licensure as a Professional Geoscientist in the discipline of geophysics who does not fully meet the education requirement for licensure may take the Texas Geophysics Examination as long as the applicant: (1) Meets or is within six months of meeting the qualifying experience requirement for licensure; (2) Submits the required number/type of acceptable references required for licensure verifying the qualifying work experience claimed (or has verified qualifying work experience claimed through an alternate means, as provided by TBPG rules); (3) Has submitted a request for an education waiver or a substitution of experience for education; (4) has submitted any other necessary forms, documents, and fees; and, (5) Has acknowledged that the Appointed Board must approve the education waiver request or a request to substitute experience for education before the applicant may be licensed as a Professional Geoscientist and that the Appointed Board will not consider an education waiver or a request for substitution of experience for education until after the Texas Geophysics Examination has been passed." The public benefit anticipated as a result of enforcing or administering the sections is that the Texas Board of Professional Geoscientists' rules are clarified regarding license eligibility and guidelines for applicants requesting to sit for a licensing examination, and the Board will be able to more effectively regulate the public practice of geoscience in Texas, which will protect and promote public health, safety, and welfare. No public comments were received regarding the proposed changes. The adopted amendment is authorized by the Texas Occupations Code , which provides that the Board shall adopt and enforce rules consistent with the Texas Geoscience Practice Act (the Act); by Occupations Code , which provides that Board shall enforce the Act; and by Occupations Code , which outlines how an applicant may demonstrate eligibility for a license, including equivalent educational requirements. The adopted amendment implements the Texas Occupations Code, , , and The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Charles Horton Executive Director Texas Board of Professional Geoscientists Effective date: December 28, 2017 Proposal publication date: October 6, 2017 For further information, please call: (512) TAC ADOPTED RULES December 22, TexReg 7407

170 The Texas Board of Professional Geoscientists (TBPG) adopts a new rule concerning the licensure and regulation of Professional Geoscientists in Texas. TBPG adopts 22 TAC , concerning Certain Licensees Temporarily Exempt from Continuing Education Requirements, for those licensees residing in Governor-designated disaster affected counties. This rule is adopted without changes to the proposed text as published in the October 13, 2017, issue of the Texas Register (42 TexReg 5639), and will not be republished. A Proclamation by the Governor of the State of Texas dated September 20, 2017, declared a state of emergency for certain counties in Texas due to Hurricane Harvey. This rule allows licensees to continue practicing geoscience without interruption during the weeks and months immediately following the hurricane. Allowing licensees to continue to practice geoscience without interruption allows them to assist in recovery, environmental damage assessment, post-flood foundation-stability assessment, environmental remediation and subsurface assessments related to structural rebuilding efforts in affected counties, thereby helping to preserve the public health, safety, and welfare in those areas, which are in imminent peril as a result of structures that have been damaged and otherwise become structurally unsound. Adopted new rule, , entitled Certain Licensees Temporarily Exempt From Continuing Education Requirements, outlines the process and conditions the board will use in providing temporary exemption from the continuing education requirements for those licensees residing in Governor-designated disaster affected counties, thereby allowing a licensee to renew a license issued by TBPG in a timely manner and to remain in compliance with continuing education requirements as long as the license, registration, or certification is renewed on or before August 31, The public benefit anticipated as a result of enforcing or administering the section is the uninterrupted availability of licensees to carry out public geoscience throughout the state, including areas impacted by Hurricane Harvey, and continuing the ability of the Board to effectively regulate the public practice of geoscience in Texas. No public comments were received regarding the proposed rule. The adopted rule is authorized by the Texas Geoscience Practice Act, Occupations Code , which authorizes the Board to adopt and enforce all rules and regulations consistent with the Act as necessary for the performance of its duties, and the regulation of the practice of geoscience in this state; and Occupations Code , which provides that Board shall enforce the Act. The adopted rule implements the Texas Occupations Code, , , and The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Charles Horton Executive Director Texas Board of Professional Geoscientists Effective date: January 25, 2018 Proposal publication date: October 13, 2017 For further information, please call: (512) TITLE 25. HEALTH SERVICES PART 7. TEXAS MEDICAL DISCLOSURE PANEL CHAPTER 601. INFORMED CONSENT 25 TAC 601.2, The Texas Medical Disclosure Panel (panel) adopts amendments to and of Title 25 of the Texas Administrative Code concerning informed consent. Amendments to are adopted without changes to the proposed text as published in the August 18, 2017, issue of the Texas Register (40 TexReg 4089), and therefore will not be republished. Amendments to are adopted with changes. BACKGROUND AND PURPOSE These amendments are adopted in accordance with the Texas Civil Practice and Remedies Code, , which requires the panel to determine which risks and hazards related to medical care and surgical procedures must be disclosed by health care providers or physicians to their patients or persons authorized to consent for their patients and to establish the general form and substance of such disclosure. Section contains the List A procedures requiring full disclosure of specific risks and hazards to patients before being undertaken; and contains the disclosure and consent form for anesthesia and/or perioperative pain management (analgesia). SECTION-BY-SECTION SUMMARY Amendments to 601.2(a) adds anesthesia risks and hazards for "deep sedation" in paragraph (5) and "moderate sedation" in paragraph (6). The amendments also add the anesthesia risks and hazards for "prenatal/early childhood anesthesia" in paragraph (7) related to the prolonged or repeated exposure to general anesthesia/moderate sedation/deep sedation during pregnancy and in early childhood. The amendments to revise the English and Spanish versions of the Disclosure and Consent Form for Anesthesia and/or Perioperative Pain Management (Analgesia) to add the words "or anxiety" to paragraph 3 of the form, and adds risks and hazards for "deep sedation" and "moderate sedation." Also, "prenatal/early childhood anesthesia" was added under Additional comments/risks concerning the risks and hazards related to the prolonged or repeated exposure to general anesthesia/moderate sedation/deep sedation during pregnancy and in early childhood. COMMENTS The 30-day comment period ended September 18, During this period, the panel received comments regarding the proposed rules from eight commenters, including Driscoll 42 TexReg 7408 December 22, 2017 Texas Register

171 Children's Hospital, Tejas Anesthesia, Texas Children's Hospital, Children's Medical Center, MD Anderson Cancer Center, Dell Children's Medical Center, Texas Tech University Health Sciences Center El Paso; and Texas Medical Association. Comment: Concerning 601.9, the Disclosure and Consent Form for Anesthesia and/or Perioperative Pain Management (Analgesia), multiple commenters supported the proposed changes. Response: No changes were made as a result of these comments. Comment: Concerning 601.9, the Disclosure and Consent Form for Anesthesia and/or Perioperative Pain Management (Analgesia), one commenter supported the proposed changes, but requested that the proposed language for Prenatal/Early Childhood Anesthesia be placed in the body of the consent form instead of, as part of the checkbox section. Response: The panel partially agreed and moved the language for Prenatal/Early Childhood Anesthesia under the heading of Additional comments/risks on the Disclosure and Consent Form for Anesthesia and/or Perioperative Pain Management in 601.9(1) and 601.9(2). STATUTORY AUTHORITY The amendments are authorized under the Texas Civil Practice and Remedies Code, , which provides the Texas Medical Disclosure Panel with the authority to prepare lists of medical treatments and surgical procedures that do and do not require disclosure by physicians and health care providers of the possible risks and hazards, and to prepare the form(s) for the treatments and procedures which do require disclosure Disclosure and Consent Form for Anesthesia and/or Perioperative Pain Management (Analgesia). The Texas Medical Disclosure Panel adopts the following form which shall be used to provide informed consent to a patient or person authorized to consent for the patient of the possible risks and hazards involved in anesthesia and/or perioperative pain management (analgesia). Providers shall have the form available in both English and Spanish language versions. Both versions are available from the Department of State Health Services. (1) English form. Figure: 25 TAC 601.9(1) (2) Spanish form. Figure: 25 TAC 601.9(2) The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 4, TRD Noah Appel, M.D. Chairman Texas Medical Disclosure Panel Effective date: December 24, 2017 Proposal publication date: August 18, 2017 For further information, please call: (512) TITLE 28. INSURANCE PART 1. TEXAS DEPARTMENT OF INSURANCE CHAPTER 3. LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES SUBCHAPTER RR. VALUATION MANUAL 28 TAC The Texas Department of Insurance (TDI) and commissioner adopt amendments to 28 TAC , concerning the valuation manual for reserving requirements without changes to the proposed text as published in the October 13, 2017, issue of the Texas Register (42 TexReg 5640). REASONED JUSTIFICATION. The amendment is necessary to implement Insurance Code , which requires the commissioner to adopt a valuation manual that is substantially similar to the valuation manual approved by the National Association of Insurance Commissioners (NAIC). The NAIC Valuation Manual adopted by this rule may be viewed through the following link: TDI adopted the NAIC Valuation Manual in in compliance with Insurance Code Insurance Code (c) requires that once the commissioner adopts the valuation manual by rule, changes to the valuation manual must be adopted by rule and be substantially similar to changes adopted by the NAIC. The changes must be adopted with an effective date of no earlier than January 1 of the year immediately following a determination by the commissioner that changes to the valuation manual have been adopted by the NAIC. The NAIC's changes must be approved by an affirmative vote representing at least three-fourths of the members voting, but not less than a majority of the total membership, and by NAIC members representing jurisdictions totaling greater than 75 percent of the direct written premiums as reported in the most recently available life insurance and accident and health annual statements, health annual statements, and fraternal annual statements. On August 9, 2017, the NAIC adopted changes to the NAIC Valuation Manual with a vote meeting the requirements set out in Insurance Code (c). On September 19, 2017, the commissioner issued Commissioner's Order No , which determined that the NAIC vote met the (c) threshold requirements. The amended valuation manual provides updated reserving and reporting requirements for the valuation manual in order to make it substantially similar to changes adopted by the NAIC. The amendments are applicable January 1, This rule includes provisions related to National Association of Insurance Commissioner rules, regulations, directives, or standards, and under Insurance Code and , TDI must consider whether authority exists to enforce or adopt it. TDI has determined that it has the authority to adopt this amendment because Insurance Code requires TDI to adopt a valuation manual and subsection (c) of the section expressly authorizes TDI to adopt changes to the valuation manual that are substantially similar to changes adopted by the NAIC. ADOPTED RULES December 22, TexReg 7409

172 SUMMARY OF COMMENTS. TDI did not receive any comments on the proposed amendment. STATUTORY AUTHORITY. The commissioner adopts the amendment under Insurance Code and Section provides that the commissioner shall adopt a valuation manual that is substantially similar to the valuation manual approved by the NAIC. The section further requires that changes to the valuation manual must be adopted by rule and must be substantially similar to changes adopted by the NAIC. Insurance Code provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of the Texas Department of Insurance under the Insurance Code and other laws of this state. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 7, TRD Norma Garcia General Counsel Texas Department of Insurance Effective date: December 27, 2017 Proposal publication date: October 13, 2017 For further information, please call: (512) TITLE 31. NATURAL RESOURCES AND CONSERVATION PART 10. TEXAS WATER DEVELOPMENT BOARD CHAPTER 384. RURAL WATER ASSISTANCE FUND SUBCHAPTER A. INTRODUCTORY PROVISIONS 31 TAC The Texas Water Development Board (TWDB) adopts an amendment to 31 Texas Administrative Code (TAC) 384.3, relating to the TWDB's administration of the Rural Water Assistance Fund (RWAF). The proposal is adopted without changes as published in the October 20, 2017, issue of the Texas Register (42 TexReg 5835). BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE ADOPTED AMENDMENT. The TWDB adopts an amendment to 31 TAC to reflect amendments to Section (c) of the Texas Water Code with the enactment into law of House Bill 544, 85th Legislative Session. DISCUSSION OF THE ADOPTED AMENDMENT. Section Use of Funds. Section 384.3, relating to the use of funds in the RWAF, is expanded to include planning activities that would assist rural political subdivisions in obtaining and using financing from any source, and not just RWAF, in addition to outreach, financial, and technical assistance. REGULATORY IMPACT ANALYSIS DETERMINATION The TWDB reviewed the adopted rulemaking in light of the regulatory analysis requirements of Texas Government Code , and determined that the rulemaking is not subject to Texas Government Code, , because it does not meet the definition of a "major environmental rule" as defined in the Administrative Procedure Act. A "major environmental rule" is defined as a rule with the specific intent to protect the environment or reduce risks to human health from environmental exposure, a rule that may adversely affect in a material way the economy or a sector of the economy, productivity, competition, jobs, the environment, or the public health and safety of the state or a sector of the state. The intent of the rulemaking is to allow additional uses of RWAF funds in accordance with a revision to Chapter 15 of the Texas Water Code in the 85th Regular Legislative Session. Even if the adopted rule were a major environmental rule, Texas Government Code, still would not apply to this rulemaking because Texas Government Code, only applies to a major environmental rule, the result of which is to: 1) exceed a standard set by federal law, unless the rule is specifically required by state law; 2) exceed an express requirement of state law, unless the rule is specifically required by federal law; 3) exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; or 4) adopt a rule solely under the general powers of the agency instead of under a specific state law. This rulemaking does not meet any of these four applicability criteria because it: 1) does not exceed any federal law; 2) does not exceed an express requirement of state law; 3) does not exceed a requirement of a delegation agreement or contract between the state and an agency or representative of the federal government to implement a state and federal program; and 4) is not adopted solely under the general powers of the agency, but rather is adopted under authority of Texas Water Code Therefore, this adopted rule does not fall under any of the applicability criteria in Texas Government Code, TAKINGS IMPACT ASSESSMENT The TWDB evaluated this adopted rule and performed an analysis of whether it constitutes a taking under Texas Government Code, Chapter The specific purpose of this rule is to incorporate additional uses of RWAF financing in accordance with a revision to Chapter 15 of the Texas Water Code in the 85th Regular Legislative Session. The adopted rule would substantially advance this stated purpose amending the TWDB's RWAF rules to be consistent with the statutory amendments. The TWDB's analysis indicates that Texas Government Code, Chapter 2007, does not apply to this adopted rule because this is an action that is reasonably taken to fulfill an obligation mandated by state law, which is exempt under Texas Government Code, (b)(4). The TWDB is the agency that administers the RWAF for the State of Texas. Nevertheless, the TWDB further evaluated this adopted rule and performed an assessment of whether it constitutes a taking under Texas Government Code, Chapter Promulgation and 42 TexReg 7410 December 22, 2017 Texas Register

173 enforcement of this adopted rule would be neither a statutory nor a constitutional taking of private real property. Specifically, the adopted regulation does not affect a landowner's rights in private real property because this rulemaking does not burden nor restrict or limit the owner's right to property and reduce its value by 25% or more beyond that which would otherwise exist in the absence of the regulation. In other words, this rule requires compliance with state law regarding RWAF. These requirements will not burden, restrict, or limit an owner's right to property. Therefore, the adopted rule does not constitute a taking under Texas Government Code, Chapter PUBLIC COMMENT No comments were received. STATUTORY AUTHORITY This rulemaking is adopted under the authority of Texas Water Code, , which provides the TWDB with the authority to adopt rules necessary to carry out the powers and duties in the Water Code and other laws of the State. The adopted rulemaking affects Chapter 15 of the Texas Water Code. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 8, TRD Todd Chenoweth General Counsel Texas Water Development Board Effective date: December 28, 2017 Proposal publication date: October 20, 2017 For further information, please call: (512) TITLE 34. PUBLIC FINANCE PART 1. COMPTROLLER OF PUBLIC ACCOUNTS CHAPTER 14. TEXAS BULLION DEPOSITORY 34 TAC The Comptroller of Public Accounts adopts new , concerning the implementation of the Texas Bullion Depository. Section 14.4 and are adopted with changes to the proposed text as published in the October 27, 2017, issue of the Texas Register (42 TexReg 5984) and will be republished. Sections , , and are adopted without changes. These sections are adopted to be located in new Chapter 14, entitled "Texas Bullion Depository." The agency is making a change to 14.4(a) to correct a typographical error. The agency is making a substantive change to in response to an internal review of the proposed rules. The change provides that powers of attorney do not need to be on a form prescribed by the comptroller, but must still be notarized. The adoption is to comply with Government Code, Chapter Government Code, (a) permits the comptroller to adopt rules regarding the Texas Bullion Depository as appropriate to ensure compliance with the law and to protect the interests of the depository, depository account holders, this state and the agencies, political subdivisions, and instrumentalities of this state, and the public at large. Section 14.1 provides definitions. Section 14.2 establishes standards for deposit. Under this rule the depository will record deposits of precious metals in units of troy ounces. Deposits may be further classified by reference to other indicators as applicable. The depository may restrict the types, sources and forms in which precious metals may be deposited and is required to publish on its website the types, sources and forms that may be deposited with the depository. Section 14.3 provides that a depository account holder may make a written demand for withdrawal of precious metals in accordance with the terms of the depository account agreement. This rule permits the depository to prescribe the form or format of a written demand for withdrawal. This rule further details how and when the depository must respond to a written demand for withdrawal. Section 14.4 provides for the process by which a depository account holder may transfer all or part of a depository account to another person in accordance with the terms of the depository account agreement. Section 14.5 outlines that a person seeking to establish a depository account must be eligible to open an account under applicable law and depository policy. This rule also provides that submission of a signed application to establish an account constitutes acceptance of the terms applicable to the account. Section 14.6 permits the depository to prescribe the manner in which a contract for depository account may be executed electronically. Section 14.7 provides that amendments to the depository account agreement may be made either by agreement between the parties or unilaterally by the depository upon providing written notice to depository account holders. Section 14.8 outlines the responsibilities of depository account holders to give notice to the depository of any discrepancies in account statements. Section 14.9 authorizes the comptroller to set fees, service charges, and penalties to be charged to a depository account holder. Section outlines the requirements for transferring a depository account to another person. Section provides that the depository has an automatic lien on depository accounts to secure the payment of any fees, charges, or other obligations that are owed by a depository account holder to the depository. Under this rule, the depository may liquidate all or part of a depository account to the extent necessary to satisfy the obligation. Alternatively, the depository may suspend withdrawal privileges for the depository account until the obligation is satisfied. This rule also outlines the requirements a third party has to meet to have a pledge of a depository account recognized by the depository. Section provides that applicable provisions of the Estates Code govern a depository account and provides that the deposi- ADOPTED RULES December 22, TexReg 7411

174 tory may prescribe the forms that must be used to implement the provisions of the Estates Code. Section provides that powers of attorney must be executed on a form prescribed by the depository and must be notarized. Section provides that the depository shall refer certain matters related to the purported confiscation of precious metals as part of a generalized declaration of illegality or emergency relating to the ownership of precious metals to the attorney general for resolution. This rule requires the depository to suspend withdrawal privileges from the depository until the matter is resolved. This rule permits the depository to prescribe procedures by which voluntary transfers of precious metals may continue to take place between depository account holders. Section requires the comptroller to publish on the depository website the official exchange rates used in pricing precious metals transactions. Section requires the comptroller to provide to depository account holders the statements or other documents necessary to report taxable gains and losses arising from depository transactions in a manner that is compliant with Federal law. Section requires depository agents to maintain suitable systems and processes as the comptroller may prescribe to ensure that all reportable transactions may be reported to the depository on a daily basis. This rule also allows the comptroller to prescribe the transactions that are reportable under this rule. Section requires depository agents to submit periodic reports of all depository transactions. This rule permits the comptroller to prescribe the form and formats of the reports to be filed under this section. The comptroller may require the forms to be filed electronically. Section permits the depository to prescribe all forms or documents that may be required to implement this chapter and may require that such forms be submitted electronically. This rule also permits that any notice required to be provided to a depository account holder by this chapter, the rules, or under the account agreement may be provided electronically. Section outlines which persons or entities are required to be licensed as depository agents. No comments were received regarding adoption of the new rules. These new rules are adopted under Government Code, , , , , , , , , , , and The new sections implement Government Code, Chapter Transfer of Depository Account Balances. (a) As provided by the depository account agreement, a depository account holder may transfer to another depository account holder or to a person who at the time of the transfer is not a depository account holder, any portion of a precious metal as is available in the depository account holder's depository account. A transfer request must be made using a form prescribed by the depository. The form prescribed by the depository may be electronic and must be submitted either on the depository website or in person to the depository or a depository agent as provided in the account agreement and in accordance with policies established by the depository. All transfers must be made in units of troy ounces pure or other applicable weights and measures as established by the depository. (b) If a payee under this section is a depository account holder, the depository shall adjust the depository account balances to reflect the transfer by reducing the payor's depository account balance and increasing the depository account balance of the payee accordingly. (c) If a payee is not a depository account holder, upon receipt of a valid transfer request, the depository shall at the option of the payee: (1) deliver to the payee the amount of precious metals transferred by the transfer request, minus any applicable fees; or (2) if the payee is otherwise eligible to open a depository account under applicable laws and regulations, allow the payee to establish a depository account and credit the balance of the payee's account accordingly. (d) The depository may require a non-account holder to provide information as is reasonably necessary to ensure that a delivery of precious metals to a non-account holder under this section is made in accordance with applicable law and policies established by the depository. Notwithstanding any other provision in these rules, the depository is not obligated to honor a transfer request if doing so violates any applicable law or depository policy. A delivery made to a non-account holder payee under this subsection may only be made in person to the payee at a facility designated by the depository. (e) As provided by the depository account agreement or depository policy, precious metals transferred under this section are subject to a settlement period for up to ten business days and may not be sold, withdrawn or otherwise transferred during that period unless approved by the depository Powers of Attorney. To be effective, a power of attorney by a depository account holder to manage or withdraw precious metals from the depository account holder's depository account must be notarized. Powers of attorney shall be effective for the length of time designated on the form unless earlier revoked by the depository account holder in writing or upon written notice of the death or adjudication of incompetency of the depository account holder. The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority. Filed with the Office of the Secretary of State on December 7, TRD Don Neal Chief Deputy General Counsel Comptroller of Public Accounts Effective date: December 27, 2017 Proposal publication date: October 27, 2017 For further information, please call: (512) TexReg 7412 December 22, 2017 Texas Register

175 Proposed Rule Reviews Texas Appraiser Licensing and Certification Board Title 22, Part 8 The Texas Appraiser Licensing and Certification Board (TALCB) files this notice of intention to review 22 TAC Chapter 155, Rules Relating to Standards of Practice, and Chapter 157, Rules Relating to Practice and Procedure. This review is undertaken pursuant to Government Code, During the review process, TALCB may determine whether a specific rule requires amendments to refine TALCB s legal and policy considerations; whether the rules reflect current TALCB procedures; that no changes to a rule as currently in effect are necessary; or that a rule is no longer valid or applicable. Rules may also be combined or reduced for simplification and clarity when feasible. Readopted rules will be noted in the Texas Register s Rules Review section without publication of the text. Any proposed amendments or repeal of a rule or chapter as a result of the review will be published in the Proposed Rules section of the Texas Register and will be open for an additional 30-day public comment period before final adoption or repeal. TALCB will accept comments for 30 days following publication of this notice in the Texas Register as to whether the reasons for adopting the sections under review continue to exist. Final consideration of this rules review is expected at the TALCB meeting in May Any questions or comments pertaining to this notice of intention to review should be directed to Kristen Worman, General Counsel, Texas Appraiser Licensing and Certification Board, P.O. Box 12188, Austin, Texas or ed to general.counsel@talcb.texas.gov within 30 days of publication. TRD Kristen Worman General Counsel Texas Appraiser Licensing and Certification Board Filed: December 11, 2017 Adopted Rule Reviews Texas Historical Commission Title 13, Part 2 The Texas Historical Commission (hereafter referred to as the commission) adopts the review of Texas Administrative Code, Title 13, Part 2, for the following chapters: Chapter 11 Administrative Department Chapter 12 Texas Historic Courthouse Preservation Program Chapter 14 Texas Historical Artifacts Acquisition Program Chapter 15 Administration of Federal Programs Chapter 16 Historic Sites Chapter 17 State Architectural Programs Chapter 20 Awards Chapter 22 Cemeteries Chapter 23 Publications Chapter 25 Office of the State Archeologist Chapter 26 Practice and Procedure No comments were received on the proposed rule review. The commission has assessed whether the reason(s) for adopting or re-adopting this chapter continues to exist. All chapters noted above were reviewed to determine whether they were obsolete, reflected current legal and policy considerations, reflected current general provisions in the governance of the THC, and/or whether it was in compliance with Chapter 2001 of the Texas Government Code (Administrative Procedures Act). TRD Mark Wolfe Executive Director Texas Historical Commission Filed: December 13, 2017 RULE REVIEW December 22, TexReg 7413

176

177 TABLES AND GRAPHICS December 22, TexReg 7415

178 42 TexReg 7416 December 22, 2017 Texas Register

179 TABLES AND GRAPHICS December 22, TexReg 7417

180 42 TexReg 7418 December 22, 2017 Texas Register

181 TABLES AND GRAPHICS December 22, TexReg 7419

182 42 TexReg 7420 December 22, 2017 Texas Register

183 TABLES AND GRAPHICS December 22, TexReg 7421

184 42 TexReg 7422 December 22, 2017 Texas Register

185 TABLES AND GRAPHICS December 22, TexReg 7423

186 42 TexReg 7424 December 22, 2017 Texas Register

187 TABLES AND GRAPHICS December 22, TexReg 7425

188 42 TexReg 7426 December 22, 2017 Texas Register

189 TABLES AND GRAPHICS December 22, TexReg 7427

190 42 TexReg 7428 December 22, 2017 Texas Register

191 TABLES AND GRAPHICS December 22, TexReg 7429

192 42 TexReg 7430 December 22, 2017 Texas Register

193 TABLES AND GRAPHICS December 22, TexReg 7431

194 42 TexReg 7432 December 22, 2017 Texas Register

195 TABLES AND GRAPHICS December 22, TexReg 7433

196 42 TexReg 7434 December 22, 2017 Texas Register

197 TABLES AND GRAPHICS December 22, TexReg 7435

198 42 TexReg 7436 December 22, 2017 Texas Register

199 TABLES AND GRAPHICS December 22, TexReg 7437

200 42 TexReg 7438 December 22, 2017 Texas Register

201 TABLES AND GRAPHICS December 22, TexReg 7439

202 42 TexReg 7440 December 22, 2017 Texas Register

203 TABLES AND GRAPHICS December 22, TexReg 7441

204 42 TexReg 7442 December 22, 2017 Texas Register

205 Office of the Attorney General Texas Water Code and Texas Health and Safety Code Settlement Notice Notice is hereby given by the State of Texas of the following proposed resolution of an environmental enforcement lawsuit under the Texas Water Code and the Texas Health & Safety Code. Before the State may settle a judicial enforcement action under the Texas Water Code, the State shall permit the public to comment in writing on the proposed judgment. The Attorney General will consider any written comments and may withdraw or withhold consent to the proposed agreed judgment if the comments disclose facts or considerations that indicate that the consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the Texas Water Code and the Texas Health & Safety Code. Case Title and Court: State of Texas v. Julio S. Alonso and Maria I. Alonso d/b/a A-1 Metal Finishing & Polishing, Cause No. D-1-GV , in the 201st Judicial District Court, Travis County, Texas. Nature of Defendants Operations: Defendants Julio and Maria Alonso owned and operated a metal plating facility, known as A-1 Metal Finishing & Polishing, located at 4206 Lonesome Trail, Von Ormy, Bexar County, Texas (the "Facility"). In late 2007, the TCEQ investigated the Facility and adjacent areas. TCEQ sampled and tested waste found in unlabeled/uncovered containers. The waste exhibited toxicity characteristic of chromium. Samples taken from an open septic system at the Facility showed elevated concentrations of mercury. Discharges were noted to the ground adjacent to the Facility. The analyzed soil samples showed elevated concentrations of chromium, nickel, and zinc. In 2010, the Defendants entered into an agreed administrative order with the TCEQ. Subsequent investigations revealed Defendants did not comply with the corrective actions required by the administrative order and failed to pay the administrative penalty. Proposed Agreed Judgment: The Agreed Final Judgment includes a permanent injunction requiring Defendants to remove and properly dispose of all waste from the Facility, conduct an affected property assessment and perform any remediation required by the assessment. Defendants agree to pay civil penalties to the State in the amount of $12, and unpaid administrative penalties of $3, The Defendants will pay attorney's fees to the State of Texas in the amount of $4, For a complete description, the Agreed Final Judgment should be reviewed. Requests for copies of the judgment, and written comments on the proposed settlement, should be directed to David A. Terry, Assistant Attorney General, Office of the Attorney General of Texas, P.O. Box (MC-066), Austin, Texas , (512) , fax (512) Written comments must be received within 30 days of publication of this notice to be considered. TRD Amanda Crawford General Counsel Office of the Attorney General Filed: December 7, 2017 Comptroller of Public Accounts Certification of the Average Closing Price of Gas and Oil The Comptroller of Public Accounts, administering agency for the collection of the Oil Production Tax, has determined, as required by Tax Code, , that the average taxable price of oil for reporting period November 2017 is $37.32 per barrel for the three-month period beginning on August 1, 2017, and ending October 31, Therefore, pursuant to Tax Code, , oil produced during the month of November 2017, from a qualified low-producing oil lease, is not eligible for a credit on the oil production tax imposed by Tax Code, Chapter 202. The Comptroller of Public Accounts, administering agency for the collection of the Natural Gas Production Tax, has determined, as required by Tax Code, , that the average taxable price of gas for reporting period November 2017 is $2.22 per mcf for the three-month period beginning on August 1, 2017, and ending October 31, Therefore, pursuant to Tax Code, , gas produced during the month of November 2017, from a qualified low-producing well, is eligible for a 100% credit on the natural gas production tax imposed by Tax Code, Chapter 201. The Comptroller of Public Accounts, administering agency for the collection of the Franchise Tax, has determined, as required by Tax Code, (s), that the average closing price of West Texas Intermediate crude oil for the month of November 2017 is $56.54 per barrel. Therefore, pursuant to Tax Code, (r), a taxable entity shall not exclude total revenue received from oil produced during the month of November 2017, from a qualified low-producing oil well. The Comptroller of Public Accounts, administering agency for the collection of the Franchise Tax, has determined, as required by Tax Code, (s), that the average closing price of gas for the month of November 2017 is $3.06 per MMBtu. Therefore, pursuant to Tax Code, (r), a taxable entity shall exclude total revenue received from gas produced during the month of November 2017, from a qualified low-producing gas well. Inquiries should be submitted to Teresa G. Bostick, Director, Tax Policy Division, P.O. Box 13528, Austin, Texas TRD Don Neal Chief Deputy General Counsel Comptroller of Public Accounts Filed: December 11, 2017 Office of Consumer Credit Commissioner Notice of Rate Ceilings The Consumer Credit Commissioner of Texas has ascertained the following rate ceilings by use of the formulas and methods described in and , Texas Finance Code. IN ADDITION December 22, TexReg 7443

206 The weekly ceiling as prescribed by and for the period of 12/18/17-12/24/17 is 18% for Consumer 1 /Agricultural/Commercial 2 credit through $250,000. The weekly ceiling as prescribed by and for the period of 12/18/17-12/24/17 is 18% for Commercial over $250, Credit for personal, family or household use. 2 Credit for business, commercial, investment or other similar purpose. TRD Leslie L. Pettijohn Commissioner Office of Consumer Credit Commissioner Filed: December 12, 2017 Texas Education Agency Request for Proficiency Tests for the Assessment of English Learners Description. The Texas Education Agency (TEA) is notifying assessment publishers that proficiency assessments and/or achievement tests may be submitted for review for the List of State Approved Tests for the Assessment of English Learners. Texas Education Code (TEC), (a)(2), authorizes the TEA to compile a list of approved assessments for the purposes of identifying students as English language learners for entry into or exit from (when appropriate) bilingual education and/or English as a second language (ESL) programs; annually assessing oral language proficiency in English and Spanish when required; and measuring reading and writing proficiency in English and Spanish for program placement. The state-approved tests placed on the list must be based on scientific research and must measure oral language proficiency in listening and speaking in English and Spanish from Prekindergarten (PK)-Grade 12. Assessments must also measure reading and writing in English and Spanish from PK-Grade 12. Norm-referenced standardized achievement tests in English will be used for identification and entry into programs and for exit from programs for Grades 1 and 2 and may be used as formative assessments. Norm-referenced standardized achievement tests in Spanish may be used for placement or language development purposes only. All tests to be included on the List of State Approved Tests for the Assessment of English Learners must be re-normed at least every eight years to meet the criteria specified in the TEC, , which requires that standardization norms not be more than eight years old at the time the test is administered. Only new assessments, newly normed assessments, and/or modified/updated assessments must be submitted for evaluation at this time. The Assessment Committee, comprised of stakeholders from throughout the state, will review and approve the List of State Approved Tests for the Assessment of English Learners. Selection Criteria. Assessment publishers will be responsible for submitting tests that they wish to be reviewed for consideration for inclusion on the List of State Approved Tests for the Assessment of English Learners. All tests submitted for review must be based on scientific research and must measure oral language proficiency in listening and speaking in English and Spanish from PK-Grade 12. Assessments must measure reading and writing in English and Spanish from PK-Grade 12 and must meet the state criteria for reliability and validity. Therefore, technical manuals must also be submitted and must be available for the review of assessments to be held on Friday, January 26, Assessments must also measure specific proficiency levels in oral language, reading, and writing in English and Spanish. Assessment instruments (English and Spanish) submitted for review will be grouped in the following categories: (1) Oral Language Proficiency Tests in English in Listening and Speaking domains; (2) Oral Language Proficiency Tests in Spanish in Listening and Speaking domains; (3) Reading and Writing Proficiency in English; and (4) Reading and Writing Proficiency in Spanish. Publishers are not required to submit proposals for all categories. Proposals must be submitted and presented on Friday, January 26, 2018, to be considered for inclusion on the List of State Approved Tests for the Assessment of English Learners. Assessment publishers will be required to attend the review of the assessments on Friday, January 26, 2018, which will be held at the William B. Travis Building, Room 1-104, 1701 North Congress Avenue, Austin, Texas. Complete official sample test copies in English and Spanish with comprehensive explanations, including (1) scoring information; (2) norming data information, including ethnicity, gender, grade level, and geographic region; and (3) technical manuals with validity and reliability information, must be presented at that time. Only materials presented on Friday, January 26, 2018, will be considered for approval. Publishers must be available all day at the request of the committee and must make arrangements to pick up all materials at the end of the day. Any materials and/or revisions submitted after the deadline cannot be reviewed until the following year. Further Information. For clarifying information, contact Susie Coultress, State Director of Bilingual/ESL/Title III, Texas Education Agency, (512) TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Filed: December 13, 2017 Texas Commission on Environmental Quality Agreed Orders The Texas Commission on Environmental Quality (TCEQ, agency, or commission) staff is providing an opportunity for written public comment on the listed Agreed Orders (AOs) in accordance with Texas Water Code (TWC), TWC, requires that before the commission may approve the AOs, the commission shall allow the public an opportunity to submit written comments on the proposed AOs. TWC, requires that notice of the proposed orders and the opportunity to comment must be published in the Texas Register no later than the 30th day before the date on which the public comment period closes, which in this case is January 22, TWC, also requires that the commission promptly consider any written comments received and that the commission may withdraw or withhold approval of an AO if a comment discloses facts or considerations that indicate that consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the statutes and rules within the commission's jurisdiction or the commission's orders and permits issued in accordance with the commission's regulatory authority. Additional notice of changes to a proposed AO is not required to be published if those changes are made in response to written comments. A copy of each proposed AO is available for public inspection at both the commission's central office, located at Park 35 Circle, Building C, 1st Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about an AO should be sent to the enforcement coordinator designated for each AO at the commission's central office at P.O. Box 13087, Austin, Texas and must be received by 5:00 p.m. on January 22, TexReg 7444 December 22, 2017 Texas Register

207 Written comments may also be sent by facsimile machine to the enforcement coordinator at (512) The commission's enforcement coordinators are available to discuss the AOs and/or the comment procedure at the listed phone numbers; however, TWC, provides that comments on the AOs shall be submitted to the commission in writing. (1) COMPANY: AMAN 2003 ENTERPRISE CORPORATION dba Pic N Go; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Garland, Dallas County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and TWC, (c)(1), by failing to monitor the underground storage tanks for releases at a frequency of at least once every month; PENALTY: $3,000; ENFORCEMENT COORDINATOR: Jonathan Nguyen, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (2) COMPANY: Aqua Development, Incorporated; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Weatherford, Parker County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (e)(2), (h), and (i)(3) and 40 Code of Federal Regulations (CFR) and (a), by failing to conduct water quality parameter sampling at the facility's entry point and the required distribution sample site for the July 1, December 31, 2016, monitoring period following the January 1, June 30, 2016, monitoring period during which the copper action level was exceeded, have the samples analyzed, and report the results to the executive director (ED); 30 TAC (d)(2)(A), (h), and (i)(2) and 40 CFR and (b), by failing to collect one lead and copper sample from the facility's entry point no later than 180 days following the end of the January 1, June 30, 2016, monitoring period during which the copper action level was exceeded, have the samples analyzed, and report the results to the ED; 30 TAC (f)(3)(A) and 40 CFR (e)(1), (a), and (c)(2), by failing to submit a recommendation to the ED for optimal corrosion control treatment within six months following the end of the January 1, June 30, 2016, monitoring period during which the copper action level was exceeded; and 30 TAC (g)(2)(A) and 40 CFR and (d)(1), by failing to submit a recommendation to the ED for source water treatment within 180 days following the end of the January 1, June 30, 2016, monitoring period during which the copper action level was exceeded; PENALTY: $1,035; ENFORCE- MENT COORDINATOR: Sarah Kim, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (3) COMPANY: Aqua Utilities, Incorporated; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Needville, Fort Bend County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (m)(4), by failing to maintain all water treatment units, storage and pressure maintenance facilities, distribution system lines, and related appurtenances in a watertight condition and free of excessive solids; 30 TAC (f)(2) and (3)(D)(ii), by failing to maintain water works operation and maintenance records and make them available for review to the executive director during the investigation; and 30 TAC (l), by failing to maintain a thorough and up-to-date plant operations manual for operator review and reference; PENALTY: $800; ENFORCEMENT COORDINATOR: Yuliya Dunaway, (210) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (4) COMPANY: City of Alvord; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Alvord, Wise County; TYPE OF FACILITY: public water supply; RULES VIO- LATED: 30 TAC (f)(1) and Texas Health and Safety Code (THSC), (c), by failing to comply with the maximum contaminant level (MCL) of 15 picocuries per liter for gross alpha particle activity, based on the running annual average; and 30 TAC (f)(1) and THSC, (c), by failing to comply with the MCL of 30 micrograms per liter for combined uranium, based on the running annual average; PENALTY: $345; ENFORCEMENT COORDINATOR: Ronica Rodriguez, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (5) COMPANY: City of La Joya; DOCKET NUMBER: MLM-E; IDENTIFIER: RN ; LOCATION: La Joya, Hidalgo County; TYPE OF FACILITY: unauthorized municipal solid waste (MSW) disposal site; RULES VIOLATED: 30 TAC (a) and (c), by failing to cause, suffer, allow, or permit the unauthorized disposal of MSW; and 30 TAC and Texas Health and Safety Code, (b), by failing to cause, suffer, allow, or permit outdoor burning within the State of Texas; PENALTY: $15,000; Supplemental Environmental Project offset amount of $12,000; ENFORCEMENT COORDINATOR: Keith Frank, (512) ; REGIONAL OF- FICE: 1804 West Jefferson Avenue, Harlingen, Texas , (956) (6) COMPANY: Clovercreek Municipal Utility District; DOCKET NUMBER: MWD-E; IDENTIFIER: RN ; LOCATION: Houston, Montgomery County; TYPE OF FACIL- ITY: wastewater treatment facility; RULES VIOLATED: TWC, (a)(1), 30 TAC (1), and Texas Pollutant Discharge Elimination System Permit Number WQ , Interim I Effluent Limitations and Requirements Number 1, by failing to comply with permitted effluent limitations; PENALTY: $21,000; Supplemental Environmental Project offset amount of $21,000; ENFORCEMENT COORDINATOR: Caleb Olson, (512) ; REGIONAL OF- FICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (7) COMPANY: CLUBCORP NV V, LLC dba Prestonwood Golf Club Hills; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Plano, Denton County; TYPE OF FACILITY: fleet refueling facility; RULES VIOLATED: 30 TAC (b)(1)(A) and (2) and TWC, (b) and (c)(1), by failing to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month, and by failing to provide release detection for the suction piping associated with the UST system; PENALTY: $4,640; ENFORCEMENT COORDINATOR: Steven Van Landingham, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (8) COMPANY: CULP AND SON, LIMITED; DOCKET NUMBER: EAQ-E; IDENTIFIER: RN ; LOCATION: Florence, Williamson County; TYPE OF FACILITY: aggregate production operation; RULES VIOLATED: 30 TAC 213.4(a)(1), by failing to obtain approval of an Edwards Aquifer Protection Plan prior to commencing a regulated activity over the Edwards Aquifer Recharge Zone; PENALTY: $37,500; ENFORCEMENT COORDINATOR: Alejandro Laje, (512) ; REGIONAL OFFICE: Park 35 Circle, Austin, Texas 78753, (512) (9) COMPANY: Diana Palacios; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Crystal City, Zavala County; TYPE OF FACILITY: out of service underground storage tank (UST); RULES VIOLATED: 30 TAC 334.7(d)(1)(A), (1)(B), and (3), by failing to provide an amended registration for any change or additional information regarding the USTs within 30 days from the date of the occurrence of the change or addition; and 30 TAC IN ADDITION December 22, TexReg 7445

208 334.47(a)(2), by failing to permanently remove from service, no later than 60 days after the prescribed upgrade implementation date, a UST system for which any applicable component of the system is not brought into timely compliance with the upgrade requirements; PENALTY: $9,187; ENFORCEMENT COORDINATOR: Carlos Molina, (512) ; REGIONAL OFFICE: 707 East Calton Road, Suite 304, Laredo, Texas , (956) (10) COMPANY: EnLink Midstream Services, LLC; DOCKET NUMBER: AIR-E; IDENTIFIER: RN ; LO- CATION: Bridgeport, Wise County; TYPE OF FACILITY: a natural gas processing plant; RULES VIOLATED: 30 TAC (3), (b)(2)(F) and (c), and (4), Texas Health and Safety Code (THSC), (b), Federal Operating Permit (FOP) Number O910, Special Terms and Conditions Number 7, and New Source Review Permit Numbers and PSDTX686M1, Special Conditions Number 1, by failing to comply with the maximum allowable emissions rates; and 30 TAC (4) and (2)(A), THSC, (b), and FOP Number O910, General Terms and Conditions, by failing to report all instances of deviations; PENALTY: $17,063; ENFORCEMENT COORDINATOR: Jo Hunsberger, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (11) COMPANY: EPP-Texas Acquisition, LLC dba Texas Mini Mart; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Hurst, Tarrant County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(2) and TWC, (a), by failing to provide release detection for the pressurized piping associated with the underground storage tank system; PENALTY: $7,625; ENFORCEMENT COORDINATOR: Stephanie McCurley, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (12) COMPANY: FEATHERLAND EGG FARMS, INCORPO- RATED; DOCKET NUMBER: AGR-E; IDENTIFIER: RN ; LOCATION: Marion, Guadalupe County; TYPE OF FACILITY: large dry litter poultry operation; RULES VIOLATED: 30 TAC (a) and (f) and TWC, (a)(1), by failing to obtain authorization for a concentrated animal feeding operation (CAFO); and TWC, (a)(1), by failing to prevent the unauthorized discharge of wastewater from a CAFO into or adjacent to any water in the state; PENALTY: $5,313; Supplemental Environmental Project offset amount of $2,125; ENFORCEMENT COORDINATOR: Alejandro Laje, (512) ; REGIONAL OFFICE: Judson Road, San Antonio, Texas , (210) (13) COMPANY: Greenville Electric Utility System; DOCKET NUM- BER: AIR-E; IDENTIFIER: RN ; LOCATION: Greenville, Hunt County; TYPE OF FACILITY: power plant; RULES VIOLATED: 30 TAC (b)(2)(F) and (c) and (4), Federal Operating Permit (FOP) Number O1, Special Terms and Conditions Number 7, New Source Review Permit Number 3706, Special Conditions Numbers 1 and 5.B, and Texas Health and Safety Code (THSC), (b), by failing to comply with the permitted hourly maximum allowable emissions rate and the permitted natural gas firing rate limit; and 30 TAC (4) and (2)(C), FOP Number O1, General Terms and Conditions, and THSC, (b), by failing to submit deviations reports no later than 30 days after the end of the reporting periods; PENALTY: $14,775; ENFORCEMENT COORDI- NATOR: David Carney, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (14) COMPANY: HDU Services, L.L.C. dba Birch Creek Village Water; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Lyons, Burleson County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (f)(1) and Texas Health and Safety Code, (c), by failing to comply with the maximum contaminant level of milligrams per liter for total trihalomethanes, based on the locational running annual average; and 30 TAC (a)(6) and TWC, 5.702, by failing to pay annual public health service fees and/or any associated late fees for TCEQ Financial Administration Account Number for Fiscal Years ; PENALTY: $232; ENFORCEMENT COORDINATOR: Raime Hayes-Falero, (713) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (15) COMPANY: Ingram Readymix Number 87, L.L.C.; DOCKET NUMBER: WQ-E; IDENTIFIER: RN ; LOCA- TION: Del Rio, Val Verde County; TYPE OF FACILITY: mineral mining; RULES VIOLATED: 30 TAC (a)(4) and 40 Code of Federal Regulations (c), by failing to maintain authorization to discharge stormwater associated with industrial activities; PENALTY: $12,500; ENFORCEMENT COORDINATOR: Farhaud Abbaszadeh, (512) ; REGIONAL OFFICE: 707 East Calton Road, Suite 304, Laredo, Texas , (956) (16) COMPANY: Jacinta Lucio De Tavarez; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Bryan, Brazos County; TYPE OF FACILITY: out of service underground storage tank (UST); RULE VIOLATED: 30 TAC (a)(2), by failing to permanently remove from service, no later than 60 days after the prescribed upgrade implementation date, a UST system for which any applicable component of the system is not brought into timely compliance with the upgrade requirements; PENALTY: $3,563; ENFORCEMENT COORDINATOR: Carlos Molina, (512) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (17) COMPANY: Jayesh A. Patel dba One Stop; DOCKET NUM- BER: PST-E; IDENTIFIER: RN ; LOCATION: Lubbock, Lubbock County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and TWC, (c)(1), by failing to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month; 30 TAC (a), by failing to designate, train, and certify at least one named individual for each class of operator - Class A, Class B, and Class C for the facility; 30 TAC (c)(2)(C) and TWC, (d), by failing to inspect the impressed current cathodic protection system at least once every 60 days to ensure that the rectifier and other system components are operating properly; 30 TAC 334.8(c)(5)(C), by failing to ensure that a legible tag, label, or marking with the tank number is permanently applied upon or affixed to either the top of the fill tube or to a non-removable point in the immediate area of the fill tube for each regulated UST at the facility according to the UST registration and self-certification form; 30 TAC (b)(1)(B) and (g), by failing to maintain the required UST records and make them immediately available for inspection upon request by agency personnel; 30 TAC (b)(2)(C) and TWC, (c)(2), by failing to equip each tank with a valve or other appropriate device designed to automatically shut off the flow of regulated substances into the tank when the liquid reaches a preset level no higher than 95% capacity; PENALTY: $10,593; ENFORCEMENT COORDINATOR: Ken Moller, (512) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (18) COMPANY: J-Country Bar, LLC; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Victoria, Victoria County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (d)(2)(A) and (b)(4) and Texas 42 TexReg 7446 December 22, 2017 Texas Register

209 Health and Safety Code, (c), by failing to maintain a minimum disinfectant residual of 0.2 milligrams per liter free chlorine throughout the distribution system at all times; PENALTY: $150; EN- FORCEMENT COORDINATOR: Sarah Kim, (512) ; RE- GIONAL OFFICE: 6300 Ocean Drive, Suite 1200, Corpus Christi, Texas , (361) (19) COMPANY: Landers Precast Concrete, LLC; DOCKET NUM- BER: WQ-E; IDENTIFIER: RN ; LOCATION: San Angelo, Tom Green County; TYPE OF FACILITY: concrete products plant; RULES VIOLATED: 30 TAC 205.4(a)(5) and TWC, (e) and (a)(1), by failing to maintain authorization to discharge wastewater and stormwater from industrial activities associated with a concrete products plant under Texas Pollutant Discharge Elimination System General Permit Number TXG110000; PENALTY: $7,875; ENFORCEMENT COORDINATOR: Claudia Corrales, (432) ; REGIONAL OFFICE: 622 South Oakes, Suite K, San Angelo, Texas , (325) (20) COMPANY: Oakmont Georgetown, LLC; DOCKET NUMBER: EAQ-E; IDENTIFIER: RN ; LOCATION: Georgetown, Williamson County; TYPE OF FACILITY: residential property; RULE VIOLATED: 30 TAC 213.4(a)(1), by failing to obtain approval of an Edwards Aquifer Protection Plan prior to commencing a regulated activity over the Edwards Aquifer Recharge Zone; PENALTY: $5,625; ENFORCEMENT COORDINATOR: Larry Butler, (512) ; REGIONAL OFFICE: Park 35 Circle, Austin, Texas 78753, (512) (21) COMPANY: Oxy Vinyls, LP; DOCKET NUMBER: AIR-E; IDENTIFIER: RN ; LOCATION: Deer Park, Harris County; TYPE OF FACILITY: vinyl chloride monomer production plant; RULES VIOLATED: 30 TAC (c) and (4), Federal Operating Permit Number O1369, Special Terms and Conditions Number 24, New Source Review Permit Number 4943B, Special Conditions Number 1, and Texas Health and Safety Code, (b), by failing to prevent unauthorized emissions; PENALTY: $4,425; Supplemental Environmental Project offset amount of $1,770; ENFORCEMENT COORDINATOR: David Carney, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (22) COMPANY: PULTE HOMES OF TEXAS, L.P.; DOCKET NUM- BER: WQ-E; IDENTIFIER: RN ; LOCATION: Conroe, Montgomery County; TYPE OF FACILITY: residential home construction; RULES VIOLATED: TWC, (a)(2), 30 TAC 307.4(b)(4), and Texas Pollutant Discharge Elimination System General Permit Number TXR , Part II, Section C.2, Part III, Section F.4(e), and Part VII, Numbers 1 and 8, by failing to prevent the discharge of water not associated with stormwater and failing to take all reasonable steps to minimize or prevent any discharge that has a reasonable likelihood of adversely affecting human health or the environment; PENALTY: $7,500; ENFORCEMENT COORDINATOR: Farhaud Abbaszadeh, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (23) COMPANY: Shell Oil Company; DOCKET NUMBER: AIR-E; IDENTIFIER: RN ; LOCATION: Deer Park, Harris County; TYPE OF FACILITY: petroleum refining plant; RULES VIOLATED: 30 TAC (1) and (4), 40 Code of Federal Regulations (a)(1), Federal Operating Permit (FOP) Number O1669, Special Terms and Conditions (STC) Number 1.A, and Texas Health and Safety Code (THSC), (b), by failing to comply with hydrogen sulfide concentration limits; 30 TAC (3), (c), and (4), FOP Number O1669, STC Number 23, New Source Review Permit Numbers and PSDTX815, Special Conditions Number 22, and THSC, (b), by failing to comply with the nitrogen oxides concentration limit; and 30 TAC (4) and (2)(A), FOP Number O1669, General Terms and Conditions, and THSC, (b), by failing to report all instances of deviations; PENALTY: $54,001; Supplemental Environmental Project offset amount of $27,000; ENFORCEMENT COORDINATOR: Raime Hayes-Falero, (713) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (24) COMPANY: TORRES READY-MIX, INCORPORATED; DOCKET NUMBER: WQ-E; IDENTIFIER: RN ; LOCATION: La Pryor, Zavala County; TYPE OF FACILITY: aggregate production operation; RULES VIOLATED: 30 TAC (a)(4) and 40 Code of Federal Regulations (c), by failing to obtain authorization to discharge stormwater associated with industrial activities under Texas Pollutant Discharge Elimination System General Permit Number TXR050000; PENALTY: $938; ENFORCEMENT COORDINATOR: Claudia Corrales, (432) ; REGIONAL OFFICE: 707 East Calton Road, Suite 304, Laredo, Texas , (956) (25) COMPANY: TPC Group LLC; DOCKET NUMBER: AIR-E; IDENTIFIER: RN ; LOCATION: Port Neches, Jefferson County; TYPE OF FACILITY: petrochemical manufacturing plant; RULES VIOLATED: 30 TAC (b)(2)(F) and (c) and (4), Federal Operating Permit Number O1327, Special Terms and Conditions Number 20, New Source Review Permit Number 20485, Special Conditions Number 1, and Texas Health and Safety Code, (b), by failing to prevent unauthorized emissions; PENALTY: $7,500; Supplemental Environmental Project offset amount of $3,000; ENFORCEMENT COORDINATOR: Raime Hayes-Falero, (713) ; REGIONAL OFFICE: 3870 Eastex Freeway, Beaumont, Texas , (409) TRD Charmaine Backens Director, Litigation Division Texas Commission on Environmental Quality Filed: December 12, 2017 Amended Notice of Hearing (To change hearing date.) DAEDELUS CORPORATION SOAH Docket No TCEQ Docket No MWD Permit No. WQ APPLICATION. Daedelus Corporation, 7160 Dallas Parkway, Suite 250, Plano, Texas 75024, has applied to the Texas Commission on Environmental Quality (TCEQ) for new Texas Pollutant Discharge Elimination System (TPDES) Permit No. WQ , to authorize the discharge of treated domestic wastewater at a daily average flow not to exceed 20,000 gallons per day. TCEQ received this application on May 24, The facility will be located approximately 1.0 mile south-southeast of the intersection of County Road 1641 and County Road 148, in Kaufman County, Texas The treated effluent will be discharged to a ditch; thence to Big Brushy Creek; thence to Kings Creek; thence to Cedar Creek Reservoir in Segment No of the Trinity River Basin. The unclassified receiving water uses are minimal aquatic life IN ADDITION December 22, TexReg 7447

210 use for the ditch and high aquatic life use for Big Brushy Creek. The designated uses for Segment No are high aquatic life use, public water supply, and primary contact recreation. In accordance with Title 30 of the Texas Administrative Code (TAC) Section and the TCEQ Procedures for the Implementation of the Texas Surface Water Quality Standards (June 2010), an antidegradation review of the receiving waters was performed. A Tier 1 antidegradation review has preliminarily determined that existing water quality uses will not be impaired by this permit action. Numerical and narrative criteria to protect existing uses will be maintained. A Tier 2 review has preliminarily determined that no significant degradation of water quality is expected in Big Brushy Creek, which has been identified as having high aquatic life use. Existing uses will be maintained and protected. The preliminary determination can be reexamined and may be modified if new information is received. The TCEQ Executive Director has prepared a draft permit which, if approved, would establish the conditions under which the facility must operate. The Executive Director has made a preliminary decision that this permit, if issued, meets all statutory and regulatory requirements. The permit application, Executive Director's preliminary decision, and draft permit are available for viewing and copying at the Talty Town Office, 9550 Helms Trail, Suite 500, Forney, Texas. As a public courtesy, we have provided the following Web page to an online map of the site or the facility's general location. The online map is not part of the application or the notice: For the exact location, refer to the application. CONTESTED CASE HEARING. The State Office of Administrative Hearings (SOAH) will conduct a formal contested case hearing at: 10:00 a.m. - January 23, 2018 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The contested case hearing will be a legal proceeding similar to a civil trial in state district court. The hearing will address the disputed issues of fact identified in the TCEQ order concerning this application issued on July 31, In addition to these issues, the judge may consider additional issues if certain factors are met. The hearing will be conducted in accordance with Chapter 2001, Texas Government Code; Chapter 26, Texas Water Code; and the procedural rules of the TCEQ and SOAH, including 30 TAC Chapter 80 and 1 TAC Chapter 155. The hearing will be held unless all timely hearing requests have been withdrawn or denied. To request to be a party, you must attend the hearing and show you would be adversely affected by the application in a way not common to members of the general public. Any person may attend the hearing and request to be a party. Only persons named as parties may participate at the hearing. In accordance with 1 Tex. Admin. Code (a), Notice of Hearing, "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH." INFORMATION. If you need more information about the hearing process for this application, please call the Public Education Program, toll free, at (800) General information about the TCEQ can be found at our web site at Further information may also be obtained from Daedelus Corporation at the address stated above or by calling Mr. Leon Bradshaw, Vice President, at (214) Persons with disabilities who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week prior to the hearing. TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 13, 2017 Enforcement Orders An agreed order was adopted regarding City of Throckmorton, Docket No MWD-E on December 13, 2017, assessing $18,975 in administrative penalties with $18,975 deferred. Information concerning any aspect of this order may be obtained by contacting Alejandro Laje, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A order was adopted regarding Texas Architectural Aggregate, Inc., Docket No WQ-E on December 13, 2017, assessing $4,500 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Jess Robinson, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Oci Beaumont LLC, Docket No AIR-E on December 13, 2017, assessing $9,525 in administrative penalties with $1,905 deferred. Information concerning any aspect of this order may be obtained by contacting Carol McGrath, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Pearsall, Docket No MLM-E on December 13, 2017, assessing $61,739 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Larry Butler, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Gulfwest Waste Solutions, LLC, Docket No AIR-E on December 13, 2017, assessing $18,450 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Shelby Orme, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding Silvia Arenales dba 4 Brothers Enterprises, Docket No MSW-E on December 13, 2017, assessing $3,812 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Amanda Patel, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Blue Ridge West Municipal Utility District, Docket No PWS-E on December 13, 2017, assessing $345 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting James Fisher, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas TexReg 7448 December 22, 2017 Texas Register

211 An agreed order was adopted regarding Texas Land Reclamation, LLC dba UTW Transportation, Docket No MSW-E on December 13, 2017, assessing $19,688 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Audrey Liter, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding B.v.s. Construction, Inc., Docket No MLM-E on December 13, 2017, assessing $6,561 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Ryan Rutledge, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default and shutdown order was adopted regarding Root Fuel, LLC dba Root Fuel Wallisville, Docket No PST-E on December 13, 2017, assessing $14,056 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Jess Robinson, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Canadian, Docket No MWD-E on December 13, 2017, assessing $30,875 in administrative penalties with $6,175 deferred. Information concerning any aspect of this order may be obtained by contacting Claudia Corrales, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding Texas Rain Holding Company, Inc., Docket No MWD-E on December 13, 2017, assessing $24,850 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Lena Roberts, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Alba, Docket No MWD-E on December 13, 2017, assessing $65,812 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Farhaud Abbaszadeh, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Old Alton Estates Home Owners Association, Docket No PWS-E on December 13, 2017, assessing $821 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Ryan Byer, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default and shutdown order was adopted regarding Sahad Investments, Inc. dba Riverside Market, Docket No PST-E on December 13, 2017, assessing $4,500 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Ryan Rutledge, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding Fazio Family Investments, Inc. dba Kid Korral, Docket No PWS-E on December 13, 2017, assessing $4,266 in administrative penalties with $4,266 deferred. Information concerning any aspect of this order may be obtained by contacting Lena Roberts, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A default order was adopted regarding Ann Kim Nguyen dba Journeys Cleaners, Docket No MLM-E on December 13, 2017, assessing $14,899 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Ryan Rutledge, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Cowtown Gas Processing Partners L.P., Docket No AIR-E on December 13, 2017, assessing $8,551 in administrative penalties with $1,710 deferred. Information concerning any aspect of this order may be obtained by contacting Carol McGrath, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Jameson Place, L.P., Docket No PWS-E on December 13, 2017, assessing $405 in administrative penalties with $405 deferred. Information concerning any aspect of this order may be obtained by contacting Carol McGrath, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Harker Heights, Docket No MWD-E on December 13, 2017, assessing $9,375 in administrative penalties with $9,375 deferred. Information concerning any aspect of this order may be obtained by contacting Elizabeth Carroll Harkrider, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Fort Worth Transportation Authority, Docket No PST-E on December 13, 2017, assessing $16,125 in administrative penalties with $3,225 deferred. Information concerning any aspect of this order may be obtained by contacting Keith Frank, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Sam Lim, Inc. dba J & J Quickstop, Docket No PST-E on December 13, 2017 assessing $11,475 in administrative penalties with $2,295 deferred. Information concerning any aspect of this order may be obtained by contacting James Baldwin, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Alton, Docket No MSW-E on December 13, 2017 assessing $12,000 in administrative penalties with $2,400 deferred. Information concerning any aspect of this order may be obtained by contacting Jonathan Nguyen, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Zrprasla Inc. dba Friendly Food Mart, Docket No PST-E on December 13, 2017 assessing $33,850 in administrative penalties with $6,770 deferred. Information concerning any aspect of this order may be obtained by contacting Ken Moller, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 13, 2017 Notice of Application and Public Hearing for an Air Quality Standard Permit for a Concrete Batch Plant with Enhanced Controls Proposed Air Quality Registration Number IN ADDITION December 22, TexReg 7449

212 APPLICATION. Silva Industries LLC, 550 Leissner School Road, Seguin, Texas has applied to the Texas Commission on Environmental Quality (TCEQ) for an Air Quality Standard Permit for a Concrete Batch Plant with Enhanced Controls Registration Number to authorize the operation of a concrete batch plant. The facility is proposed to be located at 1100 Sweet Home Road, Seguin, Guadalupe County, Texas This link to an electronic map of the site or facility's general location is provided as a public courtesy and not part of the application or notice. For exact location, refer to application. This application was submitted to the TCEQ on October 2, The primary function of this plant is to manufacture concrete by mixing materials including (but not limited to) sand, aggregate, cement and water. The executive director has determined the application was technically complete on November 7, PUBLIC COMMENT / PUBLIC HEARING. Public written comments about this application may be submitted at any time during the public comment period. The public comment period begins on the first date notice is published and extends to the close of the public hearing. Public comments may be submitted either in writing to the Texas Commission on Environmental Quality, Office of the Chief Clerk, MC-105, P.O. Box 13087, Austin, Texas , or electronically at Please be aware that any contact information you provide, including your name, phone number, address and physical address will become part of the agency's public record. A public hearing has been scheduled, that will consist of two parts, an informal discussion period and a formal comment period. During the informal discussion period, the public is encouraged to ask questions of the applicant and TCEQ staff concerning the application, but comments made during the informal period will not be considered by the executive director before reaching a decision on the permit, and no formal response will be made to the informal comments. During the formal comment period, members of the public may state their comments into the official record. Written comments about this application may also be submitted at any time during the hearing. The purpose of a public hearing is to provide the opportunity to submit written comments or an oral statement about the application. The public hearing is not an evidentiary proceeding. The Public Hearing is to be held: Monday, January 8, 2018, at 6:00 p.m. Holiday Inn Express & Suites Seguin 2801 Jay Road Seguin, Texas RESPONSE TO COMMENTS. A written response to all formal comments will be prepared by the executive director after the comment period closes. The response, along with the executive director's decision on the application, will be mailed to everyone who submitted public comments and the response to comments will be posted in the permit file for viewing. The executive director shall approve or deny the application not later than 35 days after the date of the public hearing, considering all comments received within the comment period, and base this decision on whether the application meets the requirements of the standard permit. CENTRAL/REGIONAL OFFICE. The application will be available for viewing and copying at the TCEQ Central Office and the TCEQ San Antonio Regional Office, located at Judson Rd, San Antonio, Texas , during the hours of 8:00 a.m. to 5:00 p.m., Monday through Friday, beginning the first day of publication of this notice. INFORMATION. If you need more information about this permit application or the permitting process, please call the Public Education Program toll free at (800) Si desea información en español, puede llamar al (800) Further information may also be obtained from Silva Industries, LLC, 550 Leissner School Road, Seguin, Texas , or by calling Mr. Fernando Silva Jr., Owner Operator at (210) Notice Issuance Date: November 29, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 6, 2017 Notice of Public Hearing on Assessment of Administrative Penalties and Requiring Certain Actions of City of Wolfforth SOAH Docket No TCEQ Docket No PWS-E The Texas Commission on Environmental Quality (TCEQ or the Commission) has referred this matter to the State Office of Administrative Hearings (SOAH). An Administrative Law Judge with the State Office of Administrative Hearings will conduct a public hearing at: 10:00 a.m. - January 11, 2018 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The purpose of the hearing will be to consider the Executive Director's Preliminary Report and Petition mailed September 7, 2017 concerning assessing administrative penalties against and requiring certain actions of the City of Wolfforth, for violations in Lubbock County, Texas, of: Tex. Health & Safety Code (c) and and 30 Tex. Admin. Code (h)(1) and (j), (c)(3)(K), (e)(3), (c)(3) and (c)(4), (h)(4), (d)(2)(A), (f)(2), (f)(3)(b)(iv), (n)(1), (n)(3), (s)(1), and (u), and (b)(4). The hearing will allow the City of Wolfforth, the Executive Director, and the Commission's Public Interest Counsel to present evidence on whether a violation has occurred, whether an administrative penalty should be assessed, and the amount of such penalty, if any. The first convened session of the hearing will be to establish jurisdiction, afford the City of Wolfforth, the Executive Director of the Commission, and the Commission's Public Interest Counsel an opportunity to negotiate and to establish a discovery and procedural schedule for an evidentiary hearing. Unless agreed to by all parties in attendance at the preliminary hearing, an evidentiary hearing will not be held on the date of this preliminary hearing. Upon failure of the City of Wolfforth to appear at the preliminary hearing or evidentiary hearing, the factual allegations in the notice will be deemed admitted as true, and the relief sought in the notice of hearing may be granted by default. The specific allegations included in the notice are those set forth in the Executive Director's Preliminary Report and Petition, attached hereto and incorporated herein for all purposes. The City of Wolfforth, the Executive Director of the Commission, and the Commission's Public Interest Counsel are the only designated parties to this proceeding. 42 TexReg 7450 December 22, 2017 Texas Register

213 Legal Authority: Tex. Health & Safety Code ch. 341 and 30 Tex. Admin. Code chs. 70 and 290; Tex. Water Code 7.058, and the Rules of Procedure of the Texas Commission on Environmental Quality and the State Office of Administrative Hearings, including 30 Tex. Admin. Code and and ch. 80, and 1 Tex. Admin. Code ch Further information regarding this hearing may be obtained by contacting Ryan Rutledge, Staff Attorney, Texas Commission on Environmental Quality, Litigation Division, Mail Code 175, P.O. Box 13087, Austin, Texas , telephone (512) Information concerning your participation in this hearing may be obtained by contacting Vic McWherter, Public Interest Counsel, Mail Code 103, at the same P.O. Box address given above, or by telephone at (512) Any document filed prior to the hearing must be filed with TCEQ's Office of the Chief Clerk and SOAH. Documents filed with the Office of the Chief Clerk may be filed electronically at or sent to the following address: TCEQ Office of the Chief Clerk, Mail Code 105, P.O. Box 13087, Austin, Texas Documents filed with SOAH may be filed via fax at (512) or sent to the following address: SOAH, 300 West 15th Street, Suite 504, Austin, Texas When contacting the Commission or SOAH regarding this matter, reference the SOAH docket number given at the top of this notice. In accordance with 1 Tex. Admin. Code (a), Notice of Hearing, "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH." Persons who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week before the hearing. Issued: December 11, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 13, 2017 Notice of Public Hearing on Assessment of Administrative Penalties and Requiring Certain Actions of Derby 581 Land Company, LLC SOAH Docket No TCEQ Docket No MSW-E The Texas Commission on Environmental Quality (TCEQ or the Commission) has referred this matter to the State Office of Administrative Hearings (SOAH). An Administrative Law Judge with the State Office of Administrative Hearings will conduct a public hearing at: 10:00 a.m. - January 4, 2018 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The purpose of the hearing will be to consider the Executive Director's Preliminary Report and Petition mailed September 12, 2017 concerning assessing administrative penalties against and requiring certain actions of Derby 581 Land Company, LLC, for violations in Frio County, Texas, of: 30 Texas Admin. Code (a) and (c). The hearing will allow Derby 581 Land Company, LLC, the Executive Director, and the Commission's Public Interest Counsel to present evidence on whether a violation has occurred, whether an administrative penalty should be assessed, and the amount of such penalty, if any. The first convened session of the hearing will be to establish jurisdiction, afford Derby 581 Land Company, LLC, the Executive Director of the Commission, and the Commission's Public Interest Counsel an opportunity to negotiate and to establish a discovery and procedural schedule for an evidentiary hearing. Unless agreed to by all parties in attendance at the preliminary hearing, an evidentiary hearing will not be held on the date of this preliminary hearing. Upon failure of Derby 581 Land Company, LLC to appear at the preliminary hearing or evidentiary hearing, the factual allegations in the notice will be deemed admitted as true, and the relief sought in the notice of hearing may be granted by default. The specific allegations included in the notice are those set forth in the Executive Director's Preliminary Report and Petition, attached hereto and incorporated herein for all purposes. Derby 581 Land Company, LLC, the Executive Director of the Commission, and the Commission's Public Interest Counsel are the only designated parties to this proceeding. Legal Authority: Texas Water Code and ch. 7, Texas Health & Safety Code ch. 361, and 30 Texas Admin. Code chs. 70 and 330; Texas Water Code 7.058, and the Rules of Procedure of the Texas Commission on Environmental Quality and the State Office of Administrative Hearings, including 30 Texas Admin. Code and and ch. 80, and 1 Texas Admin. Code ch Further information regarding this hearing may be obtained by contacting Clayton Smith, Staff Attorney, Texas Commission on Environmental Quality, Litigation Division, Mail Code 175, P.O. Box 13087, Austin, Texas , telephone (512) Information concerning your participation in this hearing may be obtained by contacting Vic McWherter, Public Interest Counsel, Mail Code 103, at the same P.O. Box address given above, or by telephone at (512) Any document filed prior to the hearing must be filed with TCEQ's Office of the Chief Clerk and SOAH. Documents filed with the Office of the Chief Clerk may be filed electronically at or sent to the following address: TCEQ Office of the Chief Clerk, Mail Code 105, P.O. Box 13087, Austin, Texas Documents filed with SOAH may be filed via fax at (512) or sent to the following address: SOAH, 300 West 15th Street, Suite 504, Austin, Texas When contacting the Commission or SOAH regarding this matter, reference the SOAH docket number given at the top of this notice. In accordance with 1 Texas Admin. Code (a), Notice of Hearing, "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH." Persons who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week before the hearing. Issued: December 4, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 6, 2017 IN ADDITION December 22, TexReg 7451

214 Notice of Public Hearing on Assessment of Administrative Penalties and Requiring Certain Actions of Oxy USA WTP LP SOAH Docket No TCEQ Docket No AIR-E The Texas Commission on Environmental Quality (TCEQ or the Commission) has referred this matter to the State Office of Administrative Hearings (SOAH). An Administrative Law Judge with the State Office of Administrative Hearings will conduct a public hearing at: 10:00 a.m. - January 11, 2018 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The purpose of the hearing will be to consider the Executive Director's Preliminary Report and Petition mailed July 24, 2017, concerning assessing administrative penalties against and requiring certain actions of Oxy USA WTP LP, for violations in Kent County, Texas, of: Texas Health & Safety Code (b), 30 Texas Administrative Code (3), (c), and (4), Federal Operating Permit No. O550, Special Terms and Conditions No. 6, and New Source Review Permit Nos and PSDTX795M2, Special Condition No. 1. The hearing will allow Oxy USA WTP LP, the Executive Director, and the Commission's Public Interest Counsel to present evidence on whether a violation has occurred, whether an administrative penalty should be assessed, and the amount of such penalty, if any. The first convened session of the hearing will be to establish jurisdiction, afford Oxy USA WTP LP, the Executive Director of the Commission, and the Commission's Public Interest Counsel an opportunity to negotiate and to establish a discovery and procedural schedule for an evidentiary hearing. Unless agreed to by all parties in attendance at the preliminary hearing, an evidentiary hearing will not be held on the date of this preliminary hearing. Upon failure of Oxy USA WTP LP to appear at the preliminary hearing or evidentiary hearing, the factual allegations in the notice will be deemed admitted as true, and the relief sought in the notice of hearing may be granted by default. The specific allegations included in the notice are those set forth in the Executive Director's Preliminary Report and Petition, attached hereto and incorporated herein for all purposes. Oxy USA WTP LP, the Executive Director of the Commission, and the Commission's Public Interest Counsel are the only designated parties to this proceeding. Legal Authority: Texas Water Code and Texas Water Code ch. 7, Texas Health & Safety Code ch. 382, and 30 Texas Administrative Code chs. 70, 101, 116, and 122; Texas Water Code 7.058, and the Rules of Procedure of the Texas Commission on Environmental Quality and the State Office of Administrative Hearings, including 30 Texas Administrative Code and and ch. 80, and 1 Texas Administrative Code ch Further information regarding this hearing may be obtained by contacting Elizabeth Lieberknecht, Staff Attorney, Texas Commission on Environmental Quality, Litigation Division, Mail Code 175, P.O. Box 13087, Austin, Texas , telephone (512) Information concerning your participation in this hearing may be obtained by contacting Vic McWherter, Public Interest Counsel, Mail Code 103, at the same P.O. Box address given above, or by telephone at (512) Any document filed prior to the hearing must be filed with TCEQ's Office of the Chief Clerk and SOAH. Documents filed with the Office of the Chief Clerk may be filed electronically at or sent to the following address: TCEQ Office of the Chief Clerk, Mail Code 105, P.O. Box 13087, Austin, Texas Documents filed with SOAH may be filed via fax at (512) or sent to the following address: SOAH, 300 West 15th Street, Suite 504, Austin, Texas When contacting the Commission or SOAH regarding this matter, reference the SOAH docket number given at the top of this notice. In accordance with 1 Texas Administrative Code (a), Notice of Hearing, "Parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH." Persons who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week before the hearing. Issued: December 11, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 13, 2017 Notice of Public Hearing on the Petition to Revoke Permit No. WQ Issued to Rancho Del Lago, Inc. SOAH Docket No TCEQ Docket No MWD The Texas Commission on Environmental Quality (TCEQ or the Commission) has referred this matter to the State Office of Administrative Hearings (SOAH). An Administrative Law Judge with SOAH will conduct a formal public hearing beginning at: 10:00 a.m. - January 10, 2018 William P. Clements Building 300 West 15th Street, 4th Floor Austin, Texas The purpose of the hearing will be to determine whether Mr. Ron Harris (Petitioner) qualifies, pursuant to applicable law, as a person affected by Permit No. WQ issued on August 14, 2014, in Blanco County, Texas to Rancho del Lago, Inc. (RDL' s permit). Should SOAH determine that Petitioner qualifies as a person affected by RDL's permit, then SOAH will proceed with a hearing on the merits of the Petition to determine whether RDL's permit should be revoked pursuant to 30 Texas Administrative Code Chapter 305. The hearing on the merits will be a legal proceeding similar to a civil trial in state district court. The first convened session of the hearing (the preliminary hearing) will be to establish jurisdiction, afford Petitioner, RDL, the Executive Director of the Commission, and the Commission's Public Interest Counsel an opportunity for settlement negotiations, and to establish a discovery and procedural schedule for the evidentiary hearing process. Unless agreed to by all parties in attendance at the preliminary hearing, 42 TexReg 7452 December 22, 2017 Texas Register

215 an evidentiary hearing will not be held on the date of the preliminary hearing. Ron Harris, Rancho del Lago, Inc., the Commission's Public Interest Counsel, and the Executive Director of the Commission are the only designated parties to this proceeding. Any person may attend the hearing but only persons named as parties may participate in the hearing. The failure of Petitioner or their representative to appear at the preliminary or evidentiary hearings may be grounds for withholding consideration of this matter or for dismissal of the Petition. The failure of RDL or its representative to appear at the preliminary or evidentiary hearings may result in a Proposal for Decision being issued by the administrative law judge based solely on the evidence presented by the other parties. In accordance with 1 Tex. Admin. Code (a) and (a), parties that are not represented by an attorney may obtain information regarding contested case hearings on the public website of the State Office of Administrative Hearings at or in printed format upon request to SOAH. The hearing will be conducted in accordance with Texas Government Code Chapter 2001; Texas Water Code Chapter 26; and the procedural rules of the TCEQ and SOAH, including Title 30 of the Texas Administrative Code, Chapters 80 and 305, and Title 1 of the Texas Administrative Code Chapter 155. Any document filed in this matter must be filed with the Office of the Chief Clerk. Documents may be filed electronically at or sent to the following address: ATTN: TCEQ Office of the Chief Clerk, Mail Code 105, P.O. Box 13087, Austin, Texas When contacting the Commission regarding this Petition, reference the TCEQ and SOAH docket numbers given at the top of this notice. Further information regarding this hearing may be obtained by contacting Michael Parr, Staff Attorney, Texas Commission on Environmental Quality, Environmental Law Division, Mail Code 173, P.O. Box 13087, Austin, Texas , telephone (512) Information concerning hearing procedures and public participation in hearings may be obtained by contacting Vic McWherter, Public Interest Counsel, Mail Code 103, at the same P.O. Box address given above, or by telephone at (512) General information about the TCEQ can be found at our web site at Persons with disabilities who need special accommodations at the hearing should call the SOAH Docketing Department at (512) , at least one week prior to the hearing. Issued: November 30, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 6, 2017 Notice of Public Meeting on January 25, 2018, in Pearland, Brazoria County, Texas Regarding the James Barr Facility State Superfund Site The executive director (ED) of the Texas Commission on Environmental Quality (TCEQ) is issuing this notice of a public meeting to receive comment on the intent to delete the James Barr Facility state Superfund site (the site) from the state Superfund registry (registry). The registry is the list of state Superfund sites which may constitute an imminent and substantial endangerment to public health and safety or the environment due to a release or threatened release of hazardous substances into the environment. The ED is proposing this deletion because the ED has determined that due to the remedial actions performed, the site no longer presents such an endangerment. This combined notice was also published in the Pearland Reporter News newspaper on December 20, The site, including all land, structures, appurtenances, and other improvements, is approximately two acres and is located in the 3300 block of Industrial Drive, Pearland, Brazoria County, Texas. The site also includes any areas where hazardous substances had come to be located as a result, either directly or indirectly, of releases of hazardous substances from the site. The site was formerly operated as a storage site for hazardous waste. The waste was transported to the site by vacuum trucks and unloaded into various aboveground storage tanks located on the property. In 1995, Brazoria County auctioned the property due to unpaid taxes. A contractor was authorized to salvage the steel from the site. In April 1997, during salvage operations at the site, a hazardous spill occurred that caused benzene and 1,2-dichloroethane to be released onto the ground. The TCEQ began investigating the site in July 1997 and performed a removal action at the site in During the removal action, the TCEQ removed 19 drums containing contaminated soil for off-site disposal and erected a fence to restrict access to the site. The site was proposed for listing on the registry in the November 8, 2002, issue of the Texas Register (27 TexReg 10644). Between 2003 and 2011, remedial investigations were conducted, including groundwater monitoring. In addition, removal actions in 2011 and 2012 included excavation and off-site disposal of soil, sediment, and sludges; the surface impoundments were backfilled and graded. In August 2013, a remedy was selected for the site consisting of an on-site plume management zone to control and monitor arsenic impacts in the uppermost groundwater bearing zone at the site. The TCEQ filed a deed notice in real property records of Brazoria County to restrict exposure to groundwater and continued routine groundwater monitoring at the site. Based on the monitoring data, the concentrations of the contaminant of concern in the groundwater no longer exceed the applicable protective concentration levels. As a result of the remedial actions that have been performed at the site, the ED has determined that the site no longer presents an imminent and substantial endangerment to public health and safety or the environment. Therefore, the site is eligible for deletion from the registry as provided by 30 TAC (c). In accordance with 30 TAC (b), the TCEQ will hold a public meeting to receive comment on this proposed deletion from the registry. This meeting will not be a contested case hearing within the meaning of Texas Government Code, Chapter The meeting will be held on January 25, 2018, at 7:00 p.m., in the Public Safety Building, 2nd Floor, located at 2555 Cullen Parkway, Pearland, Texas All persons desiring to make comments regarding the proposed deletion of the site may do so prior to or at the public meeting. All comments submitted prior to the public meeting must be received by 5:00 p.m. on January 24, 2018, and should be sent in writing to Sherell Heidt, Project Manager, TCEQ, Remediation Division, MC-143, P.O. Box 13087, Austin, Texas or by to superfnd@tceq.texas.gov or facsimile to (512) The public comment period for this action will end at the close of the public meeting on January 25, A portion of the record for the site including documents pertinent to the ED's proposed deletion is available for review during regu- IN ADDITION December 22, TexReg 7453

216 lar business hours at the Pearland Library, located at 3522 Liberty Drive, Pearland, Texas (The Pearland Library is currently undergoing renovations and has temporarily moved to 2341 North Galveston Avenue, Pearland, Texas ) The complete public file may be obtained during regular business hours at the TCEQ's Central File Room, Building E, Room 103, Park 35 Circle, Austin, Texas 78753, (512) Additional files may be obtained by contacting the TCEQ project manager for the site, Sherell Heidt, at (713) Fees are charged for photocopying file information. Parking for persons with disabilities is available on the east side of Building D, convenient to access ramps that are between Buildings D and E. Information is also available regarding the site's state Superfund history at Persons who have special communication or other accommodation needs who are planning to attend the meeting should contact the agency at (800) or (512) Requests should be made as far in advance as possible. For further information about the public meeting, please call Crystal Taylor, Community Relations Liaison, at (800) TRD Charmaine Backens Director, Litigation Division Texas Commission on Environmental Quality Filed: December 12, 2017 Notice of Water Rights Application Notices issued December 5 through 7, 2017 APPLICATION NO ; SW Taber 2014, L.P., 2220 Sandy Lake Road, Carrollton, Texas 75006, Applicant, has applied for a Water Use Permit to authorize the use of the bed and banks of the Elm Fork Trinity River, Trinity River Basin to convey groundwater for storage in an off-channel reservoir and subsequent diversion for agricultural purposes in Dallas County. The application and partial fees were received on July 9, Additional information and fees were received on June 3, 2016 and September 1, The application was declared administratively complete and accepted for filing with the Office of the Chief Clerk on September 9, The Executive Director has completed the technical review of the application and prepared a draft permit. The draft permit, if granted, would contain special conditions including, but not limited to, limiting the diversion of groundwater to amounts that do not exceed the actual daily amount of groundwater discharged. The application, technical memoranda, and Executive Director's draft permit are available for viewing and copying at the Office of the Chief Clerk, Park 35 Circle, Bldg. F., Austin, Texas Written public comments and requests for a public meeting should be submitted to the Office of Chief Clerk, at the address provided in the information section below, by January 4, CERTIFICATE OF ADJUDICATION No A; Bexar-Medina- Atascosa Counties Water Control and Improvement District No. 1, PO Box 170, Natalia, Texas 78059, Applicant, seeks authorization to extend the time to commence and complete modification of Chacon Reservoir on Chacon Creek, tributary of San Miguel Creek, tributary of the Frio River, tributary of the Nueces River, Nueces River Basin, Medina County. The application and partial fees were received on July 26, Additional information and fees were received on October 13, and October 18, The application was declared administratively complete and filed with office of the Chief Clerk on October 26, The Executive Director has determined the applicant has shown due diligence and justification for delay. In the event a hearing is held on this application, the Commission shall also consider whether the appropriation shall be forfeited for failure to demonstrate sufficient due diligence and justification for delay. The Executive Director has completed the technical review of the application and prepared a draft Order. The draft Order, if granted, would authorize the extension of time to commence and complete construction. The application, technical memoranda, and Executive Director's draft Order are available for viewing and copying at the Office of the Chief Clerk, Park 35 Circle, Bldg. F., Austin, Texas Written public comments and requests for a public meeting should be submitted to the Office of Chief Clerk, at the address provided in the information section below, within 30 days of the date of newspaper publication of the notice. To view the complete issued notice, view the notice on our web site at or call the Office of the Chief Clerk at (512) to obtain a copy of the complete notice. When searching the web site, type in the issued date range shown at the top of this document to obtain search results. A public meeting is intended for the taking of public comment, and is not a contested case hearing. The Executive Director can consider approval of an application unless a written request for a contested case hearing is filed. To request a contested case hearing, you must submit the following: (1) your name (or for a group or association, an official representative), mailing address, daytime phone number, and fax number, if any; (2) applicant's name and permit number; (3) the statement (I/we) request a contested case hearing; and (4) a brief and specific description of how you would be affected by the application in a way not common to the general public. You may also submit any proposed conditions to the requested application which would satisfy your concerns. Requests for a contested case hearing must be submitted in writing to the TCEQ Office of the Chief Clerk at the address provided in the information section below. If a hearing request is filed, the Executive Director will not issue the requested permit and may forward the application and hearing request to the TCEQ Commissioners for their consideration at a scheduled Commission meeting. Written hearing requests, public comments or requests for a public meeting should be submitted to the Office of the Chief Clerk, MC 105, TCEQ, P.O. Box 13087, Austin, Texas For information concerning the hearing process, please contact the Public Interest Counsel, MC 103, at the same address. For additional information, individual members of the general public may contact the Public Education Program at (800) General information regarding the TCEQ can be found at our web site at Si desea información en español, puede llamar al (800) TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: December 13, 2017 Texas Forensic Science Commission Correction of Error The Texas Forensic Science Commission proposed new 37 TAC in the December 15, 2017, issue of the Texas Register (42 TexReg 7104). Due to an error by Commission staff, the date for the deadline to receive comments was published incorrectly. Under the Request for Public Comment section in the preamble of the submission, the deadline to receive comments was originally posted 42 TexReg 7454 December 22, 2017 Texas Register

217 as January 18, The corrected paragraph and date should read as follows: Request for Public Comment. The Texas Forensic Science Commission invites comments on the proposal from any member of the public. Please submit comments to Leigh Savage, 1700 North Congress Avenue, Suite 445, Austin, Texas or Comments must be received by January 18, 2018, to be considered by the Commission. TRD Texas Health and Human Services Commission Notice of Public Hearing on Proposed Medicaid Payment Rate for Levulan Kerastick Hearing. The Texas Health and Human Services Commission (HHSC) will conduct a public hearing on January 11, 2018, at 3:00 p.m., to receive comment on the proposed Medicaid payment rate for Levulan Kerastick (J7308). The public hearing will be held in HHSC's Public Hearing Room at the Brown-Heatly Building, located at 4900 North Lamar Boulevard, Austin, Texas. Entry is through security at the main entrance of the building, which faces Lamar Boulevard. HHSC also will broadcast the public hearing; the broadcast can be accessed at The broadcast will be archived and can be accessed on demand at the same website. The hearing will be held in compliance with Texas Human Resources Code , which requires public notice of and hearings on proposed Medicaid reimbursements. Proposal. The payment rate for Levulan Kerastick (J7308) is proposed to be effective January 1, Methodology and Justification. The proposed payment rate was calculated in accordance with Title 1 of the Texas Administrative Code: , which addresses the reimbursement methodology for physicians and other practitioners; and , which addresses the reimbursement methodology for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services (also known as Texas Health Steps). Briefing Package. A briefing package describing the proposed payment rate will be available at on or after December 28, Interested parties may obtain a copy of the briefing package prior to the hearing by contacting Rate Analysis by telephone at (512) ; by fax at (512) ; or by at RADAcuteCare@hhsc.state.tx.us. The briefing package will also be available at the public hearing. Written Comments. Written comments regarding the proposed payment rate may be submitted in lieu of, or in addition to, oral testimony until 5 p.m. the day of the hearing. Written comments may be sent by U.S. mail to the Texas Health and Human Services Commission, Attention: Rate Analysis, Mail Code H-400, P.O. Box , Austin, Texas ; by fax to Rate Analysis at (512) ; or by to RADAcuteCare@hhsc.state.tx.us. In addition, written comments may be sent by overnight mail or hand delivered to Texas Health and Human Services Commission, Attention: Rate Analysis, Mail Code H-400, Brown-Heatly Building, 4900 North Lamar Blvd., Austin, Texas Persons with disabilities who wish to attend the hearing and require auxiliary aids or services should contact Rate Analysis at (512) at least 72 hours before the hearing so appropriate arrangements can be made. TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Filed: December 12, 2017 Notice of Public Hearing on Proposed Medicaid Payment Rates for the 2018 Annual Healthcare Common Procedure Coding System Updates Hearing. The Texas Health and Human Services Commission (HHSC) will conduct a public hearing on January 11, 2018, at 3:00 p.m., to receive comment on proposed Medicaid payment rates for the 2018 Annual Healthcare Common Procedure Coding System (HCPCS) Updates. The public hearing will be held in HHSC's Public Hearing Room at the Brown-Heatly Building, located at 4900 North Lamar Boulevard, Austin, Texas. Entry is through security at the main entrance of the building, which faces Lamar Boulevard. HHSC also will broadcast the public hearing; the broadcast can be accessed at The broadcast will be archived and can be accessed on demand at the same website. The hearing will be held in compliance with Texas Human Resources Code , which requires public notice of and hearings on proposed Medicaid reimbursements. Proposal. The payment rates for the 2018 Annual HCPCS Updates are proposed to be effective January 1, 2018, for the following services: Physician Administered Drugs - Type of Service (TOS) 1 (Medical Services); Medical Services - TOS 1 (Medical Services); Surgery and Assistant Surgery Services - TOS 2 (Surgery Services) and 8 (Assistant Surgery); Nonclinical Laboratory Services - TOS 5 (Laboratory), I (Interpretation Component), and T (Technical Component); Clinical Laboratory Services - TOS 5 (Laboratory Services); Anesthesia Services - TOS 7 (Anesthesia Services); Durable Medical Equipment, Prosthetics, Orthotics, and Supplies - TOS 9 (Other Medical Items or Services) and J (DME Purchase - New); Ambulatory Surgical Center - TOS F (Ambulatory Surgical Center); and Dental Services - TOS W (Texas Health Steps Dental/Orthodontia). Methodology and Justification. The proposed payment rates were calculated in accordance with Title 1 of the Texas Administrative Code: , which addresses the reimbursement methodology for home health services; , which addresses the reimbursement methodology for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS); , which addresses the reimbursement methodology for physicians and other practitioners; IN ADDITION December 22, TexReg 7455

218 , which addresses the reimbursement methodology for physical, occupational, and speech therapy services; , which addresses the reimbursement methodology for ambulatory surgical centers; , which addresses the reimbursement methodology for certified registered nurse anesthetists and anesthesiologist assistants; , which addresses the reimbursement methodology for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services (also known as Texas Health Steps); and , which addresses the reimbursement methodology for clinical laboratory services. Briefing Package. A briefing package describing the proposed payment rates will be available at on or after December 28, Interested parties may obtain a copy of the briefing package prior to the hearing by contacting Rate Analysis by telephone at (512) ; by fax at (512) ; or by at RADAcuteCare@hhsc.state.tx.us. The briefing package will also be available at the public hearing. Written Comments. Written comments regarding the proposed payment rates may be submitted in lieu of, or in addition to, oral testimony until 5 p.m. the day of the hearing. Written comments may be sent by U.S. mail to the Texas Health and Human Services Commission, Attention: Rate Analysis, Mail Code H-400, P.O. Box , Austin, Texas ; by fax to Rate Analysis at (512) ; or by to RADAcuteCare@hhsc.state.tx.us. In addition, written comments may be sent by overnight mail or hand delivered to Texas Health and Human Services Commission, Attention: Rate Analysis, Mail Code H-400, Brown-Heatly Building, 4900 North Lamar Blvd., Austin, Texas Persons with disabilities who wish to attend the hearing and require auxiliary aids or services should contact Rate Analysis at (512) at least 72 hours before the hearing so appropriate arrangements can be made. TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Filed: December 12, 2017 Department of State Health Services Licensing Actions for Radioactive Materials 42 TexReg 7456 December 22, 2017 Texas Register

219 IN ADDITION December 22, TexReg 7457

220 42 TexReg 7458 December 22, 2017 Texas Register

221 TRD Barbara L. Klein Interim General Counsel Department of State Health Services Filed: December 13, 2017 Texas Parks and Wildlife Department Notice of Proposed Real Estate Transactions Grant of Easement - Denton County Communications Antenna at Lake Ray Roberts State Park In a meeting on January 25, 2018, the Texas Parks and Wildlife Commission (the Commission) will consider authorizing the grant of an easement at Lake Ray Roberts State Park in Randall County. The easement will allow an internet provider to place equipment on a tower located inside Lake Ray Roberts State Park to add additional capacity and coverage to their current broadband signal. The public will have an opportunity to comment on the proposed transaction before the Commission takes action. The meeting will start at 9:00 a.m. at the Texas Parks and Wildlife Department Headquarters, 4200 Smith School Road, Austin, Texas Prior to the meeting, public comment may be submitted to Trey Vick, Land Conservation, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas ( trey.vick@tpwd.texas.gov); or via the department's website at Disposition of Real Estate - Williamson County House and Lot in Williamson County Texas In a meeting on January 25, 2018, the Texas Parks and Wildlife Commission (the Commission) will consider authorizing the disposition of approximately 1/4 acre and manufactured home that was donated to Texas Parks and Wildlife Department. The funds made on the proposed transaction will be used for future State Park acquisitions. The public will have an opportunity to comment on the proposed transaction before the Commission takes action. The meeting will start at 9:00 a.m. at the Texas Parks and Wildlife Department Headquarters, 4200 Smith School Road, Austin, Texas Prior to the meeting, public comment may be submitted to Trey Vick, Land Conservation, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas ( trey.vick@tpwd.texas.gov); or via the department's website at Disposition of Land - Walker County Approximately.50 acre at Huntsville State Park In a meeting on January 25, 2018, the Texas Parks and Wildlife Commission (the Commission) will consider authorizing the disposition of approximately.50 acre at Huntsville State Park in exchange for a permanent 25' no-clear buffer along the perimeter of the park. The.50 acre will be used for needed repairs to the City of Huntsville's public utilities. The public will have an opportunity to comment on the proposed transaction before the Commission takes action. The meeting will start at 9:00 a.m. at the Texas Parks and Wildlife Department Headquarters, 4200 Smith School Road, Austin, Texas Prior to the meeting, public comment may be submitted to Trey Vick, Land Conservation, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas ( trey.vick@tpwd.texas.gov); or via the department's website at Acceptance of Land Donations - Brazoria County Approximately 190 Acres at Follets Island Coastal Management Area In a meeting on January 25, 2018, the Texas Parks and Wildlife Commission (the Commission) will consider enlarging the project area for the Follets Island Coastal Management Area with the acceptance of a donation of 190 acres of land in Brazoria County. At this meeting the public will have an opportunity to comment on the proposed transaction before the Commission takes action. The meeting will start at 9:00 a.m. at the Texas Parks and Wildlife Department Headquarters, 4200 Smith School Road, Austin, Texas Prior to the meeting, public comment may be submitted to Ted Hollingsworth, Land Conservation, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas or by at ted.hollingsworth@tpwd.texas.gov or through the TPWD website at tpwd.texas.gov. Disposition of Real Estate - Smith County 3.5-acre tract at the Tyler Fish Hatchery In a meeting on January 25, 2018, the Texas Parks and Wildlife Commission (the Commission) will consider authorizing the sale of an approximately 3.5-acre tract of land that was once part of the Texas Parks and Wildlife Department Tyler Fish Hatchery. The public will have an opportunity to comment on the proposed transaction before the Commission takes action. The meeting will start at 9:00 a.m. at the Texas Parks and Wildlife Department Headquarters, 4200 Smith School Road, Austin, Texas Prior to the meeting, public comment may be submitted to Stan David, Land Conservation, Texas Parks and Wildlife Department, 4200 Smith School Road, Austin, Texas ( stan.david@tpwd.texas.gov); or via the department's website at TRD Robert D. Sweeney, Jr. General Counsel Texas Parks and Wildlife Department Filed: December 12, 2017 Public Utility Commission of Texas Notice of Application for a Service Provider Certificate of Operating Authority Notice is given to the public of an application filed with the Public Utility Commission of Texas (commission) on December 12, 2017, for a service provider certificate of operating authority. Applicant intends to provide facilities-based, data, and resale services in the exchanges of all incumbent local exchange companies throughout the state of Texas. Docket Title and Number: Application of Magna5 LLC for Service Provider Certificate of Operating Authority. Docket Number Persons wishing to comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas, , or by phone at (512) or toll free at no later than December 29, Hearing and speech impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 13, 2017 Notice of Application for Retail Electric Provider Certification IN ADDITION December 22, TexReg 7459

222 Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) of an application on December 7, 2017, for retail electric provider certification, under Public Utility Regulatory Act (PURA) Docket Title and Number: Application of Power of Texas Holdings, Inc. for a Retail Electric Provider Certificate, Docket Number Application: Power of Texas Holdings, Inc. filed an application for an option 1 certificate to provide retail electric services in the geographic service areas of the entire state of Texas. Information on the application may be obtained by contacting the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll free at (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All inquiries should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 12, 2017 Notice of Application for Sale, Transfer, or Merger Notice is given to the public of an application filed with the Public Utility Commission of Texas (commission) on December 5, 2017, under the Public Utility Regulatory Act, Tex. Util. Code Ann and Docket Style and Number: Application of Fidelity Management & Research Company, Fortress Credit Advisors LLC, GSO/Blackstone Debt Funds Management LLC, Guggenheim Partners Investment Management, LLC, Oppenheimerfunds, Inc., Pinebridge Investments LLC, and Avenue Capital Management II, L.P., Lenders to Exgen Texas Power, LLC under of the Public Utility Regulatory Act, Docket Number The Application: On December 5, 2017, the members of an ad hoc committee of lenders to ExGen Texas Power, LLC (EGTP), holding a majority of EGTP's existing secured term loan, filed an application for approval of the distribution to EGTP's secured lenders of ownership interests in some or all of EGTP's subsidiaries: Wolf Hollow I Power, LLC, Colorado Bend I Power, LLC, Mountain Creek Power, LLC, La- Porte Power, LLC, and Handley Power, LLC (the project companies), owners of generation facilities in the power region of ERCOT. The combined generation owned and controlled by the project companies, the members of the ad hoc committee, and their affiliates after consummation of the proposed transaction will not exceed the 20% of the total electricity offered for sale in ERCOT. Persons wishing to intervene or comment on the action sought should contact the commission as soon as possible as an intervention deadline will be imposed. A comment or request to intervene should be mailed to by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 12, 2017 Notice of Application for Waiver from Requirements Notice is given to the public of an application filed on December 5, 2017, with the Public Utility Commission of Texas (commission) for waiver from the requirements in 16 Texas Administrative Code (f)(3)(B)(iii). Docket Style and Number: Application of Range Global Services LLC for Waiver to Apply Safe Harbor Percentage to Calculate Texas Universal Service Fund Assessment, Docket Number The Application: Range Global requests a permanent waiver under 16 TAC (f)(3)(B)(ii) because currently there is no means available to measure actual traffic and segregate the jurisdiction of the traffic. Range Global proposes to use, for CMRS providers, 37.10% for interstate and international traffic and 62.90% for intrastate traffic. The percentages will be multiplied by Range Global's Texas revenues to arrive at a figure for Texas intrastate taxable telecommunications receipts and ultimately calculation of TUSF fees due. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 12, 2017 Notice of Application to Obtain Water Certificate of Convenience and Necessity Notice is given to the public of an application filed with the Public Utility Commission of Texas (commission) on December 5, 2017, to obtain a water certificate of convenience and necessity in Parker County. Docket Style and Number: Application of Hood Water LLC for a Water Certificate of Convenience and Necessity in Parker County, Docket Number The Application: Hood Water LLC filed an application to obtain a new water certificate of convenience and necessity in Parker County. The total area being requested includes approximately 1,078 acres and 50 current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 12, TexReg 7460 December 22, 2017 Texas Register

223 Notice of Application to Obtain Water Certificate of Convenience and Necessity Notice is given to the public of an application filed with the Public Utility Commission of Texas (commission) on December 12, 2017, to obtain a water certificate of convenience and necessity in Midland County. Docket Style and Number: Application of Countryside Acres Homeowners Association Inc. for a Water Certificate of Convenience and Necessity in Midland County, Docket Number The Application: Countryside Acres Homeowners Association Inc. filed an application to obtain a new water certificate of convenience and necessity in Midland County. The total area being requested includes approximately 120 acres and no current customers. Persons wishing to intervene or comment on the action sought should contact the commission by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 13, 2017 Notice of Petition for Recovery of Universal Service Funding Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) an application on November 29, 2017 for recovery of Universal Service Funding pursuant to Public Utility Regulatory Act and 16 Texas Administrative Code Docket Style and Number: Application of Blossom Telephone Company to Recover Funds From the Texas Universal Service Fund. Docket Number The Application: Blossom Telephone Company (BTC) seeks recovery of funds from the Texas Universal Service Fund (TUSF) due to Federal Communications Commission (FCC) actions resulting in a reduction in the Federal Universal Service Fund (FUSF) revenues available to BTC. The petition requests that the commission allow BTC recovery of funds from the TUSF in the amount of $158,838 to replace projected 2017 FUSF revenue reductions. BTC is not seeking any rate increases through this proceeding. Persons wishing to intervene or comment on the action sought should contact the Public Utility Commission of Texas by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 11, 2017 Notice of Petition for Recovery of Universal Service Funding Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) an application on November 29, 2017 for recovery of Universal Service Funding pursuant to Public Utility Regulatory Act and 16 Texas Administrative Code Docket Style and Number: Application of Community Telephone Company to Recover Funds From the Texas Universal Service Fund. Docket Number The Application: Community Telephone Company (CTC) seeks recovery of funds from the Texas Universal Service Fund (TUSF) due to Federal Communications Commission (FCC) actions resulting in a reduction in the Federal Universal Service Fund (FUSF) revenues available to CTC. The petition requests that the commission allow CTC recovery of funds from the TUSF in the amount of $179,900 to replace projected 2017 FUSF revenue reductions. CTC is not seeking any rate increases through this proceeding. Persons wishing to intervene or comment on the action sought should contact the Public Utility Commission of Texas by mail at P.O. Box 13326, Austin, Texas , or by phone at (512) or toll-free at (888) A deadline for intervention in this proceeding will be established. Hearing and speech-impaired individuals with text telephone (TTY) may contact the commission through Relay Texas by dialing All comments should reference Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: December 11, 2017 Sam Houston State University Notice of Intent to Seek Financial Report Auditing and Consulting Services In compliance with the provisions of Texas Government Code, Chapter 2254, Sam Houston State University ("SHSU") in Huntsville, Texas, solicits Request for Qualifications ("RFQ") for auditing and consultant services. The services are for review of the University's Annual Financial Report ("AFR") as part of the reaffirmation process of its accreditation with the Southern Association of Colleges and Schools Commission on Colleges ("SACSCOC"). The President of Sam Houston State University has made a fact finding that the consulting services are necessary and Sam Houston State University does not have the in-house expertise to complete the review. Pursuant to Texas Government Code (b) notice is given that the services sought relate to services provided in response to Lamar University's RFQ # SC awarded to Belt Harris Pechacek, LLLP, 3210 Bingle Road, Suite 300, Houston, Texas 77055, and that SHSU intends to award the contract for these services to Belt Harris Pechacek, LLLP, unless an offer of better value is received. Texas law authorizes Institutions of Higher Education (defined by Section , Texas Education Code) to use the group purchasing procurement method (ref. Sections Texas Education Code). Institutions of Higher Education may enter into a contract with the successful respondent(s) for the purchase of the services described herein based on the terms, conditions, and prices, offered by the successful respondent for the duration of any agreement or contractual arrangement resulting from this solicitation. These State Agencies and Institutions of Higher Education will issue their own purchase orders, directly receive goods or services at their place of business, and receive direct billing by the successful respondent. IN ADDITION December 22, TexReg 7461

224 The closing date for receipt of offers is January 22, The date of award is anticipated to be on or before February 1, SHSU contact for inquires is: William H. Tidwell Assistant Director Procurement and Business Services P.O. Box 2028 Huntsville, Texas Phone: (936) TRD Rhonda Beassie Assistant General Counsel - TSUS Sam Houston State University Filed: December 12, 2017 Texas Department of Transportation Dallas District Notice Affording an Opportunity for a Public Hearing - District Projects and Programs Affecting Bicycle Use on the State Highway System In accordance with Texas Administrative Code - Title 43, Part 1, Chapter 25, Subchapter D, Rule 25.55(b), the Texas Department of Transportation (TxDOT) - Dallas District is affording the opportunity for a public hearing on district transportation projects and programs affecting bicycle use on the state highway system. The purpose of this notice is to allow any person an opportunity to request, in writing, that a public hearing be held to provide information on the bicycle plans, policies, and programs for the TxDOT Dallas District. A mailing list will be developed by the district on this topic and interested individuals and groups may submit a request to be added to the list by contacting the TxDOT Dallas District as outlined below. All interested individuals may request a public hearing be held by submitting a written request, by mail, to the TxDOT Dallas District - Advance Project Development, at 4777 East Highway 80, Mesquite, Texas , Attn.: Shelley D. Pridgen. All written requests must be postmarked on or before the Tuesday of January 16, 2018, to be included as a part of the official public hearing request record. For additional information, please contact Ms. Pridgen at (214) or her at Shelley.Pridgen@txdot.gov. In the event a public hearing is requested, one would be scheduled and notices would be published indicating the hearing date and location. TRD Leonard Reese Associate General Counsel Texas Department of Transportation Filed: December 6, 2017 Public Notice - Advertising in Texas Department of Transportation's Travel Literature and Texas Highways Magazine Advertising in Texas Department of Transportation Travel Literature and Texas Highways magazine, both in print and in digital or online assets. The Texas Department of Transportation is authorized by Texas Transportation Code, Chapter 204, to publish literature for the purpose of advertising the highways of this state and attracting traffic thereto, and to include paid advertising in such literature. Title 43, Texas Administrative Code, describe the policies governing advertising in department travel literature and Texas Highways magazine, both in print and in digital or online, list acceptable and unacceptable subjects for advertising in department travel literature and the magazine, and describe the procedures by which the department will solicit advertising. As required by 43 TAC 23.17, the department invites any entity or individual interested in advertising in department travel literature and Texas Highways magazine to request to be added to the department's contact list. Written requests may be mailed to the Texas Department of Transportation, Travel Information Division, Travel Publications Section, P.O. Box , Austin, Texas, Requests may also be made by telephone to (512) or sent by fax to (512) The department is now accepting advertising for the 2019 edition of the Texas State Travel Guide, scheduled to be printed and available in January The Texas State Travel Guide is designed to encourage readers to explore and travel to and within the State of Texas. The guide lists cities and towns, featuring population figures and recreational travel sites for each, along with maps and 4-color photography. The guide may also include sections listing Texas lakes, state parks, state and national forests, along with hunting and fishing information. The State of Texas distributes this vacation guide to travelers in Texas and to those who request information while planning to travel in Texas. Media kits are available on the texashighways.com website. All Texas State Travel Guide insertion orders, including premium space will be accepted on a first-come first-served basis. Insertion orders for an inside front cover spread and inside back cover spread will take precedence over an inside front cover and inside back cover insertion order. In most cases, larger ads will be positioned ahead of smaller ads. The department is now accepting advertising for the 2019 edition of the Texas Official Travel Map scheduled to be printed and available in January The State of Texas distributes this map to travelers in Texas and to those who request information while planning to travel in Texas. The department continues to accept advertising for all quarterly issues of the Texas Highways Events Calendar, beginning with the Summer 2018 calendar. The Texas Highways Events Calendar is published quarterly, corresponding with the seasons, to provide information about events happening in Texas throughout the year. The Texas Highways Events Calendar includes festivals, art exhibits, rodeos, indoor and outdoor music and theatre productions, concerts, nature tours, and more, depending on the season. The State of Texas distributes this quarterly calendar to travelers in Texas and to those who request information on events happening around the state. The Summer 2018 calendar lists events scheduled for June 2018, July 2018, and August The Fall 2018 calendar lists events scheduled for September 2018, October 2018, and November The Winter calendar lists events scheduled for December 2018, January 2019, and February The Spring 2019 calendar lists events scheduled for March 2019, April 2019, and May The advertising due dates for the Texas Highways Events Calendar vary depending on the issue involved. The publication deadline for accepting advertising space in the Texas Highways Events Calendar is the third Wednesday of the fourth month preceding the issue date. The deadline for accepting materials for the Texas Highways Events Calendar is one week after space closing. When material or space closing dates fall on a Saturday, Sunday, or holiday, space and/or materials are due the preceding workday. 42 TexReg 7462 December 22, 2017 Texas Register

225 The department is now accepting advertising for all monthly 2018 issues of Texas Highways magazine. Texas Highways magazine is a monthly publication designed to encourage recreational travel within the state and to tell the Texas story to readers around the world. Accordingly, the content of the magazine is focused on Texas vacation, recreational, travel, or tourism related subjects, shopping opportunities in Texas and for Texas related products, various outdoor events, sites, facilities, and services in the state, transportation modes and facilities in the state, and other sites, products, facilities, and services that are travel related or Texas-based, and that are determined by the department to be of cultural, educational, historical, or recreational interest to Texas Highways readers. The publication deadline for accepting advertising space in Texas Highways magazine is the 27th of the third month preceding the issue date. The deadline for accepting materials for Texas Highways magazine is seven days after space closing. When material or space closing dates fall on a Saturday, Sunday, or holiday, space and/or materials are due the preceding workday. The rate card information for potential advertisers in the Texas State Travel Guide, the Texas Highways Events Calendar, Texas Highways magazine, the Texas Official Travel Map and related digital assets are included in this notice. Digital assets may include TexasHighways.com and Texas Highways Extra enewsletter. IN ADDITION December 22, TexReg 7463

226 42 TexReg 7464 December 22, 2017 Texas Register

227 IN ADDITION December 22, TexReg 7465

228 42 TexReg 7466 December 22, 2017 Texas Register

229 IN ADDITION December 22, TexReg 7467

230 42 TexReg 7468 December 22, 2017 Texas Register

231 IN ADDITION December 22, TexReg 7469

232 TRD Joanne Wright Deputy General Counsel Texas Department of Transportation Filed: December 12, 2017 Texas Water Development Board Applications for December 2017 Pursuant to Texas Water Code 6.195, the Texas Water Development Board provides notice of the following applications: Project ID #62660, a request from the City of Gorman, P.O. Box 236, Gorman, Texas , received April 21, 2017, for $2,000,000 in financial assistance, consisting of a $1,000,000 obligation and $1,000,000 in principal forgiveness from the Drinking Water State Revolving Fund for construction of water system improvements. Project ID #73769, a request from the City of Abilene, P.O. Box 60, Abilene, Texas , received June 22, 2017, for $18,370,000 in financing from the Clean Water State Revolving Fund for planning, design, and construction of a meter replacement project. Project ID #62762, a request from the City of Paradise, P.O. Box 314, Paradise, Texas , received September 20, 2017, for $300,000 in principal forgiveness from the Drinking Water State Revolving Fund for planning, design, and construction of water system improvements. Project ID #73775, a request from the Greater Texoma Utility Authority on behalf of the City of Gunter, 5100 Airport Dr., Denison, Texas , received September 20, 2017, for $2,300,000 in financing from the Clean Water State Revolving Fund for planning, design, and construction of wastewater system improvements. TRD Todd Chenoweth General Counsel Texas Water Development Board Filed: December 8, TexReg 7470 December 22, 2017 Texas Register

233 How to Use the Texas Register Information Available: The sections of the Texas Register represent various facets of state government. Documents contained within them include: Governor - Appointments, executive orders, and proclamations. Attorney General - summaries of requests for opinions, opinions, and open records decisions. Texas Ethics Commission - summaries of requests for opinions and opinions. Emergency Rules - sections adopted by state agencies on an emergency basis. Proposed Rules - sections proposed for adoption. Withdrawn Rules - sections withdrawn by state agencies from consideration for adoption, or automatically withdrawn by the Texas Register six months after the proposal publication date. Adopted Rules - sections adopted following public comment period. Texas Department of Insurance Exempt Filings - notices of actions taken by the Texas Department of Insurance pursuant to Chapter 5, Subchapter L of the Insurance Code. Review of Agency Rules - notices of state agency rules review. Tables and Graphics - graphic material from the proposed, emergency and adopted sections. Transferred Rules - notice that the Legislature has transferred rules within the Texas Administrative Code from one state agency to another, or directed the Secretary of State to remove the rules of an abolished agency. In Addition - miscellaneous information required to be published by statute or provided as a public service. Specific explanation on the contents of each section can be found on the beginning page of the section. The division also publishes cumulative quarterly and annual indexes to aid in researching material published. How to Cite: Material published in the Texas Register is referenced by citing the volume in which the document appears, the words TexReg and the beginning page number on which that document was published. For example, a document published on page 2402 of Volume 40 (2015) is cited as follows: 40 TexReg In order that readers may cite material more easily, page numbers are now written as citations. Example: on page 2 in the lower-left hand corner of the page, would be written 40 TexReg 2 issue date, while on the opposite page, page 3, in the lower right-hand corner, would be written issue date 40 TexReg 3. How to Research: The public is invited to research rules and information of interest between 8 a.m. and 5 p.m. weekdays at the Texas Register office, James Earl Rudder Building, 1019 Brazos, Austin. Material can be found using Texas Register indexes, the Texas Administrative Code section numbers, or TRD number. Both the Texas Register and the Texas Administrative Code are available online at: The Texas Register is available in an.html version as well as a.pdf version through the internet. For website information, call the Texas Register at (512) Texas Administrative Code The Texas Administrative Code (TAC) is the compilation of all final state agency rules published in the Texas Register. Following its effective date, a rule is entered into the Texas Administrative Code. Emergency rules, which may be adopted by an agency on an interim basis, are not codified within the TAC. The TAC volumes are arranged into Titles and Parts (using Arabic numerals). The Titles are broad subject categories into which the agencies are grouped as a matter of convenience. Each Part represents an individual state agency. The complete TAC is available through the Secretary of State s website at The Titles of the TAC, and their respective Title numbers are: 1. Administration 4. Agriculture 7. Banking and Securities 10. Community Development 13. Cultural Resources 16. Economic Regulation 19. Education 22. Examining Boards 25. Health Services 28. Insurance 30. Environmental Quality 31. Natural Resources and Conservation 34. Public Finance 37. Public Safety and Corrections 40. Social Services and Assistance 43. Transportation How to Cite: Under the TAC scheme, each section is designated by a TAC number. For example in the citation 1 TAC 27.15: 1 indicates the title under which the agency appears in the Texas Administrative Code; TAC stands for the Texas Administrative Code; is the section number of the rule (27 indicates that the section is under Chapter 27 of Title 1; 15 represents the individual section within the chapter). How to Update: To find out if a rule has changed since the publication of the current supplement to the Texas Administrative Code, please look at the Index of Rules. The Index of Rules is published cumulatively in the blue-cover quarterly indexes to the Texas Register. If a rule has changed during the time period covered by the table, the rule s TAC number will be printed with the Texas Register page number and a notation indicating the type of filing (emergency, proposed, withdrawn, or adopted) as shown in the following example. TITLE 1. ADMINISTRATION Part 4. Office of the Secretary of State Chapter 91. Texas Register 1 TAC (P)

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