Volume 42 Number 40 October 6, 2017 Pages

Transcription

1 Volume 42 Number 40 October 6, 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 GOVERNOR Appointments Proclamation Proclamation Proclamation ATTORNEY GENERAL Requests for Opinions EMERGENCY RULES TEXAS DEPARTMENT OF INSURANCE PROPERTY AND CASUALTY INSURANCE 28 TAC PROPOSED RULES TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS MANUFACTURED HOUSING 10 TAC 80.2, TAC 80.32, 80.33, 80.36, TAC 80.40, TAC TAC TAC 80.90, RAILROAD COMMISSION OF TEXAS COAL MINING REGULATIONS 16 TAC TEXAS DEPARTMENT OF LICENSING AND REGULATION TEMPORARY COMMON WORKER EMPLOYERS 16 TAC 64.1, 64.10, 64.20, 64.70, 64.72, BOILERS 16 TAC 65.1, TAC TAC TAC TAC TAC TAC 65.63, TAC TAC TAC TAC , , BARBERS 16 TAC 82.10, 82.20, 82.22, 82.23, 82.29, 82.40, 82.50, 82.52, 82.54, , 82.78, 82.80, , TAC COSMETOLOGISTS 16 TAC 83.10, , 83.29, 83.31, 83.40, , 83.54, , 83.78, 83.80, , TAC TEXAS RACING COMMISSION RACETRACK LICENSES AND OPERATIONS 16 TAC OTHER LICENSES 16 TAC TEXAS EDUCATION AGENCY TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR SCIENCE 19 TAC , TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR CAREER AND TECHNICAL EDUCATION 19 TAC HEARINGS AND APPEALS 19 TAC TEXAS BOARD OF ARCHITECTURAL EXAMINERS REGISTERED INTERIOR DESIGNERS 22 TAC TAC , TAC , TAC TAC TEXAS STATE BOARD OF EXAMINERS OF PSYCHOLOGISTS APPLICATIONS AND EXAMINATIONS 22 TAC TAC TAC TAC RULES OF PRACTICE 22 TAC TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY ELIGIBILITY 22 TAC TABLE OF CONTENTS 42 TexReg 5285

4 22 TAC TAC LICENSES 22 TAC PRACTICE AND PROCEDURE 22 TAC TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS LICENSING AND ENFORCEMENT RULES 22 TAC DEPARTMENT OF STATE HEALTH SERVICES COMMUNICABLE DISEASES 25 TAC COMPTROLLER OF PUBLIC ACCOUNTS TAX ADMINISTRATION 34 TAC TEXAS COMMISSION ON LAW ENFORCEMENT TRAINING AND EDUCATIONAL PROVIDERS 37 TAC DEPARTMENT OF AGING AND DISABILITY SERVICES NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION 40 TAC TAC TAC INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS 40 TAC LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES 40 TAC LICENSING STANDARDS FOR HOME AND COMMUNITY SUPPORT SERVICES AGENCIES 40 TAC TAC 97.13, 97.17, DEPARTMENT OF FAMILY AND PROTECTIVE SERVICES MINIMUM STANDARDS FOR SHELTER CARE 40 TAC TAC LICENSING 40 TAC TAC , , , , , , , , , , , TAC , , , , , TAC , , , , , , , , , , , , , TAC , , TAC , TAC TAC , , , , , , , , , , TAC , , , , , , , , , , TAC , , TAC , , , , , , , , TAC TAC TAC TAC TAC , TAC TAC , TAC , TAC ADOPTED RULES TEXAS HEALTH AND HUMAN SERVICES COMMISSION REIMBURSEMENT RATES 1 TAC TAC TAC TAC , TAC , TAC TAC TEXAS EDUCATION AGENCY FOUNDATION SCHOOL PROGRAM TABLE OF CONTENTS 42 TexReg 5286

5 19 TAC COMMISSIONER'S RULES CONCERNING EDUCATOR APPRAISAL 19 TAC TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY EMPLOYEES OF THE BOARD 22 TAC CRIMINAL BACKGROUND INVESTIGATIONS 22 TAC TAC TEXAS COMMISSION ON ENVIRONMENTAL QUALITY GENERAL AIR QUALITY RULES 30 TAC , , TAC , , COMPTROLLER OF PUBLIC ACCOUNTS TAX ADMINISTRATION 34 TAC TEXAS FORENSIC SCIENCE COMMISSION DNA, CODIS, FORENSIC ANALYSIS, AND CRIME LABORATORIES 37 TAC DEPARTMENT OF AGING AND DISABILITY SERVICES LICENSING STANDARDS FOR PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS 40 TAC TAC TAC NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION 40 TAC TAC INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS 40 TAC TAC INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS 40 TAC TAC TAC 90.61, LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES 40 TAC TAC LICENSING STANDARDS FOR HOME AND COMMUNITY SUPPORT SERVICES AGENCIES 40 TAC TAC DAY ACTIVITY AND HEALTH SERVICES REQUIREMENTS 40 TAC TAC TEXAS WORKFORCE COMMISSION INTEGRITY OF THE TEXAS WORKFORCE SYSTEM 40 TAC RULE REVIEW Proposed Rule Reviews Texas Education Agency TABLES AND GRAPHICS IN ADDITION Office of the Attorney General Texas Water Code and Texas Health and Safety Code Settlement Notice Texas Water Code Settlement Notice Comptroller of Public Accounts Certification of the Average Closing Price of Gas and Oil - August Office of Consumer Credit Commissioner Notice of Rate Ceilings Texas Commission on Environmental Quality Agreed Orders Enforcement Orders Notice of Application and Preliminary Decision for an Air Quality Permit Proposed Permit Number: 74746L Notice of Application and Preliminary Decision for an Air Quality Permit Proposed Permit Number: L Notice of Opportunity to Comment on Agreed Orders of Administrative Enforcement Actions TABLE OF CONTENTS 42 TexReg 5287

6 Notice of Opportunity to Comment on Default Orders of Administrative Enforcement Actions Notice of Opportunity to Comment on Shutdown/Default Order of Administrative Enforcement Actions Texas Ethics Commission List of Late Filers Texas Health and Human Services Commission Public Notice - Amendment to the Texas Healthcare Transformation Quality Improvement Program Waiver Public Notice - Procurement of Services by Area Agencies on Aging Texas Department of Insurance Company Licensing Texas Department of Licensing and Regulation Notice of Vacancies on Hearing Instrument Fitters and Dispensers Advisory Board Notice of Vacancy on Elevator Advisory Board Notice of Vacancy on Polygraph Advisory Committee Notice of Vacancy on Speech-Language Pathologists and Audiologists Advisory Board Notice of Vacancy on the Advisory Board on Cosmetology Notice of Vacancy on the Auctioneer Advisory Committee Notice of Vacancy on the Board of Boiler Rules Notice of Vacancy on the Dietitians Advisory Board Texas Lottery Commission Scratch Ticket Game Number 2006 "Holiday Wishes" Scratch Ticket Game Number 2007 "Holiday Gift Pack" Scratch Ticket Game Number 2008 "Season's Greetings" Scratch Ticket Game Number 2011 "$50 or $100!" North Central Texas Council of Governments Application for New Ideas for Blue-Green-Grey Initiative North Texas Behavioral Health Authority Request for Proposal - Fiscal Year 2017 Annual Financial and Compliance Audit Public Utility Commission of Texas Notice of Application for Amendment to Certificated Service Area Boundary Notice of Application for Sale, Transfer, or Merger Notice of Application for Sale, Transfer, or Merger Notice of Application for Sale, Transfer, or Merger Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice of Application to Amend Service Provider Certificate of Operating Authority Notice of Petition for Amendment to a Water Certificate of Convenience and Necessity by Expedited Release Texas Department of Transportation Public Notice - Aviation Texas Veterans Commission Accepting Membership Applications for Advisory Committees Texas Water Development Board Notice of Public Hearing on Draft Amendments to the State Fiscal Year 2018 Clean and Drinking Water State Revolving Fund Intended Use Plans Workforce Solutions Deep East Texas Request For Applications for Consulting and Technical Writing Services, RFA TABLE OF CONTENTS 42 TexReg 5288

7 Appointments Appointments for September 20, 2017 Appointed to the Public Utility Commission, for a term to expire September 1, 2021, DeAnn T. Walker of Austin (replacing Donna L. Nelson of Austin who resigned). Ms. Walker will also serve as Presiding Officer. Appointments for September 21, 2017 Appointed as Commissioner of Insurance for a term to expire February 1, 2019, Kent C. Sullivan of Austin (replacing David C. Mattax of Austin who is deceased). Greg Abbott, Governor TRD Proclamation TO ALL TO WHOM THESE PRESENTS SHALL COME: WHEREAS, Hurricane Irma made landfall on September 10, 2017, in the state of Florida and subsequently moved through much of the southeastern United States, causing catastrophic damage; and WHEREAS, the President of the United States and the governors of the states of Alabama, Florida, Georgia, North Carolina, South Carolina, Tennessee, and Virginia have issued emergency or disaster declarations as a result of Hurricane Irma; and WHEREAS, strict compliance with various motor carrier registration requirements would prevent, hinder, or delay necessary action in assisting those states affected by Hurricane Irma; NOW, THEREFORE, I, GREG ABBOTT, Governor of the State of Texas, in accordance with the authority vested in me by Section of the Texas Government Code, do hereby suspend the following requirements for commercial vehicles traveling in or through the state of Texas to provide disaster assistance to those states directly affected by Hurricane Irma: International Registration Plan (IRP) vehicle registration requirements under Section of the Texas Transportation Code and Title 43, Section of the Texas Administrative Code to the extent the vehicle is not already registered under IRP, as long as the vehicle is registered in one of the 48 contiguous states of the United States; and 72-/144-hour temporary registration permit requirements under Section of the Texas Transportation Code and Title 43, Section (b)(3) of the Texas Administrative Code, as long as the vehicle is registered in one of the states of the United States. This suspension is in effect until October 18, 2017, or until terminated by the Office of the Governor. The executive director of the Texas Department of Motor Vehicles or her designee is directed to impose all necessary and proper conditions and restrictions regarding this suspension and shall notify the Texas Department of Public Safety and the motor carrier industry of this suspension. In accordance with the statutory requirements, copies of this proclamation shall be filed with the applicable authorities. IN TESTIMONY WHEREOF, I have hereunto signed my name and have officially caused the Seal of State to be affixed at my office in the City of Austin, Texas, this the 19th day of September, Greg Abbott, Governor TRD Proclamation TO ALL TO WHOM THESE PRESENTS SHALL COME: WHEREAS, I, GREG ABBOTT, Governor of the State of Texas, issued a disaster proclamation on August 23, 2017, certifying that Hurricane Harvey posed a threat of imminent disaster for Aransas, Austin, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Harris, Jackson, Jefferson, Jim Wells, Karnes, Kleberg, Lavaca, Liberty, Live Oak, Matagorda, Nueces, Refugio, San Patricio, Victoria, Waller, Wharton and Wilson counties; and WHEREAS, the disaster proclamation of August 23, 2017, was subsequently amended on August 26, August 27, August 28, and September 14 to add the following counties to the disaster proclamation: Angelina, Atascosa, Bastrop, Burleson, Bexar, Brazos, Caldwell, Cameron, Comal, Grimes, Guadalupe, Hardin, Jasper, Kerr, Lee, Leon, Madison, Milam, Montgomery, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Washington and Willacy; and WHEREAS, due to the catastrophic damage caused by Hurricane Harvey, a state of disaster continues to exist in those same counties; NOW, THEREFORE, in accordance with the authority vested in me by Section of the Texas Government Code, I do hereby renew the disaster proclamation for the 60 counties listed above. Pursuant to Section of the code, I authorize the use of all available resources of state government and of political subdivisions that are reasonably necessary to cope with this disaster. Pursuant to Section of the code, any regulatory statute prescribing the procedures for conduct of state business or any order or rule of a state agency that would in any way prevent, hinder or delay necessary action in coping with this disaster shall be suspended upon written approval of the Office of the Governor. However, to the extent that the enforcement of any state statute or administrative rule regarding contracting or procurement would impede any state agency s emergency response that is necessary to protect life or property threatened by this declared disaster, I hereby authorize the suspension of such statutes and rules for the duration of this declared disaster. In accordance with the statutory requirements, copies of this proclamation shall be filed with the applicable authorities. GOVERNOR October 6, TexReg 5289

8 IN TESTIMONY WHEREOF, I have hereunto signed my name and have officially caused the Seal of State to be affixed at my office in the City of Austin, Texas, this the 20th day of September, 2017 Greg Abbott, Governor TRD Proclamation TO ALL TO WHOM THESE PRESENTS SHALL COME: WHEREAS, I, GREG ABBOTT, Governor of the State of Texas, did issue a proclamation on August 25, 2017, suspending all laws authorizing or requiring the collection of state or local hotel or motel occupancy taxes from the victims of Hurricane Harvey or personnel participating in relief operations, for a period of 14 days, beginning August 23, 2017, and ending September 6, 2017; and WHEREAS, the aforementioned proclamation was amended on September 6, 2017, to extend its termination date to September 22, 2017; and WHEREAS, the effects of Hurricane Harvey are expected to continue causing a temporary housing emergency in the state beyond September 22, 2017; NOW, THEREFORE, in accordance with the authority vested in me by Section (c) of the Texas Government Code, I do hereby amend the aforementioned proclamation and suspend all laws authorizing or requiring the collection of state or local hotel or motel occupancy taxes from the victims of Hurricane Harvey or personnel participating in relief operations, beginning on September 23, 2017, and ending October 23, In accordance with the statutory requirements, copies of this proclamation shall be filed with the applicable authorities. IN TESTIMONY WHEREOF, I have hereunto signed my name and have officially caused the Seal of State to be affixed at my office in the City of Austin, Texas, this the 21st day of September, Greg Abbott, Governor TRD TexReg 5290 October 6, 2017 Texas Register

9 Requests for Opinions RQ-0182-KP Requestor: The Honorable Rod Ponton Presidio County Attorney Post Office Drawer M Marfa, Texas Re: Authority of a county commissioners court to implement a health wellness plan that includes a monthly payroll deduction for county employees who use tobacco products (RQ-0182-KP) Briefs requested by October 23, 2017 RQ-0183-KP Requestor: Jeffrey Barnard, M.D. Chair, Forensic Science Commission 1700 North Congress Avenue, Suite 445 Austin, Texas Re: Whether postmortem toxicological analysis conducted pursuant to the request of a medical examiner or forensic pathologist is subject to accreditation requirements of the Forensic Science Commission (RQ KP) Briefs requested by October 23, 2017 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: September 27, 2017 ATTORNEY GENERAL October 6, TexReg 5291

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11 TITLE 28. INSURANCE PART 1. TEXAS DEPARTMENT OF INSURANCE CHAPTER 5. PROPERTY AND CASUALTY INSURANCE SUBCHAPTER E. TEXAS WINDSTORM INSURANCE ASSOCIATION DIVISION 4. CONSUMER ASSISTANCE; CLAIM PROCESSES 28 TAC INTRODUCTION. The Texas Department of Insurance adopts new 28 TAC on an emergency basis, effective immediately. This rule concerns good cause extensions to deadlines that are part of the claim-handling process for claims filed under a Texas Windstorm Insurance Association (TWIA) policy. This adoption is made under Government Code , concerning Emergency Rulemaking, and , concerning Effective Date of Rules; Effect of Filing with Secretary of State. REASONED JUSTIFICATION FOR EMERGENCY ADOPTION OF Governor Greg Abbott issued a proclamation declaring a disaster due to the effects of Hurricane Harvey, a weather-related event that occurred August 25 through August 31, 2017, and President Donald Trump issued a major disaster declaration and ordered federal aid to supplement state and local recovery efforts in the area affected by Hurricane Harvey. Section implements the commissioner's authority to extend, for good cause, the deadlines by which TWIA must request information on a claim from a claimant and accept or deny a claim. TDI finds that immediate implementation of this extension of deadlines is necessary to avoid imminent peril to the economic welfare of the state resulting from the extensive damage caused by Hurricane Harvey, and the number of resulting insurance claims TWIA must adjust following this catastrophic event. TWIA is the residual insurer of last resort for windstorm and hail insurance coverage in designated parts of the seacoast territory for those unable to obtain wind and hail insurance in the private market. Under TWIA's governing statute, Insurance Code , the Legislature establishes that "adequate windstorm and hail insurance is necessary to the economic welfare of this state." During Hurricane Harvey approximately 225,000 residential and 9,000 commercial TWIA policies were in effect. As of September 18, 2017, TWIA had received 55,851 residential property claims and 2,290 commercial property claims for losses caused by Hurricane Harvey. Insurance Code Chapter 2210, Subchapter L-1, governs claims under a TWIA policy and the process by which TWIA and claimants must resolve disputes over claims. Insurance Code Chapter 542, Subchapter B, which governs claims and the prompt payment of claims for most insurers, does not apply to TWIA. Under Insurance Code , the commissioner may, by rule and for good cause, extend any deadline in Subchapter L-1. Hurricane Harvey is the first major hurricane affecting TWIA since Subchapter L-1 was enacted in Existing rules provide a means for TWIA or claimants to request, for good cause, extension of deadlines related to appraisal and mediation and for claimants to request additional time to file a claim with TWIA, also for good cause. However, existing rules do not provide a means to extend the deadlines by which TWIA must request information on a claim from a claimant and accept or deny a claim. As noted, TWIA has received approximately 58,127 residential property claims and 2,371 commercial property claims from Hurricane Harvey. This has stressed TWIA's resources and those of other insurers, who are also facing an elevated number of claims. Under Insurance Code , TDI has granted a request to extend the claim-handling deadlines in Chapter 542, Subchapter B, for insurers subject to that subchapter, but this extension does not assist TWIA or those who have filed claims with TWIA. Accurate adjustment of claims is necessary to enable Texans to focus on recovery. While ideally all claims are adjusted quickly, in an event such as Hurricane Harvey, claim-adjusting resources are in high demand. Qualified adjusters, especially for complex claims, may be in short supply. Regardless of the number of adjusters available, complex claims may take significant time to adjust accurately. The sheer number of claims may make it difficult or impossible for an insurer to accurately adjust all claims within the statutory deadlines. Without an extension of time to accept or deny a claim or to request information from a claimant, TWIA could be at risk of not being able to adjust claims accurately. If, in an attempt to comply with the statutory time periods, TWIA adjusts claims inaccurately, then some claimants will not receive the claim payments to which they are entitled and others will receive excess payments. Providing a mechanism to grant TWIA additional time is necessary to help ensure that TWIA adjusts claims accurately and its funds are used to pay claims. This rule will establish a transparent process for extensions of TWIA's claim-handling deadlines to accommodate the volume of claims resulting from Hurricane Harvey and the resultant strain on resources. Failure to provide TWIA a means to receive additional time to adjust claims accurately would jeopardize TWIA's purpose to provide an adequate windstorm and hail insurance market in the seacoast territory. Accurate and timely claim adjustment is integral to providing adequate insurance. Because adequate windstorm and hail insurance is necessary to the eco- EMERGENCY RULES October 6, TexReg 5293

12 nomic welfare of the state, it is necessary to adopt on an emergency basis to prevent an imminent peril to the public welfare. Insurance Code does not include a definition of good cause. Therefore, (a) defines good cause for the purpose of extending the deadlines in Insurance Code (b) and (d). The definition is adopted in order to create a reasonable, objective standard. Under (b), TWIA must ask a claimant for information necessary to determine whether to accept or deny a claim not later than the 30th day after the claim is filed. Under (d), TWIA must accept or deny a claim, either in full or in part, not later than 60 days after it gets notice of the claim or receives additional information it has requested from the claimant. Section (b) provides that the commissioner may extend the deadlines under Insurance Code (b) and (d) if TWIA shows good cause and also in the absence of a request from TWIA if the commissioner determines good cause exists. Subsection (d) provides that the commissioner may use any additional information the commissioner deems appropriate when determining if good cause exists under Sections (b) and (d) give the commissioner flexibility to determine that good cause exists without relying solely on TWIA s request. Section (c) requires a request under to include information useful for the commissioner to make a determination. Section (e) states that for claims filed in a particular catastrophe year, extensions granted under Insurance Code may not, in total, exceed 120 days. Decisions to grant or deny requests for extension of the deadlines established under Insurance Code (b) and (d) will be subject to judicial review under Insurance Code Chapter 36. Under Government Code , this emergency rule will not be in effect for longer than 120 days, unless TDI renews it for an additional 60 days as allowed by Government Code (c). TDI intends to propose this or a similar rule under the normal rulemaking process as provided in Government Code and , and all interested parties will have the opportunity to comment on those rules when they are proposed. STATUTORY AUTHORITY. New is adopted on an emergency basis with an immediate effective date, under Insurance Code , , and and Government Code and (a)(2). Insurance Code provides that the commissioner may adopt any rules necessary and appropriate to implement the powers and duties of TDI under the Insurance Code and other laws of this state. Insurance Code (b) authorizes the commissioner to adopt reasonable and necessary rules to implement Chapter Insurance Code authorizes the commissioner to extend deadlines established under Subchapter L-1 by rule. Government Code authorizes a state agency to adopt emergency rules without prior notice or hearing if the agency "finds that an imminent peril to the public health, safety, or welfare" requires the adoption of rules on fewer than 30 days' notice. Government Code (a)(2) provides for a rule to be effective immediately on filing with the secretary of state if an expedited effective date is necessary because of imminent peril to the public health, safety, or welfare. CROSS-REFERENCE TO STATUTE. Section implements Insurance Code Good Cause Extensions under Insurance Code (b) and (d). (a) This section defines good cause for the purpose of extending the deadlines in Insurance Code (b) and (d), relating to the association's request for claim-related information and the association's acceptance or denial of a claim, respectively. In this section, good cause means objective facts beyond the association's control that reasonably caused or may cause the association to fail to meet a deadline in Insurance Code (b) or (d). (b) If the association shows good cause, or if the commissioner, in the absence of a request, determines good cause exists, the commissioner may extend the deadlines established under Insurance Code (b) and (d). An extension granted under this section is effective on the date of the deadline for which it is granted. An extension is limited to the claims for which it is granted. (c) A request for an extension under this section must: (1) be sent in writing to the department, under of this title (relating to Requests and Submissions to the Department); (2) specify the deadline or deadlines for which an extension is requested; by: (3) identify the claims for which an extension is requested (A) the type of policy; and (B) the time period and a description of the event that gave rise to the claims; (4) specify the association's estimated total number of claims arising from the event that gave rise to the claims for which an extension is requested; and (5) describe the good cause for which the association cannot meet the deadlines in Insurance Code (b) and (d). (d) In addition to the information described in subsection (c) of this section, the commissioner may use any other information the commissioner deems appropriate when determining if good cause exists to extend the deadlines in Insurance Code (b) and (d). (e) With reference to claims filed during a particular catastrophe year, extensions under this section and any other extension granted under Insurance Code , relating to the extension of claimhandling deadlines, may not exceed 120 days in the aggregate. The agency certifies that legal counsel has reviewed the emergency adoption and found it to be within the state agency's legal authority to adopt. Filed with the Office of the Secretary of State on September 21, TRD TexReg 5294 October 6, 2017 Texas Register

13 Norma Garcia General Counsel Texas Department of Insurance Effective date: September 21, 2017 Expiration date: January 18, 2018 For further information, please call: (512) EMERGENCY RULES October 6, TexReg 5295

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15 TITLE 10. COMMUNITY DEVELOPMENT PART 1. TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS CHAPTER 80. MANUFACTURED HOUSING The Manufactured Housing Division of the Texas Department of Housing and Community Affairs (the "Department") proposes to amend 10 Texas Administrative Code, Chapter 80, 80.2, 80.3, 80.32, 80.33, 80.36, 80.38, 80.40, 80.41, 80.73, 80.80, and relating to the regulation of the manufactured housing program. The rules are revised to comply with House Bill 2019 (85th Legislature, 2017 regular session) that amends the Manufactured Housing Standards Act and for clarification purposes. Section 80.2(2): Clarification of the definition of business days. Section 80.3(c): The term of lease-purchase is removed and the name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.3(g): The reference to the home previously being designated for business use is removed and the name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.3(h)(3): The name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.3(k)(1) and (2): The name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.32(b), (c), (h) and (u): Removed the reference to lease-purchase. Section 80.32(d) and (g): The name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.32(p): The name of the Texas Manufactured Homeowners' Recovery Trust Fund changed to the Texas Manufactured Homeowner Consumer Claims Program (Claims Program). Section 80.33(g): Additional responsibilities are added for contracting installers subcontracting the installation and included the requirement for provisional installers to submit a copy of the Notice of Installation to the Department's Field Office within three days of installation. Section 80.33(h): The name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.36(a): The name of the Statement of Ownership and Location is changed to the Statement of Ownership. Section 80.38(b): Removed the requirement that the Governor of Texas must declare existence of an emergency, which allows the consumer the right to waive their three day right of rescission in case of an emergency, rather than only after a governor declared natural disaster. Section 80.40(a): Made a correction in the last sentence by deleting the word "of." Section 80.41(c)(4) - (8): Includes additional requirements for the licensing education course for related persons added to licenses. Section 80.41(d)(1): Removed all the Continuing Education specific hour requirements. Section 80.41(d)(2): Added requirement that all related persons added to a license must complete the eight hours of continuing education every two years. Section 80.41(e)(4)(A): Removed language requiring fingerprints to be obtained prior to applying for a license. Section 80.41(f)(1)(C): The name of the Trust Fund changed to the Manufactured Homeowner Consumer Claims Program. Section 80.73(i): The new subsection allows a purchaser of a manufactured home for business use to file a complaint against the retailer if the home is not habitable, if they disclosed to the retailer in writing at the time of purchase the intent for a person to be present for regularly scheduled work of not less than eight hours. The title of Subchapter F is changed from Manufactures Homeowners' Recovery Trust Fund to Manufactured Homeowner Consumer Claims Program. The title of Section is changed from Administration of Claims under the Manufactured Homeowners' Recovery Trust Fund to Manufactured Homeowner Consumer Claims Program. Section 80.80(a), (b) and (f): Revised the name from Manufactured Homeowners' Recovery Trust Fund or the Fund to either Manufactured Homeowner Consumer Claims Program or the Claims Program. The title of Subchapter G is changed from Statements of Ownership and Location to Statements of Ownership. The title of Section is changed from Issuance of Statements of Ownership and Location to Issuance of Statements of Ownership. Section 80.90(a) - (c): Changed the application name from application for statement of ownership and location to application for statement of ownership. Section 80.90(d): Removes the requirement for certified copies of supporting documentation to accept just copies and updates the name of Statement of Ownership and Location by removing "and Location." PROPOSED RULES October 6, TexReg 5297

16 Section 80.90(e): Updates the name of Statement of Ownership and Location by removing "and Location" and includes the term Certificates of Attachment as automatically converting to the new document of title, the Statement of Ownership. Section 80.90(f) - (i): Updates the name of the Statement of Ownership and the application by removing "and location." Section 80.90(j): Adds new subsection stating the executive director may require an affidavit of fact requesting additional documentation to accompany a statement of ownership application. Section 80.91(a): Changes SOL to Statement of Ownership. Joe A. Garcia, Executive Director of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs, has determined that for the first five-year period that the proposed rules are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering these sections. There will be no effect on small or micro-businesses because of the proposed amendments. Companies with a related person(s) may realize an increase in educational costs associated with the Standards Act. There are no additional anticipated economic costs to persons who are required to comply with the proposed rules. Mr. Garcia also has determined that for each year of the first five years that the proposed rules are in effect the public benefit as a result of enforcing the amendments will be to provide clarification of procedures and to comply with the Manufactured Housing Standards Act. Mr. Garcia has also determined that for each year of the first five years the proposed rules are in effect there should be no adverse effect on a local economy, and therefore no local employment impact statement is required under Administrative Procedure Act (APA), Texas Government Code If requested, the Department will conduct a public hearing on this rulemaking, pursuant to the Administrative Procedure Act, Texas Government Code The request for a public hearing must be received by the Department within 15 days after publication. Comments may be submitted to Mr. Joe A. Garcia, Executive Director of the Manufactured Housing Division of the Texas Department of Housing and Community Affairs, P.O. Box 12489, Austin, Texas or by at mhproposedrulecomments@tdhca.state.tx.us. The deadline for comments is no later than 30 days from the date that these proposed rules are published in the Texas Register. SUBCHAPTER A. CODES, STANDARDS, TERMS, FEES AND ADMINISTRATION 10 TAC 80.2, 80.3 The amendments are proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rules Definitions. Terms used herein that are defined in the Code and the Standards Act have the meanings ascribed to them therein. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise: (1) (No change.) (2) Business days--includes every day on the calendar except Saturday, Sunday, and federal and state holidays. If there is a time limitation of five (5) days or less, within the Standards Act, it is business days unless specified otherwise. (3) - (26) (No change.) Fees. (a) - (b) (No change.) (c) Seal Fee: Except for an application by a tax appraiser or a tax assessor-collector, for which there is no fee, there is a fee of $35 for the issuance of a Texas Seal for one manufactured home section. Any person who sells, exchanges, [lease purchases,] or offers for sale or[,] exchange[, or lease purchase] one or more sections of used HUD-Code manufactured homes manufactured after June 15, 1976, that do not each have a HUD label affixed, or one or more sections of a used mobile home manufactured prior to June 15, 1976, that do not each have a Texas Seal affixed shall file an Application for Statement of Ownership [and Location] to the Department for a Texas Seal and issuance of an updated Statement of Ownership [and Location]. The application shall be accompanied by the seal fee of $35 per section made payable to the Department. (d) - (f) (No change.) (g) There is a fee of $150 for the inspection of a manufactured home which is to be designated for residential use and [after having been previously designated for business use or which] is elected as personal property after having been designated as real property. The purpose of the inspection is to determine if the home is habitable. The fee must accompany a written request for inspection and must be submitted either prior to or in connection with the submission of an Application for Statement of Ownership [and Location]. (h) There is a fee of $200 for the plan review and inspection of a salvaged manufactured home which is to be rebuilt. The purpose of the inspection is to determine if the home is habitable as defined by of the Standards Act so that it may be designated for residential use. (1) - (2) (No change.) (3) The Department shall invoice the retailer for the charges incurred, and no Statement of Ownership [and Location] shall be issued until all charges and fees have been paid. (i) - (j) (No change.) (k) Fees Relating to Statements of Ownership [and Location]. Each fee shall accompany the required documents delivered or mailed to the Department at its principal office in Austin. (1) A fee of $55 will be required for the issuance of a Statement of Ownership [and Location]. (2) If a correction of a document is required as a result of a mistake by the Department, there is no fee for the issuance of corrected document. However, if the error was not made by the Department, a request for correction of the error must be made on a completed Application for Statement of Ownership [and Location] and submitted to the Department along with the required fee of $55 and any necessary supporting documentation. (3) - (4) (No change.) 42 TexReg 5298 October 6, 2017 Texas Register

17 (l) - (n) (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 September 25, TRD Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER C. LICENSEES' RESPONSIBIL- ITIES AND REQUIREMENTS 10 TAC 80.32, 80.33, 80.36, The amended sections are proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rules Retailers' Responsibilities and Requirements. (a) (No change.) (b) At the time of signing a contract for the sale [or lease] of a manufactured home, the retailer must disclose to the purchaser, a notice of the existence of a Dispute Resolution Program through HUD, either on a separate document from the sales contract or it may be incorporated clearly at the top of the sales contract. Disclosure of this requirement should be acknowledged by the consumer. (c) A retailer shall timely provide each consumer who acquires a manufactured home by sale or[,] exchange with[, or lease purchase] the applicable warranty or warranties specified in the Standards Act and any warranty regarding the home itself shall specify whether the warranty includes cosmetic items or not and, if it does include them, whether there are any limitations or special requirements, such as a walk-through punch lists, excluded items, or the like. (d) For each manufactured home taken into a retailer's inventory, a retailer shall maintain a copy of either a completed and timely submitted application for a statement of ownership [and location] to reflect the home as inventory or, once such a statement of ownership [and location] has been issued and received, a copy of that statement of ownership [and location]. (e) - (f) (No change.) (g) If a retailer relies on a third party, such as a title company or closing attorney, to file with the Department the required forms necessary to enable the Department to issue a Statement of Ownership [and Location] to a consumer, the retailer must provide an instruction letter to that third party, advising them of their responsibilities to make such filings and the required timeframes therefore. This does not relieve the retailer from responsibility. The retailer must retain with their sale records a copy of that instruction letter and all documentation provided to such third party to enable them to make such filings. This optional form is available on the Department's website. (h) On a new manufactured home and on any used manufactured home where the sale or[,] exchange [or lease-purchase] includes installation, the retailer must specify in the applicable contract or an accompanying written disclosure the intended date by which installation will be complete and a designated person to contact for the current status as to the intended date for completion of installation. For new manufactured homes, the retailer is responsible for ensuring that a licensed installer warrants the proper installation of the home and performs the required site preparation. (i) - (o) (No change.) (p) In order to comply with the provisions of (d) of the Standards Act, a retailer or broker must: (1) have a current, in effect surety bond issued in the most recent form promulgated by the Department; and (2) the applicable sales agreement must identify the surety bond that applies to the transaction and contain the following statement: "The above-described surety bond applies to this transaction in the following manner: The bond is issued to the Texas Manufactured Homeowner Consumer Claims Program (the "Claims Program"), the Claims Program [Homeowners' Recovery Trust Fund (the "Fund"), a fund] described in the Texas Manufactured Housing Standards Act (Tex. Occ. Code, Chapter 1201) and administered by the Department [Director]. If the Claims Program [Fund] makes a payment to a consumer, the Claims Program [Fund] will seek to recover under the surety bond. The obligation of the Claims Program [Fund] to compensate a consumer for damages subject to reimbursement by the Claims Program [Fund] is independent of the Claims Program's [Fund's] right or ability to recover from the above-described surety bond, but recoveries on surety bonds are an important part of the Claims Program's [Fund's] ability to maintain sufficient assets to compensate consumers. There can be no assurance that the Claims Program [Fund] will have sufficient assets to compensate a consumer for a covered claim. Assuming it has sufficient assets to compensate a consumer for a covered claim, the liability of the Claims Program [ Fund] is limited to actual damages, not to exceed $35,000." (q) - (t) (No change.) (u) A person may exercise their right of rescission of contract for sale or[,] exchange[, or lease-purchase] of home pursuant to of the Standards Act within three (3) business days without penalty or charge. (v) - (w) (No change.) Installers' Responsibilities and Requirements. (a) - (f) (No change.) (g) For each installation completed, the [contracting] installer must complete a Notice of Installation and submit the original, signed form with the required fee to the Department no later than seven (7) days after which the installation is completed, but not later than three (3) days for installers with a provisional license. If an installer submits multiple installation reports at one time, a single payment for the combined fees may be submitted. (1) If a contracting installer subcontracts the installation to a licensed installer, the subcontracted installer who performs the installation shall complete the Notice of Installation, and submit the original signed form to the Department no later than seven (7) days after which the installation is completed, or not later than three (3) days for PROPOSED RULES October 6, TexReg 5299

18 installers with a provisional license. The subcontracted installer may submit the required fee with the Notice of Installation Form. (2) If a contracting installer subcontracts the installation to a licensed installer, and the subcontracted installer does not pay the fee, the contracting installer shall submit a copy of the Notice of Installation, labeled as such, with the required fee to the Department, no later than seven (7) days after which the installation is completed, or not later than three (3) days for subcontracted installers with a provisional license. (3) Provisional installers that provide the installation are required to send a copy of the Notice of Installation to the Department's Field Office within three (3) days of the installation to ensure a timely inspection may be conducted. (4) The timely submittal of the Notice of Installation after completion of the installation ensures the Department inspectors may inspect the manufactured home with utilities connected, but before the home is skirted. (h) The completed Notice of Installation may, within the time frames specified in subsection (g) of this section be submitted with an application for Statement of Ownership [and Location] but is not a requirement to obtain a Statement of Ownership [and Location]. Copies must be labeled as such. The licensed installer who is listed on a Notice of Installation is presumed to be the installer primarily responsible for the installation and the person to whom any warranty orders, notices of inspection, or other communications from the Department regarding the installation shall be directed. (i) - (l) (No change.) Retailers' Rebuilding Responsibilities and Requirements. (a) Any home that is salvaged as defined in of the Standards Act, may be rebuilt/repaired for purposes of issuance of a manufactured Statement of Ownership [and Location] at the option of the Department after inspection in accordance with Department procedures. Notification in writing to the Department at its Austin headquarters shall be required before rebuilding/repair begins. (b) - (d) (No change.) Right to Advance Copy of Certain Documents. (a) (No change.) (b) Printed forms may be used to the rights as provided for in of the Standards Act only if: [(1) The Governor of the State of Texas has declared an emergency to exist in the location where the home is to be located;] (1) [(2)] The basic form set forth on the Department's website is used; and (2) [(3)] The Director has reviewed and approved the language used to describe the specific declared emergency. 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 September 25, TRD Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER D. LICENSING 10 TAC 80.40, The amended sections are proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rules Security Requirements. (a) For purposes of meeting the security requirements of of the Standards Act, "other security" means a deposit in a state or federally chartered bank or savings and loan association. If other security is posted, the other security must be maintained in or by a banking institution located in this state subject to a control agreement in the promulgated form set forth on the Department's website. Such deposits are hereinafter referred to as security. If such security is reduced by a claim, the license holder shall, within twenty (20) calendar days, make up the deficit as required by (c) of the Standards Act. No advance notice is required by the Department to the license holder, but the Department shall verify [of] the deposit. (b) - (f) (No change.) License Requirements. (a) - (b) (No change.) (c) Education. (1) - (3) (No change.) (4) All related persons added to a retailer.s license are required to take the initial eight (8) hour course of instruction in the law, including instruction in consumer protection regulations and the four (4) hour retailer education course prior to being added to the retailer.s license. (5) All related persons added to an installer.s license are required to take the initial eight (8) hour course of instruction in the law, including instruction in consumer protection regulations and the four (4) hour installer education course prior to being added to the installer.s license. (6) All related persons added to a retailer/installer license or retailer/installer/broker license are required to take the initial eight (8) hour course of instruction in the law, including instruction in consumer protection regulations; the four (4) hour retailer education course; and the four (4) hour installer education course prior to being added to the license. (7) All related persons added to a manufacturer.s license are required to take the initial eight (8) hour course of instruction in the law, including instruction in consumer protection regulations prior to being added to the manufacturer.s license. 42 TexReg 5300 October 6, 2017 Texas Register

19 (8) All related persons added to a broker.s license are required to take the initial eight (8) hour course of instruction in the law, including instruction in consumer protection regulations prior to being added to the broker.s license. (d) Continuing Education. (1) Continuing education program courses must total eight (8) hours and shall include: (A) Continuing [A minimum of two (2) hours of continuing] education addressing the law and rules with a focus on any revisions to the Code or Rules within the preceding two years. (B) Continuing [A minimum of one (1) hour of continuing] education addressing the Department's current complaint resolution process. (C) The following additional topics may be covered: [covered to satisfy the remaining credit hours needed not addressed in subparagraph (A) or (B) of this paragraph.] communities; (i) installation requirements; (ii) manufactured home financing; (iii) operation of manufactured home parks and (iv) insurance requirements; (v) industry best practices; (vi) business ethics; (vii) topical market statistics or trends; or (viii) other subjects determined by the Department to relate directly to the lawful operation of a business subject to the Code. (2) Acceptable evidence that the requirements of (b) of the Standards Act have been satisfied by the license holder or their related person on record with the Department, would be a certificate, letter, or similar statement provided by the approved education provider indicating that the education program was timely completed. Such evidence may be submitted by fax, mail, , or in person. All related persons listed on a license are required to complete the eight (8) hours of continuing education required every two years. (3) - (6) (No change.) (e) License Application and Renewal. (1) - (3) (No change.) (4) Fingerprints and Criminal History Check. (A) License [Prior to initial application on or after September 1, 2013 or the first renewal of a license expiring on or after September 1, 2013, license] applicants must submit a complete and legible set of fingerprints to a vendor approved by the Department of Public Safety, for the purpose of a criminal background check, which will be provided to the Department. (B) (No change.) (f) License Application or Renewal Denial. (1) In the evaluation of an applicant for a license, the Director shall consider whether the applicant or any related person involved with the applicant has previously: (A) - (B) (No change.) (C) caused the Manufactured Homeowner Consumer Claims Program [trust fund] to incur unreimbursed payments or claims; (D) - (E) (No change.) (2) - (6) (No change.) (g) (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 September 25, TRD Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER E. ENFORCEMENT 10 TAC The amended section is proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rule Procedures for Handling Consumer Complaints. (a) - (h) (No change.) (i) If a purchaser of a manufactured home for business use has proof that they disclosed to the retailer in writing at the time of purchase that the purchaser intended for a person to be present in the home for regularly scheduled work shifts of not less than eight (8) hours prior to purchasing a manufactured home for business use they may file a complaint with the Department if the manufactured home is not habitable. (1) The complaint must be filed in writing to the Department within sixty (60) days of the later of the date of sale or the date of installation. (2) The retailer is required to make the home habitable if after a Department inspection it is determined to be inhabitable and the proper evidence was submitted demonstrating the intended business use of the manufactured home. 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 September 25, TRD PROPOSED RULES October 6, TexReg 5301

20 Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER F. MANUFACTURED HOMEOWNER CONSUMER CLAIMS PROGRAM 10 TAC The amended section is proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rule Administration of Claims under the Manufactured Homeowner Consumer Claims Program [Homeowners' Recovery Trust Fund]. (a) The Director, before authorizing any party performing warranty work or providing other goods or services that are to be reimbursed from the Manufactured Homeowner Consumer Claims Program (the "Claims Program") [Homeowners' Recovery Trust Fund (the "Fund")] to proceed, will require that an estimate be submitted on the form set forth on the Department's website properly completed and executed. (b) Re-assigned warranty work required by the Director to be performed shall, unless extended for good cause or provided otherwise in the order, be performed within thirty (30) days or such other time as the director may by order specify: (1) (No change.) (2) all warranty work or other work to be reimbursed from the Claims Program [Fund], once completed, is subject to being re-inspected. (c) - (e) (No change.) (f) Once a payment is made from the Claims Program [Fund], the Department shall file a claim under the bond of or deduct the amount paid from other security provided by the party primarily responsible for the unsatisfied claim. 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 September 25, TRD Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER G. STATEMENTS OF OWNERSHIP 10 TAC 80.90, The amended sections are proposed under of the Texas Occupations Code, which provides the Director with authority to amend, add, and repeal rules governing the Manufactured Housing Division of the Department and of the Texas Occupations Code, which authorizes the board to adopt rules as necessary and the director to administer and enforce the manufactured housing program through the Manufactured Housing Division. No other statutes, codes, or articles are affected by the proposed rules Issuance of Statements of Ownership [and Location]. (a) Application Requirements. In order to be deemed complete, an application for a Statement of Ownership [and Location] must include, as applicable: (1) A completed and fully executed Application for Statement of Ownership [and Location] on the Department's prescribed current form; (2) (No change.) (3) If the statement of ownership [and location] is to reflect the recordation of a lien, other than a tax lien, for which the Department does not have the owner's consent, copies of documentation establishing the creation and existence of each such lien, and an affidavit of fact explaining the circumstances of the lien; (4) (No change.) (5) When an application for Statement of Ownership [and Location] indicates a change in ownership but no change in lien, supporting documentation that clearly establishes that the lien holder consented to that change; and (6) (No change.) (b) Right of Survivorship: If a right of survivorship election is made, then the Department will issue a new Statement of Ownership [and Location] to the surviving person(s) upon receipt of a copy of the death certificate of the deceased person(s), and a properly executed application for Statement of Ownership [and Location], and the applicable fee. (c) Corrections to Statements of Ownership [and Location]. (1) (No change.) (2) If a correction is requested because of an error made by a party other than the Department, the correction will not be made until the Department receives the following: (A) A complete corrected application for Statement of Ownership [and Location], or (B) (No change.) (d) Upon issuance of a Statement of Ownership [and Location], the Department will mail one [certified] copy to the owner and one [certified] copy to the lienholder. If an additional [certified] copy is desired for a third party it should be noted on the application with appropriate mailing information. (e) Exchanging a Document of Title or certificate of attachment for a Statement of Ownership [and Location]: The Department 42 TexReg 5302 October 6, 2017 Texas Register

21 will issue a Statement of Ownership, with no change in status, to replace a title or certificate of attachment at no charge upon receipt of the original title or certificate of attachment and the physical location of the home. If a manufactured home title showed that it was personal property, that will be presumed to be its status until and unless a revised Statement of Ownership [and Location] is applied for and issued. Likewise, if a manufactured home has had a certificate of attachment issued and had title cancelled to real property, that shall be presumed to be its status until and unless a revised Statement of Ownership [and Location] is applied for and issued. (f) Updating of Statements of Ownership [and Location] on Manufactured Homes Transferred as Real Property. (1) When a manufactured home has become real property because the owner completed the conversion process required by the Standards Act, the home may be sold, transferred, or encumbered as real property by the customary means used for real property transactions. As long as the home remains real property at the same location, ownership of the home is confirmed in the same manner as any other real property, rather than by verifying Department records. A new Statement of Ownership [and Location] does not have to be applied for until and unless: (A) the home is moved from the location specified on the statement of ownership [ and location]; (B) - (D) (No change.) (2) To convert a manufactured home from real property to personal property, the owner of the home must submit a completed Application for Statement of Ownership [and Location] to the Department with supporting documentation as follows: (A) - (D) (No change.) (3) To update the ownership on a manufactured home already elected and perfected as real property, and remaining in the same location as real property, the new owner of the home must submit a completed Application for Statement of Ownership [and Location] to the Department with supporting documentation as follows: (A) - (C) (No change.) (4) When a home is being converted to real property, a copy stamped "filed" by the county must be submitted to the Department as evidence that the requirements of of the Standards Act have been satisfied and the real property election has been perfected. This must be done within sixty (60) days from the issuance date reflected on the Statement of Ownership [and Location]. (g) When a title company or attorney's office fails to complete the conversion of a manufactured home to real property, the holder or servicer of the loan may apply for a statement of ownership [and location] electing real property status after-the-fact, providing that evidence of notice to all parties is sent via certified mail and that proof of such efforts is provided along with an affidavit of fact describing such efforts, pursuant to (i)(3) of the Standards Act. (h) Submitting an application for Statement of Ownership [and Location] pursuant to the abandonment provision in of the Standards Act, should include an affidavit of fact, on the prescribed form, attesting to that all statutory notifications have been made to the appropriate parties, including the tax assessor-collector of the county where the home is located, and evidence that all notification was sent via certified mail. (i) A Priority Handling Service may be offered by the Department for an additional fee of $55, each time an application for statement of ownership [and location (SOL)] is reviewed on a priority basis, whether the application is complete or incomplete. Initial or resubmitted applications submitted with priority handling requested and including the additional fee, will be processed within five working days from the date the application is recognized as received in the Department (applications received after 3:30 p.m. become part of the following day's mail). (1) If the application is received complete, a Statement of Ownership [and Location] will be issued and mailed within the established time. (2) - (3) (No change.) (j) When it is deemed appropriate by the executive director, an affidavit of fact may be required as additional documentation to accompany a statement of ownership application Issuance of a Texas Seal. (a) Issuance of a Texas Seal requires the submittal of an application for Statement of Ownership [SOL], the applicable fee and the fee for each Texas Seal issued. (b) (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 September 25, TRD Joe A. Garcia Executive Director Texas Department of Housing and Community Affairs Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) 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) proposes to amend , relating to Permit Fees, to 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. PROPOSED RULES October 6, TexReg 5303

22 The Commission proposes to amend the fees set forth in subsection (b) by amending the calendar years to 2017 and The Commission proposes to amend 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 proposes to amend 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. J. Denny Kingsley, Director, Surface Mining and Reclamation Division, has determined that during each year of the first five years the proposed amendments would be in effect, the net effect on state government as a result of enforcing the proposed amendments would be zero. There are no fiscal impacts on local governments. The Commission's coal mining regulatory program is partially funded with a 50 percent cost reimbursement grant from the United States Department of the Interior, Office of Surface Mining Reclamation and Enforcement. The appropriated state share of the cost for implementing this regulatory program, $2,615,236 in FY 2018 and $2,612,850 in FY 2019, is funded from fees paid by the regulated coal mining industry. Fees for the Commission's surface coal mining regulatory program come from two general categories: application fees and annual fees. The application fees are specified in (a) and the Commission does not propose to revise these fees in this rulemaking. Annual fee collection is based on the bonded acreage for each permit as of December 31st of each year. The Commission may adjust the annual fees in future rulemakings if additional funding is needed due to changes in: federal funding, legislative appropriations, the number of permits, the amount of funds received from application fees, the amount of bonded acreage, or other relevant factors. The total amount of annual fees required to fund the regulatory program was determined by subtracting the total amount of application fees estimated to be collected in each fiscal year from the estimated annual state share cost for FY 2018: $2,615,236. Mr. Kingsley estimates that the Commission will collect application fees annually in the amount of $60,000 in both FY 2018 and FY The remainder in state share expense ($2,555,236.00) is then allocated for collection from annual fees. In accordance with an agreement with industry established in 2005, the total remaining amount of annual fees required is allocated at seven percent for annual permit fees and 93 percent from bonded acreage fees. The proposed annual fee rates are then determined based on the estimated permit status and bonded acres on December 31, Staff divided the seven percent to be collected from annual permit fees ($178,866.52) by 29 (the estimated number of permits on December 31, 2017) to derive the individual permit annual fee of $6,170 proposed in subsection (b)(2). The remaining 93 percent to be collected through the bonded acreage fee ($2,376,369.48) was divided by 185,000 acres, the cumulative acres the Commission estimates will be under bond on December 31, 2017, to derive the $12.85 per bonded acre fee proposed in subsection (b)(1). Mr. Kingsley has determined that during each year of the first five years the proposed amendments would be in effect there will be a decrease in the economic cost to the mining industry of approximately $49,470. This is based on: (1) a comparison of the revenue that would be generated under the current annual fee of $13.05 per bonded acre to the revenue that would be generated under the proposed decrease to $12.85 per bonded acre; and (2) a comparison of the revenue generated under the current annual fee of $6,600 per permit to the revenue that would be generated under the proposed decreased amount of $6,170 for each of the 29 permits in existence. Mr. Kingsley has determined that the public benefit resulting from the new fee structure for coal mining activities is the alignment of fees paid by the coal mining industry with the costs incurred by the Commission, as required by Senate Bill 1. In accordance with Texas Government Code , the Commission has determined that there will be no adverse economic effects on rural communities, small businesses, or micro-businesses resulting from the proposed amendments; therefore, the Commission has not prepared the economic impact statement or regulatory flexibility analysis described in (c). The proposed amendments also will not affect a local economy; therefore, the Commission has not prepared a local employment impact statement pursuant to Texas Government Code Lastly, the Commission has determined that the proposed rule does not meet the statutory definition of a major environmental rule as set forth in Texas Government Code ; therefore, a regulatory analysis pursuant to that section is not required. Comments on the proposal may be submitted to Rules Coordinator, Office of General Counsel, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas ; online at or by electronic mail to rulescoordinator@rrc.texas.gov. The Commission will accept comments until 12:00 p.m. (noon) on Monday, November 6, 2017, which is 31 days after publication in the Texas Register. The Commission finds that this comment period is reasonable because the proposal and an online comment form will be available on the Commission's web site more than two weeks prior to Texas Register publication of the proposal, giving interested persons additional time to review, analyze, draft, and submit comments. The Commission encourages all interested persons to submit comments on the proposal no later than the deadline. The Commission cannot guarantee that comments submitted after the deadline will be considered. For further information, call Mr. Kingsley at (512) The status of pending Commission rulemakings is available at The Commission proposes 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 TexReg 5304 October 6, 2017 Texas Register

23 Cross-reference to statute: Texas Natural Resources Code, and Issued in Austin, Texas, on September 19, Permit Fees. (a) Application Fees. Each application for a surface coal mining and reclamation permit or renewal or revision of a permit shall be accompanied by a fee. The initial application fee and the application fee for renewal of a permit may be paid in equal annual installments during the term of the permit. The fee schedule is as follows: (1) application for a permit: $5,000. (2) application for revision of a permit: $500. (3) application for renewal of a permit: $3,000. (b) Annual Fees. In addition to application fees required by this section, each permittee shall pay to the Commission the following annual fees for calendar years 2017 [2015] and 2018 [2016] due and payable not later than March 15th of the year following the calendar year for which these fees are applicable: (1) a fee of $12.85 [$13.05] for each acre of land within a permit area covered by a reclamation bond on December 31st of the year, as shown on the map required by (2)(C) of this chapter (relating to Operation Plan: Maps and Plans); and (2) a fee of $6,170 [$6,600] for each permit in effect on December 31st of the year. (c) Fees paid to the Commission under this section shall be deposited in the state treasury and credited to the general revenue fund. 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 September 19, TRD Haley Cochran Rules Attorney, Office of General Counsel Railroad Commission of Texas Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 4. TEXAS DEPARTMENT OF LICENSING AND REGULATION CHAPTER 64. TEMPORARY COMMON WORKER EMPLOYERS 16 TAC 64.1, 64.10, 64.20, 64.70, 64.72, The Texas Department of Licensing and Regulation (Department) proposes the repeal of existing rules at 16 Texas Administrative Code (TAC), Chapter , 64.10, 64.20, 64.70, 64.72, and 64.80, regarding the Temporary Common Worker Employers program. JUSTIFICATION AND EXPLANATION OF THE RULES This proposal repeals the existing rules of the Texas Commission of Licensing and Regulation (Commission), the Department's governing body, regarding the licensing and regulation of temporary common worker employers by the Department. The existing rules under 16 TAC Chapter 64 implemented Texas Labor Code, Chapter 92. The repeal of the existing rules is necessary to implement Senate Bill (S.B.) 2065, 85th Legislature, Regular Session, This bill, in part, repealed the state licensing requirements for temporary common worker employers under Texas Labor Code, Chapter 92, Temporary Common Worker Employers. S.B preserved the provisions in Chapter 92 regarding the standards of conduct and practice for temporary common worker employers and the provision allowing municipalities over 1 million people to impose stricter standards of conduct and practice. As amended by S.B. 2065, unless prohibited by a governmental subdivision, a temporary common worker employer is authorized to operate in the state if it meets the requirements of Chapter 92. A governmental subdivision may enforce Chapter 92 within the boundaries of the governmental subdivision. These statutory changes were effective September 1, This proposal repeals the existing rules for the Temporary Common Worker Employers Program under 16 TAC Chapter , 64.10, 64.20, 64.70, 64.72, and As of September 1, 2017, the Department no longer licenses or regulates temporary common worker employers. FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT Brian E. Francis, Executive Director, has determined that for each year of the first five years the proposed repeal of the rules is in effect, there will be a reduction in costs to the State. While S.B repealed the state licensing requirements under Texas Labor Code, Chapter 92, the rules under 16 TAC Chapter 64 implemented the Temporary Common Worker Employers Program. There will be a reduction in costs to the State in the amount of $3,700 each year for the first five years due to the Department no longer needing to pay full time employees (FTEs) to administer and enforce the program. No FTEs worked on this program on a full-time basis, so there is no loss of FTEs. In addition, Mr. Francis has determined that for each year of the first five years the proposed repeal of the rules is in effect, there will be a loss of revenue to the State. While S.B repealed the state licensing requirements under Texas Labor Code, Chapter 92, the rules under 16 TAC Chapter 64 set out the specific fee amounts that were paid to the Department. Temporary common worker employers paid $30 in license application fees and $30 in annual license renewal fees. Elimination of the application and annual renewal fees will result in a loss of revenue to the State in the amount of $3,700 each year for the first five years. Mr. Francis has determined that for each year of the first five years the proposed repeal of the rules is in effect, enforcing or administering the proposed repeal of the rules does not have foreseeable implications relating to costs or revenues of local governments. Local governments may have cost or revenue implications based on changes to the statute as amended by S.B 2065; however, any cost or revenue implications are not a result of the proposed repeal of the rules. LOCAL EMPLOYMENT IMPACT STATEMENT Mr. Francis has determined that the proposed repeal of the rules may affect the local economy, so the agency has prepared the following local employment impact statement, as required under Government Code PROPOSED RULES October 6, TexReg 5305

24 S.B repealed the state licensing requirements for temporary common worker employers under Texas Labor Code, Chapter 92. The proposed repeal of the rules eliminates the initial and renewal license applications and fees and other licensing requirements. The proposed repeal of the rules does not eliminate or restrict the actual business of any temporary common worker employers. These employers will continue to operate as before but without the need for a state license and without some licensing and operating costs associated with the rules. These savings could potentially result in a lowering of prices for the hiring of common workers, which could potentially result in more common workers being hired for each year of the first five years the proposed repeal is in effect. There is no data, however, to support these potential effects on the local economy and on local employment since is unknown what each temporary common worker employer may or may not do. Texas Labor Code, Chapter 92 authorizes municipalities that have populations greater than one million to impose stricter standards of conduct and practice than those set out under the statute. Currently, there are three municipalities with over one million people. If these three municipalities choose to impose stricter standards, it could possibly impact local employment in those municipalities. This potential impact, however, would be a result of the statute as amended by S.B. 2065, not by the proposed repeal of the rules. In addition, Texas Labor Code, Chapter 92 provides that unless prohibited by a governmental subdivision, a temporary common worker employer is authorized to operate in the state if it meets the statutory requirements. If a governmental subdivision chooses to prohibit a temporary common worker employer from operating within the boundaries of the governmental subdivision, it could possibly impact local employment in that governmental subdivision. This potential impact, however, would be a result of the statute as amended by S.B. 2065, not by the proposed repeal of the rules. PUBLIC BENEFITS Mr. Francis also has determined that for each year of the first five-year period the proposed repeal of the rules is in effect, the public benefit will be elimination of obsolete rules. The rules under 16 TAC Chapter 64 implemented the state licensing requirements under Texas Labor Code, Chapter 92. The state licensing requirements were repealed by S.B In addition, the repeal of the state licensing requirements under Chapter 92 and the associated rules eliminate the cost of a state regulatory program with a small license population, zero to little enforcement activity, and minimal risk of consumer harm. There will be less of a tax burden on taxpayers. Companies will no longer be required to submit initial or renewal license applications and fees or meet other rule requirements that had associated costs. There will be less of a regulatory burden on the businesses in this industry. While there is no supporting data and it is unknown what temporary common worker employers may or may not do, the proposed repeal of the rules and the reduction in regulatory burdens may potentially enable a reduction in prices for users of common workers, potentially enable the employment of more common workers, and potentially allow local employers to complete additional work. Finally, there are still protections for common workers in the statute. Temporary common worker employers still have to meet standards of conduct and practice requirements under Chapter 92, and municipalities over 1 million people may impose stricter standards of conduct and practice. In addition, a governmental subdivision may enforce Chapter 92 within the boundaries of the governmental subdivision. PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL Mr. Francis has determined that for each year of the first fiveyear period the proposed repeal of the rules is in effect, there will be a reduction in costs to persons who are required to comply with the proposed repeal of the rules. Temporary common worker employers will no longer have to pay $30 in license application fees or $30 in annual license renewal fees. The elimination of the application and annual renewal fees will be a reduction in costs in the amount of $3,700 each year for the first five years. In addition, there may be a decrease in costs from the elimination of rules that impose certain requirements on licensees, such as vehicle, insurance, and waiting room requirements. The Department is not able to estimate what specific cost-savings, if any, temporary common worker employers may receive as a result of the repeal of these rules. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS -- FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMU- NITIES There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed repeal of the rules. Since the agency has determined that the proposed repeal of the rules will have no adverse economic effect on small businesses, micro-businesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code , are not required. ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT Under Government Code , a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule. There are exceptions for certain types of rules under (c). The proposed repeal of the rules does not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. In addition, the repeal is necessary to implement legislation, which is an exception under (c). Therefore, the agency is not required to take any further action under Government Code PUBLIC COMMENTS Comments on the proposal may be submitted to Pauline Easley, Legal Assistant, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711, or facsimile (512) , or electronically: erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register. STATUTORY AUTHORITY 42 TexReg 5306 October 6, 2017 Texas Register

25 The repeal of the existing rules is proposed under Texas Occupations Code, Chapter 51, which authorizes the Commission, the Department's governing body, to adopt rules as necessary to implement this chapter and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Texas Labor Code, Chapter 92. No other statutes, articles, or codes are affected by the proposal Authority Definitions Licensing Requirements General Duties of a License Holder Licensee Labor Hall Responsibilities Fees 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 September 21, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 65. BOILERS The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 65, Subchapter A, 65.1 and 65.2; Subchapter C, ; Subchapter D 65.25; Subchapter E 65.30; Subchapter G, 65.45; Subchapter J, 65.72; Subchapter N, ; Subchapter O, ; Subchapter R, , , ; proposes repeal of current Subchapter I, 65.63; and proposes new Subchapter I, and 65.64, regarding the Boilers program. JUSTIFICATION AND EXPLANATION OF THE RULES The Texas Legislature enacted House Bill 3257 (HB 3257), 85th Legislature, Regular Session (2017), which set the periodicity of portable boiler inspections. Editorial corrections and clarifications are also being proposed. The proposed amendments, repeal and new rules are necessary to implement HB The proposed amendments to 65.1 corrects the statutory authority. The proposed amendments to 65.2 removes the definitions for "existing installations" and "new installations" since the terms are not used in this program. Editorial changes are also made to renumber the section accordingly. The proposed amendments to clarifies the current certificate of operation to be displayed at or near the boiler, or otherwise readily accessible to an inspector. The proposed amendments to clarifies the process to test-fire and operate a newly installed boiler and the Temporary Operating Permit. The proposed amendments to corrects the name of the National Board Commission and requires the applicant to demonstrate they meet eligibility requirements. The proposed amendments to changes the title of the section to correctly name boiler certification requirements and clarify when inspection reports and written authorization are needed. The proposed amendments to changes the title of the section to correctly name authorized inspector requirements. The proposed amendments to clarifies the requirement for the applicant to demonstrate they meet eligibility requirements. The proposed amendments to removes "portable boiler" language in the title and section to be placed in a new section. The proposed repeal of current is to renumber it to proposed new The proposed new establishes the requirements of HB The proposed amendments to further identify which stamped tag designates the boiler as condemned and clarify the decal which shall be altered/defaced. The proposed amendments to adds a reference and makes an editorial change. The proposed amendments to corrects the title to reflect all fees and specifies who is required to pay each fee. The proposed amendments to clarifies existing language to reflect practice and makes editorial changes. The proposed amendments to clarifies where the record of calibration must be placed. The proposed amendments to corrects the title of the section to reflect practice. The proposed amendments to makes editorial changes. The proposed amendments to makes editorial changes. The proposed amendments to makes editorial changes. FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed rules are in effect, there will be no fiscal impact on the revenue of local or state government. LOCAL EMPLOYMENT IMPACT STATEMENT Mr. Francis has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code PUBLIC BENEFITS Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public will benefit as boilers will be inspected on a regular schedule which is not possible or highly impracticable under the current rules which require an inspection each time the portable boiler is moved. The establishment of a definite schedule for inspection ensures the safe operation of the equipment to prevent harm to the unsuspecting public. PROPOSED RULES October 6, TexReg 5307

26 PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL Mr. Francis has determined that for each year of the first fiveyear period the proposed rules are in effect, there will be a reduction in operating costs to boiler owners and operators because an annual inspection will allow the boiler to remain in service and available for operations rather than being out of service awaiting an inspection. ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS - FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSINESSES, AND RURAL COMMU- NITIES There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed amendments, new rules and repeal. Since the agency has determined that the proposed rules will have no adverse economic effect on small businesses, microbusinesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code , are not required. ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT Under Government Code , a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule. There are exceptions for certain types of rules under (c). The proposed amendments, new rule and repeal do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code PUBLIC COMMENTS Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) , or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register. SUBCHAPTER A. GENERAL PROVISIONS 16 TAC 65.1, 65.2 STATUTORY AUTHORITY The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Authority. This chapter is promulgated [adopted] under authority of Texas Health and Safety Code, Chapter 755 and Texas Occupations Code, Chapter Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) - (25) (No change.) [(26) Existing Installation--Any boiler constructed, installed, placed in operation, or contracted for before June 3, 1937.] (26) [(27)] External Inspection--An inspection of the exterior of a boiler and its appurtenances that is made, if possible, while the boiler is in operation. (27) [(28)] Heat Recovery Steam Generator (HRSG)--A boiler which produces steam where its principle source of thermal energy is a hot gas stream having high ramp rates, such as the exhaust of a gas turbine. (28) [(29)] Heating Boiler--A steam heating boiler, hot water heating boiler, hot water supply boiler, or potable water heater that is directly fired with oil, gas, solar energy, electricity, coal, or other solid or liquid fuel. (29) [(30)] High-Temperature Water Boiler--A water boiler designed for operation at pressures exceeding 160 pounds per square inch gage (1100 kilopascals) or temperatures exceeding 250 degrees Fahrenheit (121 degrees Celsius). (30) [(31)] Hot Water Heating Boiler--A boiler designed for operation at a pressure not exceeding 160 pounds per square inch gage (1100 kilopascals) or temperatures not exceeding 250 degrees Fahrenheit (121 degrees Celsius) at or near the boiler outlet. (31) [(32)] Hot Water Supply Boiler--A boiler designed for operation at pressures not exceeding 160 pounds per square inch gage (1100 kilopascals) or temperatures not exceeding 250 degrees Fahrenheit (121 degrees Celsius) at or near the boiler outlet if the boiler's heat input exceeds 200,000 British thermal units per hour (58.6 kilowatts); water temperature exceeds 210 degrees Fahrenheit (99 degrees Celsius); or nominal water-containing capacity exceeds 120 gallons (454 Liters). (32) [(33)] Immersion Resistance Element Type Boiler--An electric boiler in which heat is generated by the passage of an electric current through a resistance heating element immersed in water. (33) [(34)] Inspection Agency--An authorized inspection agency providing inspection services. (34) [(35)] Inspector--The chief inspector, a deputy inspector, or an authorized inspector. (35) [(36)] Install--To place, position or fit into position and then to connect, change or modify in such a manner as to bring the boiler into service. (36) [(37)] Installation--The act of installing a boiler or associated equipment. (37) [(38)] Internal inspection--a complete and thorough inspection of the interior waterside and fireside areas of a boiler as construction allows. 42 TexReg 5308 October 6, 2017 Texas Register

27 (38) [(39)] Maximum Allowable Working Pressure (MAWP)--The greatest pressure at which a boiler is designed to operate. (39) [(40)] Metric (SI)--An international system of measurement. (40) [(41)] Metrication--The process of converting between US customary units and metric (SI) units. (41) [(42)] Modular Boiler--A steam or hot water heating assembly consisting of a group of individual boilers called modules, intended to be installed as a unit, with a single inlet and single outlet. Modules may be under one jacket or may be individually jacketed. (42) [(43)] Multiple Pressure Steam Generator--A boiler consisting of several sections of heat exchange surface designed for different pressure levels. (43) [(44)] National Board--The National Board of Boiler and Pressure Vessel Inspectors. (44) [(45)] National Board Inspection Code--The manual for boiler and pressure vessel inspectors published by the National Board. [(46) New Installations--A boiler constructed, installed, or placed in operation after June 3, 1937.] (45) [(47)] Nominal--The accepted ASME standard used to designate a size or capacity of an item. (46) [(48)] Non-Code Boiler--A complete boiler not constructed to the appropriate ASME Code. (47) [(49)] Nonstandard Boiler--A boiler that does not qualify as a standard boiler. (48) [(50)] Nuclear Boiler--A nuclear power plant system, including its pressure vessels, piping systems, pumps, valves, and storage tanks that produces and controls an output of thermal energy from nuclear fuel and the associated systems essential to the function of the power system. (49) [(51)] Owner or Operator--Any person, firm, or corporation owning or operating boilers within the State of Texas. (50) [(52)] Person--An individual, corporation, partnership, association or other legal entity. (51) [(53)] Pool Heater--A hot water supply boiler or a potable water heater designed to provide hot water to a pool. (52) [(54)] Portable [Power] Boiler--A boiler primarily intended for use at a temporary location. (53) [(55)] Potable Water Heater--A boiler designed for operation at pressures not exceeding 160 pounds per square inch gage (1100 kilopascals) and water temperatures not exceeding 210 degrees Fahrenheit (99 degrees Celsius) if the boiler's heat input exceeds 200,000 British thermal units per hour (58.6 kilowatts) or nominal water-containing capacity exceeds 120 gallons (454 liters). (54) [(56)] Power Boiler--A high-temperature water boiler or a boiler in which steam is generated at a pressure exceeding 15 pounds per square inch gage (103 kilopascals) for a purpose external to the boiler. (55) [(57)] Preliminary order--a written order issued by the chief inspector or any commissioned boiler inspector to require repairs or alterations to render a boiler safe for use or to require that operation of the boiler be discontinued. The Boiler Inspection report which requires repairs to be made or the boiler operation to be ceased which is signed by the chief inspector or a commissioned boiler inspector is a Preliminary Order. (56) [(58)] Process Steam Generator--An evaporator, heat exchanger, or vessel in which steam is generated by the use of heat resulting from the operation of a processing system that contains a number of pressure vessels, such as used in the manufacture of chemical and petroleum products. (57) [(59)] Reinstalled Boiler--A boiler removed from its original setting and reinstalled at the same location or at a new location without change of ownership. (58) [(60)] Repair--The work necessary to restore pressureretaining items to a safe and satisfactory operating condition. (59) [(61)] Rules--The rules promulgated and enforced by the commission in accordance with Texas Health and Safety Code, and Texas Occupations Code, Chapter 51. (60) [(62)] Safety Appliance--A safety device such as a safety valve or a pressure relief valve for a boiler provided to diminish the danger of accidents. (61) [(63)] Secondhand Boiler--A boiler in which the location and ownership have changed. (62) [(64)] Serious Accident--An explosion resulting in any degree of distortion to the wall of the boiler or related equipment or damage to the building where the boiler is located. Or, emergency medical services are dispatched to the location of a boiler accident in which one or more persons require on-site medical services, transport to a medical facility or the accident results in a fatality. (63) [(65)] Special Inspection--An inspection by the chief inspector or deputy inspector other than those in Texas Health and Safety Code, (64) [(66)] Stacked Boiler--A design in which one boiler is placed onto a rack above another boiler, as designed by the boiler manufacturer with a rack nameplate, and as approved by the department. (65) [(67)] Standard Boiler--A boiler that bears the stamp of a nationally recognized engineering professional society, or the stamp of any jurisdiction that has adopted a standard of construction equivalent to the standard required by the executive director. (66) [(68)] Steam Heating Boiler--A boiler designed for operation at pressures not exceeding 15 pounds per square inch gage (103 kilopascals). (67) [(69)] System Pressure--The pressure of the boiler system, which is governed by the highest safety valve or pressure relief valve set pressure as allowed by ASME Code and this chapter. (68) [(70)] Texas Commission--Authorization to inspect boilers and enforce Texas Health and Safety Code, Chapter 755, and 16 Texas Administrative Code, Chapter 65, on behalf of the department. (A) ASME Only Commission--Only authorizes an inspector to conduct ASME new construction activities. (B) In-Service Only Commission--Only authorizes an inspector to conduct boiler in-service activities. (C) ASME and In-Service Commission--Authorizes an inspector to conduct both activities in subparagraphs (A) and (B). (69) [(71)] Unfired Steam Boiler--An unfired pressure vessel in which steam is generated. The term does not include: vessels known as evaporators or heat exchangers; or vessels in which steam is generated by using the heat that results from the operation of a process- PROPOSED RULES October 6, TexReg 5309

28 ing system that contains a number of pressure vessels, as used in the manufacture of chemical and petroleum products. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER C. BOILER REGISTRATION AND CERTIFICATE OF OPERATION-- REQUIREMENTS 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Boiler Registration and Certificate of Operation Required. Except as provided by this chapter, each boiler operated in this state must: (1) be registered with the department; and (2) have qualified for a current certificate of operation with the current certificate of operation displayed at or near the boiler, or readily accessible to an inspector Boiler Installation. (a) (No change.) (b) The boiler shall not be test-fired or operated prior to the required first inspection except as allowed under subsection (c). (c) Temporary Operating Permit. (1) The owner or operator may request a Temporary Operating Permit on a department-approved form. (2) The owner or operator must pay the applicable fee required under (3) Upon approval of the Temporary Operating Permit from the department, the boiler may be operated [for thirty (30) days] prior to the required initial inspection for up to thirty (30) days Inspector Commissions. (a) In-Service Commission. To be eligible for in-service commission, an applicant must: (1) submit a completed application on a department-approved form demonstrating eligibility; (2) successfully pass a criminal background check; (3) pass a written examination approved by the department; (4) attend a department-approved boiler orientation program; and (5) pay the fee required under (b) Texas ASME Commissions. To be eligible for a Texas ASME commission, an applicant must: (1) submit a completed application on a department-approved form; (2) successfully pass a criminal background check; (3) hold a valid National Board Authorized Inspector ["A" Endorsement] Commission; and (4) pay the fee required under [Initial] Boiler Certification Requirements. (a) To be eligible for a certificate of operation each boiler must meet the following: (1) comply with ; (2) have an applicable [a completed first] inspection report completed; (b) (3) if necessary, complete required repairs; and (4) pay the fees required under (No change.) (c) Non-code boilers may not be installed or operated without written authorization from the department. (1) Non-code boilers, if installed without written authorization from the department, must be completely replaced to ensure the complete boiler meets or exceeds ASME code and this chapter. (2) Installing code compliant parts onto a non-code boiler does not make a non-code boiler ASME code compliant. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER D. AUTHORIZED INSPECTOR 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and 42 TexReg 5310 October 6, 2017 Texas Register

29 Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Authorized Inspector--Eligibility Requirements. To be an authorized inspector, an applicant must have at least five years' experience in the construction, installation, inspection, operation, maintenance, or repair of boilers. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER E. EXAMINATIONS AND WAIVER OF EXAMINATION 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Waiver of Examination. An applicant for a Texas Commission who is licensed or commissioned in another state that has an examination substantially equivalent to that required by this chapter, as determined by the department, may obtain a commission without examination, if the person: (1) submits a completed application on a department-approved form demonstrating eligibility; and (2) except for the examination requirement otherwise meets the requirements in Subchapter F. 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 September 27, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER G. APPLICATION TO OPERATE PORTABLE AND STATIONARY NONSTANDARD BOILERS IN THE STATE 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal [Portable and Stationary] Nonstandard Boilers. (a) Operation of a [portable or stationary] nonstandard boiler is prohibited unless the department has granted approval as a nonstandard boiler used for exhibition, instruction, education, show, display, or demonstration. (b) - (c) (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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER I. INSPECTION OF BOILERS 16 TAC The repeal is proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the repeal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Extension of Interval between Internal Inspections. 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 September 22, TRD PROPOSED RULES October 6, TexReg 5311

30 Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC 65.63, The new rules are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Inspection of Portable Boilers. The internal and external inspection of Portable Boilers shall occur as follows: (1) Boilers fabricated in accordance with the ASME Section I (i.e. "S" or any other Section I Designator) shall be inspected annually; (2) Boilers fabricated in accordance with the ASME Section IV, "H" Designator shall be inspected biennially; (3) Boilers fabricated in accordance with the ASME Section IV, "HLW" Designator shall be inspected triennially; and (4) Boilers designated as a Nonstandard Boiler in accordance with 65.43, shall be inspected annually Extension of Interval between Internal Inspections. (a) For the interval between internal inspection to be extended as provided for in Texas Health and Safety Code, , the following procedure must be followed. (1) Not less than thirty (30) days and not more than sixty (60) days prior to the expiration date of the current certificate of operation, the owner or operator shall submit in a manner prescribed by the department a request for each boiler, stating the desired length of extension, which will be no more than one (1) year from the expiration date of the current certificate of operation, the date of the last internal inspection, and a statement certifying that records are available showing compliance with Texas Health and Safety Code, , and pay the required fees. (2) The department shall notify the owner or operator and the inspection agency having jurisdiction of the maximum extension period that may be approved. (3) Prior to the expiration of the current certificate of operation, the inspection agency shall review all records, make an external inspection, and submit the external inspection report to the department. (4) Upon completion of paragraphs (1) - (3) and payment of all required fees, a new certificate of operation may be issued for the extended period of operation. (5) Violations noted during the external inspection may be cause for denial of the extension request. (6) If the department denies an extension request, the boiler shall be internally inspected prior to the expiration of the certificate of operation, unless authorized in writing to continue operation until an internal inspection can be conducted. (b) An additional extension for up to one hundred twenty (120) days may be allowed as provided for in Texas Health and Safety Code, , when it is established an emergency exists. (1) Prior to the expiration date of the current certificate the owner or operator shall submit to the department a request stating an emergency exists with an explanation of the emergency and the date of the last internal inspection. The request shall be submitted along with the inspection agency's external inspection report, confirming compliance with Texas Health and Safety Code, (2) The department shall notify the owner or operator and the inspection agency having jurisdiction of the maximum extension period that may be approved. (3) Upon completion of paragraphs (1) and (2) and payment of all required fees, a new certificate of operation may be issued for the extended period of operation. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER J. TEXAS BOILER NUMBERS 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Condemned Boilers. (a) Any boiler, stamped or identified with the corrosion-resistant metal tag, having been inspected and declared unsafe by the chief inspector, deputy inspector or executive director, shall be stamped by the inspector with an "X" on the star on either side of the Texas boiler number. The "X" stamped tag identifies/designates the boiler as condemned. (b) Any boiler, identified with the Texas boiler number decal, having been inspected and declared unsafe by the chief inspector or deputy inspector, shall have the decal [be] altered/defaced by the inspector by removing the star on either side of the Texas boiler number on the decal. The altered/defaced decal identifies/designates the boiler as condemned. 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 5312 October 6, 2017 Texas Register

31 Filed with the Office of the Secretary of State on September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER N. RESPONSIBILITIES OF THE OWNER AND OPERATOR 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal Variance. (a) - (g) (No change.) (h) An approved variance must be posted [under glass,] next to the certificate of operation[,] of the boiler for which it is issued, in accordance with 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER O. FEES 16 TAC The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal [Certificate/Inspection] Fees. (a) Certificate of operation. The owner or operator shall make payment for the following fees: (1) On or before expiration date--$70; in addition to all outstanding invoices, including any past due invoices associated with the boiler. (2) After expiration date--late fees for certificates are provided for under of this title (relating to Late Renewal Fees). (3) Duplicate--$25 (b) Inspections. The owner or operator shall make payment for the following fees: (1) Heating boilers. (A) (B) With an inspection opening--$70 Without an inspection opening--$40 (2) Other than heating boilers--$70 (c) Special inspections or non-standard boiler reviews. The owner or operator shall make a[--] $1,700 fee payment, which must be received by the department before the department may schedule [scheduling] the requested special inspection or non-standard boiler review. (d) Commission Fees. The Authorized Inspector seeking or holding the Commission shall make payment for the following fees: (1) New--$50 (2) Reinstatement--$50 (3) Renewal--$50 (4) Duplicate--$25 (5) Reissuance after re-employment--$50 (6) Late renewal fees for commissions issued under this chapter are provided under of this title (relating to Late Renewal Fees). (e) Authorized Inspection Agency/Letter of Recognition. The authorized Inspection Agency shall make payment for the following fees: (f) payment. (1) Original Application--$100 (2) Renewal Application--$100 Variances. The owner or operator shall make a[--] $50 fee (g) Extensions. The owner or operator shall make a[--] $100 fee payment. (h) Re-Stamping. The owner or operator shall make a[--] $50 fee payment. (i) Boiler Installation Reports. The owner or operator shall make a[--] $25 fee payment. (j) Overdue Boiler Inspection Fee. The owner or operator shall make a[--] $260 fee payment to the agency assigned by the department in accordance with (k) Temporary Operating Permit Fee. The owner or operator shall make a[--] $50 fee payment. 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 September 22, PROPOSED RULES October 6, TexReg 5313

32 TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER R. TECHNICAL REQUIREMENTS 16 TAC , , The amendments are proposed under Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapter 51 and Health and Safety Code, Chapter 755. No other statutes, articles, or codes are affected by the proposal General Safety. (a) A boiler that is deemed unsafe for operation by the inspector shall be removed from service or placed in a safe condition in the following manner: (1) the Inspector must notify the owner/operator about: (A) the prohibition against operating an unsafe boiler; (B) any insurance policy provisions, if any, that may exclude insurance coverage for operating an unsafe boiler; (C) possible administrative penalties for operating an unsafe boiler; and (D) request the immediate but voluntary shut-down of the boiler; [or] (2) if the owner/operator refuses to immediately shut the boiler down, before leaving the premise on which the unsafe boiler is located, the Inspector must notify the Chief Boiler Inspector about the condition of the unsafe boiler. (b) Upon receipt of the notice required by subsection (a)(2), the Chief Inspector shall assign a Deputy Inspector to confirm that an unsafe condition exists [exist] and, if confirmed, to declare the boiler unsafe for operation [render the boiler inoperative] by placing a red tag on the boiler prohibiting continued operations of the [unsafe] boiler. (c) The continued operation of an unsafe boiler shall subject the owner/operator to administrative penalties as provided for in this chapter Boiler Room Ventilation (a) - (c) (No change.) (d) Carbon Monoxide Detectors shall be calibrated every eighteen months and a record of calibration shall be posted at or near the boiler, or readily accessible to an inspector [in a conspicuous place] Atmospheric Vents, Gas Vents, Bleed or Relief Lines for Power Boilers, Unfired Steam Boilers and Process Steam Generators with Supplemental Firing (extensions only). (a) Gas pressure regulators not incorporating integral vent limiters, and all other gas train components requiring atmospheric air pressure to balance a diaphragm or other similar device, shall be provided with a connection for a vent line. (1) The vent lines in subsection (a) shall be: (A) sized in accordance with the component manufacturer's instructions; and (B) at least the same size as the vent outlet of the device. (2) Where there is more than one gas pressure regulator at a location, each gas pressure regulator shall have a separate vent. The vent lines may be manifolded in accordance with accepted engineering practices to minimize back pressure in the event of a diaphragm failure (see subsections (c) and (d)). (3) A gas pressure regulator shall not be vented into the boiler flue or exhaust system. (b) Gas pressure relief valves may discharge into common manifolding only with other gas vent, bleed, or relief lines. When manifolded, the common vent line shall have a cross-sectional area not less than the area of the largest vent line plus 50% of the areas of the additional vent lines. (c) Atmospheric vent lines, when manifolded, shall be connected into a common atmospheric vent line, having a cross-sectional area not less than the area of the largest vent line, plus 50% of the areas of the additional vent lines. (d) Atmospheric vent lines shall not be connected to any common or manifolded gas vent, bleed, or relief lines. (e) All vent and relief lines shall be: (1) piped to the outdoors at a safe point of discharge, so there is no possibility of discharged gas being drawn into the air intake, ventilating system, or openings of any structure or piece of equipment; (2) shall extend sufficiently above any structure, so that gaseous discharge does not present a fire hazard; and (3) a means shall be provided at the terminating point to prevent blockage of the line by foreign material, moisture, or insects Power Boilers, Excluding Unfired Steam Boilers and Process Steam Generators (a) - (b) (No change.) (c) Water level indicators. (1) Each boiler, except forced-flow steam generators with no fixed steam and waterline, and high-temperature water boilers of the forced circulation type that have no steam and waterline shall have at least one water gage glass. (2) Except for electric boilers of the electrode type, boilers with a MAWP over 400 psig (three (3) megapascals) shall be provided with two water gage glasses, which may be connected to a single water column or connected directly to the drum. (3) Two independent remote level indicators may be provided instead of one of the two required gage glasses for boiler drum water level indication, when the MAWP is above 400 psig (three (3) megapascals). When both remote level indicators are in reliable operation, the remaining gage glass may be shut off, but shall be maintained in serviceable condition. (4) - (8) (No change.) (d) - (i) (No change.) Unfired Steam Boilers. (a) - (d) (No change.) 42 TexReg 5314 October 6, 2017 Texas Register

33 (e) Water level indicators. (1) ASME Code, Section I, unfired steam boilers with a MAWP of 400 psig (three (3) megapascals) or less, shall have at least one gage glass. For a MAWP over 400 psig (three (3) megapascals), shall have two required gage glasses. When two gage glasses are required, one of the gage glasses may be replaced by two independent remote level indicators that are maintained in simultaneous operation while the boiler is in service. (2) - (7) (No change.) (f) - (h) (No change.) Process Steam Generators. (a) - (e) (No change.) (f) Water level indicators. (1) ASME Code, Section I, process steam generators with a MAWP of 400 psig (three (3) megapascals) or less shall have at least one gage glass. For a MAWP over 400 psig (three (3) megapascals), shall have two required gage glasses. When two gage glasses are required, one of the gage glasses may be replaced by two independent remote level indicators that are maintained in simultaneous operation while the process steam generator is in service. (2) - (7) (No change.) (g) - (i) (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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 82. BARBERS The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 82, 82.10, 82.20, 82.22, 82.23, 82.29, 82.40, 82.50, 82.52, 82.54, , 82.78, 82.80, , and ; and proposes the repeal of current 82.53, regarding the Barbers program. JUSTIFICATION AND EXPLANATION OF THE RULES The Texas Legislature enacted Senate Bill 1503, Senate Bill 2065, House Bill 2738, and House Bill 2739, 85th Legislature, Regular Session (2017). The proposed amendments and repeal include removing the requirement for a shampoo apprentice permit or shampoo specialty certificate; eliminating risk-based inspections; clarifying the definition of barbering to exclude threading; authorizing licensed schools to account for hours on the basis of clock or credit; allowing standards to be established for equivalency and conversion of clock to credit hours and vice versa; removing square footage, chair, and sink requirements for barber schools; and distinguishing between larger and specialty school requirements. The proposed amendments and repeal are necessary to implement the legislative changes. The proposed amendments to correct a reference. The proposed amendments to add the word "specialty" to match current statutory language. The proposed amendments to add a reference regarding specialty shop permits. The proposed amendments to remove specific requirements for barber schools. The proposed amendments to clarify the current requirements for an establishment relocation or change of ownership. The proposed amendments to increase the amount per claim that a student may receive in the event of a school closure. The proposed amendments to remove the reference to risk-based inspections. The proposed amendments to remove risk-based inspections as part of periodic inspections. The proposed repeal of remove risk-based inspections and the classifications. The proposed amendments to allow individuals a full ten days to complete the necessary modification after an inspection. The proposed amendments to correct language to make it consistent throughout the chapter. The proposed amendments to remove shampoo permit requirements, make language consistent, and correct a reference. The proposed amendments to remove shampoo requirements and outdated language and establish equivalency and conversion standards between credit and clock hours. The proposed amendments to clarify language and update a reference. The proposed amendments to remove fees relating to risk-based inspections and renumber the section accordingly. The proposed amendments to streamline language for clarity and quick reference. The proposed amendments to make an editorial change. FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed rules are in effect, there may be additional estimated costs to the State as a result of enforcing or administering the rules. The rules remove specific square footage and equipment requirements for barber schools. Removing these requirements could increase the number of applications, licenses, and inspections for barber schools. However, at this time, the Department is unable to estimate the amount or increase in barber schools as a result of these rules. For the first five-year period the proposed rules will not result in any estimated reductions in costs to the State. For each year of the first five-years the rules will be in effect, there will not be an estimated loss in revenue to the State. Additionally, there may be an increase in revenue to the State as a result of enforcing or administering the proposed rules due to the removal of specific square footage and equipment require- PROPOSED RULES October 6, TexReg 5315

34 ments for barber schools. Removing these requirements could increase the number of application and inspection fees paid for barber schools. However, at this time, the Department is unable to estimate the amount or increase in barber schools as a result of these rules. Mr. Francis has also determined that for each year of the first five-year period the proposed rules are in effect there will be no additional estimated costs or estimated reductions in costs to local government as a result of enforcing or administering the proposed rules. Furthermore, there will be no estimated loss or increase in revenue to local governments as a result of enforcing or administering the proposed rules. LOCAL EMPLOYMENT IMPACT STATEMENT Mr. Francis has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code PUBLIC BENEFITS Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public will benefit by the removal of square footage and equipment requirements. This proposed rule change will allow more individuals, particularly in rural areas, to operate barber schools and would potentially lower costs for purchasing space or equipment. The proposed rules raise the maximum reimbursement amount per student from the Barber School Tuition Protection Account, which will provide more assistance to students for lost tuition in the event of school closures. Additionally, the proposed rules will now provide facility owners a full ten days to complete corrective modifications and additional time to notify the Department of those modifications. The proposed rules also provide schools with additional guidance for operating on clock or credit hours. PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL Mr. Francis has determined that for each year of the first fiveyear period the proposed rules are in effect, there will be no significant economic cost to persons required to comply with the proposed rules. FISCAL IMPACT ON SMALL BUSINESSES, MICRO-BUSI- NESSES, AND RURAL COMMUNITIES There will be no adverse effect on small businesses, micro-businesses, or rural communities as a result of the proposed rules. Since the agency has determined that the proposed rules will have no adverse economic effect on small businesses, microbusinesses, or rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code , are not required. ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT Under Government Code , a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule. There are exceptions for certain types of rules under (c). The proposed rules do not have a fiscal note that imposes a cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code PUBLIC COMMENTS Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) , or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register. 16 TAC 82.10, 82.20, 82.22, 82.23, 82.29, 82.40, 82.50, 82.52, 82.54, , 82.78, 82.80, , STATUTORY AUTHORITY The amendments are proposed under Texas Occupations Code, Chapters 51, 1601 and 1603, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51, 1601 and No other statutes, articles, or codes are affected by the proposal Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) - (4) (No change.) (5) Barber Technician--A person who holds a specialty license and who is authorized to practice the services defined in Texas Occupations Code (1)(C), (D), (F), and (G) [and (I)]. (6) - (35) (No change.) License Requirements--Individuals. (a) - (h) (No change.) (i) Barber Technician/Manicurist Specialty License--To be eligible for a Barber Technician/Manicurist Specialty License, an applicant must meet the eligibility requirements set forth in Texas Occupations Code (j) Barber Technician/Hair Weaving Specialty License--To be eligible for a Barber Technician/Hair Weaving Specialty License, an applicant must meet the eligibility requirements set forth in Texas Occupations Code (k) (No change.) Permit Requirements--Barbershops, Specialty Shops, Dual Shops, Mini-Barbershops, Mini-Dual Shops, Mobile Shops, and Booth Rental. (a) - (b) (No change.) (c) Specialty Shop Permit--To be eligible for a Specialty Shop Permit, an applicant must meet the eligibility requirements set forth in Texas Occupations Code and The categories of Specialty Shop Permits issued by the department are: manicurist and hair weaving. 42 TexReg 5316 October 6, 2017 Texas Register

35 (d) - (h) (No change.) Permit Requirements--Barber Schools. (a) - (c) (No change.) (d) Barber schools that offer instruction to persons seeking a certificate, license, or permit under this chapter must have and maintain at a minimum the following: (1) a building of permanent construction that must include classroom and practical areas covered in a hard-surface floor covering of tile or other suitable material [and that must also include access to permanent restrooms, adequate drinking fountain and adequate lighting for each room]; [(2) in municipalities with populations of more than 50,000 the building must have a minimum of 2,000 square feet of floor space. In municipalities with populations of 50,000 or less or in an unincorporated area of a county, the building must have a minimum of 1,000 square feet of floor space. Population shall be determined according to the most current decennial census compiled by the United States Census Bureau;] [(3) at least 10 student work stations that include a chair that reclines, a back bar, and a wall mirror;] [(4) a sink behind every two workstations;] [(5) a liquid sanitizer for each workstation;] [(6) at least 10 classroom chairs and other materials necessary to teach the required subjects;] (2) [(7)] access to permanent restrooms and adequate drinking fountain facilities; and (3) [(8)] adequate space, equipment, lighting, and instructional materials to provide quality classroom training to the number of students enrolled [lighting for each room]. (e) Barber schools must comply with all health and safety standards established by this chapter Establishment Relocation, Change of Ownership, Owner Death or Incompetency. (a) - (b) (No change.) (c) If an establishment changes ownership, the new owner must apply for a license within 30 days after the change of ownership. Additionally, a school must be inspected but may continue to operate prior to inspection. A change of ownership includes the following: (1) For a sole proprietorship, the licensee no longer owns [and/or operates] the establishment. (2) For a partnership or limited partnership, the partnership is dissolved. (3) For a corporation or limited liability company,if [the corporation is] sold to another person or entity. A change of ownership does not include corporate officer or stockholder restructuring. (4) The death or legal incompetency of the owner Barber School Tuition Protection Account. (a) - (e) (No change.) (f) The total payment of a claim from the account may not exceed $2,500 [$1,000]. The total amount of claims paid against a single closed school may not exceed $5,000 [$2,500]. (g) - (j) (No change.) Inspections--General. (a) Barber establishments shall be inspected periodically[, according to a risk-based schedule,] or as a result of a complaint. These inspections will be performed to determine compliance with the requirements of the Act and this chapter, particularly those requirements relating to public safety, licensing, and sanitation. In addition, the department will make information available to barber establishment owners and managers on best practices for risk-reduction techniques. (b) - (d) (No change.) Periodic Inspections. (a) - (d) (No change.) (e) Based on the results of the periodic inspection, a barber establishment found out of compliance may be reinspected. [may be moved to a risk-based schedule of inspections. The department will notify the owner of a barber establishment, in writing, if the establishment becomes subject to the risk-based inspection schedule and the scheduled frequency of inspection.] Corrective Modifications Following Inspection. (a) required: When corrective modifications to achieve compliance are (1) the department shall provide the owner a list of required corrective modification(s); (2) within 10 calendar days after receiving the list of required corrective modifications, the owner shall complete all corrective modifications and provide [written] verification, in a manner prescribed by the department, of the corrective modifications, within 30 days of completion [to the department]; and (3) the department may grant an extension of time, consistent with established procedures, if satisfactory evidence is presented showing that the time period specified is inadequate to perform the necessary corrections. (b) (No change.) Responsibilities of Individuals. (a) - (f) (No change.) (g) Licensees shall maintain a current mailing address on file with the department and must notify the department within [not later than] thirty days following any change of mailing address. (h) (No change.) Responsibilities of Barbershops, Specialty Shops, Dual Shops, Mini-Barbershops, and Mini-Dual Shops. (a) - (o) (No change.) (p) Shops shall maintain a current mailing address on file with the department and must notify the department within [not later than] thirty days following any change of mailing address. (q) - (t) (u) (No change.) Mini-dual shops must: (1) comply with all requirements of the Act and this chapter applicable to barbershops; and (2) comply with all requirements of Texas Occupations Code, Chapter 1602, and 16 TAC Chapter 83 applicable to beauty shops; and (3) comply with all the requirements for dual shops listed under subsection (s) [(t)]. PROPOSED RULES October 6, TexReg 5317

36 (v) A person holding a barber shop, mini-barbershop, specialty shop, dual shop, mini-dual shop, or mobile shop license may [not] employ a person who is not otherwise licensed by the department to shampoo or condition a person's hair[, unless the person holds an active student permit] Responsibilities of Barber Schools. (a) - (b) (No change.) (c) A barber school must have an appropriate number of chairs for the number of students enrolled. [one barber chair available for each student in attendance on the practical floor. Additional students in attendance must be assigned to the beginner's department or theory classroom.] (d) - (k) (No change.) [(l) Notwithstanding subsection (j), a student may shampoo and condition a person's hair in a facility licensed under Texas Occupations Code, Chapters 1601 and 1603.] (l) [(m)] A barber school shall maintain one album displaying the school's portion of student permits, including affixed picture, of all enrolled students. The permits shall be in alphabetical order. No student may accrue hours for practical work or theory unless the student's permit is displayed in accordance with this subsection. (m) [(n)] Each barber school approved by the department shall include in its instruction the curricula approved by the department. (n) [(o)] No business other than the teaching and practicing of barbering can be operated on the premises of a barber school, with the exception of vending machines or retail products directly relating to hair care. (o) [(p)] A barber school offering distance education must: (1) obtain department approval before offering a course; (2) provide students with the educational materials necessary to fulfill course requirements; and (3) comply with the curriculum requirements set forth in by limiting distance education to the maximum number of theory hours designated for each course type. (p) [(q)] Only a permitted barber school, barbershop, mini-barbershop, dual shop, mini-dual shop, mobile shop, or manicurist specialty shop or a licensed barber may advertise as a "Barber." (q) [(r)] Schools may establish rules of operation and conduct, which may include rules relating to student clothing, that do not conflict with this chapter. (r) [(s)] A student enrolled in a barber school must wear a clean uniform or smock during school hours. (s) [(t)] Barber schools are responsible for compliance with the health and safety standards of this chapter. (t) [(u)] Alterations to the school's floor plan must be in compliance with the requirements of the Act and this chapter. (u) [(v)] Barber schools shall notify the department in writing of any name change of the school within thirty days of the change. (v) [(w)] Barber schools shall maintain a current mailing address on file with the department and must notify the department not later than thirty days following any change of mailing address. (w) [(x)] At least one time per month, barber schools shall submit to the department an electronic record of each student's accrued hours, in a manner and format prescribed by the department. Delayed data submission(s) are permitted only upon department approval, and the department shall determine the period of time for which a school may delay the electronic submission of data on a case by case basis. Upon department approval, a school may submit data required under this subsection in an alternate manner and format as determined by the department, if the school demonstrates that the requirements of this subsection would cause a substantial hardship to the school. (x) Schools changing from clock hours to credit hours or credit hours to clock hours must apply with the department for approval, on a department approved form, prior to making any changes. Successful completion of 1 credit hour is equal to 37.5 clock hours. This equivalency will be used for conversion between clock hours to credit hour or credit hour to clock hours and the department must periodically assess this equivalency conversion to ensure it is an acceptable industry standard. (y) - (dd) (No change.) Responsibilities of Mobile Shops. (a) (No change.) (b) A mobile shop license holder shall maintain a permanent physical address as required by 82.22(g) [(e)]. The mobile shop shall notify the department in writing of any change in physical or mailing address within 10 calendar days of the change. (c) (d) (No change.) A mobile shop shall either: (1) (No change.) (2) submit to the department, in a manner specified by the department, a weekly itinerary showing the dates, exact locations, and times of service to be provided. The license holder shall submit the itinerary not less than 7 calendar days prior to the beginning of service described in the itinerary and shall submit to the department any changes in the itinerary not less than 24 hours prior to the change. A mobile shop shall follow the itinerary in providing service and notify the department of any changes. (e) - (l) Fees. (a) (b) (4) [(5)] Specialty Certificate of Registration--Hair Weaving--$30 (No change.) (No change.) Renewal Fees: (1) - (3) (No change.) [(4) Student Permit--No fee] (5) [(6)] Specialty Instructor License--Barber Technician, Manicurist, Barber Technician/Manicurist, Barber Technician/Hair Weaving, Hair Weaving--$65 (6) [(7)] Barbershop Permit--$60 (7) [(8)] Mini-Barbershop Permit--$60 (8) [(9)] Specialty Shop Permit--$50 (9) [(10)] Booth Rental Permit--No fee (10) [(11)] School Permit--$200 (11) [(12)] Dual Shop--$100 (12) [(13)] Mini-Dual Shop Permit--$60 (13) [(14)] Mobile Shop--$60 (c) - (g) (No change.) 42 TexReg 5318 October 6, 2017 Texas Register

37 (h) Initial Inspection or Re-inspection of school [Inspection] Fees (for each occurrence)--$200 [:] $150] [(1) Initial Inspection or Re-inspection of school--$200] [(2) Risk-based Inspection Fees for schools and shops-- (i) - (j) (No change.) Health and Safety Standards--General Requirements. (a) All licensees shall clean their hands with soap and water or use a hand sanitizer prior to performing any services and as necessary during the services to ensure a client health and safety. All barber establishments and licensees shall utilize clean and disinfected equipment, tools, implements, and supplies in accordance with this Chapter, and shall employ good hygiene habits while providing barbering services. (b) - (f) (No change.) (g) A container, large enough to fully immerse all tools and implements with [of] liquid disinfectant shall be [located at each barber chair or station in a barber establishment to be] used to disinfect combs, brushes, scissors or other equipment which may be safely immersed in a liquid disinfectant. (h) - (o) (No change.) Health and Safety Standards--Footspas. (a) - (d) (No change.) (e) A record shall be made on a form prescribed [prescribe] by the Department of the date and time of each cleaning and disinfecting indicating whether the cleaning was a daily or bi-weekly cleaning. This record shall be made at or near the time of cleaning and disinfecting. The record shall indicate if a spa was not used at all during any individual work day. Cleaning and disinfecting records shall be made available upon request by either a patron or a Department representative. (f) - (g) (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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The repeal is proposed under Texas Occupations Code, Chapters 51, 1601 and 1603, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51, 1601 and No other statutes, articles, or codes are affected by the proposal Risk-Based Inspections. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 83. COSMETOLOGISTS The Texas Department of Licensing and Regulation (Department) proposes amendments to existing rules at 16 Texas Administrative Code (TAC), Chapter 83, 83.10, , 83.29, 83.31, 83.40, , 83.54, , 83.78, 83.80, and ; and proposes the repeal of current 83.53, regarding the Cosmetologists program. JUSTIFICATION AND EXPLANATION OF THE RULES The Texas Legislature enacted Senate Bill 1503, Senate Bill 2065, House Bill 2738, House Bill 2739, 85th Legislature, Regular Session (2017). The proposed amendments and repeal include removing the requirement for a shampoo apprentice permit or shampoo specialty certificate; eliminating risk-based inspections; clarifying the definition of barbering to exclude threading; authorizing licensed schools to account for hours on the basis of clock or credit; allowing standards to be established for equivalency and conversion of clock to credit hours and vice versa; removing square footage, chair, and sink requirements for barber schools; and distinguishing between larger and specialty school requirements. The proposed amendments and repeal are necessary to implement the legislative changes. The proposed amendments to corrects references, removes outdated language, and adds "specialty shop" to be consistent with statutory language. The proposed amendments to removes redundant language for clarity. The proposed amendments to removes specific requirements for beauty culture schools. The proposed amendments to removes language regarding inactive license status to reflect current practice. The proposed amendments to corrects a reference and adds human trafficking to continuing education requirements. The proposed amendments to clarifies the current requirements for establishment relocation and change of ownership. The proposed amendments to removes shampoo specialty certificates. The proposed amendments to reduces the maximum amount per claim per student to assist more students in the event of a school closure. The proposed amendments to removes a reference to risk-based inspections. PROPOSED RULES October 6, TexReg 5319

38 The proposed amendments to updates language to be consistent with statutory language. The proposed amendments to removes risk-based inspections from periodic inspections. The proposed repeal of removes risk-based inspections and classifications. The proposed amendments to allows individuals a full ten days to complete the necessary modification after an inspection. The proposed amendments to updates language to be consistent throughout chapter. The proposed amendments to removes shampoo permit requirements, adds facility license posting requirements, and updates language for consistency. The proposed amendments to requires human trafficking information to be posted, removes outdated language, and establishes equivalency and conversion standards between credit and clock hours. The proposed amendments to removes the shampoo apprentice permits and shampoo specialty certificates. The proposed amendments to updates language for clarity. The proposed amendments to removes fees relating to shampoo certificates and risk-based inspections and renumbers the section accordingly. The proposed amendments to streamlines language for clarity and quick reference. The proposed amendments to removes threading language for clarity. FISCAL IMPACT ON STATE AND LOCAL GOVERNMENT Brian E. Francis, Executive Director, has determined that for the first five-year period the proposed rules are in effect, there may be additional estimated costs to the State as a result of enforcing or administering the rules. The rules remove specific square footage and equipment requirements for beauty culture schools. Removing these requirements could increase the number of applications, licenses, and inspections for beauty culture schools. However, at this time, the Department is unable to estimate the amount or increase in beauty culture schools as a result of these rules. For the first five-year period the proposed rules will not result in any estimated reductions in costs to the State. For each year of the first five-years the rules will be in effect, there will be an estimated loss in revenue to the State due to the deregulation of shampoo apprentice permits and shampoo specialty certificates. The licensing population was very small and would result in an approximate loss of $2,700. Additionally, there may be an increase in revenue to the State as a result of enforcing or administering the rule due to the removal of specific square footage and equipment requirements for beauty culture schools. Removing these requirements could increase the number of application and inspection fees paid for beauty culture schools. However, at this time, the Department is unable to estimate the amount or increase in beauty culture schools as a result of these rules. Mr. Francis has also determined that for each year of the first five-year period the proposed rules are in effect there will be no additional estimated costs or estimated reductions in costs to local government as a result of enforcing or administering the proposed rules. Furthermore, there will be no estimated loss or increase in revenue to local governments as a result of enforcing or administering the proposed rules. LOCAL EMPLOYMENT IMPACT STATEMENT Mr. Francis has determined that the proposed rules will not affect the local economy, so the agency is not required to prepare a local employment impact statement under Government Code PUBLIC BENEFITS Mr. Francis also has determined that for each year of the first five-year period the proposed rules are in effect, the public will benefit by the removal of square footage and equipment requirements. This proposed rule change will allow more individuals, particularly in rural areas, to operate beauty culture schools and would potentially lower costs for purchasing space or equipment. The proposed rules lower the maximum reimbursement amount per student from the Private Beauty Culture School Tuition Protection Account, which will allow for more students to be reimbursed in the event of school closures. The proposed rules implement human trafficking awareness initiatives by training thousands of licensees on the issue of human trafficking, how to identify key indicators, and how to report suspicions. The posting of human trafficking information in establishments will provide the public with more awareness and potentially help report and prevent human trafficking. Additionally, the proposed rules will now provide facility owners a full ten days to complete corrective modifications and additional time to notify the Department of those modifications. The proposed rules also provide schools with additional guidance for operating on clock or credit hours. PROBABLE ECONOMIC COSTS TO PERSONS REQUIRED TO COMPLY WITH PROPOSAL Mr. Francis has determined that for each year of the first fiveyear period the proposed rules are in effect, there may be an increase cost to the continuing education providers by possibly requiring them to redevelop curricula to incorporate human trafficking information. At this time, there is no way to estimate their possible development costs, if any. However, providers will have the ability to use already developed and available human trafficking information to satisfy this requirements with no additional cost. FISCAL IMPACT ON SMALL BUSINESSES AND MICRO-BUSI- NESSES Mr. Francis has determined that the proposed rules could possibly have an adverse effect on small businesses or micro-businesses by requiring continuing education providers to redevelop curriculums to incorporated human trafficking information. Economic Impact Statement There are approximately 202 continuing education providers who will have to comply with the rule requiring information on human trafficking to be included in their continuing education courses. Some providers could choose to develop their own method to deliver information on human trafficking in their continuing education course hours. Others may choose to utilize instruction and videos which have already been developed and may be used at no additional cost. There is no requirement regarding how long the information on human trafficking must be. Given the lack of information of how each provider will incorporate the required human trafficking information into their course hours, and how much information will be delivered and 42 TexReg 5320 October 6, 2017 Texas Register

39 how lengthy it will actually be, the economic impact on small and micro-businesses cannot be estimated. Again, providers will have the ability to use already developed and available human trafficking information to satisfy this requirements with no additional cost. Regulatory Flexibility Analysis There are no alternative methods of achieving the purpose of the proposed rule because by law continuing education providers must include information on human trafficking in their continuing education course hours. ADVERSE ECONOMIC EFFECT ON RURAL COMMUNITIES There will be no adverse effect on rural communities as a result of the proposed rules. Since the agency has determined that the proposed rules will have no adverse economic effect on rural communities, preparation of an Economic Impact Statement and a Regulatory Flexibility Analysis, as detailed under Texas Government Code , are not required. ONE-FOR-ONE REQUIREMENT FOR RULES WITH A FISCAL IMPACT Under Government Code , a state agency may not adopt a proposed rule if the fiscal note states that the rule imposes a cost on regulated persons, including another state agency, a special district, or a local government, unless the state agency: (a) repeals a rule that imposes a total cost on regulated persons that is equal to or greater than the total cost imposed on regulated persons by the proposed rule; or (b) amends a rule to decrease the total cost imposed on regulated persons by an amount that is equal to or greater than the cost imposed on the persons by the proposed rule. There are exceptions for certain types of rules under (c). The proposed rules do not have a fiscal note that imposes a direct cost on regulated persons, including another state agency, a special district, or a local government. Therefore, the agency is not required to take any further action under Government Code Cost to continuing education providers, if any, for implementing the proposed rules regarding the new human trafficking requirements fall under exceptions (c)(6) and (9). These rules are necessary to protect health, safety, and welfare of the residents of this state from human trafficking and necessary to implement the requirements of House Bill 2552, 85th Legislature, Regular Session (2017). PUBLIC COMMENTS Comments on the proposal may be submitted by mail to Pauline Easley, Legal Assistant, General Counsel's Office, Texas Department of Licensing and Regulation, P.O. Box 12157, Austin, Texas 78711; or by facsimile to (512) , or electronically to erule.comments@tdlr.texas.gov. The deadline for comments is 30 days after publication in the Texas Register. 16 TAC 83.10, , 83.29, 83.31, 83.40, , 83.54, , 83.78, 83.80, , STATUTORY AUTHORITY The amendments are proposed under Texas Occupations Code, Chapters 51, 1602 and 1603, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51, 1602 and No other statutes, articles, or codes are affected by the proposal Definitions. The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) - (11) (No change.) (12) Eyelash Extension Specialist--A person who holds a specialty license and who is authorized to practice the service defined in Texas Occupations Code (a)(10) [ (a)(11)]. (13) Esthetician--A person who holds a specialty license and who is authorized to practice the services defined in Texas Occupations Code (a)(4) - (7), and (10) [ (a)(5) - (8) and (11)]. The term esthetician in this chapter includes the term facialist. (14) Esthetician/Manicurist--An esthetician/manicurist may perform only those services defined in Texas Occupations Code (a)(4) - (9) [ (a)(5) - (11)]. (15) (No change.) (16) Hair weaver--a person who holds a hair weaving specialty certificate and who may perform only the practice of cosmetology defined in Texas Occupations Code (a)(11) [ (a)(2) and (12)]. (17) - (20) (No change.) (21) Manicurist--A manicurist may perform only those services defined in Texas Occupations Code (a)(8) and (9) [ (a)(9) and (10)]. (22) - (31) (No change.) (32) Specialty Instructor--An individual authorized by the department to perform or offer instruction in an act or practice of cosmetology limited to Texas Occupations Code, (a)(5), (7), (8), and (10) [ (a)(5) - (10) and/or (11)]. (33) Specialty Salon or Specialty Shop--A cosmetology establishment in which only the practice of cosmetology as defined in Texas Occupations Code, (a)(2), (5), (7), (8), or (10) [ (a)(3) or (5) - (12)] is performed. Specialty salons may only perform the act or practice of cosmetology in which the salon is licensed. (34) Student Permit--A permit issued by the department to a student enrolled in cosmetology school which states the student's name and the name of the school. [A person holding an active student permit may shampoo and condition a person's hair in a facility licensed under Texas Occupations Code, Chapters 1602 and 1603.] (35) Tweezing Technique--Any type of temporary hair removal procedure involving the extraction of hair from the hair follicle by use of, but not limited to, an instrument, appliance or implement made of metal, plastic, [thread] or other material. (36) - (37) (No change.) (38) Wig Specialist--A person who holds a wig specialty certificate and who may perform only the practice of cosmetology defined in Texas Occupations Code (a)(2) [ (a)(3)] License Requirements--Beauty Salons, Specialty Salons, Mini-Salons, Dual Shops, Mini-Dual Shops, Mobile Shops, and Booth Rentals (Independent Contractors). PROPOSED RULES October 6, TexReg 5321

40 (a) To be eligible for a beauty salon, specialty salon, dual shop, mobile shop, mini-salon, mini-dual shop, or booth rental license, an applicant must: (2) comply with the requirements of the Act and this chapter; (1) obtain the current law and rules book; (3) submit a completed application on a department-approved form; and (4) pay the fee required under [(b) To be eligible for a mini-salon or mini-dual shop license an applicant must:] [(2) comply with the requirements of the Act and this chapter;] [(1) obtain the current law and rules book;] [(3) submit a completed application on a department-approved form; and] [(4) pay the fee required under ] (b) [(c)] In addition to the requirements of subsection (a), an applicant for a dual shop or mini-dual shop must also comply with Texas Occupations Code, Chapters 1601, 1602, and 1603 and 16 TAC Chapters 82 and 83 for obtaining a beauty salon license and a barbershop permit. [(d) In addition to the requirements of subsection (b), an applicant for a mini-dual shop must also comply with Texas Occupations Code, Chapters 1601, 1602, and 1603 and 16 TAC Chapters 82 and 83 for obtaining a beauty salon license and a barbershop permit.] (c) [(e)] In addition to the requirements of subsection (a), a mobile shop license applicant must: (1) provide a permanent physical address from which the mobile unit is dispatched and to which the mobile unit is returned when not in use; (2) provide a permanent mailing address where correspondence from the department may be received; and (3) verify that the mobile shop complies with the requirements of the Act and this chapter License Requirements--Beauty Culture Schools. (a) To be eligible for a beauty culture school license, an applicant must: (1) - (2) (No change.) (3) submit a completed application on a department-approved form; and (4) - (5) (No change.) (b) (No change.) (c) Private beauty culture schools offering instruction for persons seeking a license or certificate must have and maintain the following: (1) a building of permanent construction that must include two separate areas, one area for instruction in theory and one area for clinic work, and that must also include access to permanent restrooms and adequate drinking fountain facilities; [(2) In counties with populations of 100,000 or less, the building must have a minimum of 1,800 square feet of floor space. In counties with populations of more than 100,000, the building must have a minimum of 2,800 square feet of floor space. Population shall be determined according to the current decennial data compiled by the United States Census Bureau.] (2) [(3)] adequate space, equipment, and instructional materials to provide quality classroom training to the number of students enrolled [established by the department sufficient to instruct a minimum of 10 students]; (3) [(4)] proof of ownership of building or proof of a lease for the first 12 months of operation; and (4) [(5)] a copy of the curriculum approved by the department for each course offered. (d) Public beauty culture schools must have and maintain the following: (1) Adequate space to provide quality classroom training for the number of students enrolled including an [not less than 2,200 square feet that includes] office, dispensary, [locker room,] classroom and laboratory space; (2) adequate equipment and instructional materials required by the department; and (3) a copy of the curriculum approved by the department for each course offered. (e) A beauty culture schools offering instruction for persons seeking a license or certificate must comply with all health and safety standards established by this chapter Inactive Status. (a) To change a license to inactive status, an applicant must submit a completed application on a department-approved form.[:] [(1) submit a completed application on a department-approved form; and] [(2) pay the fee required under 83.80]. (b) - (d) (No change.) License Requirements--Continuing Education. (a) - (b) (No change.) (c) Continuing education hours required under 83.25(b)(2) must include information on human trafficking as required by Texas Occupations Code Chapter 1602, (c) and at a minimum must include information on: and (1) activities commonly associated with human trafficking; (2) recognition of potential victims of human trafficking; (3) methods for assisting victims of human trafficking, including how to report human trafficking. (d) [(c)] To renew an instructor license, or an esthetician instructor, manicure instructor, esthetician/manicure instructor or eyelash extension instructor specialty license, a licensee must complete a total of 4 hours of continuing education through department-approved courses. The continuing education hours must include the following [in the following manner]: (1) 1 hour in Sanitation required under the Act and this chapter; and (2) 3 hours in methods of teaching in accordance with [; or] (e) Continuing education hours required under 83.25(c)(2) must include information on human trafficking as required by Texas 42 TexReg 5322 October 6, 2017 Texas Register

41 Occupations Code Chapter 1602, (c) and at a minimum must include information on: and (1) activities commonly associated with human trafficking; (2) recognition of potential victims of human trafficking; (3) methods for assisting victims of human trafficking, including how to report human trafficking. (f) [(d)] For a timely or a late renewal, a licensee must complete the required continuing education hours within the two-year [two year] period immediately preceding the renewal date. (g) [(e)] A licensee may receive continuing education hours in accordance with the following: (1) A licensee may not receive continuing education hours for attending the same course more than once. (2) A licensee will receive continuing education hours for only those courses that are registered with the department, under procedures prescribed by the department. (h) [(f)] A licensee shall retain a copy of the certificate of completion for a course for two years after the date of completion. In conducting any inspection or investigation of the licensee, the department may examine the licensee's records to determine compliance with this subsection. (i) [(g)] To be approved under Chapter 59 of this title, a provider's course must be dedicated to instruction in one or more of the following topics: (1) Sanitation required under the Act and this chapter; (2) the Act and this chapter, addressing topics other than Sanitation; (3) the curriculum subjects listed in (j) [(h)] A registered course may be offered until the expiration of the course registration or until the provider ceases to hold an active provider registration, whichever occurs first. (k) [(i)] A provider shall pay to the department a continuing education record fee of $5 for each licensee who completes a course for continuing education credit. A provider's failure to pay the record fee for courses completed may result in disciplinary action against the provider, up to and including revocation of the provider's registration under Chapter 59 of this title. (l) [(j)] Notwithstanding subsections (b) and (c) a licensee may satisfy the continuing education requirement for renewal by completing one hour of Sanitation in department-approved courses, if the licensee: (1) is at least 65 years of age; and (2) has held a cosmetology license for at least 15 years Establishment Relocation, Change of Ownership, Owner Death or Incompetency. (a) - (b) (No change.) (c) If an establishment changes ownership, the new owner must apply for a new establishment license within 30 days after the change of ownership. Additionally, a beauty culture school must be inspected but may continue to operate pending the department's inspection. A change of ownership includes the following: (1) For a sole proprietorship, the licensee no longer owns [and/or operates] the establishment. (2) For a partnership or limited partnership, the partnership is dissolved. (3) For a corporation or limited liability company, if [the corporation is] sold to another person or entity. A change of ownership does not include corporate officer or stockholder restructuring. (4) Legal incompetence or death Licenses--License Terms. (a) The following licenses have a term of two (2) years: (1) - (2) (No change.) (3) specialty certificate--hair weaving, wig[, shampoo/conditioning]; (4) - (11) (No change.) (b) - (c) (No change.) Private Beauty Culture School Tuition Protection Account. (a) - (e) (No change.) (f) In the event a student from a closed school cannot be placed or does not accept a place in another school, a refund, calculated under the closed school's refund policy, may be paid from the Private Beauty Culture School Tuition Protection Account and the total payment of a claim may not exceed $10,000 [$35,000]. The total amount of claims paid against a single closed school may not exceed $100,000. (g) - (k) (No change.) Inspections--General. (a) Cosmetology establishments shall be inspected periodically[, according to a risk-based schedule,] or as a result of a complaint. These inspections will be performed to determine compliance with the requirements of the Act and this chapter, particularly those requirements relating to public safety, licensing, and sanitation. In addition, the department will make information available to cosmetology establishment owners and managers on best practices for risk-reduction techniques. (b) - (d) (No change.) Initial Inspections--Inspection of Beauty Culture Schools Before Operation. (a) - (e) (No change.) (f) A beauty culture school that does not meet the minimum requirements on initial inspection may [must] be reinspected. The beauty culture school owner must submit the request for reinspection along with the fee required by 83.80, before the department will perform the reinspection Periodic Inspections. (a) - (d) (No change.) (e) Based on the results of the periodic inspection, a cosmetology establishment found out of compliance may be re-inspected. [moved to a risk-based schedule of inspections. The department will notify the owner of a cosmetology establishment, in writing, if the establishment becomes subject to the risk-based inspection schedule and the scheduled frequency of inspection.] Corrective Modifications Following Inspection. (a) When corrective modifications to achieve compliance are required: (1) the department shall provide the owner a list of required corrective modification(s); PROPOSED RULES October 6, TexReg 5323

42 (2) within 10 days after receiving the list of required corrective modifications, the owner shall complete all corrective modifications and provide [written] verification, in a manner prescribed by the department, of the corrective modifications, within thirty (30) days of completion [to the department]; and (3) (No change.) (b) (No change.) Responsibilities of Individuals. (a) - (d) (No change.) (e) All current licenses [Individual licenses and booth rental (independent contractor) licenses] may be posted at the licensee's work station in the public view or be made available in a notebook at the salon reception desk. (f) (No change.) (g) Licensees shall notify the department in writing of any name change within thirty (30) [30] days of the change. (h) Licensees must notify the department within [not later than] thirty (30) days following any change of address. The department may send all notices on other information required by applicable laws and rules to any licensee's last known mailing address on file with the department. (i) - (j) (No change.) Responsibilities of Beauty Salons, Mini-Salons, Specialty Salons, Dual Shops, Mini-Dual Shops and Booth Rentals. (a) - (f) (No change.) [(g) A person holding a beauty, specialty or mini-salon license or a dual or mini-dual shop permit, may not employ a person who is not otherwise licensed by the department to shampoo or condition a person's hair, unless the person holds a student permit.] (g) [(h)] Each salon shall comply with the following requirements: (1) a sink with hot and cold running water; (2) an identifiable sign with the salon's name; (3) a suitable receptacle for used towels/linen; (4) a [one] wet disinfectant soaking container, large enough to fully immerse tools and implements; (5) a clean, dry, debris-free storage area; (6) a minimum of one covered trash container; and (7) if providing manicure or pedicure nail services, an autoclave, dry heat sterilizer or ultraviolet sanitizer. (h) [(i)] In addition to the requirements of subsection (g) [(h)]: (1) beauty salons and mini-salons shall provide the following equipm ent for each licensee present and providing services: (A) one working station; (B) one styling chair; and (C) a sufficient amount of shampoo bowls. (2) manicure salons shall provide the following equipment for each licensee present and providing services: (A) one manicure table with light; (B) one manicure stool; and one professional client chair for each manicure station. (C) (3) esthetician salons shall provide the following equipment for each licensee present and providing services: (A) (B) one facial bed or chair; and one mirror. (4) combination esthetician/manicure salons shall provide the following equipment: (A) (B) the requirements for manicure salon; and the requirements for esthetician salon. (5) eyelash extension salons shall provide the following equipment for each licensee present and providing services: (A) one facial bed or massage table that allows the consumer to lie completely flat; (B) (C) one lamp; and one stool or chair. (6) wig salons shall provide the following equipment for each licensee present and providing services: (A) one mannequin table, station, or styling bar to accommodate a minimum of 10 hairpieces; (B) (C) one wig dryer; and two canvas wig blocks. (7) hair weaving salons shall provide the following equipment for each licensee present and providing services: (A) one work station; (B) one styling chair; and (C) a sufficient amount of shampoo bowls for licensees providing hair weaving services. (8) Dual shops shall: (A) comply with all requirements of the Act and this chapter applicable to beauty salons; (B) comply with all requirements of Texas Occupations Code, Chapter 1601, and Chapter 82 of this title applicable to barbershops; (C) if the shop does not currently have employed or have a contract with at least one licensed barber or one licensed cosmetologist, the owner must immediately display a prominent sign at the entrance and exit of the shop indicating that no barber or no cosmetologist is available; and (D) if the shop has neither employed nor contracted with at least one licensed barber or cosmetologist for a period of 45 days or more the owner shall: (i) not place any new advertisement or display any sign or symbol indicating that the shop offers barbering or cosmetology services; and (ii) remove or obscure any existing sign or symbol indicating that the shop offers barbering or cosmetology services. (9) Mini-dual shops shall: (A) comply with all requirements of the Act and this chapter applicable to beauty salons; and 42 TexReg 5324 October 6, 2017 Texas Register

43 (B) comply with all requirements of Texas Occupations Code, Chapter 1601, and 16 TAC Chapter 82 applicable to barbershops. (i) [(j)] All booth rental licensees acting as independent contractors must have the following items: (1) a [one] wet disinfectant soaking container, large enough to fully immerse tools and implements; (2) a clean, dry, debris-free storage area; (3) a suitable receptacle for used towels/linen; and (4) a current law and rules book. (j) [(k)] In addition to the requirements in subsection (i) [(j)], booth rental licensees acting as independent contractors must have the following items. (1) If practicing in a beauty salon, one work station and one styling chair. (2) If practicing in an esthetician salon, one facial bed or chair and one mirror, wall hung or hand held. (3) If practicing in a manicure salon, one manicure table with a light, one manicure stool, and one chair, professional in appearance. (4) If practicing in an eyelash extension salon, one facial bed or massage table that allows the consumer to lie completely flat, one stool or chair and one lamp. (k) [(l)] Booth rental licensees acting as independent contractors must comply with all state and federal laws relating to independent contractors. (l) [(m)] Cosmetology establishments shall display in the establishment, in a conspicuous place clearly visible to the public, a copy of the establishment's most recent inspection report issued by the department. (m) All licensed facilities must display in a conspicuous place clearly visible to the public a sign, acceptable to the department, regarding human trafficking information as required by Texas Occupations Code, Chapter 1602, Section Responsibilities of Beauty Culture Schools. (a) - (b) (No change.) (c) Notify the department of any [Any] alterations of a cosmetology establishment's floor plan. [must be done in accordance with this chapter and the Act.] (d) The approved curricula shall be posted in a conspicuous place in the school. A current syllabus and lesson plan for each course shall be maintained by the school and be available for inspection. (e) - (n) (No change.) (o) Schools changing from clock hours to credit hours or from credit hours to clock hours must apply with the department for approval, on a department approved form, prior to making any changes. [shall submit to the department their curriculum for approval before making the change.] (p) Successful completion of 1 credit hour is equal to 37.5 clock hours. This equivalency will be used for conversion between clock hours to credit hours or credit hours to clock hours and the department must periodically assess this equivalency conversion to ensure it is an acceptable industry standard. (q) [(p)] Except for a documented leave of absence, schools shall electronically submit a student's withdrawal or termination to the department within 10 calendar days after the withdrawal or termination. Except for a documented leave of absence, a school shall terminate a student who does not attend a cosmetology curriculum for 30 days. (r) [(q)] Public schools shall electronically submit a student's accrual of 500 hours in math, lab science, and English. (s) [(r)] All areas of a school or campus are acceptable as instructional areas for a public cosmetology school, provided that the instructor is teaching cosmetology curricula required under (t) [(s)] A private cosmetology school or post-secondary school may provide cosmetology instruction to public high school students by contracting with the school district and complying with Texas Education Agency law and rules. A public high school student receiving instruction under such contract is considered to be a public high school student enrolled in a public school cosmetology program for purposes of the Act and department rules. (u) [(t)] Schools may establish school rules of operation and conduct, including rules relating to absences and clothing, that do not conflict with this chapter. (v) [(u)] Schools must ensure that guest presenters possess the necessary knowledge and teaching ability to present a curriculum topic and that a licensed instructor is present during the guest presenter's classroom teaching. (w) [(v)] Beauty culture schools must have a classroom separated from the laboratory area by walls extending to the ceiling and equipped with the following equipment to properly instruct [a minimum of ten] students enrolled at the school: (1) - (6) (No change.) (7) [2] covered trash cans in lab area; and (8) [one large] wet disinfectant soaking container, large enough to fully immerse tools and implements. (9) If offering the operator curriculum the following equipment must be available in adequate number for student use: (A) shampoo bowl and shampoo chair; (B) heat processor, [or] hand-held hair dryer, [and] heat cap, or therapeutic light; (C) - (L) (No change.) (M) wet disinfectant soaking containers, large enough to fully immerse tools and implements. (10) If offering the esthetician curriculum the following equipment must be available in adequate number for student use: (A) - (L) (No change.) (M) wet disinfectant soaking containers, large enough to fully immerse tools and implements. (11) If offering the manicure curriculum the following equipment must be available in adequate number for student use: (A) - (I) (No change.) (J) wet disinfectant soaking containers, large enough to fully immerse tools and implements. (12) - (13) (No change.) (x) [(w)] Cosmetology schools [establishments] shall display in the school [establishment], in a conspicuous place clearly visible to the public:[,] PROPOSED RULES October 6, TexReg 5325

44 (1) a copy of the school's [establishment's] most recent inspection report issued by the department; and (2) a sign, acceptable to the department, regarding human trafficking information as required by Texas Occupations Code, Chapter 1602, Responsibilities of Students. (a) - (b) (No change.) [(c) A person holding an active student permit may shampoo and condition a person's hair in a facility licensed under Texas Occupations Code, Chapters 1602 and 1603.] Responsibilities of Mobile Shops. (a) - (c) (No change.) (d) A mobile shop shall either: (1) (No change.) (2) submit to the department, in a manner specified by the department, a weekly itinerary showing the dates, exact locations, and times of service to be provided. The license holder shall submit the itinerary not less than 7 calendar days prior to the beginning of service described in the itinerary and shall submit to the department any changes in the itinerary not less than 24 hours prior to the change. A mobile shop shall follow the itinerary in providing service and notify the department of any changes. (e) - (l) (No change.) Fees. (a) (No change.) (b) Renewal fees. (1) - (2) (No change.) (3) Specialty Certificate--Hair Weaving, Wig[, Shampoo/Conditioning]--$50 charge.] (4) - (12) (No change.) (c) (No change.) (d) Inactive License Status [(1) Change from active status to inactive status--no (1) [(2)] Renewal of license on inactive status--renewal fees as stated in 83.80(b). (2) [(3)] Change from inactive status to active status--$25. (e) - (f) (No change.) (g) School (public and private) Inspection Fees (for each occurrence)--$200 [(1) School (public and private) --$200] [(2) Risk-based Inspection of establishments--$150] (h) - (l) (No change.) Health and Safety Standards--General Requirements. (a) All licensees shall clean their hands with soap and water or use a hand sanitizer prior to performing any services and as necessary during the service to ensure a client health and safety. All cosmetology establishments and licensees shall utilize clean and disinfected equipment, tools, implements, and supplies in accordance with this chapter, and shall employ good hygiene habits while providing cosmetology services. (b) - (n) (No change.) Health and Safety Standards--Temporary Hair Removal Services. (a) - (d) (No change.) [(e) Thread shall be stored in a sealed bag or covered container until ready to use and shall be kept in a clean, dry, debris-free storage area.] (e) [(f)] All multi-use items shall be properly cleaned, disinfected and sterilized or sanitized prior to each service, in accordance with this chapter. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The repeal is proposed under Texas Occupations Code, Chapters 51, 1602 and 1603, which authorize the Commission, the Department's governing body, to adopt rules as necessary to implement these chapters and any other law establishing a program regulated by the Department. The statutory provisions affected by the proposal are those set forth in Texas Occupations Code, Chapters 51, 1602 and No other statutes, articles, or codes are affected by the proposal Risk-Based Inspections. 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 September 22, TRD Brian E. Francis Executive Director Texas Department of Licensing and Regulation Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 8. TEXAS RACING COMMISSION CHAPTER 309. RACETRACK LICENSES AND OPERATIONS SUBCHAPTER A. RACETRACK LICENSES DIVISION 1. GENERAL PROVISIONS 42 TexReg 5326 October 6, 2017 Texas Register

45 16 TAC The Texas Racing Commission proposes an amendment to 16 TAC 309.8, Racetrack License Fees. The section relates to the purpose and amounts of annual fees charged to the racetracks. The amendment increases the amount of annual fees charged to Class 1 horse racetracks and decreases the amount of fees charged to each of the other classes of racetracks. The amendment adjusts the schedule of payments so that all racetracks pay the annual fees in monthly installments rather than calling for non-operating tracks to pay on a quarterly basis. The amendment decreases the base number of race dates that may be conducted for the annual fee and increases the charge for each additional race date beyond the base to $6,313. Finally, the amendment removes the provision permitting the executive director to recommend a supplemental fee when the total revenue from annual fees is insufficient to pay the Commission's costs. Chuck Trout, Executive Director, has determined that for the first five-year period the rule is in effect there will be positive fiscal implications for local and state government as a result of enforcing the amended rule. Five of the ten racetrack licensees are currently refusing to pay their annual fees and are thereby placing the Texas Racing Commission at risk of becoming insolvent. Without the racetracks' payment of annual fees, the Commission will be unable to operate and there will be no legal racing with pari-mutuel wagering. However, the proposed fee schedule was proposed by nine of the ten racetracks and no racetrack has refused to comply with the proposed amendment. As a result, adoption of the rule will allow the Commission to operate and generate revenue for the state. Simulcasting in Texas generates approximately $2.9 million in general revenue for the State of Texas, and without the Commission's continued operations, that revenue will be lost. In addition, racetracks in Texas pay a variety of local taxes, including sales taxes, that will be lost without the Commission's continued operation. Mr. Trout has determined that for each year of the first five years that the amended rule is in effect the anticipated public benefit will be not only the generation of revenue for state and local government as described above, but also the change will stabilize the agency's funding so that the Commission may continue regulating racing. Racing carries inherent risks to its participants, and the Commission mitigates those risks by, among other activities, conducting pre-race inspections of the race animals, detecting and preventing the use of prohibited drugs in race animals, and inspecting the facilities to ensure that they are safe for both the participants and the patrons. For each year of the first five years that the amended rule is in effect the government growth impact is as follows: the amendment does not create or eliminate a government program; the amendment does not create any new employee positions or eliminate any existing employee positions; implementation of the rule does not require an increase or decrease in future legislative appropriations to the agency; implementation of the rule will increase the fees paid to the agency by the Class 1 racetracks and decrease the fees paid to the agency by the Class 2, Class 3, Class 4, and greyhound racetracks; the amendment does not create any new regulations; the amendment does not expand, limit, or repeal any existing regulations; the amendment does not increase or decrease the number of individuals subject to the rule's applicability; and the proposed rule positively affects this state's economy by enabling all of the economic activity associated with pari-mutuel racing in Texas to continue. The amendment will have no adverse economic effect on small or micro-businesses, and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required. In fact, failure to adopt the amendment may have an adverse economic effect on these businesses since entities that rely on the continued existence of racing in Texas, such as racetrack tack rooms and backside veterinarians, will not be able to continue if pari-mutuel racing ends. There are no negative impacts upon employment conditions in this state as a result of the proposed amendment. As described above, failure to adopt the amendment may have negative effects on employment conditions if racing ends and the businesses that rely on that racing also close as a result. The amendment will have a positive effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry by providing the revenue the agency requires to continue operations. If the agency is forced to close due to insolvency, there will no longer be an incentive to engage in the agricultural, breeding and training efforts that are directly related to Texas racing. All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Jean Cook, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas , telephone (512) , or fax (512) The amendment is proposed under Texas Revised Civil Statutes Annotated, Article 179e, 5.01, which requires the Commission to set fees in amounts reasonable and necessary to cover the costs of regulating, overseeing, and licensing live and simulcast racing at racetracks, and under 6.18, authorizes the Commission to prescribe a reasonable annual fee to be paid by each racetrack licensee to pay the costs of administering and enforcing the Act. The amendment implements Texas Revised Civil Statutes Annotated, Article 179e Racetrack License Fees (a) (No change.) (b) Annual License Fee for State Fiscal Years Beginning September 1, 2017, and Thereafter. [(1)] A licensed racing association shall pay an annual license fee. The annual license fee for each license type is as follows: and [$360,000]. (1) [(A)] for a Class 1 racetrack, $700,000 [$500,000]; (2) [(B)] for a Class 2 racetrack, $125,000 [$230,000]; (3) [(C)] for a Class 3 or 4 racetrack, $35,000 [$70,000]; (4) [(D)] for a Greyhound racetrack, $200,000 (c) Fee Payments for the State Fiscal Year Beginning September 1, Beginning on December 1, 2017, each association shall pay its annual license fee by remitting to the Commission 1/9th of the fee remaining due as of December 1, 2017, on the first business day of each month of state fiscal year (d) Fee Payments for State Fiscal Years Beginning September 1, 2018, and thereafter. PROPOSED RULES October 6, TexReg 5327

46 [(2)] Each [An] association [that is conducting live racing or simulcasting] shall pay its annual license fee by remitting to the Commission 1/12th of the fee on the first business day of each month. [(3) An association that is not conducting live racing or simulcasting shall pay its annual license fee in four equal installments on September 1, December 1, March 1, and June 1 of each fiscal year.] (e) [(c)] Adjustment of Fees. (1) Annual fees are calculated using a projected base of 68 [143] days of live horse racing and 36 [270] performances of live greyhound racing per calendar year. To cover the additional regulatory cost in the event additional days or performances are requested by the associations the executive secretary may: (A) recalculate a horse racetrack's annual fee by adding $6,313 [$3,750] for each live day added beyond the base; (B) recalculate a greyhound racetrack's annual fee by adding $750 for each live performance added beyond the base; and (C) review the original or amended race date request submitted by each association to establish race date baselines for specific associations if needed. [(2) If at any point the executive secretary determines the total revenue from the annual fees is insufficient to pay the Commission's costs during a fiscal year, the executive secretary shall recommend to the Commission a supplemental fee, in addition to the license fee, that each association would be required to pay to generate the necessary revenue to pay the Commission's costs.] (2) [(3)] If the executive secretary determines that the total revenue from the annual fees exceeds the amount needed to pay those costs, the executive secretary may order a moratorium on all or part of the annual license fees remitted monthly by any or all of the associations. Before entering a moratorium order, the executive secretary shall develop a formula for providing the moratorium in an equitable manner among the associations. In developing the formula, the executive secretary shall consider the amount of excess revenue received by the Commission, the source of the revenue, the Commission's costs associated with regulating each association, the Commission's projected receipts for the next fiscal year, and the Commission's projected expenses during the next fiscal year. 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 September 25, TRD Mark Fenner General Counsel Texas Racing Commission Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 311. OTHER LICENSES SUBCHAPTER A. LICENSING PROVISIONS DIVISION 1. OCCUPATIONAL LICENSES 16 TAC The Texas Racing Commission proposes an amendment to 16 TAC 311.5, License Categories and Fees. The section relates to fees paid to obtain an occupational license. The amendment increases the license fee paid for each occupational license by 20 percent. Chuck Trout, Executive Director, has determined that for the first five-year period the rule is in effect that there will be positive fiscal implications for state government as a result of enforcing the new rule. The increase in fees will generate additional revenue for the agency that is necessary for it to remain solvent and continue regulating pari-mutuel racing in Texas. There will be no fiscal implications for local government as a result of enforcing the new rule since the agency projects that the same number of licenses will be issued during each year, with the result that the same number of licensees will visit and generate local taxes by spending funds on local services and products. Mr. Trout has determined that for each year of the first five years that the amended rule is in effect the anticipated public benefit will be to stabilize the agency's funding so that the Commission may continue regulating racing. Racing carries inherent risks to its participants, and the Commission mitigates those risks by, among other activities, conducting pre-race inspections of the race animals, detecting and preventing the use of prohibited drugs in race animals, and inspecting the facilities to ensure that they are safe for both the participants and the patrons. For each year of the first five years that the amended rule is in effect the government growth impact is as follows: the amendment does not create or eliminate a government program; the amendment does not create any new employee positions or eliminate any existing employee positions; implementation of the rule does not require an increase or decrease in future legislative appropriations to the agency; implementation of the rule will require a 20 percent increase in fees paid to the agency by all occupational licensees; the amendment does not create any new regulations; the amendment does not expand, limit, or repeal any existing regulations; the amendment does not increase or decrease the number of individuals subject to the rule's applicability; and the proposed rule positively affects this state's economy by enabling all of the economic activity associated with pari-mutuel racing in Texas to continue. The amendment will have no adverse economic effect on small or micro-businesses and therefore preparation of an economic impact statement and a regulatory flexibility analysis is not required. Although an increase of 20 percent on occupational license fees will cost some business people an additional $20 per year, the increase is de minimis in light of their overall income. Further, the increase will cause less hardship than would be caused by the agency's insolvency and the subsequent cessation of all pari-mutuel racing in Texas. Nevertheless, the Commission considered and rejected a number of alternatives to raising fees on licensees, including options to assess fees only on racetracks, to reduce costs by reducing race dates, to assess fees in varying levels on both racetracks and on occupational licensees, and to make additional cuts to administrative expenses. The Commission has already cut expenses by over $372,000 in fiscal years and projects additional cuts of $261,000 in fiscal year These savings were achieved by eliminating some positions, not filling or combining positions when some employees left, reducing travel, reducing equipment and information technology expenses, and reducing hours. However, these reductions were insufficient to address the revenue shortfall caused by the loss of three racetrack licenses 42 TexReg 5328 October 6, 2017 Texas Register

47 in 2016 and the refusal of five additional racetracks to pay their fees in After consideration of the various proposals developed by staff and the submission of an industry proposal by the racetracks, the Commission has elected to publish the industry proposal for public comment and consideration. There are no negative impacts upon employment conditions in this state as a result of the proposed amendment. Failure to adopt the amendment may have negative effects on employment conditions if racing ends and the businesses that rely on that racing also close as a result. The amendment will have a net positive effect on the state's agricultural, horse breeding, horse training, greyhound breeding, and greyhound training industry by providing the revenue the agency requires to continue operations. If the agency is forced to close due to insolvency, there will no longer be an incentive to engage in the agricultural, breeding or training efforts that support Texas racing. All comments or questions regarding the proposed amendment may be submitted in writing within 30 days following publication of this notice in the Texas Register to Jean Cook, Assistant to the Executive Director for the Texas Racing Commission, at P.O. Box 12080, Austin, Texas , telephone (512) , or fax (512) The amendment is proposed under Texas Revised Civil Statutes Annotated, Article 179e, 5.01, which requires the Commission to set fees in amounts reasonable and necessary to cover the costs of regulating, overseeing, and licensing live and simulcast racing at racetracks, and under 7.05, which requires the Commission to adopt a fee schedule for occupational licenses. The amendment implements Texas Revised Civil Statutes Annotated, Article 179e License Categories and Fees. (a) - (c) (No change.) (d) The fee for an occupational license is as follows: Figure: 16 TAC 311.5(d) 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 September 25, TRD Mark Fenner General Counsel Texas Racing Commission Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TITLE 19. EDUCATION PART 2. TEXAS EDUCATION AGENCY CHAPTER 112. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR SCIENCE SUBCHAPTER D. OTHER SCIENCE COURSES 19 TAC , The State Board of Education (SBOE) proposes the repeal of and , concerning Texas Essential Knowledge and Skills (TEKS) for science. The proposed repeal would remove rules that are duplicative of other SBOE rules and are no longer necessary. Principles of Technology, a career and technical education (CTE) course, has been identified by the SBOE as a course that may satisfy science graduation requirements. The TEKS for Principles of Technology are currently included in both 19 TAC Chapter 130, Texas Essential Knowledge and Skills for Career and Technical Education, and 19 TAC Chapter 112, Texas Essential Knowledge and Skills for Science. In 2015, the SBOE approved new CTE TEKS, which were implemented beginning in the school year. New 19 TAC , Principles of Technology (One Credit), Adopted 2015, includes revisions to the original TEKS in , and the two courses are no longer aligned. Rules in 19 TAC Chapter 74, Curriculum Requirements, Subchapter B, Graduation Requirements, identify the courses that may satisfy specific graduation requirements. These rules currently identify 12 CTE courses that may satisfy science graduation requirements. As a result of recent changes to the graduation requirements, , Other Courses for Which Students May Receive Science Credit, is no longer aligned to the graduation requirements. The proposed repeal would eliminate and to remove rules that are outdated and duplicative of other SBOE rules. The SBOE approved the repeal for first reading and filing authorization at its September 15, 2017 meeting. The proposed repeal would have no procedural and reporting requirements. The proposed repeal would have no locally maintained paperwork requirements. FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed repeal is in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed repeal. There is no effect on local economy for the first five years that the proposed repeal is in effect; therefore, no local employment impact statement is required under Texas Government Code, The proposed repeal does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed repeal is in effect, the public benefit anticipated as a result of enforcing the repeal will be eliminating language that is outdated and avoiding confusion for administrators and teachers. There is no anticipated economic cost to persons who are required to comply with the proposed repeal. 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 analysis, specified in Texas Government Code, , is required. PROPOSED RULES October 6, TexReg 5329

48 REQUEST FOR PUBLIC COMMENT. 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 A request for a public hearing on the proposed repeal submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register. STATUTORY AUTHORITY. The repeal is proposed under the Texas Education Code (TEC), 7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, , which identifies the subjects of the required curriculum and requires the SBOE by rule to identify the essential knowledge and skills of each subject in the required curriculum that all students should be able to demonstrate and that will be used in evaluating instructional materials and addressed on the state assessment instruments; and TEC, , as amended by House Bill 3593 and Senate Bill 826, 85th Texas Legislature, Regular Session, 2017, which requires the SBOE by rule to determine the curriculum requirements for the foundation high school graduation program that are consistent with the required curriculum under the TEC, CROSS REFERENCE TO STATUTE. The repeal implements the Texas Education Code, 7.102; ; and , as amended by House Bill 3593 and Senate Bill 826, 85th Texas Legislature, Regular Session, Principles of Technology (One Physics Credit) Other Courses for Which Students May Receive Science Credit. 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 September 25, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 130. TEXAS ESSENTIAL KNOWLEDGE AND SKILLS FOR CAREER AND TECHNICAL EDUCATION SUBCHAPTER C. ARTS, AUDIO/VIDEO TECHNOLOGY, AND COMMUNICATIONS 19 TAC The State Board of Education (SBOE) proposes an amendment to , concerning Texas Essential Knowledge and Skills (TEKS) for extended practicum in fashion design. The proposed amendment would change the amount of credit offered for the course to be consistent with other extended practicum courses. In 2015, the SBOE adopted new career and technical education (CTE) TEKS, which were implemented beginning with the school year. The new TEKS eliminated the range of credit for CTE courses and implemented a consistent amount of credit for each course. Additionally, the new TEKS provide a number of one-credit extended practicum courses. During a review of the new CTE TEKS, staff discovered an error in the amount of credit identified for the Extended Practicum in Fashion Design course. As adopted, the course includes a range of two to three credits, which is not consistent with all other extended practicum courses. The SBOE approved the amendment for first reading and filing authorization at its September 15, 2017 meeting. The proposed amendment would have no procedural and reporting requirements. The proposed amendment would have no locally maintained paperwork requirements. FISCAL NOTE. Monica Martinez, associate commissioner for standards and support services, has determined that for the first five-year period the proposed amendment is in effect there will be no additional costs to state and local government as a result of enforcing or administering the proposed amendment. There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, The proposed amendment does not impose a cost on regulated persons and, therefore, is not subject to Texas Government Code, PUBLIC BENEFIT/COST NOTE. Ms. Martinez has determined that for each year of the first five years the proposed amendment is in effect, the public benefit anticipated as a result of enforcing the amendment will be consistency in the amount of credit awarded for all extended practicum courses. There is no anticipated economic cost to persons who are required to comply with the proposed amendment. 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 analysis, specified in Texas Government Code, , is required. REQUEST FOR PUBLIC COMMENT. 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 rules@tea.texas.gov. A request for a public hearing on the proposed amendment submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register. STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code (TEC), 7.102(c)(4), which requires the State Board of Education (SBOE) to establish curriculum and graduation requirements; TEC, , which identifies the subjects of the required curriculum and requires the SBOE by rule to identify the essential knowledge and skills of each subject in the required curriculum that all students should be able to demonstrate and that will be used in evaluating instructional materials and addressed on the state assessment instruments; and TEC, , as amended by House Bill 3593 and Senate 42 TexReg 5330 October 6, 2017 Texas Register

49 Bill 826, 85th Texas Legislature, Regular Session, 2017, which requires the SBOE by rule to determine the curriculum requirements for the foundation high school graduation program that are consistent with the required curriculum under the TEC, CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, 7.102; ; and , as amended by House Bill 3593 and Senate Bill 826, 85th Texas Legislature, Regular Session, Extended Practicum in Fashion Design (One Credit) [(Two to Three Credits)], Adopted (a) General requirements. This course is for students in Grades 11 and 12. The practicum course is a paid or unpaid capstone experience for students participating in a coherent sequence of career and technical education courses in the Arts, Audio/Video Technology, and Communications Career Cluster. Prerequisite: Fashion Design II and Fashion Design II Lab. Corequisite: Practicum in Fashion Design. This course must be taken concurrently with Practicum in Fashion Design and may not be taken as a stand-alone course. Students shall be awarded one credit for successful completion of this course. A student may repeat this course once for credit provided that the student is experiencing different aspects of the industry and demonstrating proficiency in additional and more advanced knowledge and skills. (b) - (c) (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 September 25, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 157. HEARINGS AND APPEALS SUBCHAPTER D. INDEPENDENT HEARING EXAMINERS 19 TAC The State Board of Education (SBOE) proposes an amendment to , concerning certification criteria for independent hearing examiners. The proposed amendment would allow the commissioner of education to decline to recertify an independent hearing examiner even if a written complaint from an attorney has not been received, add a factor that the commissioner may consider in the decision whether to recertify, and specify that the commissioner can take action against an independent hearing examiner's certification for violating statutory requirements. Texas Education Code (TEC), (a), requires the SBOE to establish certification criteria for independent hearing examiners. Section specifies certification criteria such as license required, experience, continuing education, and annual recertification for independent hearing examiners. The examiners preside over due process hearings involving terminations, suspensions without pay, and nonrenewal of term employment contracts. The examiners also develop findings of fact and conclusions of law, which are referred to the school district board of trustees. Currently, specifies that the commissioner can decline to recertify an independent hearing examiner based on issues of the independent hearing examiner's quality of work only if a written complaint is received from an attorney. The proposed amendment would remove the requirement in subsection (k) that a written complaint from an attorney must be received and would specify that the commissioner, in the decision whether to recertify, may consider whether the examiner applies appropriate legal standards. Under the current rule, the commissioner is severely limited in the ability to remove independent hearing examiners due to poor-quality work. The proposed amendment would give the commissioner greater flexibility in removing low-performing independent hearing examiners, which should result in better hearings and recommendations and less need for appeals to the commissioner and the courts. The proposed amendment would also add a new subsection (l) stating that the commissioner can take action against an independent hearing examiner's certification for violating statutory requirements. This clarification of the commissioner's authority would better inform independent hearing examiners, teachers, and school districts of the statutory standards and the potential consequences for violating those standards. The SBOE approved the amendment for first reading and filing authorization at its September 15, 2017, meeting. The proposed amendment would have no procedural and reporting requirements. The proposed amendment would have no locally maintained paperwork requirements. FISCAL NOTE. Von Byer, general counsel, has determined that for the first five-year period the proposed amendment is in effect, there will be positive economic impact for state and local government and individuals as a result of enforcing or administering the proposed amendment. By allowing the commissioner not to certify poorly performing independent hearing examiners, there will be fewer appeals of independent hearing examiner recommendations to the commissioner and the state courts of Texas. State government, including the TEA and the Office of the Attorney General, will see a cost savings of approximately $20,000 per year for each of the first five fiscal years the proposed rule is in effect by having fewer cases to defend in the courts of Texas. Similarly, school districts will see a cost savings of approximately $20,000 per year for each of the first five fiscal years the proposed rule is in effect by having fewer appeals of their teacher contract decisions to defend before the commissioner and the state courts of Texas. Finally, it is likely that fewer teachers will appeal school district decisions to end their contracts if independent hearing examiners provide better recommendations. Therefore, it is estimated that teachers will see a cost savings of approximately $20,000 per year for each of the first five fiscal years the proposed rule is in effect. There will be no net economic effect on independent hearing examiners as a whole because for every independent hearing examiner who is not assigned a case because he or she is not certified, a certified independent hearing examiner will be assigned a case. There is no effect on local economy for the first five years that the proposed amendment is in effect; therefore, no local employment impact statement is required under Texas Government Code, The proposed amendment does not impose a PROPOSED RULES October 6, TexReg 5331

50 cost on regulated persons and, therefore, is not subject to Texas Government Code, PUBLIC BENEFIT/COST NOTE. Mr. Byer has determined that for each year of the first five years the proposed amendment is in effect, the public benefit anticipated as a result of enforcing the amendment will be a higher quality of work by independent hearing examiners. There is no anticipated economic cost to persons who are required to comply with the proposed amendment. 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 analysis, specified in Texas Government Code, , is required. REQUEST FOR PUBLIC COMMENT. 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 rules@tea.texas.gov. A request for a public hearing on the proposed amendment submitted under the Administrative Procedure Act must be received by the commissioner of education not more than 14 calendar days after notice of the proposal has been published in the Texas Register. STATUTORY AUTHORITY. The amendment is proposed under the Texas Education Code, , which requires the State Board of Education, in consultation with the State Office of Administrative Hearings, by rule to establish criteria for certifying independent hearing examiners who conduct hearings under the TEC, Chapter 21, Subchapter F. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education Code, Certification Criteria for Independent Hearing Examiners. (a) License required. An individual who is certified as an independent hearing examiner must be licensed to practice law in the State of Texas. (b) Representations prohibited. An independent hearing examiner, and the law firm with which the independent hearing examiner is associated, must not serve as an agent or representative of: (1) a school district; (2) a teacher in any dispute with a school district; or (3) an organization of school employees, school administrators, or school boards. (c) Moral character and criminal history. An independent hearing examiner must: (1) possess good moral character; and (2) as demonstrated by a criminal history report process required by the commissioner of education, not have been convicted, given probation (whether through deferred adjudication or otherwise), or fined for: (A) a felony; (B) a crime of moral turpitude; or (C) a crime that directly relates to the duties of an independent hearing examiner in a public school setting. (d) Status as a licensed attorney. An independent hearing examiner must: (1) currently be a member in good standing of the State Bar of Texas; (2) within the last five years, not have had the independent hearing examiner's bar license: (A) (B) (C) reprimanded, either privately or publicly; suspended, either probated or otherwise; or revoked; (3) have been licensed to practice law in the State of Texas or any other state for at least five years prior to application; and (4) have engaged in the actual practice of law on a full-time basis, as defined by the Texas Board of Legal Specialization, for at least five years. (e) Experience. During the three years immediately preceding certification, an independent hearing examiner must have devoted a minimum of 50% of the examiner's time practicing law in some combination of the following areas, with a total of at least one-tenth or 10% of the independent hearing examiner's practice involving substantial responsibility for taking part in a contested evidentiary proceeding convened pursuant to law in which the independent hearing examiner personally propounded and/or defended against questions put to a witness under oath while serving as an advocate, a hearing officer, or a presiding judicial officer: (1) civil litigation; (2) administrative law; (3) school law; or (4) labor law. (f) Continuing education. During each year of certification, an independent hearing examiner must receive credit for ten hours of continuing legal education, with three hours in the area of school law and seven hours in the area of civil trial advocacy and legal writing skills, which must include any combination of course work in evidence, civil procedure, and legal writing skills, during the period January 1 to December 31 of each year of certification. (g) Sworn application. In order to be certified as an independent hearing examiner, an applicant must submit a sworn application to the commissioner of education. The application shall contain the following acknowledgments, waivers, and releases. (1) The applicant agrees to authorize appropriate institutions to furnish relevant documents and information necessary in the investigation of the application, including information regarding grievances maintained by the State Bar of Texas. (2) If selected as an independent hearing examiner, the applicant has the continuing duty to disclose grievance matters under subsection (d)(2) of this section at any time during the certification period. Failure to report these matters constitutes grounds for rejecting an application or removal as an independent hearing examiner. (3) If selected as an independent hearing examiner, the applicant has the continuing duty to disclose criminal matters under subsection (d)(2) of this section at any time during the certification period. Failure to report these matters constitutes grounds for rejecting an application or removal as an independent hearing examiner. (h) Assurances as to position requirements. In the sworn application, the applicant must: (1) demonstrate that the applicant currently maintains an office or offices within the State of Texas; 42 TexReg 5332 October 6, 2017 Texas Register

51 (2) designate the office locations from which the applicant will accept appointments; (3) demonstrate that the applicant provides telephone messaging and facsimile services during regular business hours; (4) agree to attend meetings of independent hearing examiners in Austin, Texas, at the examiner's expense; and (5) agree to comply with all reporting and procedural requirements established by the commissioner. (i) Voluntary evaluations. The commissioner may solicit voluntary evaluations from parties to a case regarding their observations of the independent hearings process. (j) Insufficient examiners in a region. In the event that insufficient numbers of independent hearing examiners are certified for any geographic region of the state, the commissioner may assign an independent hearing examiner whose office is within reasonable proximity to the school district. (k) Annual recertification. (1) Certification expires on December 31 of each calendar year. All independent hearing examiners seeking recertification shall reapply on a date specified by the commissioner. Certification as a hearing examiner is effective on a yearly basis only and does not confer any expectation of recertification in subsequent years. (2) The [Upon written complaint by an attorney who has participated in a hearing and a response from the independent hearing examiner, the] commissioner, in his discretion, after providing notice and an opportunity to respond, may decline to recertify an independent hearing examiner, if the commissioner determines that the independent hearing examiner has failed to perform the duties of an independent hearing examiner in a competent manner. The commissioner may consider, but is not limited to, the following factors: (A) timeliness; (B) accuracy and appropriateness of procedural and evidentiary rulings; [or] (C) decorum or control; or[.] (D) application of appropriate legal standards. (3) The commissioner's decision in regard to recertification is final and not appealable. (l) Action against certification. The commissioner, after providing notice and an opportunity to respond, may take action against the certificate of an independent hearing examiner if it is determined that the independent hearing examiner, during the time the independent hearing examiner has been certified, has: (1) served as an agent or representative of a school district; (2) served as an agent or representative of a teacher in any dispute with a school district; (3) served as an agent or representative of an organization of school employees, school administrators, or school boards; or (4) failed to timely issue a recommendation. 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 September 25, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TITLE 22. EXAMINING BOARDS PART 1. TEXAS BOARD OF ARCHITECTURAL EXAMINERS CHAPTER 5. REGISTERED INTERIOR DESIGNERS The Texas Board of Architectural Examiners (Board) proposes the amendment of Texas Administrative Code Part 1, Title (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 proposes the repeal of Texas Administrative Code Part 1, Title (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). This proposed rulemaking action would implement Senate Bill 1932 (85th Regular Session, 2017), which amends 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 has eliminated this rulemaking authority, and instead applicants for registration will be required to satisfy the educational and professional experience requirements 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 proposes amendments to its applications and testing processes to assist the Board in implementing changes to the eligibility requirements. The proposed amendments to 5.5 revise definitions relevant to eligibility requirements and the applications and examinations processes. In the proposed rules, the term "candidate" is used in reference to person who may not have completed the examination or application process, and the definition in 5.5 has been amended to reflect this use. Additionally, due to a change in the name of the organization that administers the Board's registration examination, the Board PROPOSED RULES October 6, TexReg 5333

52 proposes amendments to corresponding definitions in 5.5. Previously, the Council for Interior Design Qualification (CIDQ) was known as the National Council for Interior Design Qualification (NCIDQ). Under both names, the registration examination was known as the "NCIDQ examination." Due to this name change, the Board proposes adoption of definitions for "Council for Interior Design Qualification" and "CIDQ," the amendment of the definition for "NCIDQ" to define the examination itself, and the repeal of the definition for "National Council for Interior Design Qualification." All references elsewhere in Chapter 5 to the "National Council for Interior Design Qualification" have been deleted and replaced, as necessary. Lastly, definitions for "CIDA," "Council for Interior Design Accreditation," "Direct Supervision," and "Table of Equivalents for Education and Experience in Interior Design" have been deleted from 5.5 because these terms are eliminated from Chapter 5 under the proposed amendments. The proposed amendments to 5.31 would implement the legislative directive contained in SB 1932 by deleting language setting forth the Board's education and experience eligibility requirements for registration as an RID. This language would be replaced with a requirement that 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 proposed amendments would include a grandfathering provision under revised 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. The proposed amendments to 5.32 are non-substantive. In subsection (a), the term "Interior Design" is capitalized to denote that this is a defined term in 5.5. Additionally, subsection (b)(1) is amended to correct an outdated reference to the "National Council for Interior Design Qualification," and to provide for consistency with corresponding provisions in 5.31 and proposed 5.51 regarding predecessors to the NCIDQ examination. The proposed amendments to 5.33 outline the process to be followed in filing an application for registration by examination. Under the amendments, an applicant would be 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. Under Tex. Occ. Code , an applicant for registration is required to demonstrate that he or she has satisfied the educational and professional experience requirements for the examination adopted by the Board (the NCIDQ). 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 proposed rule will ensure that this eligibility requirement has been met. The proposed amendments to 5.35 substitute 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 proposed amendments to 5.36 substitute 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 amendment would extend the rule to those 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. The proposed amendments to 5.51(a) state 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 proposed for non-substantive amendment to provide for consistency with corresponding provisions in 5.31 and proposed 5.51 regarding predecessors to the NCIDQ examination. Additionally, the Board proposes to repeal current 5.51(b), which authorizes an applicant to begin testing after completing six months of full time work experience. This conflicts 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) is proposed for repeal, and instead the Board proposes the adoption of 5.53(a), which would require an Applicant to schedule and pass all sections of the NCIDQ within the time period required by CIDQ. Current 5.51(c) is proposed for repeal as discussed below regarding amendments to Finally, the term "examinee" is substituted for "candidate" in proposed subsection (c), relating to the process to request the refund of examination fees. Under the application process, an individual may or may not have filed an application with the Board prior to taking the NCIDQ exami- 42 TexReg 5334 October 6, 2017 Texas Register

53 nation. Since this rule is intended to cover requests for refunds from either class of individual, the term "examinee" is appropriate. The amendments to 5.52 are intended to simplify the Board's rules relating to examination administration and scoring. As currently written, the rule includes a number of provisions relating to examination administration, addressing the timing of examination administrations and the information required to be given to examinees, and imposes requirements on examinees regarding the identification required of examinees in order to enter the examination and the tools to bring to the examination. Similarly, current 5.51(c) addresses the acceptable location at which the examination may be taken. However, as the independent administrator of the examination, CIDQ is responsible for developing and enforcing examination administration procedures and the Board's proposed amendment recognizes this role by stating that, unless otherwise noted in the Board's rules, the administration and examination of the NCIDQ is governed by the procedures adopted by CIDQ. The amendments to 5.53 amend the Board's rules relating to scheduling of examinations. Under current 5.53(a) an applicant is required to pass all sections of the examination within five years of passing the first section. If a candidate does not pass all sections within five years, credit for any examination passed more than five years prior is forfeited, and the section must be passed again. Comparatively, under CIDQ's current 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 proposes to repeal 5.53(a). Rather, the Board proposes the adoption of amended 5.53(a), which would state 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 proposes the adoption of proposed 5.53(b), which would allow those applicants to complete the test within the time period in effect at the time the application was filed. Finally, amended subsection (c) would preserve the opportunity for individuals to request an extension to the examination time period for reasons of child birth or adoption, the development of a serious medical condition, or active duty service in the military. Such requests would be subject to the approval of the Board and CIDQ. The Board proposes to repeal 5.54 relating to transfer of passing scores. The process described in 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 is inconsistent with practice and unnecessary. Therefore, repeal is appropriate. The amendments to Rule 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, and the Board would address such testing accommodations with CIDQ, as necessary. The Board proposes to repeal Subchapter J, 5.201, 5.202, and These rules identify the amount and type of educational and professional experience required to qualify for registration. The proposed repeal would implement amended Tex. Occ. Code , 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. FISCAL NOTE Lance Brenton, General Counsel, Texas Board of Architectural Examiners, has determined that for the first five-year period the amended rules are in effect, the amendments will have no significant adverse fiscal impact upon state government, local government, or the Texas Board of Architectural Examiners. GOVERNMENT GROWTH IMPACT STATEMENT During the first five years the proposed rules would be in effect, no government program would be created or eliminated. The proposed rules modify or eliminate existing regulations as opposed to create new ones. The legislature's adoption of SB 1932 has resulted in the limitation of existing regulations, in that the educational and professional experience requirements have been decreased, and this rule change implements the change in law. The adoption of the proposed rules would not result in the creation or elimination of employee positions. Implementation of the proposed rule is not expected to require an increase or decrease in legislative appropriations to the agency, and the proposed rule would not increase or decrease the Board's fees. However, if more individuals seek registration due to the relaxed eligibility requirements, then the Board would receive annual registration fees from an increased number of registrants. Similarly, if more individuals seek registration, then more individuals would be subject to regulation by the Board. However, registration with the Board is voluntary, and the proposed rules would not subject any person to increased regulation involuntarily. The proposed rules are not expected to have any adverse impact on the state's economy. PUBLIC BENEFIT/COST OF COMPLIANCE For the first five-year period the amended rules are in effect, the public benefit of the proposed rule changes will be the implementation of the policy required by the legislature's enactment of Senate Bill 1932 (85th Regular Session, 2017). Under this enactment, the educational and professional experience requirements to become a registered interior designer in Texas will be those requirements adopted by CIDQ to sit for the NCIDQ examination. Since a greater number of educational programs meet CIDQ's standards compared to the Board's current eligibility requirements, graduates of those programs may now be eligible for registration. If more individuals achieve registration, the public could benefit from a larger population of registered interior designers who have demonstrated competence through education, experience, and examination, and are subject to the Board's continuing education requirements and oversight. Furthermore, candidates for registration will benefit from a simplified process under which the requirements for registration and the requirements for examination qualification are the same. Lastly, the grandfathering provisions in proposed 5.31(c) and 5.53(b) will minimize disruption to those with pending applications before the Board at the time the rule takes effect. Compliance with the proposed amendments are not expected to result in increased economic costs compared to the existing PROPOSED RULES October 6, TexReg 5335

54 rules. The proposed rules will have no negative fiscal impact on small or micro-business or rural communities, and no Economic Impact Statement or Regulatory Flexibility Analysis is required. PUBLIC COMMENT Comments may be submitted to Lance Brenton, General Counsel, Texas Board of Architectural Examiners, P.O. Box 12337, Austin, Texas Comments must be received by November 7, SUBCHAPTER A. SCOPE; DEFINITIONS 22 TAC 5.5 STATUTORY AUTHORITY The amendment to 5.5 is proposed 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 proposed rules will provide additional clarity to the definitions. CROSS REFERENCE TO STATUTE The proposed amendments to these rules do not affect any other statutes Terms Defined Herein. The following words, terms, and acronyms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) - (9) (No change.) (10) Candidate--An individual that is seeking registration by examination but has not yet completed the examination or application process [Applicant approved by the Board to take the Interior Design registration examination]. (11) CEPH--Continuing Education Program Hour(s). (12) Chair--The member of the Board who serves as the Board's presiding officer. tion.] (13) CIDQ--The Council for Interior Design Qualification. [(13) CIDA--The Council for Interior Design Accredita- (14) Construction Documents--Drawings; specifications; and addenda, change orders, construction change directives, and other Supplemental Documents prepared for the purpose(s) of Regulatory Approval, permitting, or construction. (15) Consultant--An individual retained by a Registered Interior Designer who prepares or assists in the preparation of technical design documents issued by the Registered Interior Designer for use in connection with the Registered Interior Designer's Construction Documents. (16) Contested Case--A proceeding, including a licensing proceeding, in which the legal rights, duties, or privileges of a party are to be determined by a state agency after an opportunity for adjudicative hearings. (17) Continuing Education Program Hour (CEPH)--At least fifty (50) minutes of time spent in an activity meeting the Board's continuing education requirements. (18) Council for Interior Design Qualification (CIDQ)--An organization comprised of regulatory boards from the United States and Canada which administers the NCIDQ examination. [(18) Council for Interior Design Accreditation (CIDA)- -An agency that sets standards for postsecondary Interior Design education and evaluates college and university Interior Design programs.] (19) Delinquent--A registration status signifying that a Registered Interior Designer: (A) has failed to remit the applicable renewal fee to the Board; and (B) is no longer authorized to use the title "Registered Interior Designer" ["registered interior designer"] in Texas. [(20) Direct Supervision--The amount of oversight by an individual overseeing the work of another whereby the supervisor and the individual being supervised work in close proximity to one another and the supervisor has both control over and detailed professional knowledge of the work prepared under his or her supervision.] (20) [(21)] Emeritus Interior Designer (or Interior Designer Emeritus)--An honorary title that may be used by a Registered Interior Designer who has retired from the practice of Interior Design in Texas pursuant to of the Texas Occupations Code. (21) [(22)] Energy-Efficient Design--The design of a project and the specification of materials to minimize the consumption of energy in the use of the project. The term includes energy efficiency strategies by design as well as the incorporation of alternative energy systems. (22) [(23)] Feasibility Study--A report of a detailed investigation and analysis conducted to determine the advisability of a proposed Interior Design project from a technical Interior Design standpoint. (23) [(24)] Good Standing-- (A) a registration status signifying that a Registered Interior Designer is not delinquent in the payment of any fees owed to the Board; or (B) an application status signifying that an Applicant or Candidate is not delinquent in the payment of any fees owed to the Board, is not the subject of a pending TBAE enforcement proceeding, and has not been the subject of formal disciplinary action by an Interior Design registration board that would provide a ground for the denial of the application for Interior Design registration in Texas. (24) [(25)] Governmental Jurisdiction--A governmental authority such as a state, territory, or country beyond the boundaries of Texas. (25) [(26)] Inactive--A registration status signifying that a Registered Interior Designer may not practice Interior Design in the State of Texas. 42 TexReg 5336 October 6, 2017 Texas Register

55 (26) [(27)] Interior Design--The identification, research, or development of creative solutions to problems relating to the function or quality of the interior environment; the performance of services relating to interior spaces, including programming, design analysis, space planning of non-load-bearing interior construction, and application of aesthetic principles, by using specialized knowledge of interior construction, building codes, equipment, materials, or furnishings; or the preparation of Interior Design plans, specifications, or related documents about the design of non-load-bearing interior spaces. (27) [(28)] Interior Designers' Registration Law--Chapter 1053, Texas Occupations Code. (28) [(29)] Interior Design Intern--An individual participating in an internship to complete the experiential requirements for Interior Design registration by examination in Texas. (29) [(30)] Licensed--Registered. (30) [(31)] Member Board--An Interior Design registration board that is part of CIDQ [NCIDQ]. [(32) National Council for Interior Design Qualification (NCIDQ)--A nonprofit organization of state and provincial interior design regulatory agencies and national organizations whose membership is made up in total or in part of interior designers.] (31) [(33)] NCIDQ--The examination developed and administered by the [National] Council for Interior Design Qualification, which is the adopted examination for registration as a Texas Registered Interior Designer. (32) [(34)] Nonregistrant--An individual who is not a Registered Interior Designer. (33) [(35)] Principal--A Registered Interior Designer who is responsible, either alone or with other Registered Interior Designers, for an organization's practice of Interior Design. (34) [(36)] Registered Interior Designer--An individual who holds a valid Texas Interior Design registration granted by the Board. (35) [(37)] Registrant--Registered Interior Designer. (36) [(38)] Regulatory Approval--The approval of Construction Documents by a Governmental Entity after a review of the Interior Design content of the Construction Documents as a prerequisite to construction or occupation of a building of facility. (37) [(39)] Reinstatement--The procedure through which a Surrendered or Revoked [revoked] Texas Interior Design registration certificate is restored. (38) [(40)] Renewal--The procedure through which a Registered Interior Designer pays a periodic fee so that his or her registration certificate will continue to be effective. (39) [(41)] Responsible Charge--That degree of control over and detailed knowledge of the content of technical submissions during their preparation as is ordinarily exercised by Registered Interior Designers applying the applicable Interior Design standard of care. (40) [(42)] Revocation or Revoked--The termination of a Texas Interior Design registration certificate by the Board. (41) [(43)] Rules and Regulations of the Board--22 Texas Administrative Code 5.1 et seq. (42) [(44)] Rules of Procedure of SOAH--1 Texas Administrative Code et seq. (43) [(45)] Secretary-Treasurer--The member of the Board responsible for signing the official copy of the minutes from each Board meeting and maintaining the record of Board members' attendance at Board meetings. (44) [(46)] Signature--A personal signature of the individual whose name is signed or an authorized copy of such signature. (45) [(47)] SOAH--State Office of Administrative Hearings. (46) [(48)] Sole Practitioner--A Registered Interior Designer who is the only design professional to offer or render Interior Design [interior design] services on behalf of a business entity. (47) [(49)] State Office of Administrative Hearings (SOAH)--A governmental entity [Governmental Entity] created to serve as an independent forum for the conduct of adjudicative hearings involving the executive branch of Texas government. (48) [(50)] Supervision and Control--The amount of oversight by a Registered Interior Designer overseeing the work of another whereby: (A) the Registered Interior Designer and the individual performing the work can document frequent and detailed communication with one another and the Registered Interior Designer has both control over and detailed professional knowledge of the work; or (B) the Registered Interior Designer is in Responsible Charge of the work and the individual performing the work is employed by the Registered Interior Designer or by the Registered Interior Designer's employer. (49) [(51)] Supplemental Document--A document that modifies or adds to the technical Interior Design content of an existing Construction Document. (50) [(52)] Surrender--The act of relinquishing a Texas Interior Design registration certificate along with all privileges associated with the certificate. (51) [(53)] Sustainable Design--An integrative approach to the process of design which seeks to avoid depletion of energy, water, and raw material resources; prevent environmental degradation caused by facility and infrastructure development during their implementation and over their life cycle; and create environments that are livable and promote health, safety and well-being. Sustainability is the concept of meeting present needs without compromising the ability of future generations to meet their own needs. [(54) Table of Equivalents for Education and Experience in Interior Design--22 Texas Administrative Code et. seq. ( of this chapter).] (52) [(55)] TBAE--Texas Board of Architectural Examiners. (53) [(56)] TDLR--Texas Department of Licensing and Regulation. (54) [(57)] Texas Department of Licensing and Regulations (TDLR)--A Texas state agency responsible for the implementation and enforcement of the Texas Architectural Barriers Act. (55) [(58)] Texas Guaranteed Student Loan Corporation (TGSLC)--A public, nonprofit corporation that administers the Federal Family Education Loan Program. (56) [(59)] TGSLC--Texas Guaranteed Student Loan Corporation. PROPOSED RULES October 6, TexReg 5337

56 (57) [(60)] Vice-Chair--The member of the Board who serves as the assistant presiding officer and, in the absence of the Chair, serves as the Board's presiding officer. If necessary, the Vice-Chair succeeds the Chair until a new Chair is appointed. 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 September 25, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER B. ELIGIBILITY FOR REGISTRATION 22 TAC , The amendments to and are proposed 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 Registration by Examination. (a) In order to obtain Interior Design registration by examination in Texas, an Applicant shall demonstrate that the Applicant has satisfied the educational and professional experience eligibility requirements adopted by the Council for Interior Design Qualification (CIDQ) to sit for the NCIDQ examination, [a combined total of at least six years of approved Interior Design education and experience] and shall successfully complete the NCIDQ [Interior Design registration] examination or a predecessor or other examination deemed equivalent by CIDQ [NCIDQ] as more fully described in Subchapter C of this chapter. (b) Alternatively, prior to December 31, 2018, an Applicant may obtain Interior Design registration by examination by successfully completing the Architectural Registration Examination or another examination deemed equivalent by NCARB after fulfilling the prerequisites of 1.21 and 1.41 of this title relating to Board approval to take the Architectural Registration Examination for architectural registration by examination. This subsection is repealed effective January 1, (c) An Applicant for Interior Design registration by examination who, as of January 1, 2018, has been approved to take the examination by the Board and has paid all application maintenance fees associated with the application, may qualify for registration by successfully completing the NCIDQ or other qualifying examination and satisfying: (1) the educational and professional experience required by CIDQ to sit for its examination; or (2) the educational and professional experience requirements adopted by the Board and in effect at the time the application was filed. [(c) For purposes of this section, an Applicant has "approved Interior Design education" if:] [(1) The Applicant graduated from:] [(A) a program that has been granted professional status by the Council for Interior Design Accreditation (CIDA) or the National Architectural Accreditation Board (NAAB);] [(B) a program that was granted professional status by CIDA or NAAB not later than two years after the Applicant's graduation;] [(C) a program that was granted candidacy status by CIDA or NAAB and became accredited by CIDA or NAAB not later than three years after the Applicant's graduation; or] [(D) an Interior Design education program outside the United States where an evaluation by World Education Services or another organization acceptable to the Board has concluded that the program is substantially equivalent to a CIDA or NAAB accredited professional program;] [(2) The Applicant has a doctorate, a master's degree, or a baccalaureate degree in Interior Design;] [(3) The Applicant has:] [(A) A baccalaureate degree in a field other than Interior Design; and] [(B) An associate's degree or a two- or three-year certificate from an Interior Design program at an institution accredited by an agency recognized by the Texas Higher Education Coordinating Board;] [(4) The Applicant has:] [(A) A baccalaureate degree in a field other than Interior Design; and] [(B) An associate's degree or a two- or three-year certificate from a foreign Interior Design program approved or accredited by an agency acceptable to the Board.] [(d) In addition to educational requirements, an applicant for Interior Design registration by examination in Texas must also complete approved experience as more fully described in Subchapter J of this chapter (relating to Table of Equivalents for Education and Experience in Interior Design).] 42 TexReg 5338 October 6, 2017 Texas Register

57 [(e) The Board shall evaluate the education and experience required by subsection (a) of this section in accordance with the Table of Equivalents for Education and Experience in Interior Design.] [(f) For purposes of this section, the term "approved Interior Design education" does not include continuing education courses.] [(g) An Applicant for Interior Design registration by examination who enrolls in an Interior Design educational program after September 1, 2006, must graduate from a program described in subsection (c)(1) of this section.] (d) [(h)] In accordance with federal law, the Board must verify proof of legal status in the United States. Each Applicant shall provide evidence of legal status by submitting a certified copy of a United States birth certificate or other documentation that satisfies the requirements of the Federal Personal Responsibility and Work Opportunity Reconciliation Act of A list of acceptable documents may be obtained by contacting the Board's office Registration by Reciprocal Transfer. (a) A person may apply for Interior Design registration by reciprocal transfer if the person holds an Interior Design [interior design] registration that is active and in good standing in another jurisdiction and the other jurisdiction: (1) has licensing or registration requirements substantially equivalent to Texas registration requirements; or (2) has entered into a reciprocity agreement with the Board that has been approved by the Governor of Texas. (b) In order to obtain Interior Design registration by reciprocal transfer, an Applicant must demonstrate that the Applicant has: (1) successfully completed the NCIDQ examination or a predecessor or other examination deemed equivalent by the [another Interior Design registration examination which the National] Council for Interior Design Qualification (CIDQ) [(NCIDQ) has approved as conforming to NCIDQ's examination standards or as being acceptable in lieu of the NCIDQ examination]; and (2) acquired at least two years of acceptable Interior Design experience following registration in another jurisdiction. (c) An Applicant for Interior Design registration by reciprocal transfer must remit the required registration fee to the Board within 60 days after the date of the tentative approval letter sent to the Applicant by the Board Application Process. (a) (No change.) (b) Prior to filing an application for registration by examination, an Applicant must: (1) satisfy the educational and professional experience eligibility requirements adopted by the Council for Interior Design Qualification (CIDQ) to sit for the NCIDQ examination; and (2) be approved by CIDQ to sit for the examination. (c) An application for TBAE registration by examination must include: (1) a verified statement of the Applicant's education, such as a transcript; (2) a detailed summary of the Applicant's interior design work experience; and (3) proof of approval by CIDQ to sit for the examination. (d) [(b)] Upon receipt of the completed application and all required supporting documentation and receipt of the required application fee, the Board shall evaluate the Applicant's application materials. The Board may require additional information or documentation from the Applicant. (e) [(c)] The Board will notify each Applicant in writing regarding the approval or rejection of the Applicant's application. (f) [(d)] Pursuant to the provisions of of the Texas Family Code, each Applicant shall submit his/her social security number to the Board. The Applicant's social security number shall be considered confidential as stated in (e) of the Texas Family Code. (g) [(e)] The Board may take action against an Applicant or Candidate pursuant to of this title (relating to Effect of Enforcement Proceedings on Application) Pending Applications. (a) (No change.) (b) Each Applicant [Candidate approved for examination] must pay an annual record maintenance fee as prescribed by the Board or the [Candidate's] application file will be closed. An Applicant [A Candidate] may reopen an application file that was closed pursuant to this section only after payment of a fee equal to the sum of the record maintenance fees for the current year and each year the file has been closed plus any costs directly related to the reopening of the application file. An application file that has been closed for five years or longer may not be reopened Preliminary Evaluation of Criminal History. (a) An Applicant, Candidate or a person enrolled or planning to enroll in a qualifying Interior Design [an accredited interior design] educational program may make a written request to the Board's executive director for a preliminary criminal history evaluation letter which states the person's eligibility for registration under of this chapter (relating to Criminal Convictions). (b) - (g) (No change.) Provisional Licensure. (a) The Board shall grant a Certificate of Registration or a provisional Certificate of Registration to an otherwise qualified Applicant [Candidate] who has been convicted of an offense that: (1) is not directly related to the Practice of Interior Design as determined by the executive director under of this chapter (relating to Criminal Convictions); (2) was committed earlier than five (5) years before the date the Applicant [Candidate] filed an application for registration; (3) is not an offense listed in 3g, Article 42.12, Code of Criminal Procedure; and (4) is not a sexually violent offense, as defined by Article , Code of Criminal Procedure. (b) - (e) (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 September 25, TRD PROPOSED RULES October 6, TexReg 5339

58 Lance Brenton General Counsel Texas Board of Architectural Examiners Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER C. EXAMINATION 22 TAC , 5.55 STATUTORY AUTHORITY The amendments to , and 5.55 are proposed 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 Requirements. (a) An Applicant for Interior Design registration by examination in Texas must meet the eligibility and application requirements contained in 5.33(b) and (c) of this chapter, and successfully complete all sections of the NCIDQ [National Council for Interior Design Qualification (NCIDQ)] examination or a predecessor or other examination deemed equivalent by the Council for Interior Design Qualification (CIDQ) [NCIDQ deems equivalent to the NCIDQ examination]. Alternatively, prior to December 31, 2018, an applicant may obtain Interior Design registration by examination by successfully completing all sections of the Architectural Registration Examination (ARE), or another examination NCARB deems equivalent to the ARE, after fulfilling the requirements of 1.21 and 1.41 of this title relating to Board approval to take the ARE for architectural registration by examination. [(b) The Board may approve an Applicant to take the NCIDQ examination only after the Applicant has completed the educational requirements for Interior Design registration by examination in Texas, has completed at least six (6) months of full-time experience working under the Direct Supervision of a Registered Interior Designer, and has submitted the required application materials. In jurisdictions where interior designers are not licensed, the supervision may be under a licensed architect or a Registered Interior Designer who has passed the NCIDQ examination.] [(c) An Applicant may take the NCIDQ examination at any official NCIDQ testing center but must satisfy all Texas registration requirements in order to obtain Interior Design registration by examination in Texas.] (b) [(d)] Each Applicant [Candidate] must achieve a passing score in each division of the NCIDQ examination. Scores from individual divisions may not be averaged to achieve a passing score. (c) [(e)] An examination fee may be refunded as follows: (1) The application fee paid to the Board is not refundable or transferable. (2) The Board, on behalf of an examinee [a Candidate], may request a refund of a portion of the examination fee paid to CIDQ [the national examination provider] for scheduling all or a portion of the registration examination. A charge for refund processing may be withheld by CIDQ [the national examination provider]. Refunds of examination fees are subject to the following conditions: (A) An examinee [A Candidate], because of extreme hardship, must have been precluded from scheduling or taking the examination or a portion of the examination. For purposes of this subsection, extreme hardship is defined as a serious illness or accident of the examinee [Candidate] or a member of the examinee's [Candidate's] immediate family or the death of an immediate family member. Immediate family members include the spouse, child(ren), parent(s), and sibling(s) of the examinee [Candidate]. Any other extreme hardship may be considered on a case-by-case basis. (B) A written request for a refund based on extreme hardship must be submitted not later than thirty (30) days after the date the examination or portion of the examination was scheduled or intended to be scheduled. Documentation of the extreme hardship that precluded the examinee [applicant] from scheduling or taking the examination must be submitted by the examinee [Candidate] as follows: the illness. Death: a copy of a death certificate or newspaper obituary. (i) (ii) (iii) Illness: verification from a physician who treated Accident: a copy of an official accident report. (C) Approval of the request and refund of the fee or portion of the fee by CIDQ [the national examination provider]. (3) An examination fee may not be transferred to a subsequent examination Examination Administration and Scoring. (a) An Applicant must apply for Interior Design registration by examination as described in 5.33 of this title (relating to Application Process). (b) Unless otherwise noted in this chapter, the administration and scoring of the NCIDQ examination shall be governed by the procedures adopted by the Council for Interior Design Qualification (CIDQ). [The NCIDQ examination shall be administered once during the spring and once during the fall of every year.] [(c) In order for an Applicant to take the NCIDQ examination in the spring, the Applicant's application and supporting documentation must be postmarked or received by the Board no later than December 1st of the preceding year. In order for an Applicant to take the NCIDQ examination in the fall, the Applicant's application and supporting documentation must be postmarked or received by the Board no later than June 1st. If the deadline falls on a date when the Board's office is closed, the application and supporting documentation must be postmarked or received by the Board no later than the next date when the Board's office is open.] [(d) A Candidate who is approved to take the NCIDQ examination must appear personally for examination as directed in the notification letter sent to the Applicant. In order to be admitted for examination, the Candidate must present the candidate's identification card that was mailed to the Candidate prior to the examination date and must 42 TexReg 5340 October 6, 2017 Texas Register

59 present a separate official form of identification bearing a recent photograph of the Candidate.] [(e) Each Candidate shall be responsible for taking to the examination all tools necessary to complete the examination.] [(f) An explanation of the scoring procedures for the NCIDQ examination shall be provided to each Candidate before the examination is administered to the Candidate.] [(g)] [A Candidate's NCIDQ examination scores shall be determined by the entity that administers the examination.] The Board shall not review any NCIDQ examination score to determine its validity. [(h) If, for any reason, a Candidate takes a section or sections of the NCIDQ examination but does not receive a score for the section or sections, the Board shall have no liability beyond authorizing the Candidate to retake the section or sections with the corresponding fee waived.] Scheduling of Examinations. [Reexamination.] (a) In order to qualify for registration by examination, an Applicant must schedule and pass all sections of the NCIDQ within the time period required by the Council for Interior Design Qualification (CIDQ). [A Candidate's passing grade for any section of the examination is valid for five (5) years. Each Candidate must pass all sections of the examination within five (5) years after the date the Candidate passes a section of the examination. A Candidate who does not pass all sections of the examination within five (5) years after passing a section of the examination will forfeit credit for the section of the examination passed and must pass that section of the examination again.] (b) Notwithstanding subsection (a) of this section, an Applicant described by 5.31(c) of this chapter may schedule and pass all sections of the NCIDQ examination within the time period: (1) required by CIDQ; or (2) adopted by the Board and in effect at the time the application was filed. (c) [(b)] A qualifying examinee may request an extension if the examinee is [The Board may grant extensions to the 5-year period for completion of the examination if the Candidate is] unable to pass all sections of the examination within the required time [that] period for the following reasons: (1) The examinee [Candidate] gave birth to, or adopted a child [within that 5-year period]; (2) The examinee [Candidate] developed a serious medical condition [within that 5-year period]; or (3) The examinee [Candidate] commenced active duty service as a member of the United States military [within that 5-year period]. (d) [(c)] An examinee [Candidate] may receive an extension of up to 6 months for the birth or adoption of a child by filing a written application with the Board together with any corroborating evidence immediately after the examinee [Candidate] learns of the impending adoption or birth. An examinee [A Candidate] may receive an extension for the period of the serious medical condition or for the period of active duty military service by filing a written application with the Board together with corroborating evidence immediately after the examinee [Candidate] learns of the medical condition or the commencement of active duty military service. An examinee [A Candidate] shall immediately notify the Board in writing when the medical condition is resolved or active duty military service ends. Any request for an extension under this section must be approved by the Board and CIDQ Special Accommodations. (a) - (c) (d) (No change.) Procedure for requesting accommodation: (1) To protect the integrity of the testing process, an examinee [Applicant] requesting an accommodation must submit documentation regarding the existence of a disability and the reason the requested accommodation is necessary to provide the examinee [Applicant] with an equal opportunity to exhibit his/her knowledge, skills, and ability through the examination. The Board shall evaluate each request on a case-by-case basis. (2) An examinee [Applicant] requesting an accommodation must have a licensed health care professional or other qualified evaluator provide certification regarding the disability as described in Subsection (e) of this section. (3) An examinee [Applicant] seeking an accommodation must make a request for accommodation on the prescribed form and provide documentation of the need for accommodation well in advance of the examination date. If the form is submitted less than sixty (60) days prior to the examination date, the Board will attempt to process the request but might not be able to provide the necessary accommodation for the next examination. (e) The following information is required to support a request for an accommodation or an auxiliary aid: (1) Identification of the type of disability (physical, mental, learning); (2) Credential requirements of the evaluator: (A) For physical or mental disabilities (not including learning), the evaluator shall be a licensed health care professional qualified to assess the type of disability claimed. If a person who does not fit these criteria completes the evaluation, the Board may reject the evaluation and require another evaluation, and the request for accommodation may be delayed. (B) In the case of learning disabilities, a qualified evaluator shall have sufficient experience to be considered qualified to evaluate the existence of learning disabilities and proposed accommodations needed for specific learning disabilities. The evaluator shall be one of the following: (i) a licensed physician or psychologist with a minimum of three years' experience working with adults with learning disabilities; or (ii) another professional who possesses a master's or doctorate degree in special education or educational psychology and who has at least three years of equivalent training and experience in all of the areas described below: (I) tests of such ability; vational factors; (II) (III) assessing intellectual ability and interpreting screening for cultural, emotional, and moti- assessing achievement level; and (IV) administering tests to measure attention and concentration, memory, language reception and expression, cognition, reading, spelling, writing, and mathematics. (3) Professional verification of the disability, which shall include a description of: PROPOSED RULES October 6, TexReg 5341

60 (A) the nature and extent of the disability, including a description of its effect on major life activities and the anticipated duration of the impairment; (B) the effect of the disability on the examinee's [applicant's] ability to: (i) evaluate written material; (ii) complete graphic sections of the examination by drawing, drafting, and lettering; and (iii) complete computerized sections of the examination that require data entry via keyboard and the manipulation of a mouse. (C) whether the disability limits the amount of time the examinee [Applicant] can spend on specific examination tasks; (D) the recommended accommodation and how it relates to the examinee's [applicant's] disability; (E) the professional's name, title, telephone number, and his/her original signature; (F) any other information necessary, in the professional's opinion, to enable the exam provider to understand the examinee's disability and the accommodation necessary to enable the examinee to demonstrate his/her knowledge, skills, and ability. (f) Documentation supporting an accommodation shall be valid for five (5) years from the date submitted to the Board except that no further documentation shall be required where the original documentation clearly states that the disability will not change in the future. (g) The Board has the responsibility to evaluate each request for accommodation and to approve, deny, or suggest alternative reasonable accommodations. The Board may consider an examinee's [Applicant's] history of accommodation in determining its reasonableness in relation to the currently identified impact of the disability. (h) Information related to a request for accommodation shall be kept confidential to the extent provided by law. 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 September 25, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC 5.54 STATUTORY AUTHORITY The repeal of 5.54 is proposed 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 Transfer of Passing Scores. 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 September 25, TRD Lance Brenton General Counsel Texas Board of Architectural Examiners Earliest possible date of adoption: November 5, 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 proposed 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 Description of Approved Education for Registration by Examination Description of Approved Experience for Registration by Examination Other Education and Experience. 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 September 25, TRD TexReg 5342 October 6, 2017 Texas Register

61 Lance Brenton General Counsel Texas Board of Architectural Examiners Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 21. TEXAS STATE BOARD OF EXAMINERS OF PSYCHOLOGISTS CHAPTER 463. APPLICATIONS AND EXAMINATIONS 22 TAC The Texas State Board of Examiners of Psychologists (Board) proposes an amendment to rule 463.1, Types of Licensure. The proposed amendment is necessary to ensure conformity in the Board's rules, namely with the proposed new rule of this title, Licensed Psychological Associate (LPA). Currently, LPAs must be under the supervision of a Licensed Psychologist (LP) and may not engage in independent practice. The proposed amendment would allow experienced LPAs to practice independently. This proposed amendment change addresses the licensed mental health provider shortage in Texas by fully utilizing LPAs in the workforce today. The proposed amendment is also directly responsive to stakeholder requests to allow independent practice by psychological associates, as well as requests from legislators who have expressed an interest in this issue. The amendment is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this rule pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. EXPLANATION OF THE PROPOSED RULE The proposed amendment allows for independent LPA practice by LPAs who meet certain requirements. Currently, LPAs must practice under the supervision of an LP. This restriction is a permanent limitation to the associate license no matter how much training or experience an LPA has. While some LPAs receive substantial, direct supervision from a psychologist, many LPAs, particularly those with many years of experience, receive only the one hour per week supervision required by current Psychology Board Rules. See 22 Tex. Admin. Code of this title. The proposed amendment takes into account this wide spectrum of competency possessed by LPAs. The proposed amendment would allow an LPA to practice independently, without supervision, if they meet certain requirements. The proposed amendment would continue to require an LPA to hold a graduate degree in psychology from an accredited university or college, but would require the degree to consist of a minimum of 60 semester credit hours, rather than the 42 semester hours currently required. The proposed amendment would also require an LPA to obtain at least 3,000 hours of supervised practice by a licensed psychologist after receiving their degree to be eligible to practice independently. The Board's competency rule would still apply to LPAs; therefore an LPA would be required to practice only in their areas of competency. See 22 Tex. Admin. Code of this title. This approach will facilitate a more robust market by utilizing LPAs in the current workforce to increase access, affordability, and expand capacity of mental health services throughout the State. Allowing LPAs to practice independently will allow LPAs to offer services in more rural counties where a supervising psychologist may not currently be available. Moreover, the proposed amendment recognizes the long-standing importance of allowing the average citizen to select his or her own health care provider, rather than unnecessarily limiting the marketplace. The proposed amendment responds to stakeholder and legislative requests for a change to the LPA supervision requirements. The proposed amendment also responds to stakeholder requests for independent practice. Currently the Board licenses approximately 915 individuals as LPAs, and as of August of 2016 approximately 860 LPAs also held a license as a professional counselor. Licensed Professional Counselors may practice independently after completing a 60 credit-hour master's degree program and completing 3,000 hours of supervised internship. See 22 Tex. Admin. Code of this title (relating to Academic Requirements for Licensed Professionals Counselors). The proposed amendment helps ensure consistent training requirements for these dual-licensed mental health professionals. The proposed amendment is also necessary to give full effect to the Sunset Advisory Commission's management action from its review of this agency in the 85th Legislature which states: "(t)he board should repeal any rule that, after its evaluation, it deems susceptible to legal challenge based on precedent in the Supreme Court ruling" in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The Board hereby incorporates by reference the Texas Sunset Advisory Commission's Staff Report with Final Results of the Texas State Board of Examiners of Psychologists for the 85th Legislature. FISCAL NOTE. Darrel D. Spinks, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost, reduction in costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rule. Additionally, Mr. Spinks has determined that enforcing or administering the rule does not have foreseeable implications relating to the costs or revenues of state or local government. PUBLIC BENEFIT. Mr. Spinks has determined for the first fiveyear period the proposed amendment is in effect, there will be a benefit to consumers due to an increase in access, affordability, and capacity of licensed mental health providers. Additionally, Mr. Spinks reasonably anticipates the proposed amendment to result in an increase in the number of mental health providers licensed by this agency, because if LPAs are allowed to practice independently then it is anticipated that more individuals will apply for an LPA license. It is also anticipated that LPAs, being able to practice independently, will increase the number of providers servicing mental health professional shortage areas throughout the state. PROBABLE ECONOMIC COSTS. Mr. Spinks has determined for the first five-year period the proposed amendment is in effect, the rule will carry a probable economic cost to some individuals PROPOSED RULES October 6, TexReg 5343

62 required to comply with the amendment. In 2019 there will be a probable economic cost to LPAs to comply with the proposed amendment. Under the proposed amendment, the credit hours for an acceptable graduate degree to qualify for licensure as an LPA will increase from 42 to 60 credit hours. The additional 18 credit hour requirement may cause an additional cost to some LPA applicants in the form of increased tuition to schools that do not currently require 60 credit hours for a master's degree in psychology. The impact will vary by school and degree program. The increased credit hours are necessary to protect the public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. The 60 credit hours is a similar standard to that used by other mental health professionals with a graduate degree that can practice independently. See 22 Tex. Admin. Code (relating to Academic Requirements for Licensed Professional Counselors). SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALY- SIS. The proposed amendment may have an adverse effect on small or micro-businesses. However, any potential adverse effect is estimated to be outweighed by the positive public benefit. And, although some LP small or micro businesses may see a negative impact in regards to lost income, an LPA's business will likely experience a positive impact. According to the most recent data collected by the Board, there are approximately 915 LPAs and 4,835 LPs actively licensed by this agency. While a majority of LPAs engaged in the practice of psychology must be under the supervision of a psychologist, some are exempt under of the Tex. Occ. Code, and others may not be engaged in the practice of psychology and thus do not require a supervisor. Additionally, other LPAs may be dually licensed as a Licensed Specialist in School Psychology and work in a public school where the supervision of an LP is not required. Furthermore, not all LPs supervise an LPA. Therefore, while an exact number is impossible to determine based upon the information available, assuming an LP employs and supervises at least one LPA, it is estimated that no more than 915 LP small or micro-businesses will be adversely impacted by the proposed amendment change. Some LPs and LPAs may have entered into fee arrangements for the LPAs supervision. This proposed amendment may reduce the income for LPs in terms of lost income from the loss of the supervision fee after an LPA has completed the 3,000 hours of supervision. Thus, psychologists who charge for their supervision services could see a reduction in their incomes. Conversely, the LPAs that are no longer required to be supervised could see an increase in their incomes since they would no longer be required to pay for supervision or split their revenue with a supervisor. However, this reduction may be offset, either in whole or in part, if a psychologist provides other activities or services during the time previously utilized for supervision. The loss of income by LPs could also be replaced by hiring newly licensed LPAs to take the place of an LPA that decide to leave for independent practice. Additionally, not all LPAs may leave, some may stay under the supervision of an LP, the proposed rule does not require LPAs to practice independently. Because, as noted above, the outcome of the negotiations between an LP and an LPA are outside the Board's control, the amount of adverse economic impact to LPs cannot be calculated with certainty. This proposed amendment may also increase market competition as it will likely increase affordability of mental health services and expand capacity and access in the marketplace to mental healthcare as a result of the increase of independent practitioners. This amendment will likely result in a positive economic impact for those LPAs who achieve independent practice status since they will no longer have to pay for permanent supervision. The Board considered the following alternative methods in an attempt to achieve the same purpose of the amendment while minimizing the adverse impacts on small and micro businesses. First, the Board considered issuing a specialty license to LPAs for particular areas of practice once they complete an additional 3,000 hours of supervised experience in a given practice area. This requirement would not be congruent with the general licensing scheme administered by the agency. While the Board possesses the rulemaking authority to restrict a licensee's practice to those areas where he or she is competent to deliver services, the Board only has authority to issue a general license, not a specialty license. The Board does not have the authority to issue a separate license for each area of competency. Furthermore, such a licensing scheme is not necessary because the Board will rely on its competency rule to require LPAs to practice only within their areas of competency. Under the Board's Competency Rule, a licensee may only provide services for which they have the education, skills, and training to perform competently. See 22 Tex. Admin. Code 465.9(a) of this title. Additionally, under this amendment, a licensee who lacks the competency to provide a psychological service must withdraw and refer the individual to a competent service provider. See 22 Tex. Admin. Code 465.9(h) of this title. Therefore, adding a requirement that an LPA receive a specialty license to practice independently would not provide any additional safeguard for the public and would not be consistent with the Board's licensing scheme. Another alternative considered was to expressly prohibit the practice of neuropsychology by LPAs. Like the first proposal, this alternative was found to be unnecessary since the Board currently has rules in place which prevent any provider, including LPAs, from practicing outside their scope of competency. The Board's competency rule has proven effective in the past, for example in limiting the practice of Industrial/Organizational Psychologists, and the Board has found no evidence as to why this would not be equally effective with regards to independent practice by LPAs. The Board also considered creating a certification committee for LPA independent practice, consisting of 3 LPs and 2 LPAs, that would certify LPAs to practice in certain areas of psychology and set standards for areas of competency. This alternative would again limit the scope of practice of an LPA and, as discussed above, this proposal would essentially create specialty licenses for LPAs which is not consistent with the Board's licensing scheme and frustrates the purposes for the proposed amendment. Finally, the Board's staff considered a no-change alternative amendment that would still require LP supervision of LPAs if the LPA is working for an employer that has fewer than 100 employees or less than $6 million in annual gross receipts and would allow independent practice only for LPAs employed by a larger business. Such an alternative rule would be impracticable for licensure and enforcement as it would be difficult for the Board to maintain current information on each small business, and again, this would frustrate the purposes behind the proposed amendment. Also, this exception would likely swallow the rule 42 TexReg 5344 October 6, 2017 Texas Register

63 since it is estimated that most LPAs are employed in small or micro businesses. While there may be alternatives that minimize the adverse impact on small or micro businesses, the alternatives are not consistent with the health, safety, and economic welfare of the state and do not accomplish the objective of the proposed amendment. RURAL IMPACT STATEMENT: The Board anticipates that the proposed amendment will not have an adverse impact on rural communities. Rather, the Board estimates that allowing LPAs to practice independently will allow LPAs the opportunity to offer services in more rural counties where a supervising psychologist may not currently be available. Therefore, the Board believes this amendment will have a positive effect on rural communities. Since the Board estimates that the 147 rural counties with a population of 25,000 or less are not likely to be adversely affected by the proposed amendment, an alternative version of the amendment regarding rural communities was not considered by the Board. LOCAL EMPLOYMENT IMPACT STATEMENT. The proposed amendment will not affect a local economy; thus, a local employment impact statement is not required. Requirement for Rule increasing costs to regulated persons. No repeal of another rule is required to offset any increased costs because 1) this proposed amendment reduces the burdens and responsibilities imposed on regulated persons; 2) this proposed amendment is necessary to protect the health, safety, and welfare of the residents of this state; and 3) the licensing and regulatory costs imposed by the Board on licensees is not expected to increase. Government Growth Impact Statement. For the first five-year period the proposed amendment is in effect, the Board estimates that the proposed amendment will not affect government growth. This proposed amendment does not create or eliminate a government program; it does not require the creation or elimination of employee positions; it does not require the increase or decrease in future legislative appropriations to the this agency; it does not require an increase or decrease in fees paid to the agency; it does not create a new regulation (it amends an existing regulation by repeal and adoption); it does not expand or repeal an existing regulation, but it does limit existing regulations by removing supervision as a permanent requirement for an LPA; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or adversely affect the state's economy. PUBLIC COMMENT. Comments on the proposed amendment may be submitted to Brenda Skiff, Public Information Officer, Texas State Board of Examiners of Psychologists, 333 Guadalupe, Ste , Austin, Texas 78701, within 30 days of publication of this proposal in the Texas Register. Comments may also be submitted via fax to (512) , or via to Open.Records@tsbep.texas.gov. The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed amendment is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the amendment, describe and estimate the economic impact of the amendment on small businesses, offer alternative methods of achieving the purpose of the amendment, then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed amendment is to be adopted, and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See (c) and (c-1) of the Tex. Gov't. Code. STATUTORY AUTHORITY. The amendment is proposed under Texas Occupations Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt make all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this amendment pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. Board rules 22 Tex. Admin. Code 463.8, and of these titles will be affected by this amendment. No other code, articles or statutes are affected by this section Types of Licensure. The Board accepts applications for four types of licenses to practice psychology in the state of Texas: (1) Licensed Psychological Associate. This is a license for qualified individuals with a graduate degree to practice psychology [under the supervision of a licensed psychologist]. Requirements for the psychological associate license are found in of this title (relating to Licensure as a Psychological Associate) and of this title (relating to Written Examinations). (2) Licensed Specialist in School Psychology. This license is required by law for the practice of school psychology in the public schools of Texas. Requirements for the specialist in school psychology license are found in of this title (relating to Licensure as a Specialist in School Psychology) and of this title. (3) Provisionally Licensed Psychologist. This is a doctoral level license to practice psychology under the supervision of a licensed psychologist. This license is a prerequisite for licensure as a psychologist. Requirements for provisionally licensed psychologist are found in of this title (relating to Provisionally Licensed Psychologist) and of this title. (4) Licensed Psychologist. This is a doctoral level license for the independent practice of psychology. It is obtained by two means: (A) Obtaining provisional licensure as a psychologist, completing the required two years of supervised experience and taking and passing the required oral exam. Requirements for licensure as a psychologist are found in of this title (relating to Licensed Psychologist), of this title, and of this title (relating to Oral Examination). (B) Applying from a jurisdiction which holds a reciprocity agreement with Texas, meeting the Board's requirements for licensure by reciprocity, and passing the Board's Jurisprudence Exam. Criteria for reciprocity jurisdictions are listed in of this title (relating to Reciprocity Requirements). Requirements for licensure as a psychologist by means of reciprocity are found in of this title (relating to Licensed Psychologist by Reciprocity) and of this title. PROPOSED RULES October 6, TexReg 5345

64 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 September 25, TRD Darrel D. Spinks Executive Director Texas State Board of Examiners of Psychologists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The Texas State Board of Examiners of Psychologists proposes the repeal of rule 463.8, Licensed Psychological Associate. The proposed repeal will correspond with the proposal of the new rule 463.8, Licensed Psychological Associate (LPA). Currently, LPAs must be under the supervision of a Licensed Psychologist (LP) and may not engage in independent practice. The proposed new rule would allow experienced LPAs to practice independently. This proposed rule change addresses the licensed mental health provider shortage in Texas by fully utilizing LPAs in the workforce today. The proposed rule is also directly responsive to stakeholder requests to allow independent practice by psychological associates, as well as requests from legislators who have expressed an interest in this issue. The repeal and new rule is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this repeal and new rule pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. EXPLANATION OF THE PROPOSED REPEAL AND NEW RULE The proposed repeal and new rule allows for independent LPA practice by LPAs who meet certain requirements. Currently, LPAs must practice under the supervision of an LP. This restriction is a permanent limitation to the associate license no matter how much training or experience an LPA has. While some LPAs receive substantial, direct supervision from a psychologist, many LPAs, particularly those with many years of experience, receive only the one hour per week supervision required by current Psychology Board Rules. See 22 Tex. Admin. Code The proposed repeal and new rule takes into account this wide spectrum of competency possessed by LPAs. The proposed repeal and new rule would allow an LPA to practice independently, without supervision, if they meet certain requirements. The proposed repeal and new rule would continue to require an LPA to hold a graduate degree in psychology from an accredited university or college, but would require the degree to consist of a minimum of 60 semester credit hours, rather than the 42 semester hours currently required. The proposed repeal and new rule would also require an LPA to obtain at least 3,000 hours of supervised practice by a licensed psychologist after receiving their degree to be eligible to practice independently. The Board's competency rule would still apply to LPAs; therefore an LPA would be required to practice only in their areas of competency. See 22 Tex. Admin. Code of this title. This approach will facilitate a more robust market by utilizing LPAs in the current workforce to increase access, affordability, and expand capacity of mental health services throughout the State. Allowing LPAs to practice independently will allow LPAs to offer services in more rural counties where a supervising psychologist may not currently be available. Moreover, the proposed repeal and new rule recognizes the long-standing importance of allowing the average citizen to select his or her own health care provider, rather than unnecessarily limiting the marketplace. The proposed repeal and new rule addresses the shortage of licensed mental health professionals in Texas. LPAs are strategically positioned to impact the mental health shortage in Texas. Just like many professions, timely supervision of new graduates is a vital tool to assure quality care is passed from provider to provider. Unlike other professions, LPAs must be supervised long after best practices have been learned. Allowing unsupervised practice of LPAs frees psychologists from working as managers, and allows both professionals to better serve a vulnerable population. It is well established that the State faces a shortage of licensed mental health care providers. For example, pursuant to House Bill 1023 from the 83rd Legislature, the Texas Department of State Health Services issued a report in February of 2014 titled The Mental Health Workforce Shortage in Texas which found that there were no practicing clinical psychologists in any of the rural border counties. The report further determined that while Texans living in major metropolitan areas of the state were served by one psychologist (of any license type issued by the Board) for every 3,190 Texas, and in non-metropolitan areas along the border there was only one psychologist per 20,024 Texans. The findings of this report as they pertain to licensees of the Board are incorporated herein by reference. The proposed repeal and new rule addresses licensed mental health provider shortages by fully utilizing professionals in the workforce today. For example, currently 35 LPAs have provided an address to the Board within a county along the border. These LPAs may be able to expand their practice along the border if they are no longer limited by the availability of a supervisor. Additionally, other LPAs will be able to expand their services to underserved counties where they are currently unable to practice due to the lack of an available LP to provide supervision. The proposed repeal and new rule responds to stakeholder and legislative requests for a change to the LPA supervision requirements. The proposed repeal and new rule also responds to stakeholder requests for independent practice. Currently, the Board licenses approximately 915 individuals as LPAs, and as of August of 2016 approximately 860 LPAs also held a license as professional counselor. Licensed Professional Counselors may practice independently after completing a 60 credit-hour master's degree program and completing 3,000 hours of supervised internship. See 22 Tex. Admin. Code of this title (relating to Academic Requirements for Licensed Professional Counselors). The proposed repeal and new rule helps ensure 42 TexReg 5346 October 6, 2017 Texas Register

65 consistent training requirements for these dual-licensed mental health professionals. The proposed repeal and new rule is also necessary to give full effect to the Sunset Advisory Commission's management action from its review of this agency in the 85th Legislature which states: "[t]he board should repeal any rule that, after its evaluation, it deems susceptible to legal challenge based on precedent in the Supreme Court ruling" in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The Board hereby incorporates by reference the Texas Sunset Advisory Commission's Staff Report with Final Results of the Texas State Board of Examiners of Psychologists for the 85th Legislature. FISCAL NOTE. Darrel D. Spinks, Executive Director of the Board, has determined that for the first five-year period the proposed repeal and new rule is in effect, there will be no additional estimated cost, reduction in costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rule. Additionally, Mr. Spinks has determined that enforcing or administering the rule does not have foreseeable implications relating to the costs or revenues of state or local government. PUBLIC BENEFIT. Mr. Spinks has determined for the first fiveyear period the proposed repeal and new rule is in effect, there will be a benefit to consumers due to an increase in access, affordability, and capacity of licensed mental health providers. Additionally, Mr. Spinks reasonably anticipates the proposed repeal and new rule to result in an increase in the number of mental health providers licensed by this agency, because if LPAs are allowed to practice independently than it is anticipated that more individuals will apply for an LPA license. It is also anticipated that LPAs, being able to practice independently, will increase the number of providers servicing mental health professional shortage areas throughout the state. PROBABLE ECONOMIC COSTS. Mr. Spinks has determined for the first five-year period the proposed repeal and new rule is in effect, the rule will carry a probable economic cost to some individuals required to comply with the rule. In 2019 there will be a probable economic cost to LPAs to comply with the proposed repeal and new rule. Under the proposed rule, the credit hours for an acceptable graduate degree to qualify for licensure as an LPA will increase from 42 to 60 credit hours. The additional 18 credit hour requirement may cause an additional cost to some LPA applicants in the form of increased tuition to schools that do not currently require 60 credit hours for a master's degree in psychology. The impact will vary by school and degree program. The increased credit hours are necessary to protect the public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. The 60 credit hours is a similar standard to that used by other mental health professionals with a graduate degree that can practice independently. See 22 Tex. Admin. Code (relating to Academic Requirements for Licensed Professional Counselors). SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALY- SIS. The proposed repeal and new rule may have an adverse effect on small or micro-businesses. However, any potential adverse effect is estimated to be outweighed by the positive public benefit. And, although some LP small or micro businesses may see a negative impact in regards to lost income, an LPA's business will likely experience a positive impact. According to the most recent data collected by the Board, there are approximately 915 LPAs and 4,835 LPs actively licensed by this agency. While a majority of LPAs engaged in the practice of psychology must be under the supervision of a psychologist, some are exempt under of the Tex. Occ. Code, and others may not be engaged in the practice of psychology and thus do not require a supervisor. Additionally, other LPAs may be dually licensed as a Licensed Specialist in School Psychology and work in a public school where the supervision of an LP is not required. Furthermore, not all LPs supervise an LPA. Therefore, while an exact number is impossible to determine based upon the information available, assuming an LP employs and supervises at least one LPA, it is estimated that no more than 915 LP small or micro-businesses will be adversely impacted by the proposed repeal and new rule change. Some LPs and LPAs may have entered into fee arrangements for the LPAs supervision. This proposed repeal and new rule may reduce the income for LPs in terms of lost income from the loss of the supervision fee after an LPA has completed the 3,000 hours of supervision. Thus, psychologists who charge for their supervision services could see a reduction in their incomes. Conversely, the LPAs that are no longer required to be supervised could see an increase in their incomes since they would no longer be required to pay for supervision or split their revenue with a supervisor. However, this reduction may be offset, either in whole or in part, if a psychologist provides other activities or services during the time previously utilized for supervision. The loss of LP income could also be replaced by hiring newly licensed LPAs to take the place of an LPA that decide to leave for independent practice. Additionally, not all LPAs may leave, some may stay under the supervision of an LP, the proposed repeal and new rule does not require LPAs to practice independently. Because, as noted above, the outcome of the negotiations between an LP and an LPA are outside the Board's control, the amount of adverse economic impact to LPs cannot be calculated with certainty. This proposed repeal and new rule may also increase market competition as it will likely increase affordability of mental health services and expand capacity and access in the marketplace to mental healthcare as a result of the increase of independent practitioners. This repeal and new rule will likely result in a positive economic impact for those LPAs who achieve independent practice status since they will no longer have to pay for permanent supervision. The Board considered the following alternative methods in an attempt to achieve the same purpose of the proposed repeal and new rule while minimizing the adverse impacts on small and micro businesses. First, the Board considered issuing a specialty license to LPAs for particular areas of practice once they complete an additional 3,000 hours of supervised experience in a given practice area. This requirement would not be congruent with the general licensing scheme administered by the agency. While the Board possesses the rulemaking authority to restrict a licensee's practice to those areas where he or she is competent to deliver services, the Board only has authority to issue a general license, not a specialty license. The Board does not have the authority to issue a separate license for each area of competency. Furthermore, such a licensing scheme is not necessary because the Board will rely on its competency rule to require LPAs to practice only within their areas of competency. Under the Board's Competency Rule, a licensee may only provide services for which they PROPOSED RULES October 6, TexReg 5347

66 have the education, skills, and training to perform competently. See 22 Tex. Admin. Code 465.9(a) of this title. Additionally, under this rule, a licensee who lacks the competency to provide a psychological service must withdraw and refer the individual to a competent service provider. See 22 Tex. Admin. Code 465.9(h) of this title. Therefore, adding a requirement that an LPA receive a specialty license to practice independently would not provide any additional safeguard for the public and would not be consistent with the Board's licensing scheme. Another alternative considered was to expressly prohibit the practice of neuropsychology by LPAs. Like the first proposal, this alternative was found to be unnecessary since the Board currently has rules in place which prevent any provider, including LPAs, from practicing outside their scope of competency. The Board's competency rule has proven effective in the past, for example in limiting the practice of Industrial/Organizational Psychologists, and the Board has found no evidence as to why this would not be equally effective with regards to independent practice by LPAs. The Board also considered creating a certification committee for LPA independent practice, consisting of 3 LPs and 2 LPAs, that would certify LPAs to practice in certain areas of psychology and set standards for areas of competency. This alternative would again limit the scope of practice of an LPA and, as discussed above, this proposal would essentially create specialty licenses for LPAs which is not consistent with the Board's licensing scheme and frustrates the purposes for the proposed rule. Finally, the Board's staff considered a no-change alternative rule that would still require LP supervision of LPAs if the LPA is working for an employer that has fewer than 100 employees or less than $6 million in annual gross receipts and would allow independent practice only for LPAs employed by a larger business. Such an alternative rule would be impracticable for licensure and enforcement as it would be difficult for the Board to maintain current information on each small business, and again, this would frustrate the purposes behind the proposed rule. Also, this exception would likely swallow the rule since it is estimated that most LPAs are employed in small or micro businesses. While there may be alternatives that minimize the adverse impact on small or micro businesses, the alternatives are not consistent with the health, safety, and economic welfare of the state and do not accomplish the objective of the proposed repeal and new rule. RURAL IMPACT STATEMENT: The Board anticipates that the proposed repeal and new rule will not have an adverse impact on rural communities. Rather, the Board estimates that allowing LPAs to practice independently will allow LPAs the opportunity to offer services in more rural counties where a supervising psychologist may not currently be available. Therefore, the Board believes this proposed repeal and new rule will have a positive effect on rural communities. Since the Board estimates that the 147 rural counties with a population of 25,000 or less are not likely to be adversely affected by the proposed rule, an alternative version of the rule regarding rural communities was not considered by the Board. LOCAL EMPLOYMENT IMPACT STATEMENT. The proposed repeal and new rule will not affect a local economy; thus, a local employment impact statement is not required. Requirement for Rule increasing costs to regulated persons. No repeal of another rule is required to offset any increased costs because 1) this proposed repeal and new rule reduces the burdens and responsibilities imposed on regulated persons; 2) this proposed repeal and new rule is necessary to protect the health, safety, and welfare of the residents of this state; and 3) the licensing and regulatory costs imposed by the Board on licensees is not expected to increase. Government Growth Impact Statement. For the first five-year period the proposed repeal and new rule is in effect, the Board estimates that the proposed new rule will not affect government growth. This proposed repeal and new rule does not create or eliminate a government program; it does not require the creation or elimination of employee positions; it does not require the increase or decrease in future legislative appropriations to the this agency; it does not require an increase or decrease in fees paid to the agency; it does not create a new regulation (it amends an existing regulation by repeal and adoption); it does not expand or repeal an existing regulation, but it does limit existing regulations by removing supervision as a permanent requirement for an LPA; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or adversely affect the state's economy. PUBLIC COMMENT. Comments on the proposed repeal may be submitted to Brenda Skiff, Public Information Officer, Texas State Board of Examiners of Psychologists, 333 Guadalupe, Ste , Austin, Texas 78701, within 30 days of publication of this proposal in the Texas Register. Comments may also be submitted via fax to (512) , or via to Open.Records@tsbep.texas.gov. The Board specifically invites comments from the public on the issues of whether or not the proposed repeal will have an adverse economic effect on small businesses; if the proposed repeal is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the repeal, describe and estimate the economic impact of the repeal on small businesses, offer alternative methods of achieving the purpose of the repeal, then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed repeal is to be adopted, and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See (c) and (c-1) of the Tex. Govt. Code. STATUTORY AUTHORITY. The repeal is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt make all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this repeal pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. Board rules 22 Tex. Admin. Code 463.1, 463.8, and of these titles will be affected by this proposed repeal. No other code, articles or statutes are affected by this section Licensed Psychological Associate. 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 5348 October 6, 2017 Texas Register

67 Filed with the Office of the Secretary of State on September 25, TRD Darrel D. Spinks Executive Director Texas State Board of Examiners of Psychologists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The Texas State Board of Examiners of Psychologists (Board) proposes new rule 463.8, Licensed Psychological Associate (LPA). Currently, LPAs must be under the supervision of a Licensed Psychologist (LP) and may not engage in independent practice. The proposed new rule would allow experienced LPAs to practice independently. This proposed new rule change addresses the licensed mental health provider shortage in Texas by fully utilizing LPAs in the workforce today. The proposed new rule is also directly responsive to stakeholder requests to allow independent practice by psychological associates, as well as requests from legislators who have expressed an interest in this issue. The new rule is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this rule pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. EXPLANATION OF THE PROPOSED RULE The proposed new rule allows for independent LPA practice by LPAs who meet certain requirements. Currently, LPAs must practice under the supervision of an LP. This restriction is a permanent limitation to the associate license no matter how much training or experience an LPA has. While some LPAs receive substantial, direct supervision from a psychologist, many LPAs, particularly those with many years of experience, receive only the one hour per week supervision required by current Psychology Board Rules. See 22 Tex. Admin. Code of this title. The proposed new rule takes into account this wide spectrum of competency possessed by LPAs. The proposed new rule would allow an LPA to practice independently, without supervision, if they meet certain requirements. The proposed new rule would continue to require an LPA to hold a graduate degree in psychology from an accredited university or college, but would require the degree to consist of a minimum of 60 semester credit hours, rather than the 42 semester hours currently required. The proposed new rule would also require an LPA to obtain at least 3,000 hours of supervised practice by a licensed psychologist after receiving their degree to be eligible to practice independently. The Board's competency rule would still apply to LPAs; therefore an LPA would be required to practice only in their areas of competency. See 22 Tex. Admin. Code of this title. This approach will facilitate a more robust market by utilizing LPAs in the current workforce to increase access, affordability, and expand capacity of mental health services throughout the State. Allowing LPAs to practice independently will allow LPAs to offer services in more rural counties where a supervising psychologist may not currently be available. Moreover, the proposed new rule recognizes the long-standing importance of allowing the average citizen to select his or her own health care provider, rather than unnecessarily limiting the marketplace. The proposed new rule addresses the shortage of licensed mental health professionals in Texas. LPAs are strategically positioned to impact the mental health shortage in Texas. Just like many professions, timely supervision of new graduates is a vital tool to assure quality care is passed from provider to provider. Unlike other professions, LPAs must be supervised long after best practices have been learned. Allowing unsupervised practice of LPAs frees psychologists from working as managers, and allows both professionals to better serve a vulnerable population. It is well established that the State faces a shortage of licensed mental health care providers. For example, pursuant to House Bill 1023 from the 83rd Legislature, the Texas Department of State Health Services issued a report in February of 2014 titled The Mental Health Workforce Shortage in Texas which found that there were no practicing clinical psychologists in any of the rural border counties. The report further determined that while Texans living in major metropolitan areas of the state were served by one psychologist (of any license type issued by the Board) for every 3,190 Texas, and in non-metropolitan areas along the border there was only one psychologist per 20,024 Texans. The findings of this report as they pertain to licensees of the Board are incorporated herein by reference. The proposed new rule addresses licensed mental health provider shortages by fully utilizing professionals in the workforce today. For example, currently 35 LPAs have provided an address to the Board within a county along the border. These LPAs may be able to expand their practice along the border if they are no longer limited by the availability of a supervisor. Additionally, other LPAs will be able to expand their services to underserved counties where they are currently unable to practice due to the lack of an available LP to provide supervision. The proposed new rule responds to stakeholder and legislative requests for a change to the LPA supervision requirements. The proposed new rule also responds to stakeholder requests for independent practice. Currently the Board licenses approximately 915 individuals as LPAs, and as of August of 2016 approximately 860 LPAs also held a license as a professional counselor. Licensed Professional Counselors may practice independently after completing a 60 credit-hour master's degree program and completing 3,000 hours of supervised internship. See 22 Tex. Admin. Code of this title (relating to Academic Requirements for Licensed Professional Counselors). The proposed new rule helps ensure consistent training requirements for these dual-licensed mental health professionals. The proposed new rule is also necessary to give full effect to the Sunset Advisory Commission's management action from its review of this agency in the 85th Legislature which states: "[t]he board should repeal any rule that, after its evaluation, it deems susceptible to legal challenge based on precedent in the Supreme Court ruling" in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The Board PROPOSED RULES October 6, TexReg 5349

68 hereby incorporates by reference the Texas Sunset Advisory Commission's Staff Report with Final Results of the Texas State Board of Examiners of Psychologists for the 85th Legislature. FISCAL NOTE. Darrel D. Spinks, Executive Director of the Board, has determined that for the first five-year period the proposed new rule is in effect, there will be no additional estimated cost, reduction in costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rule. Additionally, Mr. Spinks has determined that enforcing or administering the rule does not have foreseeable implications relating to the costs or revenues of state or local government. PUBLIC BENEFIT. Mr. Spinks has determined for the first fiveyear period the proposed new rule is in effect, there will be a benefit to consumers due to an increase in access, affordability, and capacity of licensed mental health providers. Additionally, Mr. Spinks reasonably anticipates the proposed new rule to result in an increase in the number of mental health providers licensed by this agency, because if LPAs are allowed to practice independently then it is anticipated that more individuals will apply for an LPA license. It is also anticipated that LPAs, being able to practice independently, will increase the number of providers servicing mental health professional shortage areas throughout the state. PROBABLE ECONOMIC COSTS. Mr. Spinks has determined for the first five-year period the proposed new rule is in effect, the rule will carry a probable economic cost to some individuals required to comply with the rule. In 2019 there will be a probable economic cost to LPAs to comply with the proposed rule. Under the proposed rule, the credit hours for an acceptable graduate degree to qualify for licensure as an LPA will increase from 42 to 60 credit hours. The additional 18 credit hour requirement may cause an additional cost to some LPA applicants in the form of increased tuition to schools that do not currently require 60 credit hours for a master's degree in psychology. The impact will vary by school and degree program. The increased credit hours are necessary to protect the public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. The 60 credit hours is a similar standard to that used by other mental health professionals with a graduate degree that can practice independently. See 22 Tex. Admin. Code (relating to Academic Requirements for Licensed Professional Counselors). SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALY- SIS. The proposed new rule may have an adverse effect on small or micro-businesses. However, any potential adverse effect is estimated to be outweighed by the positive public benefit. And, although some LP small or micro businesses may see a negative impact in regards to lost income, an LPA's business will likely experience a positive impact. According to the most recent data collected by the Board, there are approximately 915 LPAs and 4,835 LPs actively licensed by this agency. While a majority of LPAs engaged in the practice of psychology must be under the supervision of a psychologist, some are exempt under of the Tex. Occ. Code, and others may not be engaged in the practice of psychology and thus do not require a supervisor. Additionally, other LPAs may be dually licensed as a Licensed Specialist in School Psychology and work in a public school where the supervision of an LP is not required. Furthermore, not all LPs supervise an LPA. Therefore, while an exact number is impossible to determine based upon the information available, assuming an LP employs and supervises at least one LPA, it is estimated that no more than 915 LP small or micro-businesses will be adversely impacted by the proposed rule change. Some LPs and LPAs may have entered into fee arrangements for the LPAs supervision. This proposed rule may reduce the income for LPs in terms of lost income from the loss of the supervision fee after an LPA has completed the 3,000 hours of supervision. Thus, psychologists who charge for their supervision services could see a reduction in their incomes. Conversely, the LPAs that are no longer required to be supervised could see an increase in their incomes since they would no longer be required to pay for supervision or split their revenue with a supervisor. However, this reduction may be offset, either in whole or in part, if a psychologist provides other activities or services during the time previously utilized for supervision. The loss of income by LPs could also be replaced by hiring newly licensed LPAs to take the place of an LPA that decide to leave for independent practice. Additionally, not all LPAs may leave, some may stay under the supervision of an LP, the proposed rule does not require LPAs to practice independently. Because, as noted above, the outcome of the negotiations between an LP and an LPA are outside the Board's control, the amount of adverse economic impact to LPs cannot be calculated with certainty. This proposed new rule may also increase market competition as it will likely increase affordability of mental health services and expand capacity and access in the marketplace to mental healthcare as a result of the increase of independent practitioners. This new rule will likely result in a positive economic impact for those LPAs who achieve independent practice status since they will no longer have to pay for permanent supervision. The Board considered the following alternative methods in an attempt to achieve the same purpose of the rule while minimizing the adverse impacts on small and micro businesses. First, the Board considered issuing a specialty license to LPAs for particular areas of practice once they complete an additional 3,000 hours of supervised experience in a given practice area. This requirement would not be congruent with the general licensing scheme administered by the agency. While the Board possesses the rulemaking authority to restrict a licensee's practice to those areas where he or she is competent to deliver services, the Board only has authority to issue a general license, not a specialty license. The Board does not have the authority to issue a separate license for each area of competency. Furthermore, such a licensing scheme is not necessary because the Board will rely on its competency rule to require LPAs to practice only within their areas of competency. Under the Board's Competency Rule, a licensee may only provide services for which they have the education, skills, and training to perform competently. See 22 Tex. Admin. Code 465.9(a) of this title. Additionally, under this rule, a licensee who lacks the competency to provide a psychological service must withdraw and refer the individual to a competent service provider. See 22 Tex. Admin. Code 465.9(h) of this title. Therefore, adding a requirement that an LPA receive a specialty license to practice independently would not provide any additional safeguard for the public and would not be consistent with the Board's licensing scheme. Another alternative considered was to expressly prohibit the practice of neuropsychology by LPAs. Like the first proposal, this alternative was found to be unnecessary since the Board 42 TexReg 5350 October 6, 2017 Texas Register

69 currently has rules in place which prevent any provider, including LPAs, from practicing outside their scope of competency. The Board's competency rule has proven effective in the past, for example in limiting the practice of Industrial/Organizational Psychologists, and the Board has found no evidence as to why this would not be equally effective with regards to independent practice by LPAs. The Board also considered creating a certification committee for LPA independent practice, consisting of 3 LPs and 2 LPAs, that would certify LPAs to practice in certain areas of psychology and set standards for areas of competency. This alternative would again limit the scope of practice of an LPA and, as discussed above, this proposal would essentially create specialty licenses for LPAs which is not consistent with the Board's licensing scheme and frustrates the purposes for the proposed new rule. Finally, the Board's staff considered a no-change alternative rule that would still require LP supervision of LPAs if the LPA is working for an employer that has fewer than 100 employees or less than $6 million in annual gross receipts and would allow independent practice only for LPAs employed by a larger business. Such an alternative rule would be impracticable for licensure and enforcement as it would be difficult for the Board to maintain current information on each small business, and again, this would frustrate the purposes behind the proposed rule. Also, this exception would likely swallow the rule since it is estimated that most LPAs are employed in small or micro businesses. While there may be alternatives that minimize the adverse impact on small or micro businesses, the alternatives are not consistent with the health, safety, and economic welfare of the state and do not accomplish the objective of the proposed rule. RURAL IMPACT STATEMENT: The Board anticipates that the proposed new rule will not have an adverse impact on rural communities. Rather, the Board estimates that allowing LPAs to practice independently will allow LPAs the opportunity to offer services in more rural counties where a supervising psychologist may not currently be available. Therefore, the Board believes this new rule will have a positive effect on rural communities. Since the Board estimates that the 147 rural counties with a population of 25,000 or less are not likely to be adversely affected by the proposed rule, an alternative version of the rule regarding rural communities was not considered by the Board. LOCAL EMPLOYMENT IMPACT STATEMENT. The proposed new rule will not affect a local economy; thus, a local employment impact statement is not required. Requirement for Rule increasing costs to regulated persons. No repeal of another rule is required to offset any increased costs because 1) this proposed new rule reduces the burdens and responsibilities imposed on regulated persons; 2) this proposed new rule is necessary to protect the health, safety, and welfare of the residents of this state; and 3) the licensing and regulatory costs imposed by the Board on licensees is not expected to increase. Government Growth Impact Statement. For the first five-year period the proposed new rule is in effect, the Board estimates that the proposed new rule will not affect government growth. This proposed new rule does not create or eliminate a government program; it does not require the creation or elimination of employee positions; it does not require the increase or decrease in future legislative appropriations to the this agency; it does not require an increase or decrease in fees paid to the agency; it does not create a new regulation (it amends an existing regulation by repeal and adoption); it does not expand or repeal an existing regulation, but it does limit existing regulations by removing supervision as a permanent requirement for an LPA; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or adversely affect the state's economy. PUBLIC COMMENT. Comments on the proposed new rule may be submitted to Brenda Skiff, Public Information Officer, Texas State Board of Examiners of Psychologists, 333 Guadalupe, Ste , Austin, Texas 78701, within 30 days of publication of this proposal in the Texas Register. Comments may also be submitted via fax to (512) , or via to Open.Records@tsbep.texas.gov. The Board specifically invites comments from the public on the issues of whether or not the proposed new rule will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule, then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed new rule is to be adopted, and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See (c) and (c-1) of the Tex. Gov't. Code. STATUTORY AUTHORITY. The new rule is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt make all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this new rule pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. Board rules 22 Tex. Admin. Code 463.1, and of these titles will be affected by this rule. No other code, articles or statutes are affected by this section Licensed Psychological Associate (LPA). (a) Licensure Requirements. An applicant for licensure as a psychological associate must: (1) hold a graduate degree in psychology from a regionally accredited institution of higher education; (2) provide documentation of at least six (6) semester credit hours of practicum, internship or other structured experience within the applicant's graduate degree program under the supervision of a licensed psychologist; (3) pass all examinations required by the board and meet each of the criteria listed in (a)(2)-(9) of the Occupations Code; and (4) demonstrate graduate level coursework in each of the following areas: (A) Psychological Foundations: (i) the biological bases of behavior; PROPOSED RULES October 6, TexReg 5351

70 (ii) the acquired or learned bases of behavior, including learning, thinking, memory, motivation and emotion; (iii) the social, cultural, and systemic bases of behavior; (iv) the individual or unique bases of behavior, including personality theory, human development, and abnormal behavior; (B) Research and Statistics: (i) the methodology used to investigate questions and acquire knowledge in the practice of psychology; (ii) coursework in research design and methodology, statistics, critical thinking, and scientific inquiry; (i) the history, theory, and application of psychological principles; (C) Applied Psychology: (ii) the application of psychological theories to individuals, families, and groups; (D) Assessment: (i) intellectual, personality, cognitive, physical, and emotional abilities, skills, interests, and aptitudes; (ii) socio-economic, including behavioral, adaptive, and cultural assessment; (F) Scientific and Professional, Legal, and Ethical Issues. (E) Interventions: (i) the application of therapeutic techniques; (ii) the behavior management; (iii) consultation; and (b) Degree Requirements. (1) For purposes of this rule: (A) a graduate degree in psychology means the name of the candidate's major or program of studies contains the term "psychology;" (B) a specialist degree shall be treated as a graduate degree; and (C) one semester credit hour equals one and one-half quarter credit hours. (2) A degree utilized to meet the requirements of this rule must consist of at least sixty (60) semester credit hours, with no more than twelve (12) semester credit hours of practicum, internship, or structured experience being counted toward the total degree hour requirement. (3) Applicants must demonstrate proof of the graduate level coursework required in subsection (a)(4) of this section by identifying which courses or training listed on their transcripts satisfy the required areas of study. Applicants may be required to provide the board with an official course catalogue or description from their university or training program to verify whether a course meets the requirements of this rule. (c) Supervision Requirements. (1) A licensed psychological associate must practice under the supervision of a licensed psychologist and may not practice independently. (2) Notwithstanding subsection (c)(1) and subject to the limitations set out in subsection (c)(3) below, a licensed psychological associate may practice independently if: (A) the licensee can demonstrate at least 3,000 hours of post-graduate degree experience in the delivery of psychological services under the supervision of one or more licensed psychologists; (B) the supervised experience was obtained in not less than 24 consecutive months, but not more than 48 consecutive months, and in not more than three placements; and (C) the licensee submits an application for independent practice evidencing proof of the required supervised experience. (3) A licensed psychological associate meeting the requirements of subsection (c)(2) shall be approved for independent practice, but remains subject to all board rules, including Board rule relating to competency. (4) Applicants may not utilize any supervised experience obtained from a psychologist with a restricted license or to whom they are related within the second degree of affinity or consanguinity to satisfy the requirements of this rule. (5) Applicants licensed as specialists in school psychology may utilize experience acquired under that license if the experience was supervised by a licensed psychologist. (d) Notwithstanding subsection (c)(3), an application for independent practice may be denied if a gap of more than two years exists between the completion of the supervised experience required for independent practice and the date of application for independent practice. The rules governing the waiver of gaps related to supervised experience found in Board rule shall govern any request for a waiver under this rule. (e) The correct title for a person licensed under this rule shall be "licensed psychological associate" or "psychological associate." (f) A licensed psychological associate authorized to practice independently under this rule must inform all patients and clients as part of the informed consent process, whether the licensee holds a masters, specialist or doctoral degree, and provide the patient with a current copy of any informational pamphlet or brochure published by the Board describing the differences between the levels of training and education received in masters, specialist, and doctoral degree programs. In lieu of providing each patient or client with a copy of the required pamphlet or brochure, licensees may publish in a conspicuous manner, the pamphlet or brochure on their website or provide a link to the pamphlet or brochure on the Board's website. (g) Continuation of Prior Law. (1) Notwithstanding subsection (b)(1)(a), a person who begins a graduate program leading to a degree required by subsection (a)(1) before August 31, 2019, will be considered to have met the requirements of that subsection if the individual's degree is primarily psychological in nature. This subsection expires on August 31, (2) Notwithstanding subsection (b)(2), a person who begins a graduate program leading to a degree required by subsection (a)(1) before August 31, 2019, will be considered to have met the requirements of that subsection if the individual has completed 42 semester credit hours with at least 27 of those hours in psychology. Applicants with degrees consisting of less than 42 semester credit hours may utilize a maximum of 12 semester credit hours from another 42 TexReg 5352 October 6, 2017 Texas Register

71 graduate degree program in psychology to achieve the total of 42 semester credit hours. This subsection expires on August 31, (h) Notwithstanding subsections (c)(1)-(3), a licensed psychological associate with an active license as of September 1, 2017 who maintained an active license throughout the three years preceding that date, is considered to have met the requirements of subsection (c)(2) and may practice independently in accordance with subsection (c)(3). 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 September 25, TRD Darrel D. Spinks Executive Director Texas State Board of Examiners of Psychologists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The Texas State Board of Examiners of Psychologist (Board) proposes amendment to rule , Written Examinations. The proposed amendment is necessary to ensure conformity in the Board's rules, namely the proposed new rule of this title, Licensed Psychological Associate (LPA), and provide reasonable assurance of competency from licensed psychological associates engaged in independent practice. Currently, LPAs must be under the supervision of a Licensed Psychologist (LP) and may not engage in independent practice. The proposed amendment would allow experienced LPAs to practice independently. This proposed amendment change addresses the licensed mental health provider shortage in Texas by fully utilizing LPAs in the workforce today. The proposed amendment is also directly responsive to stakeholder requests to allow independent practice by psychological associates, as well as requests from legislators who have expressed an interest in this issue. The proposed amendment is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this amendment pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. EXPLANATION OF THE PROPOSED RULE The proposed amendment allows for independent LPA practice by LPAs who meet certain requirements. Currently, LPAs must practice under the supervision of an LP. This restriction is a permanent limitation to the associate license no matter how much training or experience an LPA has. While some LPAs receive substantial, direct supervision from a psychologist, many LPAs, particularly those with many years of experience, receive only the one hour per week supervision required by current Psychology Board Rules. See 22 Tex. Admin. Code of this title. The proposed amendment takes into account this wide spectrum of competency possessed by LPAs. The proposed amendment would allow an LPA to practice independently, without supervision, if they meet certain requirements. The proposed amendment would continue to require an LPA to hold a graduate degree in psychology from an accredited university or college, but would require the degree to consist of a minimum of 60 semester credit hours, rather than the 42 semester hours currently required. The proposed amendment would also require an LPA to obtain at least 3,000 hours of supervised practice by a licensed psychologist after receiving their degree to be eligible to practice independently. The Board's competency rule would still apply to LPAs; therefore an LPA would be required to practice only in their areas of competency. See 22 Tex. Admin. Code of this title. The proposed amendment increases the examination score requirements for LPA applicants to match the scores of other licensees of this Board who can practice independently. The increased examination score requirements are necessary to protect the health, safety, and welfare of public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. This approach will facilitate a more robust market by utilizing LPAs in the current workforce to increase access, affordability, and expand capacity of mental health services throughout the State. Allowing LPAs to practice independently will allow LPAs to offer services in more rural counties where a supervising psychologist may not currently be available. Moreover, the proposed amendment recognizes the long-standing importance of allowing the average citizen to select his or her own health care provider, rather than unnecessarily limiting the marketplace. The proposed amendment responds to stakeholder and legislative requests for a change to the LPA supervision requirements. The proposed amendment also responds to stakeholder requests for independent practice. Currently the Board licenses approximately 915 individuals as LPAs, and as of August of 2016 approximately 860 LPAs also held a license as a professional counselor. Licensed Professional Counselors may practice independently after completing a 60 credit-hour master's degree program and completing 3,000 hours of supervised internship. See 22 Tex. Admin. Code of this title (relating to Academic Requirements for Licensed Professionals Counselors). The proposed amendment helps ensure consistent training requirements for these dual-licensed mental health professionals. The proposed amendment is also necessary to give full effect to the Sunset Advisory Commission's management action from its review of this agency in the 85th Legislature which states: "(t)he board should repeal any rule that, after its evaluation, it deems susceptible to legal challenge based on precedent in the Supreme Court ruling" in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The Board hereby incorporates by reference the Texas Sunset Advisory Commission's Staff Report with Final Results of the Texas State Board of Examiners of Psychologists for the 85th Legislature. FISCAL NOTE. Darrel D. Spinks, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost, reduction in costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rule. Additionally, Mr. Spinks has determined that enforcing or administering the rule does not have foresee- PROPOSED RULES October 6, TexReg 5353

72 able implications relating to the costs or revenues of state or local government. PUBLIC BENEFIT. Mr. Spinks has determined for the first fiveyear period the proposed amendment is in effect, there will be a benefit to consumers due to an increase in access, affordability, and capacity of licensed mental health providers. Additionally, Mr. Spinks reasonably anticipates the proposed amendment to result in an increase in the number of mental health providers licensed by this agency, because if LPAs are allowed to practice independently then it is anticipated that more individuals will apply for an LPA license. It is also anticipated that LPAs, being able to practice independently, will increase the number of providers servicing mental health professional shortage areas throughout the state. PROBABLE ECONOMIC COSTS. Mr. Spinks has determined for the first five-year period the proposed amendment is in effect, the rule will carry a probable economic cost to some individuals required to comply with the amendment. In 2019 there will be a probable economic cost to LPAs to comply with the proposed amendment. Under the proposed amendment, the credit hours for an acceptable graduate degree to qualify for licensure as an LPA will increase from 42 to 60 credit hours. The additional 18 credit hour requirement may cause an additional cost to some LPA applicants in the form of increased tuition to schools that do not currently require 60 credit hours for a master's degree in psychology. The impact will vary by school and degree program. The increased credit hours are necessary to protect the public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. The 60 credit hours is a similar standard to that used by other mental health professionals with a graduate degree that can practice independently. See 22 Tex. Admin. Code (relating to Academic Requirements for Licensed Professional Counselors). SMALL BUSINESS AND MICRO-BUSINESS IMPACT ANALY- SIS. The proposed amendment may have an adverse effect on small or micro-businesses. However, any potential adverse effect is estimated to be outweighed by the positive public benefit. And, although some LP small or micro businesses may see a negative impact in regards to lost income, an LPA's business will likely experience a positive impact. According to the most recent data collected by the Board, there are approximately 915 LPAs and 4,835 LPs actively licensed by this agency. While a majority of LPAs engaged in the practice of psychology must be under the supervision of a psychologist, some are exempt under of the Tex. Occ. Code, and others may not be engaged in the practice of psychology and thus do not require a supervisor. Additionally, other LPAs may be dually licensed as a Licensed Specialist in School Psychology and work in a public school where the supervision of an LP is not required. Furthermore, not all LPs supervise an LPA. Therefore, while an exact number is impossible to determine based upon the information available, assuming an LP employs and supervises at least one LPA, it is estimated that no more than 915 LP small or micro-businesses will be adversely impacted by the proposed amendment change. Some LPs and LPAs may have entered into fee arrangements for the LPAs supervision. This proposed amendment may reduce the income for LPs in terms of lost income from the loss of the supervision fee after an LPA has completed the 3,000 hours of supervision. Thus, psychologists who charge for their supervision services could see a reduction in their incomes. Conversely, the LPAs that are no longer required to be supervised could see an increase in their incomes since they would no longer be required to pay for supervision or split their revenue with a supervisor. However, this reduction may be offset, either in whole or in part, if a psychologist provides other activities or services during the time previously utilized for supervision. The loss of income by LPs could also be replaced by hiring newly licensed LPAs to take the place of an LPA that decide to leave for independent practice. Additionally, not all LPAs may leave, some may stay under the supervision of an LP, the proposed rule does not require LPAs to practice independently. Because, as noted above, the outcome of the negotiations between an LP and an LPA are outside the Board's control, the amount of adverse economic impact to LPs cannot be calculated with certainty. This proposed amendment may also increase market competition as it will likely increase affordability of mental health services and expand capacity and access in the marketplace to mental healthcare as a result of the increase of independent practitioners. This amendment will likely result in a positive economic impact for those LPAs who achieve independent practice status since they will no longer have to pay for permanent supervision. The Board considered the following alternative methods in an attempt to achieve the same purpose of the amendment while minimizing the adverse impacts on small and micro businesses. First, the Board considered issuing a specialty license to LPAs for particular areas of practice once they complete an additional 3,000 hours of supervised experience in a given practice area. This requirement would not be congruent with the general licensing scheme administered by the agency. While the Board possesses the rulemaking authority to restrict a licensee's practice to those areas where he or she is competent to deliver services, the Board only has authority to issue a general license, not a specialty license. The Board does not have the authority to issue a separate license for each area of competency. Furthermore, such a licensing scheme is not necessary because the Board will rely on its competency rule to require LPAs to practice only within their areas of competency. Under the Board's Competency Rule, a licensee may only provide services for which they have the education, skills, and training to perform competently. See 22 Tex. Admin. Code 465.9(a) of this title. Additionally, under this amendment, a licensee who lacks the competency to provide a psychological service must withdraw and refer the individual to a competent service provider. See 22 Tex. Admin. Code 465.9(h) of this title. Therefore, adding a requirement that an LPA receive a specialty license to practice independently would not provide any additional safeguard for the public and would not be consistent with the Board's licensing scheme. Another alternative considered was to expressly prohibit the practice of neuropsychology by LPAs. Like the first proposal, this alternative was found to be unnecessary since the Board currently has rules in place which prevent any provider, including LPAs, from practicing outside their scope of competency. The Board's competency rule has proven effective in the past, for example in limiting the practice of Industrial/Organizational Psychologists, and the Board has found no evidence as to why this would not be equally effective with regards to independent practice by LPAs. The Board also considered creating a certification committee for LPA independent practice, consisting of 3 LPs and 2 LPAs, 42 TexReg 5354 October 6, 2017 Texas Register

73 that would certify LPAs to practice in certain areas of psychology and set standards for areas of competency. This alternative would again limit the scope of practice of an LPA and, as discussed above, this proposal would essentially create specialty licenses for LPAs which is not consistent with the Board's licensing scheme and frustrates the purposes for the proposed amendment. Finally, the Board's staff considered a no-change alternative amendment that would still require LP supervision of LPAs if the LPA is working for an employer that has fewer than 100 employees or less than $6 million in annual gross receipts and would allow independent practice only for LPAs employed by a larger business. Such an alternative rule would be impracticable for licensure and enforcement as it would be difficult for the Board to maintain current information on each small business, and again, this would frustrate the purposes behind the proposed amendment. Also, this exception would likely swallow the rule since it is estimated that most LPAs are employed in small or micro businesses. While there may be alternatives that minimize the adverse impact on small or micro businesses, the alternatives are not consistent with the health, safety, and economic welfare of the state and do not accomplish the objective of the proposed amendment. RURAL IMPACT STATEMENT: The Board anticipates that the proposed amendment will not have an adverse impact on rural communities. Rather, the Board estimates that allowing LPAs to practice independently will allow LPAs the opportunity to offer services in more rural counties where a supervising psychologist may not currently be available. Therefore, the Board believes this amendment will have a positive effect on rural communities. Since the Board estimates that the 147 rural counties with a population of 25,000 or less are not likely to be adversely affected by the proposed amendment, an alternative version of the amendment regarding rural communities was not considered by the Board. LOCAL EMPLOYMENT IMPACT STATEMENT. The proposed amendment will not affect a local economy; thus, a local employment impact statement is not required. Requirement for Rule increasing costs to regulated persons. No repeal of another rule is required to offset any increased costs because 1) this proposed amendment reduces the burdens and responsibilities imposed on regulated persons; 2) this proposed amendment is necessary to protect the health, safety, and welfare of the residents of this state; and 3) the licensing and regulatory costs imposed by the Board on licensees is not expected to increase. Government Growth Impact Statement. For the first five-year period the proposed amendment is in effect, the Board estimates that the proposed amendment will not affect government growth. This proposed amendment does not create or eliminate a government program; it does not require the creation or elimination of employee positions; it does not require the increase or decrease in future legislative appropriations to the this agency; it does not require an increase or decrease in fees paid to the agency; it does not create a new regulation (it amends an existing regulation by repeal and adoption); it does not expand or repeal an existing regulation, but it does limit existing regulations by removing supervision as a permanent requirement for an LPA; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or adversely affect the state's economy. PUBLIC COMMENT. Comments on the proposed amendment may be submitted to Brenda Skiff, Public Information Officer, Texas State Board of Examiners of Psychologists, 333 Guadalupe, Ste , Austin, Texas 78701, within 30 days of publication of this proposal in the Texas Register. Comments may also be submitted via fax to (512) , or via to Open.Records@tsbep.texas.gov. The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed amendment is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the amendment, describe and estimate the economic impact of the amendment on small businesses, offer alternative methods of achieving the purpose of the amendment, then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed amendment is to be adopted, and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See (c) and (c-1) of the Tex. Gov't. Code. STATUTORY AUTHORITY. The amendment is proposed under Texas Occupations Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt make all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this amendment pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. Board rules 22 Tex. Admin. Code 463.8, , and of these titles will be affected by this amendment. No other code, articles or statutes are affected by this section Written Examinations. (a) Jurisprudence Examination. All applicants for licensure by the Board are required to pass the Jurisprudence Examination prior to licensure. (b) Examination in School Psychology. Applicants for licensure as a specialist in school psychology must take the National School Psychology Examination administered by the Educational Testing Service and obtain at least the current cut-off score for the National Certified School Psychologist before applying for the Licensed Specialist in School Psychology. (c) Examination for Professional Practice in Psychology. All applicants for licensure as a psychological associate, provisional licensure as a psychologist, or licensure as a psychologist are required to pass the Examination for Professional Practice in Psychology (EPPP) prior to the Board granting licenses. (d) Applicants Having Previously Taken the EPPP [Professional Examination]. An applicant for licensure who has taken the EPPP either in the past or in another jurisdiction will not be required to retake the exam provided that: (1) the applicant's score satisfies [satisfied ] the Board's current minimum acceptable score for licensure; and PROPOSED RULES October 6, TexReg 5355

74 (2) the applicant can demonstrate that he/she has remained professionally involved in psychology; i.e., at least half-time professional employment and/or academic enrollment in a regionally accredited educational institution. [(e) Doctoral Applicants Taking Exam at Master's Level. An applicant for provisional licensure as a psychologist who has taken the EPPP at the master's level will not be required to retake the exam provided that:] [(1) the applicant's score satisfied the Board's current minimum acceptable score for doctoral level applicants; and] [(2) the applicant can demonstrate that he or she has remained academically and/or professionally involved in psychology.] (e) [(f)] Cutoff Scores for the EPPP. The minimum acceptable score for the EPPP is seventy percent (70%) of questions scored [for psychologist licensure applicants and fifty-five percent (55%) of questions scored for psychological associate licensure applicants] on the pencil and paper version of the test. For computer-delivered EPPP examinations, the cutoff scaled score is 500. [are 500 and 350 respectively. Applicants for licensure as a psychological associate must receive a minimum score of eighty percent (80%) of questions scored on the Board's Jurisprudence Examination. All other applications for licensure must receive a minimum score of ninety percent (90%) of questions scored on the Board's Jurisprudence Examination. The exam score of applicants for licensure who have already taken the EPPP must satisfy the requirements of the Board as of the date of application to the Board.] (f) Cutoff Scores for the Jurisprudence Examination. The minimum acceptable score for the jurisprudence examination for all licensure applicants is ninety percent (90%). 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 September 25, TRD Darrel D. Spinks Executive Director Texas State Board of Examiners of Psychologists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER TAC RULES OF PRACTICE The Texas State Board of Examiners of Psychologists proposes an amendment to rule 465.2, Supervision. The proposed amendment is necessary to ensure conformity in the Board's rules, namely with the proposed new rule of this title, Licensed Psychological Associate (LPA). Currently, LPAs must be under the supervision of a Licensed Psychologist (LP) and may not engage in independent practice. The proposed amendment would allow experienced LPAs to practice independently. This proposed amendment change addresses the licensed mental health provider shortage in Texas by fully utilizing LPAs in the workforce today. The proposed amendment is also directly responsive to stakeholder requests to allow independent practice by psychological associates, as well as requests from legislators who have expressed an interest in this issue. The amendment is proposed under Tex. Occ. Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this rule pursuant to the authority found in of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. EXPLANATION OF THE PROPOSED RULE The proposed amendment allows for independent LPA practice by LPAs who meet certain requirements. Currently, LPAs must practice under the supervision of an LP. This restriction is a permanent limitation to the associate license no matter how much training or experience an LPA has. While some LPAs receive substantial, direct supervision from a psychologist, many LPAs, particularly those with many years of experience, receive only the one hour per week supervision required by current Psychology Board Rules. See 22 Tex. Admin. Code of this title. The proposed amendment takes into account this wide spectrum of competency possessed by LPAs. The proposed amendment would allow an LPA to practice independently, without supervision, if they meet certain requirements. The proposed amendment would continue to require an LPA to hold a graduate degree in psychology from an accredited university or college, but would require the degree to consist of a minimum of 60 semester credit hours, rather than the 42 semester hours currently required. The proposed amendment would also require an LPA to obtain at least 3,000 hours of supervised practice by a licensed psychologist after receiving their degree to be eligible to practice independently. The Board's competency rule would still apply to LPAs; therefore an LPA would be required to practice only in their areas of competency. See 22 Tex. Admin. Code of this title. This approach will facilitate a more robust market by utilizing LPAs in the current workforce to increase access, affordability, and expand capacity of mental health services throughout the State. Allowing LPAs to practice independently will allow LPAs to offer services in more rural counties where a supervising psychologist may not currently be available. Moreover, the proposed amendment recognizes the long-standing importance of allowing the average citizen to select his or her own health care provider, rather than unnecessarily limiting the marketplace. The proposed amendment responds to stakeholder and legislative requests for a change to the LPA supervision requirements. The proposed amendment also responds to stakeholder requests for independent practice. Currently the Board licenses approximately 915 individuals as LPAs, and as of August of 2016 approximately 860 LPAs also held a license as a professional counselor. Licensed Professional Counselors may practice independently after completing a 60 credit-hour master's degree program and completing 3,000 hours of supervised internship. See 22 Tex. Admin. Code of this title (relating to Academic Requirements for Licensed Professionals Counselors). The proposed amendment helps ensure consistent training requirements for these dual-licensed mental health professionals. 42 TexReg 5356 October 6, 2017 Texas Register

75 The proposed amendment is also necessary to give full effect to the Sunset Advisory Commission's management action from its review of this agency in the 85th Legislature which states: "[t]he board should repeal any rule that, after its evaluation, it deems susceptible to legal challenge based on precedent in the Supreme Court ruling" in North Carolina State Board of Dental Examiners v. Federal Trade Commission. The Board hereby incorporates by reference the Texas Sunset Advisory Commission's Staff Report with Final Results of the Texas State Board of Examiners of Psychologists for the 85th Legislature. FISCAL NOTE. Darrel D. Spinks, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost, reduction in costs, or loss or increase in revenue to the state or local governments as a result of enforcing or administering the rule. Additionally, Mr. Spinks has determined that enforcing or administering the rule does not have foreseeable implications relating to the costs or revenues of state or local government. PUBLIC BENEFIT. Mr. Spinks has determined for the first fiveyear period the proposed amendment is in effect, there will be a benefit to consumers due to an increase in access, affordability, and capacity of licensed mental health providers. Additionally, Mr. Spinks reasonably anticipates the proposed amendment to result in an increase in the number of mental health providers licensed by this agency, because if LPAs are allowed to practice independently then it is anticipated that more individuals will apply for an LPA license. It is also anticipated that LPAs, being able to practice independently, will increase the number of providers servicing mental health professional shortage areas throughout the state. PROBABLE ECONOMIC COSTS. Mr. Spinks has determined for the first five-year period the proposed amendment is in effect, the rule will carry a probable economic cost to some individuals required to comply with the amendment. In 2019 there will be a probable economic cost to LPAs to comply with the proposed amendment. Under the proposed amendment, the credit hours for an acceptable graduate degree to qualify for licensure as an LPA will increase from 42 to 60 credit hours. The additional 18 credit hour requirement may cause an additional cost to some LPA applicants in the form of increased tuition to schools that do not currently require 60 credit hours for a master's degree in psychology. The impact will vary by school and degree program. The increased credit hours are necessary to protect the public and help ensure future licensees have the requisite knowledge to be qualified for independent practice. The 60 credit hours is a similar standard to that used by other mental health professionals with a graduate degree that can practice independently. See 22 Tex. Admin. Code (relating to Academic Requirements for Licensed Professional Counselors). SMALL BUSINESS AND MICRO-BUSINES IMPACT ANAL- YSIS. The proposed amendment may have an adverse effect on small or micro-businesses. However, any potential adverse effect is estimated to be outweighed by the positive public benefit. And, although some LP small or micro businesses may see a negative impact in regards to lost income, an LPA's business will likely experience a positive impact. According to the most recent data collected by the Board, there are approximately 915 LPAs and 4,835 LPs actively licensed by this agency. While a majority of LPAs engaged in the practice of psychology must be under the supervision of a psychologist, some are exempt under of the Tex. Occ. Code, and others may not be engaged in the practice of psychology and thus do not require a supervisor. Additionally, other LPAs may be dually licensed as a Licensed Specialist in School Psychology and work in a public school where the supervision of an LP is not required. Furthermore, not all LPs supervise an LPA. Therefore, while an exact number is impossible to determine based upon the information available, assuming an LP employs and supervises at least one LPA, it is estimated that no more than 915 LP small or micro-businesses will be adversely impacted by the proposed amendment change. Some LPs and LPAs may have entered into fee arrangements for the LPAs supervision. This proposed amendment may reduce the income for LPs in terms of lost income from the loss of the supervision fee after an LPA has completed the 3,000 hours of supervision. Thus, psychologists who charge for their supervision services could see a reduction in their incomes. Conversely, the LPAs that are no longer required to be supervised could see an increase in their incomes since they would no longer be required to pay for supervision or split their revenue with a supervisor. However, this reduction may be offset, either in whole or in part, if a psychologist provides other activities or services during the time previously utilized for supervision. The loss of income by LPs could also be replaced by hiring newly licensed LPAs to take the place of an LPA that decide to leave for independent practice. Additionally, not all LPAs may leave, some may stay under the supervision of an LP, the proposed rule does not require LPAs to practice independently. Because, as noted above, the outcome of the negotiations between an LP and an LPA are outside the Board's control, the amount of adverse economic impact to LPs cannot be calculated with certainty. This proposed amendment may also increase market competition as it will likely increase affordability of mental health services and expand capacity and access in the marketplace to mental healthcare as a result of the increase of independent practitioners. This amendment will likely result in a positive economic impact for those LPAs who achieve independent practice status since they will no longer have to pay for permanent supervision. The Board considered the following alternative methods in an attempt to achieve the same purpose of the amendment while minimizing the adverse impacts on small and micro businesses. First, the Board considered issuing a specialty license to LPAs for particular areas of practice once they complete an additional 3,000 hours of supervised experience in a given practice area. This requirement would not be congruent with the general licensing scheme administered by the agency. While the Board possesses the rulemaking authority to restrict a licensee's practice to those areas where he or she is competent to deliver services, the Board only has authority to issue a general license, not a specialty license. The Board does not have the authority to issue a separate license for each area of competency. Furthermore, such a licensing scheme is not necessary because the Board will rely on its competency rule to require LPAs to practice only within their areas of competency. Under the Board's Competency Rule, a licensee may only provide services for which they have the education, skills, and training to perform competently. See 22 Tex. Admin. Code 465.9(a) of this title. Additionally, under this amendment, a licensee who lacks the competency to provide a psychological service must withdraw and refer the in- PROPOSED RULES October 6, TexReg 5357

76 dividual to a competent service provider. See 22 Tex. Admin. Code 465.9(h) of this title. Therefore, adding a requirement that an LPA receive a specialty license to practice independently would not provide any additional safeguard for the public and would not be consistent with the Board's licensing scheme. Another alternative considered was to expressly prohibit the practice of neuropsychology by LPAs. Like the first proposal, this alternative was found to be unnecessary since the Board currently has rules in place which prevent any provider, including LPAs, from practicing outside their scope of competency. The Board's competency rule has proven effective in the past, for example in limiting the practice of Industrial/Organizational Psychologists, and the Board has found no evidence as to why this would not be equally effective with regards to independent practice by LPAs. The Board also considered creating a certification committee for LPA independent practice, consisting of 3 LPs and 2 LPAs, that would certify LPAs to practice in certain areas of psychology and set standards for areas of competency. This alternative would again limit the scope of practice of an LPA and, as discussed above, this proposal would essentially create specialty licenses for LPAs which is not consistent with the Board's licensing scheme and frustrates the purposes for the proposed amendment. Finally, the Board's staff considered a no-change alternative amendment that would still require LP supervision of LPAs if the LPA is working for an employer that has fewer than 100 employees or less than $6 million in annual gross receipts and would allow independent practice only for LPAs employed by a larger business. Such an alternative rule would be impracticable for licensure and enforcement as it would be difficult for the Board to maintain current information on each small business, and again, this would frustrate the purposes behind the proposed amendment. Also, this exception would likely swallow the rule since it is estimated that most LPAs are employed in small or micro businesses. While there may be alternatives that minimize the adverse impact on small or micro businesses, the alternatives are not consistent with the health, safety, and economic welfare of the state and do not accomplish the objective of the proposed amendment. RURAL IMPACT STATEMENT: The Board anticipates that the proposed amendment will not have an adverse impact on rural communities. Rather, the Board estimates that allowing LPAs to practice independently will allow LPAs the opportunity to offer services in more rural counties where a supervising psychologist may not currently be available. Therefore, the Board believes this amendment will have a positive effect on rural communities. Since the Board estimates that the 147 rural counties with a population of 25,000 or less are not likely to be adversely affected by the proposed amendment, an alternative version of the amendment regarding rural communities was not considered by the Board. LOCAL EMPLOYMENT IMPACT STATEMENT. The proposed amendment will not affect a local economy; thus, a local employment impact statement is not required. Requirement for Rule increasing costs to regulated persons. No repeal of another rule is required to offset any increased costs because 1) this proposed amendment reduces the burdens and responsibilities imposed on regulated persons; 2) this proposed amendment is necessary to protect the health, safety, and welfare of the residents of this state; and 3) the licensing and regulatory costs imposed by the Board on licensees is not expected to increase. Government Growth Impact Statement. For the first five-year period the proposed amendment is in effect, the Board estimates that the proposed amendment will not affect government growth. This proposed amendment does not create or eliminate a government program; it does not require the creation or elimination of employee positions; it does not require the increase or decrease in future legislative appropriations to the this agency; it does not require an increase or decrease in fees paid to the agency; it does not create a new regulation (it amends an existing regulation by repeal and adoption); it does not expand or repeal an existing regulation, but it does limit existing regulations by removing supervision as a permanent requirement for an LPA; it does not increase or decrease the number of individuals subject to the rule's applicability; and it does not positively or adversely affect the state's economy. PUBLIC COMMENT. Comments on the proposed amendment may be submitted to Brenda Skiff, Public Information Officer, Texas State Board of Examiners of Psychologists, 333 Guadalupe, Ste , Austin, Texas 78701, within 30 days of publication of this proposal in the Texas Register. Comments may also be submitted via fax to (512) , or via to Open.Records@tsbep.texas.gov. The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed amendment is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the amendment, describe and estimate the economic impact of the amendment on small businesses, offer alternative methods of achieving the purpose of the amendment, then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed amendment is to be adopted, and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See (c) and (c-1) of the Tex. Gov't. Code. STATUTORY AUTHORITY. The amendment is proposed under Texas Occupations Code, Title 3, Subtitle I, Chapter 501, which provides the Texas State Board of Examiners of Psychologists with the authority to adopt make all rules not inconsistent with the Constitution and Laws of this State, which are reasonably necessary for the proper performance of its duties and regulations of proceedings before it. Additionally, the Board proposes this amendment pursuant to the authority found in Section of the Tex. Occ. Code which vests the Board with the authority to set standards for the issuance of licenses to psychological personnel who hold a master's degree. Board rules 22 Tex. Admin. Code 463.8, and of these titles will be affected by this amendment. No other code, articles or statutes are affected by this section Supervision. (a) Supervision in General. The following rules apply to all supervisory relationships. 42 TexReg 5358 October 6, 2017 Texas Register

77 (1) A licensee is responsible for the supervision of all individuals that the licensee employs or utilizes to provide psychological services of any kind. (2) Licensees ensure that their supervisees have legal authority to provide psychological services. (3) Licensees delegate only those responsibilities that supervisees may legally and competently perform. (4) All individuals who receive psychological services requiring informed consent from an individual under supervision must be informed in writing of the supervisory status of the individual and how the patient or client may contact the supervising licensee directly. (5) All materials relating to the practice of psychology, upon which the supervisee's name or signature appears, must indicate the supervisory status of the supervisee. Supervisory status must be indicated by one of the following: (B) Under the supervision of (name of supervising licensee); (A) Supervised by (name of supervising licensee); (C) The following persons are under the supervision of (name of supervising licensee); or (D) Supervisee of (name of supervising licensee). (6) Licensees provide an adequate level of supervision to all individuals under their supervision according to accepted professional standards given the experience, skill and training of the supervisee, the availability of other qualified licensees for consultation, and the type of psychological services being provided. (7) Licensees utilize methods of supervision that enable the licensee to monitor all delegated services for legal, competent, and ethical performance. Methods of supervision may include remote or electronic means if: (A) adequate supervision can be provided through remote or electronic means; (B) the difficulties in providing full-time in-person supervision place an unreasonable burden on the delivery of psychological services; and (C) no more than fifty percent of the supervision takes place through remote or electronic means. (8) Licensees must be competent to perform any psychological services being provided under their supervision. (9) Licensees shall document their supervision activities in writing, including any remote or electronic supervision provided. Documentation shall include the dates, times, and length of supervision. (10) Licensees may only supervise the number of supervisees for which they can provide adequate supervision. (b) Supervision of Students, Interns, Residents, Fellows, and Trainees. The following rules apply to all supervisory relationships involving students, interns, residents, fellows, and trainees. (1) Unlicensed individuals providing psychological services pursuant to (a)(2), (b)(2), or (b)(3) of the Act must be under the supervision of a qualified supervising licensee at all times. (2) Supervision must be provided by a qualified supervising licensee before it will be accepted for licensure purposes. (3) A licensee practicing under a restricted status license is not qualified to, and shall not provide supervision for a person seeking to fulfill internship or practicum requirements, or a person seeking licensure under the Psychologists' Licensing Act, regardless of the setting in which the supervision takes place, unless authorized to do so by the Board. A licensee shall inform all supervisees of any Board order restricting their license and assist the supervisees with finding appropriate alternate supervision. (4) A supervisor must document in writing their supervisee's performance during a practicum, internship, or period of supervised experience required for licensure. The supervisor must provide this documentation to the supervisee. (5) An individual subject to this subsection may allow a supervisee, as part of a required practicum, internship, or period of supervised experience required for licensure with this Board, to supervise others in the delivery of psychological services. (6) For provisional trainees, a supervisor must provide at least one hour of individual supervision per week and may reduce the amount of weekly supervision on a proportional basis for provisional trainees working less than full-time. (7) Licensees may not supervise an individual to whom they are related within the second degree of affinity or consanguinity. (c) Supervision of Provisionally Licensed Psychologists and Licensed Psychological Associates. The following rules apply to all supervisory relationships involving Provisionally Licensed Psychologists and Licensed Psychological Associates. (1) Provisionally Licensed Psychologists [and Licensed Psychological Associates] must be under the supervision of a Licensed Psychologist and may not engage in independent practice. (2) A Provisionally Licensed Psychologist who is licensed in another state to independently practice psychology and is in good standing in that state, and who has applied for licensure as a psychologist may during the time that the Board is processing the applicant's application for licensure as a psychologist, practice psychology without supervision. However, upon notification from the Board that an applicant has not met the qualifications for licensure as a psychologist, the provisionally licensed psychologists must obtain supervision within 30 days in order to continue to practice. (3) A provisionally licensed psychologist may, as part of a period of supervised experience required for full licensure with this Board, supervise others in the delivery of psychological services. (4) A supervisor must provide at least one hour of individual supervision per week. A supervisor may reduce the amount of weekly supervision on a proportional basis for supervisees working less than full-time. (d) Supervision of Licensed Specialists in School Psychology interns and trainees. The following rules apply to all supervisory relationships involving Licensed Specialists in School Psychology, as well as all interns and trainees working toward licensure as a specialist in school psychology. (1) A supervisor must provide an LSSP trainee with at least one hour of supervision per week, with no more than half being group supervision. A supervisor may reduce the amount of weekly supervision on a proportional basis for trainees working less than full-time. (2) Supervision within the public schools may only be provided by a Licensed Specialist in School Psychology, who has a minimum of three years of experience providing psychological services within the public school system without supervision. To qualify, a li- PROPOSED RULES October 6, TexReg 5359

78 censee must be able to show proof of their license, credential, or authority to provide unsupervised school psychological services in the jurisdiction where those services were provided, along with documentation from the public school(s) evidencing delivery of those services. (3) Supervisors must sign educational documents completed for students by the supervisee, including student evaluation reports, or similar professional reports to consumers, other professionals, or other audiences. It is not a violation of this rule if supervisors do not sign documents completed by a committee reflecting the deliberations of an educational meeting for an individual student which the supervisee attended and participated in as part of the legal proceedings required by federal and state education laws, unless the supervisor also attended and participated in such meeting. (4) Supervisors shall document all supervision sessions. This documentation must include information about the duration of sessions, as well as the focus of discussion or training. The documentation must also include information regarding: (A) any contracts or service agreements between the public school district and university school psychology training program; (B) any contracts or service agreements between the public school district and the supervisee; (C) the supervisee's professional liability insurance coverage, if any; (D) any training logs required by the school psychology training program; and (E) the supervisee's trainee or licensure status. (5) Supervisors must ensure that each individual completing any portion of the internship required by Board rule 463.9, [463.9,] is provided with a written agreement that includes a clear statement of the expectations, duties, and responsibilities of each party, including the total hours to be performed by the intern, benefits and support to be provided by the supervisor, and the process by which the intern will be supervised and evaluated. (6) Supervisors must ensure that supervisees have access to a process for addressing serious concerns regarding a supervisee's performance. The process must protect the rights of clients to receive quality services, assure adequate feedback and opportunities for improvement to the supervisee, and ensure due process protection in cases of possible termination of the supervisory relationship. (e) The various parts of this rule should be construed, if possible, so that effect is given to each part. However, where a general provision conflicts with a more specific provision, the specific provision shall control. 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 September 25, TRD Darrel D. Spinks Executive Director Texas State Board of Examiners of Psychologists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY CHAPTER 511. ELIGIBILITY SUBCHAPTER D. CPA EXAMINATION 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Definitions. Background, Justification and Summary The amendment to utilizes the best language for describing impairments. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better description of impairments. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on November 6, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority 42 TexReg 5360 October 6, 2017 Texas Register

79 The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Definitions. The following words and terms when used in this chapter shall have the following meanings, unless the context clearly indicates otherwise. (1) Disability--A physical or mental impairment that substantially limits one or more of the major life activities of an individual; a record of such an impairment; being regarded as having such an impairment. (2) Learning disability--evidence of significant learning difficulties which substantially affect or limit one or more major life activities, and which are not primarily due to cultural, emotional, or motivational factors. The term does not include learning problems which are primarily the result of visual, hearing, or motor disabilities, intellectual disabilities [mental retardation], emotional disturbance, or of environmental, cultural, or economic disadvantage. Note that while some of these factors may be involved in other types of disabilities, such factors are excluded from the determination of a learning disability. (3) Major life activities--walking, speaking, seeing, hearing, breathing, learning, working, caring for one's self. (4) Mental impairment--any mental or psychological disorder such as organic brain syndrome, emotional or mental illness, and specific learning disabilities. 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Documentation of the Need for an Accommodation. Background, Justification and Summary The amendment to utilizes the best language for describing impairments. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a better description of impairments. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on November 6, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted; and finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Documentation of the Need for an Accommodation. (a) Requirements of an applicant requesting accommodation. (1) To protect the integrity of the testing process, the board requires documentation of the existence of a disability and reason the requested accommodation is necessary to provide the applicant with an equal opportunity to exhibit his/her knowledge, skills, and ability through the examination. (2) An applicant requesting an accommodation shall have the professional certifying to the disability provide all of the information listed in subsection (c) of this section. For subsequent examinations, the applicant who was earlier provided an accommodation shall submit a statement from the professional who previously certified to the disability condition stating that the disability condition has not changed to the extent that it would require a modification to the accommoda- PROPOSED RULES October 6, TexReg 5361

80 tion previously provided. The applicant is responsible for any costs involved in providing this documentation. (3) An evaluation and documentation supporting a disability shall be valid for three years from the date submitted to the board, except that no further documentation shall be required where the evaluation clearly states that the disability will not change in the future. (b) Additional requirements for an applicant with a learning disability [a learning-disabled applicant]. (1) The applicant shall demonstrate: (A) at least average overall intellectual functioning as measured by general cognitive ability tests; and (B) evidence of a significant impairment in one or more of the following areas of intellectual functioning and information processing: (iii) reception (perception and verbal comprehension); (i) attention and concentration; (ii) efficiency and speed of information processing; (iv) memory (ability for new learning); (v) cognition (thinking); and (vi) expression. (2) Significant impairment is generally determined by a discrepancy of 1.5 standard deviations, or more, between the applicant's intellectual functioning, as measured by general cognitive ability tests, and actual performance on reliable standardized measures of attention and concentration, memory, language reception and expression, cognition, as well as academic areas of reading, spelling, writing, and mathematics. (3) Further, determination of the learning disability shall be based on reliable standardized psychometric tests of achievement and ability and a complete clinical history including medical, family, developmental, educational and occupational information. (c) Information required to evaluate disabilities. An applicant who requests an accommodation and/or an auxiliary aid shall provide the board with the necessary information to evaluate the request. The board shall evaluate each request on a case-by-case basis. The following information is required to support requests for an accommodation and/or auxiliary aid: (1) identification of the type of disability (physical, mental, learning); (2) credential requirements of the evaluator: (A) For physical or mental disabilities (not including learning), the evaluator shall be a licensed physician or psychologist with special expertise in the area of the disability. If someone else who does not fit these criteria completes the evaluation, the board may reject the unqualified evaluation and require another evaluation by a professional of its choosing, and the request may be delayed. (B) In the case of learning disabilities, a qualified evaluator shall have sufficient experience to be considered qualified to evaluate the existence of learning disabilities and proposed accommodations needed for specific learning disabilities. The evaluator shall be one of the following: (i) a licensed physician or psychologist who possesses a minimum of three years experience working with adults with learning disabilities, and who has training in all of the areas described in clause (ii) of this subparagraph; or (ii) another professional who possesses a master's or doctoral degree in special education or educational psychology from a regionally accredited institution, defined as being accredited or an applicant for accreditation, identified by the American Association of Collegiate Registrars and Admissions Officers, and who has at least three years of equivalent training and experience in all of the areas described in subclauses (I) - (IV) of this clause: (I) assessing intellectual ability level and interpreting tests of such ability; screening for cultural, emotional, and motivational factors; (II) (III) assessing achievement level; and (IV) administering tests to measure attention and concentration, memory, language reception and expression, cognition, reading, spelling, writing, and mathematics. include: applicable; (3) Professional verification of the disability, which shall (A) (B) the nature and extent of the disability; the test(s) performed to diagnose the disability, if (C) the effect of the disability on the applicant's ability to perform under standard testing conditions; (D) the recommended accommodation and how it relates to the applicant's disability, given the format of the examination; (E) the professional's name, title, telephone number, professional license or certification number, educational credential, and his/her original signature; and (F) a description of the professional's educational experience which qualifies him/her to make the determination. 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER F. EXPERIENCE REQUIREMENTS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to , concerning Reporting Work Experience. Background, Justification and Summary 42 TexReg 5362 October 6, 2017 Texas Register

81 The amendment to proposes language requiring the supervising CPA to affirm in writing that he has supervised the work of the applicant for at least one year and expresses the opinion that the applicant is qualified to perform accounting work in accordance with professional standards. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be applicants whose supervisor has affirmed he has supervised the applicants work to perform accounting work in accordance with professional standards. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on November 6, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Reporting Work Experience. (a) The board requires a minimum of one year of work experience as described in of this chapter (relating to Acceptable Work Experience) which shall be obtained in one of the following ways: (1) full time employment consisting of 40 or more hours per week completed in no less than 12 months; or (2) part time employment consisting of a minimum of 20 hours per week until 2000 hours of accounting work experience have been completed. Part-time work experience must be completed in no more than 24 months from the date the work begins. (b) All work experience presented to the board for consideration shall be accompanied by the following items: (1) a statement from the supervising CPA describing the non-routine work performed by the applicant and a description of the important accounting matters requiring the applicant's independent thought and judgment; [and] (2) a statement from the supervising CPA describing the type of experience that the CPA possesses which qualifies the CPA to supervise the applicant; and[.] (3) an affidavit from the supervising CPA stating that he has supervised the applicant's work; and offers his opinion that the applicant is qualified to perform all the accounting related work assigned to the applicant in accordance with the professional standards required by the 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 515. LICENSES 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 515.8, concerning Retired or Disability Status. Background, Justification and Summary The amendment to provides guidance on what constitutes compensation as it applies to retired CPAs, requires retired CPAs to identify themselves as "retired," and expands upon what constitutes what may be considered to be volunteer work performed in retired status. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local govern- PROPOSED RULES October 6, TexReg 5363

82 ments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be to make it clearer to the public when a CPA is retired and to clarify when a CPA may provide volunteer accounting work when in retired status. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on November 6, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Retired or Disability Status. (a) Retired status. A licensee who is at least 60 years old and has filed a request on a form prescribed by the board stating that he has no association with accounting [work for compensation] may be granted retired status at the time of license renewal. A licensee [An individual] who has been granted retired status and who reenters the workforce in a position that has an association with accounting [work for which he receives compensation] automatically loses the retired status except as provided for in subsection (a)(1) of this section. [A CPA who serves on a Board of Directors, Board of Trustees, or in a similar governance position is not eligible for retired status unless the service is provided without compensation and for a charity, civic, or similar non-profit organization. Upon reentry into the workforce under such conditions, the individual must notify the board and request a new license renewal notice and:] (1) A licensee who serves without compensation on a Board of Directors, or Board of Trustees, or provides volunteer tax preparation services, participates in a government sponsored business mentoring program such as the Internal Revenue Service's Volunteer Income Tax Assistance (VITA) program or the Small Business Administration's SCORE program or participates in an advisory role for a similar charitable, civic or other non-profit organization continues to be eligible for retired status. (2) Licensees providing such uncompensated volunteer services have the responsibility to maintain professional competence relative to the volunteer services they provide even though exempted from CPE requirements. (3) The board shall require licensees to affirm in writing their understanding of the limited types of activities in which they may engage while in retired status and their understanding that they have a professional duty to ensure that they hold the professional competencies necessary to offer these limited volunteer services. (4) Licensees may only convert to retired status if they hold a license in good standing and not be subject to any sanction or disciplinary action. (5) Compensated services do not include routine reimbursement for travel costs and meals associated with the volunteer services or de minimis per diem amounts paid to cover such expenses. (6) A retired licensee shall place the word "retired" adjacent to his CPA or Public Accountant title on any business card, letterhead or any other document. A licensee may be held responsible for a third party incorrectly repeating the CPA's title and shall make reasonable efforts to assure that the word "retired" is used in conjunction with CPA. Any of these terms must not be applied in such a manner that could likely confuse the public as to the current status of the licensee. The licensee will not be required to have a certificate issued with the word "retired" on the certificate. CPE. (7) A licensee in "retired" status is not required to maintain (8) A retired licensee shall not offer or render professional services that requires his signature and use of the CPA title either with or without "retired" attached, except a retired licensee providing supervision of an applicant to take the UCPAE may sign the work experience form. (9) Upon reentry into the workforce, the licensee must notify the board and request a new license renewal notice and: (A) [(1)] pay the license fee established by the board for the period since he became employed; (B) [(2)] complete a new license renewal notice; and (C) [(3)] meet the CPE requirements for the period since he was granted the retired status as required by (3) [ (1)(B)(ii)] of this title (relating to Exemptions from CPE). (b) Disability status. Disability status may be granted to an individual who submits to the board a statement and a notarized affidavit from the licensee's physician which identifies the disability and states that the individual is unable to work because of a severe ongoing physical or mental impairment or medical condition that is not likely to improve within the next 12 consecutive months. This status may be granted only at the time of license renewal. 42 TexReg 5364 October 6, 2017 Texas Register

83 (1) Disability status is immediately revoked upon: (A) the CPA reentering the workforce in a position that has an association with accounting work for which he receives compensation; or (B) the CPA serving on a Board of Directors, Board of Trustees, or in a similar governance position unless the service is for a charity, civic, or similar non-profit organization. (2) Upon reentry into the workforce under such conditions, the individual must notify the board and request a new license renewal notice and: (A) pay the license fee established by the board for the period since he became employed; (B) complete a new license renewal notice; and (C) meet the CPE requirements for the period pursuant to (3) [ (1)(B)(ii)] of this title. (c) For purposes of this section the term "association with accounting [work]" shall include the following: (1) working[, supervising] or providing oversight of accounting or supervising work performed in the areas of financial accounting and reporting; tax compliance, planning or advice; management advisory services; accounting information systems; treasury, finance, or audit; or (2) representing to the public, including an employer, that the individual is a CPA or public accountant in connection with the sale of any services or products involving accounting services or work, as provided for in (22) of this title (relating to Definitions) including such designation on a business card, letterhead, proxy statement, promotional brochure, advertisement, or office; or (3) offering testimony in a court of law purporting to have expertise in accounting and reporting, auditing, tax, or management services; or (4) providing instruction in accounting courses; or (5) [(4)] for purposes of making a determination as to whether the individual fits one of the categories listed in this section [subsection (a) or (b) of this section] the questions shall be resolved in favor of including the work as an "association with accounting[work]." (d) Nothing herein shall be construed to limit the board's disciplinary authority with regard to a license in retired or disabled status. All board rules and all provisions of the Act apply to an individual in retired or disability status. 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 519. PRACTICE AND PROCEDURE SUBCHAPTER A. GENERAL PROVISIONS 22 TAC The Texas State Board of Public Accountancy (Board) proposes an amendment to 519.7, concerning Misdemeanors that Subject a Licensee or Certificate Holder to Discipline by the Board. Background, Justification and Summary The amendment to puts in place the process for determining whether a misdemeanor conviction in another state is comparable to a misdemeanor in Texas which would subject a licensee to possible disciplinary action. Fiscal Note William Treacy, Executive Director of the Board, has determined that for the first five-year period the proposed amendment is in effect, there will be no additional estimated cost to the state, no estimated reduction in costs to the state and to local governments, and no estimated loss or increase in revenue to the state, as a result of enforcing or administering the amendment. Public Benefit Cost Note Mr. Treacy has determined that for the first five-year period the amendment is in effect the public benefits expected as a result of adoption of the proposed amendment will be a clearer understanding of out of state misdemeanors which could subject a licensee to disciplinary action by the Board. There will be no probable economic cost to persons required to comply with the amendment and a Local Employment Impact Statement is not required because the proposed amendment will not affect a local economy. Small Business and Micro-Business Impact Analysis Mr. Treacy has determined that the proposed amendment will not have an adverse economic effect on small businesses or micro-businesses because the amendment does not impose any duties or obligations upon small businesses or micro-businesses, therefore, an Economic Impact Statement and a Regulatory Flexibility Analysis is not required. Public Comment Written comments may be submitted to J. Randel (Jerry) Hill, General Counsel, Texas State Board of Public Accountancy, 333 Guadalupe, Tower 3, Suite 900, Austin, Texas or faxed to his attention at (512) , no later than noon on November 6, The Board specifically invites comments from the public on the issues of whether or not the proposed amendment will have an adverse economic effect on small businesses; if the proposed rule is believed to have an adverse effect on small businesses, estimate the number of small businesses believed to be impacted by the rule, describe and estimate the economic impact of the rule on small businesses, offer alternative methods of achieving the purpose of the rule; then explain how the Board may legally and feasibly reduce that adverse effect on small businesses considering the purpose of the statute under which the proposed rule is to be adopted, finally describe how the health, safety, environmental and economic welfare of the state will be impacted by the various proposed methods. See Texas Government Code, (c). Statutory Authority PROPOSED RULES October 6, TexReg 5365

84 The amendment is proposed under the Public Accountancy Act ("Act"), Texas Occupations Code, which authorizes the Board to adopt rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by this proposed amendment Misdemeanors that Subject a Licensee or Certificate Holder to Discipline by the Board. (a) Final conviction or placement on deferred adjudication, deferred prosecution, withheld adjudication or community supervision may subject a licensee or certificate holder to disciplinary action pursuant to of this title (relating to Discreditable Acts). Licensees and certificate holders are often placed in a position of trust with respect to client funds. The public including the business community relies on the integrity, morality and honesty of licensees and certificate holders in providing professional accounting services or professional accounting work. The board considers conviction or placement on deferred adjudication, deferred prosecution, withheld adjudication or community supervision for any crime relating to integrity, morality and honesty to relate directly to the practice of public accountancy and may subject the licensee or certificate holder to discipline. The board has determined that the following list of misdemeanor offenses that involve integrity, morality and honesty directly relate to the duties and responsibilities involved in providing professional accounting services or professional accounting work, pursuant to the provisions of Chapter 53 of the Occupations Code: (D) Burglary of Coin-Operated or Coin Collection Machines; (1) dishonesty or fraud: (A) Unlawful Use of Criminal Instrument; (B) Unlawful Access to Stored Communications; (C) Illegal Divulgence of Public Communications; (E) Burglary of Vehicles; (F) Theft; (G) Theft of Service; (H) Tampering with Identification Numbers; (I) Theft of or Tampering with Multichannel Video or Information Services; (J) Manufacture, Distribution, or Advertisement of Multichannel Video or Information Services Device; (K) Sale or Lease of Multichannel Video or Information Services Device; (L) Possession, Manufacture, or Distribution of Certain Instruments Used to Commit Retail Theft; Order; (M) Forgery; (N) Criminal Simulation; (O) Trademark Counterfeiting; (P) Stealing or Receiving Stolen Check or Similar Sight (Q) False Statement to Obtain Property or Credit or in the Provision of Certain Services; (R) Hindering Secured Creditors; (S) Fraudulent Transfer of a Motor Vehicle; (T) Credit Card Transaction Record Laundering; (U) Issuance of a Bad Check; (V) Deceptive Business Practices; (W) Rigging Publicly Exhibited Contest; (X) Misapplication of Fiduciary Property or Property of Financial Institution; (Y) Securing Execution of Document by Deception; (Z) Fraudulent Destruction, Removal, or Concealment of Writing; (AA) Simulating Legal Process; (BB) Refusal to Execute Release of Fraudulent Lien or Claim; (CC) Fraudulent, Substandard, or Fictitious Degree; (DD) Breach of Computer Security; (EE) Unauthorized Use of Telecommunications Service; (FF) Theft of Telecommunications Service; (GG) Publication of Telecommunications Access Device; (HH) Insurance Fraud; (II) Medicaid Fraud; (JJ) Coercion of Public Servant or Voter; (KK) Improper Influence; (LL) Acceptance of Honorarium (by restricted government employees); (MM) Gift to Public Servant by Person Subject to his Jurisdiction; (NN) Offering Gift to Public Servant; (OO) Perjury; (PP) False Report to Police Officer or Law Enforcement Employee; (QQ) Tampering with or Fabricating Physical Evidence; (RR) Tampering with Governmental Record; (SS) Fraudulent Filing of Financial Statement; (TT) False Identification as Peace Officer; (UU) Misrepresentation of Property; (VV) Record of a Fraudulent Court; (WW) Bail Jumping and Failure to Appear; (XX) False Alarm or Report; (YY) Engaging in Organized Criminal Activity; (ZZ) Violation of Court Order Enjoining Organized Criminal Activity; and (AAA) Failing to file license holder's own tax return; (2) moral turpitude: (A) Public Lewdness; 42 TexReg 5366 October 6, 2017 Texas Register

85 (B) Indecent Exposure; (C) Enticing a Child; (D) Violation of a Protective Order Preventing Offense Caused by Bias or Prejudice; (H) Barratry and Solicitation of Professional Employment; (E) Failure to Identify; (F) Hindering Apprehension or Prosecution; (G) Improper Contact with Victim; (I) Unauthorized Practice of Law; (J) Hindering Proceedings by Disorderly Conduct; (K) Abuse of Corpse; (L) Prostitution; (M) Promotion of Prostitution; (N) Obscene Display or Distribution; (O) Obscenity; (P) Sale, Distribution, or Display of Harmful Material to Minor; and (Q) Employment Harmful to Children; (3) alcohol abuse or controlled substances: (A) Possession of Substance in Penalty Group 3 (less than 28 grams), under the Texas Health and Safety Code; (B) Possession of Substance in Penalty Group 4 (less than 28 grams), under the Texas Health and Safety Code; (C) Manufacture, Delivery, or Possession with Intent to Deliver Miscellaneous Substances, under the Texas Health and Safety Code; (D) Manufacture, Delivery, or Possession of Miscellaneous Substances, under the Texas Health and Safety Code; (E) Delivery of Marijuana, under the Texas Health and Safety Code; (F) Possession of Marijuana, under the Texas Health and Safety Code; (G) Possession or Transport of Certain Chemicals with Intent to Manufacture Controlled Substance (for substance listed in a Schedule but not in a Penalty Group), under the Texas Health and Safety Code; (H) Possession or Delivery of Drug Paraphernalia, under the Texas Health and Safety Code; (I) Obstructing Highway or Other Passageway; and (J) Any misdemeanor involving intoxication under the influence of alcohol or a controlled substance. (4) physical injury or threats of physical injury to a person: (A) Assault; (B) Deadly Conduct; (C) Terroristic Threat; and (D) Leaving a Child in a Vehicle. (b) A licensee or certificate holder is often placed in a position of trust with respect to client funds; and the public, including the business community relies on the integrity, morality and honesty of licensees and certificate holders in preparing reports and providing professional accounting services or professional accounting work. The board considers repeated violations of criminal laws to relate directly to a licensee or certificate holder providing professional accounting services or professional accounting work. (c) A conviction or placement on deferred adjudication, deferred prosecution, withheld adjudication or community supervision for a violation of any state or federal law that is equivalent to an offense listed in subsection (a)(1) - (4) of this section is considered to directly relate to a licensee or certificate holder providing professional accounting services or professional accounting work and may subject a certificate or registration holder to discipline by the board. (d) Misdemeanor convictions in another state will be analyzed by the general counsel to determine if such out of state misdemeanor has an equivalency to Texas law prior to opening a complaint investigation. 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 39. TEXAS BOARD OF PROFESSIONAL GEOSCIENTISTS 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) proposes an amendment to 22 TAC concerning the licensure and regulation of Professional Geoscientists. BACKGROUND AND PURPOSE TBPG proposes an amendment to 22 TAC to establish guidelines for applicants requesting to sit for a licensing examination. TBPG proposes to 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. PROPOSED RULES October 6, TexReg 5367

86 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. SECTION SUMMARY Proposed 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." FISCAL NOTE Charles Horton, Executive Director of the Texas Board of Professional Geoscientists, has determined that for each fiscal year of the first five years the sections are in effect there is no cost to the state as a result of enforcing or administering the section as proposed. SMALL AND MICRO-BUSINESS ECONOMIC IMPACT ANALY- SIS Mr. Horton has determined that there will be no anticipated economic costs to small businesses or micro-businesses required to comply with proposed amendment to Consequently, an economic impact statement or regulatory flexibility analysis is not required. There will be no anticipated economic cost to individuals who are required to comply with the proposed sections. There is no anticipated negative impact on state or local government. PUBLIC BENEFIT Mr. Horton has also determined that for each year of the first five years the sections are in effect, the public will benefit from adoption of the section. 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 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. REGULATORY ANALYSIS OF MAJOR ENVIRONMENTAL RULES The Board has determined that these proposals are 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. Although Professional Geoscientists and Registered Geoscience Firms play a key role in environmental protection for the state of Texas, this proposal is not specifically intended to protect the environment nor reduce risks to human health from environmental exposure. TAKINGS IMPACT ASSESSMENT Mr. Horton 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, do not constitute a taking under Texas Government Code, PUBLIC COMMENT Comments on the proposed amendment may be submitted in writing to Charles Horton, Executive Director, Texas Board of Professional Geoscientists, 333 Guadalupe Street, Tower I-530, Austin, Texas or by mail to P.O. Box 13225, Austin, Texas or by to chorton@tbpg.state.tx.us. Please indicate "Comments on Proposed Rules" in the subject line of all s submitted. Please submit comments within 30 days following publication of the proposal in the Texas Register. The proposed amendments are 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 demon- 42 TexReg 5368 October 6, 2017 Texas Register

87 strate eligibility for a license, including equivalent educational requirements. The proposed amendments implement the Texas Occupations Code, , , and Licensing Requirements--Examinations. (a) Qualifying examinations: (1) An applicant for the Geology discipline must pass both parts of the National Association of State Boards of Geology (AS- BOG ) examination. Applicants taking the ASBOG examinations must also abide by the rules and regulations of ASBOG. (2) An applicant for the Soil Science discipline must pass both parts of the Council of Soil Science Examiners (CSSE) examination. Applicants taking the CSSE examinations must also abide by the rules and regulations of CSSE. (3) An applicant for the Geophysics discipline must pass the Texas Geophysics Examination (TGE). (b) An applicant may request an accommodation in accordance with the Americans with Disabilities Act. Proof of disability may be required. (c) An applicant who does not timely arrive at and complete a scheduled examination will forfeit the examination fee. (d) Cheating on an examination is grounds for denial, suspension, or revocation of a license and/or an administrative penalty. (e) An applicant who has passed an examination may not retake that type of examination. (f) Applicants requesting a waiver from any examination(s) shall complete a Waiver Request (Form V) and any additional information needed to substantiate the eligibility for the waiver with the application. (g) Examination requirements and examination procedure: A qualified individual who has not passed qualifying licensing examination(s) may access and abide by all relevant components of one of the following procedures to sit for a qualifying examination(s) in the appropriate discipline: (1) Licensure in the discipline of geology (part I)/ASBOG Fundamentals of Geology examination: (A) Requirements: Completion of the education qualifications for licensure as specified in Texas Occupations Code and of this chapter or currently enrolled in a course of study that meets the education requirements for licensure and within two regular semesters of completion of the qualifying course of study. (B) Procedure: (i) The applicant shall complete and submit an Exam Request (Form E) and any required documents to the TBPG, along with the appropriate fee by the deadline posted on the TBPG website for the examination date desired by the applicant. (ii) The Board staff will review the application and inform the applicant of any deficiencies in the application. Upon determination that the requirements have been met, the Board staff will mail an ASBOG Examination Candidate Request Form to the applicant. (iii) The applicant shall submit the ASBOG Examination Candidate Request Form and send the form, along with the examination fee to ASBOG. A courtesy copy of the ASBOG Candidate Request Form shall be provided to the TBPG. (iv) The applicant shall follow all examination administration procedures and take the examination. (v) The Board staff shall notify the applicant of the results of the examination after receiving the results from ASBOG. (2) Licensure in the discipline of geology (part II)/AS- BOG Practice of Geology examination: (A) Requirements: (i) Under application for licensure as a Professional Geoscientist with the TBPG. (ii) Meet all other qualifications for licensure in subsection (a) of this section, and be within six months of meeting the qualifying experience requirement. (B) Procedure: (i) The applicant shall complete and submit both the Initial Application for P.G. Licensure (Form A), in accordance with the application procedures specified in subsection (d) of this section, along with the appropriate fee and an Exam Request (Form E) along with the appropriate fee and any required documents to the TBPG, by the deadline posted on the TBPG website for the examination date desired by the applicant. (ii) The Board staff will review the application and inform the applicant of any deficiencies in the application. Upon determination that the requirements have been met, the Board staff will mail an ASBOG Examination Candidate Request Form to the applicant. (iii) The applicant shall submit the ASBOG Examination Candidate Request Form and send the form, along with the examination fee to ASBOG. A courtesy copy of the ASBOG Examination Candidate Request Form shall be provided to the TBPG. (iv) The applicant shall follow all examination administration procedures and take the examination. (v) The Board staff shall notify the applicant of the results of the examination after receiving the results from ASBOG. (3) Licensure in the discipline of geophysics/tge: (A) Requirements: (i) Under application for licensure as a Professional Geoscientist with the TBPG and meet all qualifications for licensure in subsection (a) of this section, with the exception of the examination requirement; or (ii) Under application for certification as a Geoscientist-in-Training with the TBPG and meet all qualifications for certification as a Geoscientist-in-Training in of this chapter with the exception of having passed the TGE. (B) Procedure: (i) The applicant shall complete and submit both Application for Professional Geoscientist (Form A), in accordance with the application procedures specified in subsection (d) of this section, along with the appropriate fee and Examination Request Form (Form E) along with the appropriate fee and any required documents to the TBPG. (ii) The Board staff will review the application and inform the applicant of any deficiencies in the application. Upon determination that the requirements have been met, the Board staff will provide TGE scheduling and examination payment information to the applicant. PROPOSED RULES October 6, TexReg 5369

88 (iii) The applicant shall submit the required information, along with the examination fee to the TBPG. (iv) The applicant shall follow all examination administration procedures and take the examination. (v) The Board staff shall notify the applicant of the results of the examination. (4) Licensure in the discipline of soil science/council of Soil Science Examiners (CSSE) Fundamentals of Soil Science and Practice of Soil Science Examinations: An applicant must meet the examination requirements of the CSSE; apply to take the required examinations directly with the CSSE and submit the required fees; follow all examination procedures of the CSSE; take and pass both parts of the examination; and follow CSSE procedures to ensure that the passing scores are forwarded to the TBPG. (h) 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. (i) 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. (j) 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 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 September 25, TRD Charles Horton Executive Director Texas Board of Professional Geoscientists Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TITLE 25. HEALTH SERVICES PART 1. DEPARTMENT OF STATE HEALTH SERVICES CHAPTER 97. COMMUNICABLE DISEASES SUBCHAPTER G. VACCINATION STAMPS 25 TAC The Executive Commissioner of the Health and Human Services Commission, on behalf of the Department of State Health Services (DSHS), proposes amendments to , concerning Purpose and Scope; , concerning Definitions; , concerning Criteria for Issuing Uniform Stamps to Physicians; , concerning Criteria for Operating as a Vaccination Center; , concerning Format of the Uniform Stamp; and , concerning Denial, Suspension, or Revocation of a Uniform Stamp. BACKGROUND AND PURPOSE The purpose of the amendments is to update the protocols for providers who administer yellow fever vaccine and issue vaccination certificates for persons who travel to countries outside the United States, and to clarify the rules. Sections have been reviewed and DSHS has determined that reasons for adopting the sections continue to exist because rules on this subject are required by federal law and provide guidance for the ongoing vaccination stamp program (program). SECTION-BY-SECTION SUMMARY 42 TexReg 5370 October 6, 2017 Texas Register

89 The proposed amendment to changes the conjunction "which" to "that" to comply with rules of grammar. Proposed amendments in , , , and , replace the word "branch" with "unit" to reflect changes to the organizational structure under the Infectious Disease Prevention Section. Proposed amendments to and capitalize the words "Vaccination Center." Proposed amendments to , , and clarify which form is needed for application by naming the "Uniform Stamp Application Form" in lieu of "application," "application form," or "Application forms." Additionally, throughout , "Uniform Stamp" was capitalized the first time the stamp was referenced, and thereafter "stamp" was used if the term reoccurred in the same sentence. The proposed amendments to clarify and enhance the meanings of terms relevant to the program. The proposed amendment to (3) clarifies access to the program by amending the definition of physician to include both medical doctors and doctors of osteopathic medicine licensed to practice medicine in the State of Texas. The proposed amendments to clarify criteria for issuing Uniform Stamps to physicians. The proposed amendments to (1) clarify the administrative process by adding language specifying the exact title of the form needed to apply for the program and provide the recently updated website address needed to obtain the form. The proposed amendment to (2) was added to clarify procedures for physicians who move locations within the same county or to another county. Physicians who move their practice to another county must submit a Uniform Stamp Replacement Form and a stamp replacement fee because of the additional administrative requirements for establishing a provider in a new county. As a result of adding (2), all subsequent subsections are renumbered progressively. The proposed amendment to (3) clarifies that approval of the application is only for the specific Vaccination Center listed on the form. The proposed amendment to (6) clarifies that vaccine adverse event reporting is not limited to cases of febrile illness in order to align with federal reporting guidelines for the CDC/FDA Vaccine Adverse Events Reporting System (VAERS). The proposed amendments to (7)(B) replace the word "or" with "of" to clarify the federal Division's name. The proposed amendments to (7)(C) substitute the Immunization Unit's P.O. Box in place of the physical address to ensure that correspondence through the postal system is delivered to the correct mailing address. The proposed amendment also adds the Immunization Unit's main phone number to provide greater access to information for providers. The proposed amendment to (8) replaces "charges" with "fees" to be consistent with the terminology in the subsequent subparagraphs (A), (B), (C), and (D). The proposed amendment to (8)(B) clarifies which form is needed for renewal by naming the "Uniform Stamp Renewal Form" in lieu of "agency's Annual Renewal Form" or "renewal." The proposed amendment to (8)(C) provides the name of the form to be submitted ("Uniform Stamp Replacement Form") for the stamp replacement process, and specifies that the stamp replacement requirements-including the fee-also apply to physicians who move their practices to another county. The proposed amendment to (D) adds the heading "Waived Fees" for consistency in the rule. Also, the amendment replaces "public health regions" with "health service regions" to reflect current DSHS terminology. The proposed amendments to (3) remove the heading "Annual report" for consistency in the rule. Also, the amendments insert specific titles for the application and renewal forms to reduce confusion regarding form requirements, and the updated website address is provided in this paragraph in order to improve accessibility. The amendments to (3)(A) also clarify that the renewal form must be received by the Immunization Unit by a specific deadline stated on the Uniform Stamp Renewal Form in order to improve administration of the program. The proposed amendment to clarifies the source of the federal guidelines for the format of the Uniform Stamp as listed in the Division of Quarantine Circular No The proposed amendment to inserts the specific title "Uniform Stamp" instead of "stamp" to be consistent with the other sections of Subchapter G, Vaccination Stamps. Also, language was changed in from "these sections" to "this subchapter (relating to Vaccination Stamps)" to clarify the reference. FISCAL NOTE Imelda Garcia, Director, Infectious Disease Prevention Section, has determined that for each year of the first five-year period that the sections will be in effect, there will be no fiscal implications to state or local governments as a result of enforcing and administering the sections as proposed. SMALL AND MICRO-BUSINESS IMPACT ANALYSIS Ms. Garcia has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities. Small businesses and micro-businesses will not be required to alter their business practices in order to comply with the sections. The sections do not apply to rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT Ms. Garcia has determined that there is an anticipated economic cost to persons who are required to comply with the sections as proposed. For physicians who hold Uniform Stamps and who move their practice outside of the county where the physician initially applied for the Uniform Stamp, the physician would be required to submit a Uniform Stamp Replacement Form with a $50 fee. 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. PUBLIC BENEFIT Ms. Garcia has determined that for each year of the first five years the sections are in effect, the public will benefit from adoption of the sections. Healthcare providers who administer yellow fever vaccine and issue vaccination certificates would benefit from clearer and more efficient processes to apply for, maintain, and renew yellow fever vaccination stamps. The public benefit anticipated as a result of enforcing or administering the sections is that persons traveling to certain countries with a risk of yellow fever transmission will obtain a valid yellow fever vaccination certificate for international travel when they are vaccinated at a designated Vaccination Center. It is expected that vaccine adverse event reporting for yellow fever vaccine would be more compre- PROPOSED RULES October 6, TexReg 5371

90 hensive by clarifying federal reporting guidelines, and vaccine adverse event monitoring would help ensure the safety of vaccines. 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 Lesley Brannan, Department of State Health Services, Infectious Disease Prevention Section, Immunization Unit, Mail Code 1946, P.O. Box , Austin, Texas ; by fax to (512) ; or by to ImmRulesFeedback@dshs.texas.gov within 30 days of publication of this proposal in the Texas Register. STATUTORY AUTHORITY The amendments are informed by U.S. Public Health Services (PHS) requirements: Code of Federal Regulations, Title 42-Public Health, Part 71-Foreign Quarantine, 71.3, Designation of Yellow Fever Vaccination Centers; Validation Stamps; and PHS publications entitled, Division of Quarantine Circular No. 106; Advisory Memorandum No. 66; and Advisory Memorandum No. 72. The amendments are authorized by 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 DSHS and for the administration of Health and Safety Code, Chapter The amendments affect Government Code, Chapter 531, and Health and Safety Code, Chapter Purpose and Scope. The U.S. Public Health Service has designated the Department of State Health Services as the governmental entity in the State of Texas that [which] is responsible for determining which physicians in the state are authorized to administer yellow fever vaccine for persons who travel outside the United States. The department provides this authorization by issuing Uniform Stamps to designated physicians. These sections cover the criteria by which the department issues the Uniform Stamp and the criteria for designating and operating a Vaccination Center Definitions. The following words and terms, when used in these sections, shall have the following meanings, unless the context clearly indicates otherwise: (1) (No change.) (2) Unit [Branch]--The Immunization Unit, Infectious Disease Prevention [Branch, Disease Prevention and Intervention] Section, Department of State Health Services. (3) Physician--A physician (medical doctor or doctor of osteopathic medicine) licensed to practice medicine in the State of Texas. (4) (No change.) (5) Uniform Stamp--A stamp issued by the unit [branch] to a physician for use in validating certificates of yellow fever vaccination for persons who travel outside the United States Criteria for Issuing Uniform Stamps to Physicians. Uniform Stamps may be issued to physicians holding a current Texas medical license, for use only at the specific Vaccination Center [vaccination center] designated on the Uniform Stamp Application Form [application]. If a physician practices at more than one Vaccination Center [vaccination center], a separate Uniform Stamp Application Form and Uniform Stamp are required for each Vaccination Center [application for each is required]. (1) Physicians may apply for the Uniform Stamp by sending the Uniform Stamp Application Form [an application form] to the unit. The Uniform Stamp Application Form [branch. Application forms] may be obtained from the unit [branch] or online at [ (2) Physicians who move the location of their practice within the same county must report a change of address in writing to the unit. Physicians who move their practice to another county must submit a Uniform Stamp Replacement Form and a Uniform Stamp replacement fee. (3) [(2)] Physicians are authorized to use the Uniform Stamp solely for the purpose of validating administration of yellow fever vaccine on vaccination certificates issued only at the approved Vaccination Center [vaccination center] indicated on the Uniform Stamp Application Form [their application]. (4) [(3)] Physicians are authorized to use only the Uniform Stamp assigned to them. Uniform Stamps may not be assigned, loaned, or given to another person or physician except those working under supervision of the physician holding the stamp. The physician will at all times be responsible for the Uniform Stamp. (5) [(4)] A physician shall report immediately to the unit [branch] any loss or theft of the Uniform Stamp. (6) [(5)] Physicians are encouraged to report adverse events [cases of febrile illness] potentially caused by yellow fever vaccination to the CDC/FDA Vaccine Adverse Events Reporting System (VAERS (7) [(6)] U.S. Public Health Services (PHS) requirements. The PHS requirements are found, as follows: (A) Code of Federal Regulations, Title 42-Public Health, Part 71-Foreign Quarantine, 71.3, Designation of Yellow Fever Vaccination Centers; Validation Stamps; and (B) PHS publications entitled, Division of [or] Quarantine Circular No. 106; Advisory Memorandum No. 66; and Advisory Memorandum No. 72. (C) The department adopts the PHS requirements listed in subparagraphs (A) and (B) of this paragraph by reference. Copies of the requirements are available upon request from the Immunization Unit [Branch], Department of State Health Services, P.O. Box [1100 West 49th Street], Austin, Texas or (800) (8) [(7)] Fees [Charges] for the Uniform Stamp. (A) New Applicant Fee. Each new applicant is required to submit a fee of $68 by personal check, cashier's check, or money order along with the completed Uniform Stamp Application Form [application]. If the unit [branch] denies the Uniform Stamp Application Form [application], the unit [branch] will return the $68 to the physician. (B) Annual Renewal Fee. In January of each year, each physician holding a Uniform Stamp is required to pay an annual fee of $38. The physician shall submit the $38 by personal check, cashier's check, or money order to the unit [branch] with the Uniform Stamp [agency's Annual] Renewal Form. If the unit [branch] denies the Uniform Stamp Renewal Form [renewal], the unit [branch] will return the $38 to the physician. 42 TexReg 5372 October 6, 2017 Texas Register

91 (C) Stamp Replacement Fee. A fee of $50 and submission of the Uniform Stamp Replacement Form will be required for issuing replacement Uniform Stamps in the event the original is lost or stolen, or if the physician moves their practice to another county. (D) Waived Fees. All fees will be waived for public health departments, public health districts, and health service [public health] regions Criteria for Operating as a Vaccination Center. Designation as a Vaccination Center [vaccination center] is made upon completion and approval of a Uniform Stamp Application Form [an application]. (1) A physician shall use the Uniform Stamp only at the Vaccination Center [vaccination center] where the yellow fever vaccine is delivered and the vaccine may not be redistributed. The physician to whom the Uniform Stamp has been issued is not authorized to administer yellow fever vaccine on board ship or aircraft. (2) (No change.) (3) [Annual report.] Each physician holding a Uniform Stamp shall establish the need for continuing possession of the stamp [Uniform Stamp] by completing and returning the Uniform Stamp Renewal Form [an annual renewal form] along with the annual renewal fee. The Uniform Stamp Renewal Form [annual renewal form] is available from the unit [Branch] or online [on line] at [ (A) If the Uniform Stamp Renewal Form [annual renewal form] is not received by the unit by [Branch within] the deadline [timeframe] stated on the Uniform Stamp Renewal Form [form], designation as an authorized Vaccination Center [vaccination center] may be removed and the physician will be required to return the [their] Uniform Stamp. (B) If the physician no longer wishes to retain the [their] Uniform Stamp, the stamp must be returned to the unit [Branch]. (4) (No change.) Format of the Uniform Stamp. The format of the Uniform Stamps will be according to federal guidelines in the Division of Quarantine Circular No. 106, which is adopted by reference in of this title (relating to Criteria for Issuing Uniform Stamps to Physicians) Denial, Suspension, or Revocation of a Uniform Stamp. (a) The unit [branch] may deny a Uniform Stamp Application Form [an application] for a Uniform Stamp [stamp] or suspend or revoke an existing stamp or not renew a stamp if the applicant or holder fails to comply with the requirements of this subchapter (relating to Vaccination Stamps) [these sections]. The applicant or holder has the opportunity to request a hearing on any of these actions in accordance with department fair hearing rules, of this title (relating to Fair Hearing Procedures). (b) The unit [branch] will not suspend or revoke a Uniform Stamp [stamp] without a prior hearing, except if the unit [branch] determines that immediate suspension or revocation is necessary because of imminent threat to public health. 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 September 18, TRD Barbara Klein Interim General Counsel Department of State Health Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TITLE 34. PUBLIC FINANCE PART 1. COMPTROLLER OF PUBLIC ACCOUNTS CHAPTER 3. TAX ADMINISTRATION SUBCHAPTER F. MOTOR VEHICLE SALES TAX 34 TAC 3.72 The Comptroller of Public Accounts proposes amendments to 3.72, concerning trailers, farm machines, and timber machines. The amendments implement Senate Bill 2076, 85th Legislature, 2017, which amended the definition of "travel trailer" in Transportation Code, Chapter 501 (Certificate of Title Act). This legislation is effective September 1, Subsection (a)(15), defining the term "travel trailer," is amended to be consistent with changes made in the Transportation Code, (30). Senate Bill 2076 increased the maximum dimensions of travel trailers, from less than 8 feet wide to less than 8 feet, six inches wide, and from less than 40 feet in length to less than 45 feet in length. No further amendments are made to this subsection to match the Transportation Code's definition of the term "travel trailer." Tom Currah, Chief Revenue Estimator, has determined that for the first five-year period the rule will be in effect, there will be no significant revenue impact on the state or units of local government. 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 implementing current statutory provisions. There would be no anticipated significant economic cost to the public. This rule is proposed under Tax Code, Title 2, and does not require a statement of fiscal implications for 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 Teresa G. Bostick, Director, Tax Policy Division, P.O. Box 13528, Austin, Texas Comments must be received no later than 30 days from the date of publication of the proposal in the Texas Register. The amendments are proposed under Tax Code, (Comptroller's Rules, Compliance, Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2. The amendments implement Tax Code, (Definitions) Trailers, Farm Machines, and Timber Machines. PROPOSED RULES October 6, TexReg 5373

92 (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (1) Bunkhouse--A house trailer designed to be used as sleeping accommodations for multiple persons, such as a work crew, but not as a single-family residence. (2) Farm or ranch--one or more tracts of land used, either wholly or in part, in the production of crops, livestock, and/or other agricultural products held for sale in the regular course of business. The term includes feed lots, dairy farms, poultry farms, commercial orchards, commercial nurseries, and similar commercial agricultural operations that are original producers of agricultural products. The term does not include, among other operations, home gardens, wildlife management, and timber operations. (3) Farm machine--a self-propelled motor vehicle specially adapted for, and whose primary use is in, the production of crops or rearing of livestock, including poultry or use in feedlots. The term includes a self-propelled motor vehicle specially adapted for distributing and applying plant-food materials, agricultural chemicals, or feed for livestock. The term does not include pickup trucks or any self-propelled motor vehicle specifically designed, or specially adapted, to transport property other than the property being applied or for the sole purpose of transporting or setting in place agricultural products, plant-food materials, agricultural chemicals, or feed for livestock. Examples of farm machines include, but are not limited to, a truck cab chassis with a tank and equipment designed to apply liquid fertilizer, a truck cab chassis with a hopper and auger designed to distribute feed in a feedlot, and a truck modified with a flat bed, feed distributor, and hay bale roll-out distribution device. A flat bed truck modified solely with a hay spear/spike, hay bale roll-out distribution device, or cube feeder of a size allowing the truck bed to be used for general purposes is an example of a vehicle that does not qualify as a farm machine. (4) Farm trailer--a trailer or semitrailer designed and whose primary use is as a farm or ranch vehicle. The term does not include a motor vehicle designed for human habitation, including, but not limited to, any vehicle designed for sleeping, dressing, lounging, restroom use, or meal preparation, even though the vehicle may also be used to transport livestock or agricultural products. (5) House trailer--this term has the meaning given in of this title (relating to Imposition and Collection of Manufactured Housing Tax) referring to Subchapter T of this chapter (relating to Manufactured Housing Sales and Use Tax). (6) Installation or set-up--activities associated with the sale of a trailer, as defined in this section, including, but not limited to, spotting the trailer; preparing the foundation; placing, leveling, blocking, and anchoring the trailer; connecting sewer, water, electricity, and other utilities; and installing under skirting, awnings, and steps. (7) Mobile office--this term has the meaning given in of this title (relating to Sales of Mobile Offices, Oilfield Portable Units, Portable Buildings, Prefabricated Buildings, and Ready-Built Homes). (8) Oilfield portable unit--this term has the meaning given in of this title. (9) Park model--this term has the meaning given in of this title. (10) Primary use--use of at least 80% of a motor vehicle's operating time. (11) Timber machine--a self-propelled motor vehicle specially adapted to perform a specialized function for use primarily in timber operations, such as land preparation, planting, maintenance, and harvesting of trees. The term does not include any self-propelled motor vehicle specifically designed or adapted for the primary use of transporting timber or timber products, including a self-propelled motor vehicle designed to transport cargo and adapted with a cargo-loading device. The term also does not include field service vehicles, such as those used to fuel or maintain other vehicles or crew vehicles. (12) Timber operations--the production of timber, meaning the activities to prepare the production site or to plant, cultivate, or harvest commercial timber that will be sold in the regular course of business. (13) Timber trailer--a trailer designed for and used primarily in a timber operation. (14) Trailer--A vehicle without automotive power that is designed for human habitation or for carrying property upon a permanent chassis with wheels, axles, and a towing device, and that is designed to be drawn by a self-propelled motor vehicle. The term includes, but is not limited to, semitrailers, vans, flatbeds, tanks, dumpsters, trailers sold unassembled in a kit, dollies, jeeps, stingers, auxiliary axles, converter gears, bunkhouses, travel trailers, park models, and house trailers. The term does not include a unit designed to be towed by a self-propelled vehicle that meets the definition of moveable specialized equipment in 3.88 of this title (relating to Moveable Specialized Equipment and Off-Road Vehicles); mobile offices, as defined in this section; manufactured homes, as defined by Tax Code, ; oilfield portable units, as defined in this section; or portable buildings, prefabricated buildings, and ready-built homes, as defined in of this title. (15) Travel trailer or recreational trailer--a trailer designed for human habitation as temporary living quarters in connection with recreational, camping, travel, or seasonal use that: (A) is not designed to be used as a permanent dwelling; (B) is less than eight feet six inches in [body] width and 45 [40 body] feet in length in the traveling mode and contains plumbing, heating, and electrical systems that may be operated without connection to outside utilities; and (C) is not a utility trailer, enclosed trailer, or other trailer that is not designed for human habitation as its primary function. (b) Loss of identity as a motor vehicle. (1) A trailer is presumed to be permanently affixed to realty, and therefore an improvement to real property that loses its identity as a motor vehicle, if: (A) it is attached so that it cannot be reasonably reconstructed and made operational for highway use; or (B) it is attached or installed in a manner that meets all governmental standards (if any) for the installation, including zoning regulations, building codes, federal regulations, and other requirements applicable to the land on which it is located; and it is either: (i) installed on land owned by the purchaser, if the purchaser intends to incorporate the trailer as a permanent fixture to the land; or (ii) installed on land leased to the purchaser, if the lease contract provides that improvements to the land become the property of the lessor. 42 TexReg 5374 October 6, 2017 Texas Register

93 (2) A trailer is presumed to be temporarily affixed to the real property, and remains a motor vehicle, if: (A) the owner of the trailer only has permission to use the land but no contractual right to do so; or (B) the owner of the trailer has a contractual right to use the land and also has the right to remove the trailer at any time or upon the termination of the contract. tax. (c) Application of motor vehicle sales and gross rental receipts (1) A retail sale of a trailer is a taxable sale of a motor vehicle. Motor vehicle sales or use tax is due on the total sales price including charges for all accessories attached at the time of sale and for transportation prior to the sale. The rental of a trailer is also a taxable transaction. Gross rental receipts tax is due on the gross receipts charged on the rental of a motor vehicle, including a trailer. Charges for transportation after the sale (transportation from the place of sale to the delivery or set-up site) and charges for installation or set-up after the sale are not subject to tax. (2) A retail sale, use, or rental of a farm machine or a farm trailer is not subject to the motor vehicle sales and use tax or gross rental receipts tax if the primary use of the machine or trailer is for an exempt purpose. For the purposes of this subsection, use for an exempt purpose means use on a farm or ranch in the production of food for human consumption, grass, feed for any form of animal life or other livestock, or agricultural products to be sold in the regular course of business. The use of a farm machine or farm trailer to transport persons or property to or from competitions, shows, or rodeos, or for any other similar use, is not use for an exempt purpose. (3) Farm trailers are also exempt from motor vehicle sales and use tax and gross rental receipts tax if the primary use of the trailer is by the original producers in processing, packing, or marketing their own livestock or agricultural products. Use in processing, packing, or marketing agricultural products by an agricultural cooperative or gin is not exempt, unless the cooperative or gin can prove the cooperative or gin itself is the original producer of all agricultural products being processed, packed, or marketed, and that those functions are performed at a location operated by the cooperative or gin. (4) A retail sale, use, or rental of a timber machine or a timber trailer is not subject to motor vehicle sales and use tax or gross rental receipts tax if the primary use of the timber machine or timber trailer is in timber operations. (5) A retail sale, use, or rental of an oilfield portable unit, as defined in this section, is not subject to motor vehicle sales and use tax or gross rental receipts tax. An oilfield portable unit that would otherwise be subject to motor vehicle sales and use tax, such as a trailer, becomes a taxable motor vehicle any time the unit ceases to be used exclusively as an oilfield portable unit. The tax is the obligation of the owner of the oilfield portable unit based on the owner's current book value of the unit multiplied by the current tax rate cited in Tax Code, (b). The tax should be remitted directly to the comptroller using Form , Texas Motor Vehicle Sales/Use Tax Payment. Tax due on diverted units that are held for motor vehicle rental should be submitted on Form , Texas Motor Vehicle Rental Tax Return. For more information regarding the taxation of oilfield portable units, refer to of this title. (d) Claiming exemption. (1) Farmers, ranchers, agricultural producers, and timber operators must register with the comptroller and obtain a Texas Agriculture and Timber Exemption Registration Number. This registration number must be stated on the exemption certificate described in this subsection and on the Application for Texas Certificate of Title/Tax Statement (Form 130-U) filed with the County Tax Assessor-Collector at the time of titling and/or registration. In addition, a person claiming the exemption for a farm or timber machine has the burden to show, at the time the vehicle is titled and/or registered, that the vehicle has been properly adapted or modified to qualify for the exemption. (2) All persons engaged in the business of selling or renting agricultural and timber items that are exempt from the motor vehicle sales and use tax or gross rental receipts tax as described in this section must obtain from all purchasers: (A) A completed Texas Motor Vehicle Tax Exemption Certificate for Agricultural/Timber (Form ) or a completed Motor Vehicle Rental Exemption Certificate (Form Back) for qualifying motor vehicle rentals; (B) a copy of the Ag/Timber Registration Number Confirmation letter issued by the comptroller (Form ); or (C) a blanket exemption certificate or the Ag/Timber Registration Number Confirmation letter (Form ) covering all motor vehicle purchases or rentals, provided that the motor vehicles being sold or rented are only of a type or quantity that would not generally be used except on a farm or ranch or in timber operations. When a person sells or rents both taxable motor vehicles and motor vehicles that may qualify for exemption under this section, the seller may either obtain an exemption certificate for each motor vehicle that qualifies for exemption or obtain a blanket certificate at the time the purchaser makes an initial exempt purchase or rental and keep that certificate on file. When subsequent exempt purchases or rentals are made, the invoice must be stamped with the words "exempt agricultural purposes," and the purchaser must sign the invoice. (3) All persons engaged in the business of selling, renting, or leasing agricultural and timber items must retain a copy of the documents described in paragraph (2) of this subsection at their principal place of business for at least four years from the date of the transaction. 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 September 20, TRD Lita Gonzalez General Counsel Comptroller of Public Accounts Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TITLE 37. PUBLIC SAFETY AND CORREC- TIONS PART 7. TEXAS COMMISSION ON LAW ENFORCEMENT CHAPTER 215. TRAINING AND EDUCATIONAL PROVIDERS 37 TAC PROPOSED RULES October 6, TexReg 5375

94 The Texas Commission on Law Enforcement (Commission) proposes new , concerning Credit for High School Public Services Endorsement. This new rule establishes requirements for accepting a public service endorsement under Texas Education Code (c-1). This new rule is necessary to follow the requirements of HB John Beauchamp, General Counsel, has determined that for each year of the first five years the section as proposed will be in effect, there will be no effect on state or local governments as a result of administering this section. Mr. Beauchamp has determined that for each year of the first five years the section as proposed will be in effect, there will be a positive benefit to the public by promoting the furtherance of law enforcement professionalism through education and training. Mr. Beauchamp has determined for each year of the first five years the section as proposed will be in effect, there will be no anticipated cost to small businesses, individuals, or both as a result of the proposed section. Comments on the proposal may be submitted electronically to public.comment@tcole.texas.gov or in writing to Mr. Kim Vickers, Executive Director, Texas Commission on Law Enforcement, 6330 E. Highway 290, Suite 200, Austin, Texas The new rule is proposed under Texas Occupations Code , General Powers of the Commission; Rulemaking Authority and Texas Education Code (c-1). No other code, article, or statute is affected by this proposal Credit for High School Public Services Endorsement. (a) In addition to the units of the basic peace officer course, a law enforcement academy shall report 40 additional training hours for an applicant who provides a high school transcript indicating that the applicant has earned a public services endorsement under Texas Education Code (c-1). (b) The transcript must reflect that the applicant has completed courses that directly relate to law enforcement, such as those in the Law, Public Safety, Corrections, and Security cluster under 19 TAC Chapter 130, Subchapter L. (c) The effective date of this section is February 1, 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 September 20, TRD Kim Vickers Executive Director Texas Commission on Law Enforcement Earliest possible date of adoption: November 5, 2017 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 , concerning Time Periods for Processing License Applications, and , concerning Medicaid Bed Allocation Requirements, in Chapter 19, Nursing Facility Requirements Related to Licensure and Medicaid Certification. BACKGROUND AND PURPOSE The proposed rule amendments are the result of an HHSC Medicaid Bed Allocation Audit and an HHSC internal audit requested by DADS Regulatory Services Licensing and Credentialing Section. The proposal amends rules regarding the nursing facility licensure process at HHSC and adds new rules regarding timeframes and additional circumstances for pending an application for renewal. These changes would allow a nursing facility time to comply with licensure requirements while an application is pending. The proposal also amends rules to allow a nursing facility to request an informal review regarding decisions related to Medicaid bed allocations. These changes would provide a mechanism for a nursing facility to contest HHSC decisions regarding de-allocated or decertified Medicaid beds, not just applications for waivers and exemptions. SECTION-BY-SECTION SUMMARY The proposed amendment of , Time Periods for Processing License Applications, adds that HHSC may pend an application for up to six months to allow an applicant to comply with licensure requirements. The proposal also adds that HHSC can pend an application for renewal if HHSC is proposing to deny or revoke the facility's license. The proposed amendment of (k), Informal Review Procedures, allows an existing nursing facility to request an informal review when it has been denied an increase in Medicaid bed allocations or was subject to decertification or de-allocation of Medicaid beds. In both sections, all references to DADS are changed to HHSC to reflect the transfer of functions from DADS to HHSC in accordance with Senate Bill 200, 84th Legislature, FISCAL NOTE David Cook, Deputy Chief Financial Officer, has determined that, for the first five years the proposed amendments are in effect, enforcing or administering the amendments does not have foreseeable implications relating to costs or revenues of state or local governments. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS HHSC has determined that the proposed amendments will not have an adverse economic effect on small businesses, microbusinesses, or rural communities because the amendments do not impose any economic requirements on small businesses, micro-businesses, or rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT 42 TexReg 5376 October 6, 2017 Texas Register

95 There are no anticipated economic costs to person who are required to comply with the sections 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 does not impose a cost on regulated persons and is amended to reduce the burden or responsibilities imposed on regulated persons by the rule. PUBLIC BENEFIT Mary T. Henderson, DADS Associate Commissioner for Long Term Care Regulation, has determined that, for each year of the first five years the amendments are in effect, the public will benefit from the adoption of the rules. The anticipated public benefit will be the provision of time to allow providers to comply with licensure requirements and, therefore, maintain continuity of care for residents. In addition, the amendments provide an appropriate mechanism for facilities to contest agency actions regarding Medicaid bed allocation other than decisions about applications for waiver and exemptions. 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 Sharon Wallace at (210) Written comments on the proposal may be submitted to Rules Coordination Office, P.O. Box , Mail Code H600, Austin, Texas , or street address 4900 North Lamar Boulevard, Austin, Texas 78751; or ed to HHSCRulesCoordinationOffice@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 the last working day of the comment period; or (3) ed by midnight on the last day of the comment period. When submitting comments, please indicate "Comments on Proposed Rule 40R011" in the subject line. SUBCHAPTER C. NURSING FACILITY LICENSURE APPLICATION PROCESS 40 TAC STATUTORY AUTHORITY The amendments are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; Texas Health and Safety Code, , which requires licensing of nursing facilities; and Texas Human Resources Code, , which authorizes nursing facility Medicaid bed certification and decertification. The amendments implement Texas Government Code, ; Texas Health and Safety Code, ; and Texas Human Resources Code, Time Periods for Processing License Applications. (a) The Health and Human Services Commission (HHSC) [Texas Department of Human Services (DHS)] will process only applications received within 60 days prior to the requested date of the issuance of the license. (b) An application is complete when all requirements for licensing have been met, including compliance with standards. If an inspection for compliance is required, the application is not complete until the inspection has occurred, reports have been reviewed, and the applicant complies with the standards. (c) If the application is postmarked by the filing deadline and received by HHSC within 15 days of the postmark, the application is [will be] considered to be timely filed [if received in the Licensing Section of the state office of Long-Term Care-Regulatory Texas Department of Human Services, within 15 days of the postmark]. (d) HHSC notifies a facility [Long-Term Care-Regulatory will notify facilities] within 30 days of receipt of the application if any of the following applications are incomplete: (1) initial application; (2) change of ownership; (3) renewal; and (4) increase in capacity. (e) A [Except as provided in the following sentence, a] license will be issued or denied within 30 days of the receipt of a complete application or within 30 days prior to the expiration date of the license. [However, DHS may pend action on an application for renewal of a license for up to six months if the facility is subject to a proposed or pending licensure termination action on or within 30 days prior to the expiration date of the license. The issuance of the license constitutes DHS's official written notice to the facility of the acceptance and filing of the application.] HHSC may pend action for up to six months on an appli- (f) cation: (1) of any type listed in subsection (d) of this section to give an applicant time to comply with licensure requirements imposed by HHSC; or (2) for renewal of the license if the facility is subject to a proposed denial or pending licensure revocation action. (g) [(f)] Criteria for reimbursement of fees are as follows. (1) In the event the application is not processed in the time periods as stated, the applicant has a right to request of the program director full reimbursement of all filing fees paid in that particular application process. If the program director does not agree that the established periods have been violated or finds that good cause existed for exceeding the established periods, the request will be denied. Good cause for exceeding the period established is considered to exist if: (A) the number of applications to be processed exceeds by 15% or more the number processed in the same calendar quarter of the preceding year; (B) another public or private entity used in the application process caused the delay; or (C) other conditions existed giving good cause for exceeding the established periods. (2) If the request for full reimbursement is denied, the applicant may appeal directly to the executive [DHS] commissioner for resolution of the dispute. The applicant must send a written statement to the executive commissioner describing the request for reimburse- PROPOSED RULES October 6, TexReg 5377

96 ment and the reasons for it. The program also may send a written statement to the executive commissioner describing the program's reasons for denying reimbursement. The executive commissioner makes a timely decision concerning the appeal and notifies the applicant and the program in writing of the decision. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (210) SUBCHAPTER X. REQUIREMENTS FOR MEDICAID-CERTIFIED FACILITIES 40 TAC STATUTORY AUTHORITY The amendments are proposed under Texas Government Code, , which provides that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; Texas Health and Safety Code, , which requires licensing of nursing facilities; and Texas Human Resources Code, , which authorizes nursing facility Medicaid bed certification and decertification. The amendments implement Texas Government Code, ; Texas Health and Safety Code, ; and Texas Human Resources Code, Medicaid Bed Allocation Requirements. (a) Definitions. The words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise. (1) Applicant--An individual or entity requesting a bed allocation waiver or exemption. (2) Assignment of rights--the Health and Human Services Commission (HHSC) [Department of Aging and Disability Services (DADS)] conveyance of a specific number of allocated Medicaid beds from a nursing facility or entity to another entity for purposes of constructing a new nursing facility or for any other use as authorized by this chapter. (3) Bed allocation--the process by which HHSC [DADS] controls the number of nursing facility beds that are eligible to become Medicaid-certified in each nursing facility. (4) Bed certification--the process by which HHSC [DADS] certifies compliance with state and federal Medicaid requirements for a specified number of Medicaid beds allocated to a nursing facility. (5) County or precinct occupancy rate--the number of residents, regardless of source of payment, occupying certified Medicaid beds in a county divided by the number of Medicaid beds allocated in the county, including Medicaid beds that are certified and Medicaid beds that have been allocated but are not certified. In the four most populous counties in the state, the occupancy rate is calculated for each county commissioner precinct. (6) Licensee--The individual or entity, including a controlling person, that is: (A) an applicant for licensure by HHSC [DADS] under Chapter 242 of the Texas Health and Safety Code and for Medicaid certification; (B) licensed by HHSC [DADS] under Chapter 242 of the Texas Health and Safety Code; or (C) licensed under Chapter 242 of the Texas Health and Safety Code and holds the contract to provide Medicaid services. (7) Lien holder--the individual or entity that holds a lien against a physical plant. (8) Multiple-facility owner--an individual or entity that owns, controls, or operates under lease two or more nursing facilities within or across state lines. (9) Occupancy rate--the number of residents occupying certified Medicaid beds divided by the number of certified Medicaid beds in a nursing facility. (10) Open solicitation period--a period during which an individual or entity may apply for an allocation of Medicaid beds in a high-occupancy county or precinct. (11) Physical plant--the land and attached structures to which beds are allocated or for which an application for bed allocation has been submitted. (12) Property owner--the individual or entity that owns a physical plant. (13) Transfer of beds--hhsc [DADS] conveyance of a specific number of allocated Medicaid beds from an existing nursing facility or entity to another existing licensed nursing facility. The nursing facility may use the transferred Medicaid beds to increase the number of Medicaid-certified beds currently licensed or to increase the number of Medicaid-certified beds when additional licensed beds are added to the nursing facility in the future. (b) Purpose. The purpose of this section is to control the number of Medicaid beds that HHSC [DADS] contracts, to improve the quality of resident care by selective and limited allocation of Medicaid beds, and to promote competition. (c) Bed allocation general requirements. The allocation of Medicaid beds is an opportunity for the property owner or the lessee of a nursing facility to obtain a Medicaid nursing facility contract for a specific number of Medicaid-certified beds. (1) Medicaid beds are allocated to a nursing facility and remain at the physical plant where they were originally allocated, unless HHSC [DADS] transfers or assigns the beds. (2) When HHSC [DADS] allocates Medicaid beds to a nursing facility as a result of actions by the licensee, HHSC [DADS] requires that the beds remain allocated to the physical plant, even when the licensee ceases operating the nursing facility, unless HHSC [DADS] assigns or transfers the beds. (3) Notwithstanding any language in subsections (f) and (g) of this section and the fact that applicants for bed allocation waivers and exemptions may be licensees or property owners, HHSC [DADS] allocates beds to the physical plant and the owner of that property con- 42 TexReg 5378 October 6, 2017 Texas Register

97 trols the Medicaid beds subject to HHSC [DADS] rules and requirements and all valid physical plant liens. (d) Control of beds. Except as specified in this section, HHSC [DADS] does not accept applications for a Medicaid contract for nursing facility beds from any nursing facility that was not granted: (1) a valid certificate of need (CON) by the Texas Health Facilities Commission before September 1, 1985; (2) a waiver or exemption approved by the Department of Human Services before January 1, 1993; or (3) a valid order that had the effect of authorizing the operation of the nursing facility at the bed capacity for which participation is sought. (e) Level of acceptable care. Unless specifically exempted from this requirement, applicants and controlling persons of an applicant for Medicaid bed allocation waivers or exemptions must comply with level of acceptable care requirements. Level of acceptable care requirements apply only in determining bed allocation waiver and exemption eligibility and have no effect on other sections of this chapter. (1) HHSC [DADS] determines a waiver or exemption applicant or a controlling person of an applicant complies with level of acceptable care requirements if, within the preceding 24 months, the applicant or controlling person: termination of Medicaid or Medicare certification; (A) has not received any of the following sanctions: (i) (ii) termination of Medicaid contract; (iii) denial, suspension, or revocation of a nursing facility license; (iv) cumulative Medicaid or Medicare civil monetary penalties totaling more than $5,000 per facility; (v) civil penalties pursuant to of the Texas Health and Safety Code; or (vi) denial of payment for new admissions; (B) does not have a pattern of substantial or repeated licensing and Medicaid sanctions, including administrative penalties or other sanctions; and (C) does not have a condition listed in (a) of this chapter (relating to Criteria for Denying a License or Renewal of a License). (2) HHSC [DADS] considers the criteria in paragraph (1) of this subsection to determine if local facilities provide a level of acceptable care in counties, communities, ZIP codes or other geographic areas that are the subject of a waiver application. HHSC [DADS] only considers sanctions that are final and are not subject to appeal when determining if a local facility complies with level of acceptable care requirements. (3) Nursing facilities that have received any of the sanctions listed in paragraph (1) of this subsection within the previous 24 months are not eligible for an allocation of Medicaid beds under subsection (h) of this section or an allocation of additional Medicaid beds under subsection (f) of this section. In the case of sanctions against the nursing facility to which the beds would be allocated that are appealed, either administratively or judicially, an application will be suspended until the appeal has been resolved. Sanctions that have been administratively withdrawn or were subsequently reversed upon administrative or judicial appeal are not considered. (4) If an applicant for an allocation of additional Medicaid beds or a controlling person of an applicant is a multiple-facility owner or a multiple-facility owner owns the applicant, the multiple-facility owner must demonstrate an overall record of complying with level of acceptable care requirements. HHSC [DADS] considers the number of facilities that have received sanctions listed in paragraph (1) of this subsection in relation to the number of facilities that the multiple-facility owner owns to determine if a multiple-facility owner meets level of acceptable care requirements. HHSC [DADS] only considers sanctions that are final and are not subject to appeal when determining whether the multiple-facility owner's facilities not receiving the new bed allocation comply with level of care requirements. (5) When the applicant is a licensee that has operated a nursing facility less than 24 months, the nursing facility must establish at least a 12-month compliance record immediately preceding the application in which the nursing facility has not received any of the sanctions listed under paragraph (1) of this subsection. (6) When the applicant has no history of operating nursing facilities, HHSC [DADS] will review the compliance record of healthcare facilities operated, managed, or otherwise controlled by controlling parties of the applicant. If a controlling party or the applicant has never operated, managed, or otherwise controlled any health-care facilities, a compliance review is not required. (7) The executive commissioner, or the executive commissioner's designee, may make an exception to any of the requirements in this subsection if the executive commissioner or the executive commissioner's designee determines the needs of Medicaid recipients in a local community will be served best by granting a Medicaid bed allocation waiver or exemption. In determining whether to make an exception to the requirements, the executive commissioner or the executive commissioner's designee may consider the following: (A) the overall compliance record of the waiver or exemption applicant; (B) the current availability of Medicaid beds in facilities that comply with level of acceptable care requirements in the local community; (C) the level of support for the waiver or exemption from the local community; (D) the way a waiver or exemption will improve the overall quality of care for nursing facility residents; and (E) the age and condition of nursing facility physical plants in the local community. (f) Exemptions. HHSC [DADS] may grant an exemption from the requirements in subsection (d) of this section. All exemption actions must comply with the requirements in this subsection and with requirements of the Centers for Medicare & [and] Medicaid Services (CMS) regarding bed capacity increases and decreases. When a bed allocation exemption is approved, the licensee must comply with the requirements in of this chapter (relating to Criteria for Licensing) at the time of licensure and Medicaid certification of the new beds or nursing facility. (1) Replacement Medicaid nursing facilities and beds. An applicant may request that HHSC [DADS] approve replacement of allocated Medicaid beds by the construction of one or more new nursing facilities. (A) The applicant must own the physical plant where the beds are allocated or possess a valid assignment of rights to the Medicaid beds. PROPOSED RULES October 6, TexReg 5379

98 (B) The applicant must obtain written approval by all lien holders of the physical plant where the beds are allocated before requesting HHSC [DADS] approval to relocate the Medicaid beds to the replacement facility if the replacement facility will be constructed at a different address than the current facility. The applicant must submit the lien holder approval with the replacement nursing facility request. If the physical plant where the Medicaid beds are allocated does not have a lien, the applicant must submit a written attestation of that fact with the replacement nursing facility request. (C) Replacement nursing facility applicants, including those who obtained the rights to the beds through a HHSC [DADS] assignment of beds, must comply with the level of acceptable care requirements in subsection (e) of this section, unless the applicant for a replacement nursing facility is the current property owner. (D) HHSC [DADS] may grant a replacement facility an increase of up to 25 percent of the currently allocated Medicaid beds, if the applicant complies with the level of acceptable care requirements in subsection (e) of this section. HHSC [DADS] will not transfer or assign the additional allocation of beds until they are certified at the replacement facility. (E) The physical plant of the replacement nursing facility must be located in the same county in which the Medicaid beds currently are allocated. (2) Transfer of Medicaid beds. An applicant may request HHSC [DADS] transfer allocated Medicaid beds certified or previously certified to another physical plant. (A) The applicant must own the physical plant where the beds are allocated, or the applicant must present HHSC [DADS] with: (i) a valid Medicaid bed transfer agreement that specifies the number of additional Medicaid beds the applicant is requesting HHSC [DADS] allocate to the receiving nursing facility; or (ii) a valid Medicaid bed assignment that specifies the number of additional Medicaid beds the applicant is requesting HHSC [DADS] allocate to the receiving nursing facility. (B) If the Medicaid beds are allocated to a specific physical plant, the applicant must obtain and submit written approval from the property owner and, if the physical plant has a lien, written approval from all lien holders to obtain a HHSC [DADS] transfer of the Medicaid beds to another facility. If the physical plant where the Medicaid beds are allocated does not have a lien, the applicant must submit a written attestation of that fact with the transfer request. (C) The receiving licensee must comply with level of acceptable care requirements in subsection (e) of this section. (D) Both facilities must be located in the same county. (3) High-occupancy facilities. Medicaid-certified nursing facilities with high occupancy rates may periodically apply to HHSC [DADS] to receive bed allocation increases. (A) The occupancy rate of the Medicaid beds of the applicant nursing facility must be at least 90.0 percent for nine of the previous 12 months prior to the application. (B) The application for additional Medicaid beds may be for no more than 10 percent (rounded to the nearest whole number) of the facility's Medicaid-certified nursing facility beds. (C) The applicant nursing facility must comply with level of acceptable care requirements in subsection (e) of this section. (D) The applicant nursing facility may reapply for additional Medicaid beds no sooner than nine months from the date of the previous allocation increase. (E) Medicaid beds allocated to a nursing facility under this requirement may only be certified at the applicant nursing facility. HHSC [DADS] does not transfer or assign the additional allocation of beds until they are certified at the applicant nursing facility. (4) Non-certified nursing facilities. Licensed nursing facilities that do not have Medicaid-certified beds may apply to HHSC [DADS] for an initial allocation of Medicaid beds. (A) The application for Medicaid beds may be for no more than 10 percent (rounded to the nearest whole number) of the facility's licensed nursing facility beds. (B) The applicant nursing facility must comply with level of acceptable care requirements in subsection (e) of this section. (C) After the applicant nursing facility receives an allocation of Medicaid beds, the facility may apply for additional Medicaid beds in accordance with paragraph (3) of this subsection. (5) Low-capacity facilities. For purposes of efficiency, nursing facilities with a Medicaid bed capacity of less than 60 may receive additional Medicaid beds to increase their capacity up to a total of 60 Medicaid beds. (A) The nursing facility must be licensed for less than 60 beds and have a current certification of less than 60 Medicaid beds. (B) The nursing facility must have been Medicaid-certified before June 1, (C) The applicant licensee must comply with level of acceptable care requirements in subsection (e) of this section. (D) Facilities that have a Medicaid capacity of less than 60 beds due to the loss of Medicaid beds under provisions in subsection (j) of this section are not eligible for this exemption. (6) Spend-down Medicaid beds. Licensed nursing facilities may apply to HHSC [DADS] for temporary spend-down Medicaid beds for residents who have "spent down" their resources to become eligible for Medicaid, but for whom no Medicaid bed is available. A HHSC [DADS] approval of spend-down Medicaid beds allows a nursing facility to exceed temporarily its allocated Medicaid bed capacity. (A) The applicant nursing facility must have a Medicaid contract with a Medicaid bed capacity of at least 10 percent of licensed capacity authorized in paragraph (4) of this subsection. If the nursing facility is not currently Medicaid-certified, the licensee must be approved for Medicaid certification and obtain a Medicaid contract with a Medicaid bed capacity at least as large as that authorized in paragraph (4) of this subsection. (B) All Medicaid or dually certified beds must be occupied by Medicaid or Medicare recipients at the time of application. (C) The application for a spend-down Medicaid bed must include documentation that the person for whom the spend-down bed is requested: (i) was not eligible for Medicaid at the time of the resident's most recent admission to the nursing facility; and (ii) was a resident of the nursing facility for at least the immediate three months before becoming eligible for Medicaid, excluding hospitalizations. 42 TexReg 5380 October 6, 2017 Texas Register

99 (D) The nursing facility is eligible to receive Medicaid benefits effective the date the resident meets Medicaid eligibility requirements. (E) The nursing facility must assign a permanent Medicaid bed to the resident as soon as one becomes available. (F) Facilities with multiple residents in spend-down beds must assign permanent Medicaid beds to those residents in the same order the residents were admitted to spend-down beds. (G) The assignment of residents in spend-down beds to permanent Medicaid beds must precede the admission of new residents to permanent beds. (H) The nursing facility must notify HHSC [DADS] immediately upon the death or permanent discharge of the resident or transfer of the resident to a permanent Medicaid bed. Failure of the nursing facility to notify HHSC [DADS] of these occurrences in a timely manner is basis for denying applications for spend-down Medicaid beds. (I) The nursing facility is not required to comply with level of acceptable care requirements in subsection (e) of this section. (g) Waivers. The executive commissioner or the executive commissioner's designee may grant a waiver of the requirements stated in subsection (d) of this section under certain conditions. (1) Applicants must meet the following conditions to be eligible for the specific waivers in subsection (h) of this section. (A) The applicant must meet the level of acceptable care requirement in subsection (e) of this section. (B) The applicant must submit a complete HHSC [DADS] waiver application. (C) At the time of licensure and Medicaid certification of the allocated beds, the licensee must comply with the requirements in of this chapter. (D) A waiver recipient or a subsequent waiver assignee must, at the time of licensure and Medicaid certification, be the property owner or the licensee of the facility where Medicaid beds allocated through the waiver process are certified. (2) A waiver recipient may request that HHSC [DADS] approve the assignment of an approved waiver to another entity in accordance with this paragraph. A waiver recipient may request HHSC [DADS] approval of only one assignment. A waiver assignment is not valid unless and until it is approved by HHSC [DADS]. (A) The waiver recipient or the owner of the waiver recipient must maintain majority ownership and management control of the assignee. (B) The assignee must not have an owner or controlling person who was not an owner or controlling person of the waiver recipient. (C) The assignee must own the physical plant of the waiver facility at the time of licensure and certification (as landlord) or be the licensee at the time of licensure and certification (as the licensed operator). Under either circumstance, the allocated beds are subject to subsection (c) of this section. (D) The assignee must meet the requirements in subsection (e) of this section regarding level of acceptable care. (3) A waiver recipient entity may remove a controlling person from ownership of the entity, but the waiver recipient entity must not add an owner after the waiver is approved by HHSC [DADS]. A change to the ownership of the waiver recipient entity or the waiver assignment entity must be reported to HHSC [DADS]. (4) HHSC [DADS] may, in its sole discretion, determine that a waiver applicant that submits false or fraudulent information is not eligible for a waiver. HHSC [DADS] may, in its sole discretion, revoke a waiver issued and decertify Medicaid beds issued based on false or fraudulent information provided by the applicant. (5) Except as provided in paragraphs (6) - (9) of this subsection, HHSC [DADS] considers waiver applications in the order in which they are received. A waiver applicant may request that review of its application be deferred until one or more applications submitted after its application has been reviewed. This request must be in writing. (6) HHSC [DADS] gives priority to a small house waiver application submitted in accordance with subsection (h)(9) of this section over a pending community needs waiver application submitted in accordance with subsection (h)(2) of this section for the same county. If approved, HHSC [DADS] includes the small house facility beds when determining the need for a community needs waiver. (7) During any period in which HHSC [DADS] is processing a waiver application in accordance with subsection (h)(2), (4), (5), or (9) of this section, HHSC [DADS] may suspend processing the waiver application for up to six months if HHSC [DADS] determines the county or precinct occupancy rate of the county or precinct in which the site of the proposed waiver is located is at least 85 percent during at least six of the previous nine months. HHSC [DADS] calculates the occupancy rate based on the monthly Medicaid occupancy reports submitted to HHSC [DADS] by Medicaid-certified nursing facilities and includes the occupancy rate of certified Medicaid beds and allocated Medicaid beds that are encumbered for future certification as a result of approval of a waiver or exemption in the subject county or precinct. (8) HHSC [DADS] initiates the high occupancy county or precinct waiver process referenced in subsection (h)(1) of this section if HHSC [DADS] determines requirements for the open solicitation process for a high occupancy county or precinct waiver are met during the temporary suspension period referenced in paragraph (7) of this subsection. HHSC [DADS] does not process any pending waiver applications in the affected county or precinct until the open solicitation process referenced in subsection (h)(1) of this section is complete. (9) HHSC [DADS] continues to process a suspended waiver application in the affected county or precinct if HHSC [DADS] determines requirements for the open solicitation process of the high occupancy county or precinct waiver are not met during the suspension period referenced in paragraph (7) of this subsection. (h) Specific waiver types. HHSC [DADS] may grant a waiver if it determines that Medicaid beds are necessary for the following circumstances. (1) High occupancy waiver. A high occupancy waiver is designed to meet the needs of counties and certain precincts that have a high county or precinct occupancy rate for multiple months. (A) HHSC [DADS] monitors monthly county or precinct occupancy rates. If HHSC [DADS] determines that a county or precinct occupancy rate equals or exceeds 85 percent for at least nine of the previous twelve months, HHSC [DADS] may initiate a waiver process by placing a public notice in the Texas Register and the Electronic State Business Daily (ESBD) to announce an open solicitation period. (B) The public notice announces that HHSC [DADS] may allocate 90 additional Medicaid beds in the county or precinct. PROPOSED RULES October 6, TexReg 5381

100 (C) The notice identifies the county or precinct and the beginning and end dates of the solicitation period. The notice also includes the HHSC [DADS] address to which the application for additional Medicaid beds must be submitted and specifies that the application must be received by HHSC [DADS] before the close of business on the end date of the solicitation period. (D) An applicant for additional Medicaid beds must comply with the level of acceptable care requirements in subsection (e) of this section. (E) An applicant must submit a complete HHSC [DADS] waiver application. (F) At the end of the solicitation period, HHSC [DADS] determines if an applicant is eligible for additional Medicaid beds. If multiple applicants are eligible, the applicant who will receive the allocation of beds will be chosen by a lottery selection. (G) If no application for the waiver process is received or if no applicant meets the requirements in this section, HHSC [DADS] conducts no further solicitation. HHSC [DADS] closes the process without allocating Medicaid beds. (H) An applicant that is granted a high occupancy waiver must provide to HHSC [DADS] a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC [DADS] to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(g) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC [DADS] will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC [DADS] approves the waiver application. (I) If an applicant chooses to provide a performance bond or surety bond instead of an irrevocable letter of credit, the performance bond or surety bond provided under this subchapter must: (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A; the bond: (ii) be in a form approved by HHSC [DADS]; and (iii) clearly and prominently display on the face of (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or (II) the toll-free telephone number maintained by the Texas Department of Insurance in accordance with Texas Insurance Code, Chapter 521, Subchapter B, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number. (J) If an applicant chooses to provide an irrevocable letter of credit, the irrevocable letter of credit must be issued by a banking institution or similar financial institution. (K) An applicant must notify HHSC [DADS] at least 60 days in advance if: (i) the applicant does not intend to renew its performance bond, surety bond, or irrevocable letter of credit on the annual renewal date; or (ii) the applicant changes the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (L) An applicant may choose a performance bond, surety bond, or irrevocable letter of credit and substitute one for the other over the course of development and construction, but regardless of which option is chosen, the performance bond, surety bond, or irrevocable letter of credit must continue in effect until the facility is certified to participate in the Medicaid program or until paid to HHSC [DADS] after notice provided in accordance with subparagraph (M) of this paragraph. (M) A performance bond, surety bond, or irrevocable letter of credit is immediately due and must be paid to HHSC [DADS] upon receipt of notice from HHSC [DADS] to the issuer of the performance bond, surety bond, or irrevocable letter of credit that: (i) the applicant did not comply with subsection (i)(4)(g) of this section, which may include an extension granted under subsection (i)(6) of this section; (ii) HHSC [DADS] revokes the applicant's waiver; (iii) the applicant did not notify HHSC [DADS] of its intent not to renew the performance bond, surety bond, or irrevocable letter of credit at least 60 days before its automatic annual renewal date; or (iv) the applicant did not notify HHSC [DADS] of a change in the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (2) Community needs waiver. A community needs waiver is designed to meet the needs of communities that do not have reasonable access to acceptable nursing facility care. (A) The applicant must submit a demographic or health needs study, prepared by an independent professional experienced at preparing demographic or health needs studies, that documents: (i) an immediate need for additional Medicaid beds in the community; and (ii) Medicaid residents in the community do not have reasonable access to acceptable nursing facility care. (B) The application must include a statement by the preparer of the study that the preparer has no interest, financial or otherwise, in the outcome of the waiver application. (C) The demographic or health needs study must include at least the following information pertaining to the community's population: (i) population growth trends; (ii) population growth trends specific to the elderly, including income or financial condition; (iii) level of acceptable care provided by local nurs- (iv) ing facilities; and Medicaid bed occupancy data; (v) any existing allocated Medicaid beds not currently certified but that could be used for a new Medicaid nursing facility. (D) The applicant must submit documentation of substantial community support for the new nursing facility or beds. (E) When determining the immediate need for additional Medicaid beds, and whether residents have reasonable access to acceptable nursing facility care, HHSC [DADS] considers: (i) the number and occupancy rate of certified Medicaid beds that comply with level of acceptable care requirements; and 42 TexReg 5382 October 6, 2017 Texas Register

101 (ii) the number of encumbered Medicaid beds that have been approved by HHSC [DADS] but are not yet certified. (F) Replacement beds or waiver beds approved in accordance with subsection (f)(1) or (h) of this section will not be considered in the calculation in subparagraph (D) of this paragraph if the owner of the replacement beds or waiver beds has not purchased land for a new construction site within 24 months after the date HHSC [DADS] initially approves the replacement request or the waiver for the beds. (G) HHSC [DADS] considers an application withdrawn if it is not completed within 90 days after the application is submitted to HHSC [DADS]. (H) HHSC [DADS] notifies local nursing facilities when a complete community needs waiver application is received and affords local nursing facilities an opportunity to comment on the waiver application. The notification includes a deadline for submission of comments. HHSC [DADS] limits subsequent comments during the review process to facilities that submit timely comments in response to the notification of a completed application. (I) An applicant that is granted a community needs waiver must provide to HHSC [DADS] a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC [DADS] to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(g) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC [DADS] will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC [DADS] approves the waiver application. (J) If an applicant chooses to provide a performance bond or surety bond, instead of an irrevocable letter of credit, the performance bond provided under this subparagraph must: (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A; the bond: (ii) be in a form approved by HHSC [DADS]; and (iii) clearly and prominently display on the face of (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or (II) the toll-free telephone number maintained by the Texas Department of Insurance in accordance with Texas Insurance Code, Chapter 521, Subchapter B, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number. (K) If an applicant chooses to provide an irrevocable letter of credit, the irrevocable letter of credit must be issued by a banking institution or similar financial/lending institution. (L) An applicant must notify HHSC [DADS] at least 60 days in advance if: (i) the applicant does not intend to renew its performance bond, surety bond, or irrevocable letter of credit on the annual renewal date; or (ii) the applicant changes the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (M) An applicant may choose a performance bond, surety bond, or irrevocable letter of credit, and may substitute one for the other over the course of development and construction, but regardless of which option is chosen, the performance bond, surety bond, or irrevocable letter of credit must continue in effect until the facility is certified to participate in the Medicaid program; or until paid to HHSC [DADS] after notice provided in accordance with subparagraph (N) of this paragraph. (N) A performance bond, surety bond, or irrevocable letter of credit is immediately due and must be paid to HHSC [DADS] upon receipt of notice from HHSC [DADS] to the issuer of the performance bond, surety bond, or irrevocable letter of credit that: (i) the applicant did not comply with subsection (i)(4)(g) of this section, which may include an extension granted under subsection (i)(6) of this section; (ii) HHSC [DADS] revokes the applicant's waiver; (iii) the applicant did not notify HHSC [DADS] of its intent not to renew the performance bond, surety bond, or irrevocable letter of credit at least 60 days before its automatic annual renewal date; or (iv) the applicant did not notify HHSC [DADS] of a change in the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (3) Criminal justice waiver. The criminal justice waiver is designed to meet the needs of the Texas Department of Criminal Justice (TDCJ). The applicant must document that: (A) the waiver is needed to meet the identified and determined nursing facility needs of TDCJ; and (B) the new nursing facility is approved by TDCJ to serve persons under their supervision who have been released on parole, mandatory supervision, or special needs parole in accordance with Texas Government Code, Chapter 508, Parole and Mandatory Supervision. (4) Economically disadvantaged waiver. The economically disadvantaged waiver is designed to meet the needs of residents of ZIP codes located in communities where a majority of residents have an average income below the countywide average income and do not have reasonable access to acceptable nursing facility care. (A) The applicant must submit a demographic or health needs study, prepared by an independent professional experienced at preparing demographic or health needs studies that documents: (i) the ZIP code in which the new nursing facility will be constructed has a population with an income that is at least 20 percent below the average income of the county according to the most recent U.S. census or more recent census projection; (ii) an immediate need for additional Medicaid beds in the ZIP code in which the new nursing facility will be constructed; and (iii) residents in the ZIP code in which the nursing facility or beds will be located do not have reasonable access to acceptable nursing facility care. (B) The application must include a statement by the preparer of the study that the preparer has no interest, financial or otherwise, in the outcome of the waiver application. (C) The demographic or health needs study must include at least the following information pertaining to the community's population: PROPOSED RULES October 6, TexReg 5383

102 (i) population growth trends; (ii) population growth trends specific to the elderly, including income or financial condition; ities; and (iii) Medicaid bed occupancy data; (iv) level of acceptable care provided by local facil- (v) any existing allocated Medicaid beds not currently certified but could be used for a new Medicaid nursing facility. (D) When determining the immediate need for additional Medicaid beds, and whether residents have reasonable access to acceptable nursing facility care, HHSC [DADS] considers: (i) the number and occupancy rate of certified Medicaid beds that comply with level of acceptable care requirements; and (ii) the number of encumbered Medicaid beds that have been approved by HHSC [DADS] but are not yet certified. (E) Replacement beds or waiver beds approved in accordance with subsection (f)(1) or (h) of this section will not be considered in the calculation in subparagraph (D) of this paragraph if the owner of the replacement beds or waiver beds has not purchased land for a new construction site within 24 months after the date HHSC [DADS] initially approves the replacement request or the waiver for the beds. (F) HHSC [DADS] considers an application withdrawn if it is not completed within 90 days after the application is submitted to HHSC [DADS]. (G) HHSC [DADS] notifies local nursing facilities when a complete economically disadvantaged waiver application is received and affords local nursing facilities an opportunity to comment on the waiver application. The notification includes a deadline for submission of comments. HHSC [DADS] limits subsequent comments during the review process to facilities that submit timely comments in response to the notification of a completed application. (H) An applicant that is granted an economically disadvantaged waiver must provide to HHSC [DADS] a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC [DADS] to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(g) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC [DADS] will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC [DADS] approves the waiver application. (I) If an applicant chooses to provide a performance bond or surety bond instead of an irrevocable letter of credit, the performance bond provided under this subparagraph must: (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A; the bond: (ii) be in a form approved by HHSC [DADS]; and (iii) clearly and prominently display on the face of (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or (II) the toll-free telephone number maintained by the Texas Department of Insurance in accordance with Texas Insurance Code, Chapter 521, Subchapter B, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number. (J) If an applicant chooses to provide an irrevocable letter of credit, the irrevocable letter of credit must be issued by a banking institution or similar financial institution. (K) An applicant must notify HHSC [DADS] at least 60 days in advance if: (i) the applicant does not intend to renew its performance bond, surety bond, or irrevocable letter of credit on the annual renewal date; or (ii) the applicant changes the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (L) An applicant may choose a performance bond, surety bond, or irrevocable letter of credit, and may substitute one for the other over the course of development and construction, but regardless of which option is chosen, the performance bond, surety bond, or irrevocable letter of credit must continue in effect until the facility is certified to participate in the Medicaid program; or until paid to HHSC [DADS] after notice provided in accordance with subparagraph (M) of this paragraph. (M) A performance bond, surety bond, or irrevocable letter of credit is immediately due and must be paid to HHSC [DADS] upon receipt of notice from HHSC [DADS] to the issuer of the performance bond, surety bond, or irrevocable letter of credit that: (i) the applicant did not comply with subsection (i)(4)(g) of this section, which may include an extension granted under subsection (i)(6) of this section; (ii) HHSC [DADS] revokes the applicant's waiver; (iii) the applicant did not notify HHSC [DADS] of its intent not to renew the performance bond, surety bond, or irrevocable letter of credit at least 60 days before its automatic annual renewal date; or (iv) the applicant did not notify HHSC [DADS] of a change in the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (5) Alzheimer's waiver. The Alzheimer's waiver is designed to meet the needs of communities that do not have reasonable access to Alzheimer's nursing facility services. (A) The applicant must document that: (i) the nursing facility is affiliated with a medical school operated by the state; (ii) the nursing facility will participate in ongoing research programs for the care and treatment of persons with Alzheimer's disease; (iii) the nursing facility will be designed to separate and treat residents with Alzheimer's disease by stage and functional level; (iv) the nursing facility will obtain and maintain voluntary certification as an Alzheimer's nursing facility in accordance with , , and of this chapter (relating to Voluntary Certification of Facilities for Care of Persons with Alzheimer's Disease; General Requirements for a Certified Facility; and Standards for Certified Alzheimer's Facilities); and 42 TexReg 5384 October 6, 2017 Texas Register

103 (v) only residents with Alzheimer's disease or related dementia will be admitted to the Alzheimer's Medicaid beds. (B) The applicant must submit a demographic or health needs study, prepared by an independent professional experienced at preparing demographic studies that documents the need for the number of Medicaid Alzheimer's beds requested. The study must include a statement by the preparer of the study that the preparer has no interest, financial or otherwise, in the outcome of the waiver application. (C) HHSC [DADS] notifies local nursing facilities when a complete Alzheimer's waiver application is received and afford local nursing facilities an opportunity to comment on the waiver application. The notification will include a deadline for submission of comments. HHSC [DADS] limits subsequent comments during the review process to facilities that submit timely comments in response to the notification of a completed application. (D) HHSC [DADS] considers an application withdrawn if it is not completed within 90 days after the application is submitted to HHSC [DADS]. (E) A facility that has Medicaid beds allocated under provisions of an Alzheimer's waiver may apply for a waiver in accordance with other subsections of this section, including subsection (f)(3) or (4) of this section. HHSC [DADS] does not count the beds allocated under an Alzheimer's waiver to determine the allowable bed allocation increase. For example, a 120-bed nursing facility with 60 Alzheimer waiver beds would be eligible for 10 percent of the 60 remaining beds or six additional Medicaid beds. (6) Teaching nursing facility waiver. A teaching nursing facility waiver is designed to meet the statewide needs for providing training and practical experience for health-care professionals. The applicant must submit documentation that the nursing facility: (A) is affiliated with a state-supported medical school; (B) is located on land owned or controlled by the statesupported medical school; and (C) serves as a teaching nursing facility for physicians and related health-care professionals. (7) Rural county waiver. A rural county waiver is designed to meet the needs of rural areas of the state that do not have reasonable access to acceptable nursing facility care. For purposes of this waiver, a rural county is one that has a population of 100,000 or less according to the most recent census, and has no more than two Medicaid-certified nursing facilities. HHSC [DADS] approves no more than 120 additional Medicaid beds per county per year and no more than 500 additional Medicaid beds statewide in a calendar year under this waiver provision. HHSC [DADS] considers a waiver application on a first-come, first-served basis. Requests received in a year in which the 500-bed limit has been met will be carried over to the next year. The county commissioner's court must request the waiver. (A) The commissioner's court must notify HHSC [DADS] of its intent to consider a rural county waiver and obtain verification from HHSC [DADS] that the county complies with the definition of rural county. (B) The commissioner's court must publish a notice in the Texas Register and in a newspaper of general circulation in the county. The notice must seek: (i) comments on whether a new Medicaid nursing facility should be requested; and (ii) proposals from persons or entities interested in providing additional Medicaid-certified beds in the county, including persons or entities currently operating Medicaid-certified facilities with high occupancy rates. HHSC [DADS], in its sole discretion, may eliminate from participating in the process persons or entities that submit false or fraudulent information. (C) The commissioner's court must determine whether to proceed with the waiver request after considering all comments and proposals received in response to the notices provided under subparagraph (B) of this paragraph. In determining whether to proceed with the waiver request, the commissioner's court must consider: county; the quality of existing Medicaid nursing facili- (ii) ties in the county; (i) the demographic and economic needs of the (iii) the quality of the proposals submitted, including a review of the past history of care provided, if any, by the person or entity submitting the proposal; and (iv) the degree of community support for additional Medicaid nursing facility services. (D) The commissioner's court must document the comments received, proposals offered and factors considered in subparagraph (C) of this paragraph. (E) If the commissioner's court decides to proceed with the waiver request, it must submit a recommendation that HHSC [DADS] issue a waiver to a person or entity who submitted a proposal for new or additional Medicaid beds. The recommendation must include: (i) the name, address, and telephone number of the person or entity recommended for contracting for the Medicaid beds; (ii) the location, if the commissioner's court desires to identify one, of the recommended nursing facility; (iii) the number of beds recommended; and (iv) the information listed in subparagraph (D) of this paragraph used to make the recommendation. (F) An applicant that is granted a rural county waiver must provide to HHSC [DADS] a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC [DADS] to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(g) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC [DADS] will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC [DADS] approves the waiver application. (G) If an applicant chooses to provide a performance bond or surety bond, instead of an irrevocable letter of credit, the performance bond or surety bond provided under this subchapter must: (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A; the bond: (ii) (iii) be in a form approved by HHSC [DADS]; and clearly and prominently display on the face of (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or PROPOSED RULES October 6, TexReg 5385

104 (II) the toll-free telephone number maintained by the Texas Department of Insurance in accordance with Texas Insurance Code, Chapter 521, Subchapter B, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number. (H) If an applicant chooses to provide an irrevocable letter of credit, the irrevocable letter of credit must be issued by a banking institution or similar financial/lending institution. (I) An applicant must notify HHSC [DADS] at least 60 days in advance if: (i) the applicant does not intend to renew its performance bond, surety bond, or irrevocable letter of credit on the annual renewal date; or (ii) the applicant changes the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (J) An applicant may choose a performance bond, surety bond, or irrevocable letter of credit, and may substitute one for the other over the course of development and construction, but regardless of which option is chosen, the performance bond, surety bond, or irrevocable letter of credit must continue in effect until the facility if certified to participate in the Medicaid program; or until paid to HHSC [DADS] after notice provided in accordance with subparagraph (K) of this paragraph. (K) A performance bond, surety bond, or irrevocable letter of credit is immediately due and must be paid to HHSC [DADS] upon receipt of notice from HHSC [DADS] to the issuer of the performance bond, surety bond, or irrevocable letter of credit that: (i) the applicant did not comply with subsection (i)(4)(g) of this section, which may include an extension granted under subsection (i)(6) of this section; (ii) HHSC [DADS] revokes the applicant's waiver; (iii) the applicant did not notify HHSC [DADS] of its intent not to renew the performance bond, surety bond, or irrevocable letter of credit at least 60 days before its automatic annual renewal date; or (iv) the applicant did not notify HHSC [DADS] of a change in the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (8) State veterans homes. State veterans homes, authorized and built under the auspices of the Texas Veterans Land Board, must meet all requirements for Medicaid participation. (9) Small house waiver. A small house waiver is designed to promote the construction of smaller nursing facility buildings that provide a homelike environment. (A) A facility must meet the requirements in of this chapter (relating to Small House and Household Facilities) for HHSC [DADS] to grant a small house waiver for the facility. (B) An applicant for a small house waiver must submit an application to HHSC [DADS] and a schematic building plan of the proposed facility with sufficient detail to demonstrate that the proposed project meets the requirements in of this chapter. (C) An applicant that is granted a small house waiver must submit final construction documents in accordance with of this chapter (relating to Plans, Approvals, and Construction Procedures) before facility construction begins. (D) HHSC [DADS] notifies local nursing facilities when a complete small house waiver application is received and allows the local nursing facilities to comment on the waiver application. The notification includes the deadline for submitting comments. HHSC [DADS] limits subsequent comments during the review process to facilities that submit timely comments in response to the notification of a completed application. (E) HHSC [DADS] does not approve more than 16 beds for a small house facility or for a household in a facility that is granted a small house waiver. (F) HHSC [DADS] considers an application withdrawn if it is not completed within 90 days after the application is submitted to HHSC [DADS]. (G) Subject to subparagraph (E) of this paragraph, HHSC [DADS] approves the replacement or transfer of beds certified at a small house nursing facility in accordance with subsection (f)(1) or (2) of this section only to another small house or household facility. (H) A facility that has Medicaid beds allocated under provisions of a small house waiver may apply for general Medicaid beds in accordance with other subsections of this section, including subsection (f)(3) or (4) of this section. HHSC [DADS] does not count the beds allocated under a small house waiver provision in determining the allowable bed allocation increase. For example, a 120-bed nursing facility with 60 Small House waiver beds would be eligible for 10 percent of the 60 remaining beds or six additional Medicaid beds. (I) An applicant that is granted a small house waiver must provide to HHSC [DADS] a performance bond, surety bond, or an irrevocable letter of credit in the amount of $500,000 payable to HHSC [DADS] to ensure that the Medicaid beds granted to the applicant under the waiver are certified within the time periods required by subsection (i)(4)(g) of this section, including any extensions granted under subsection (i)(6) of this section. HHSC [DADS] will revoke a waiver if the performance bond, surety bond, or irrevocable letter of credit is not provided within 90 days after HHSC [DADS] approves the waiver application. (J) If an applicant chooses to provide a performance bond or surety bond, instead of an irrevocable letter of credit, the performance bond or surety bond provided under this subparagraph must: (i) be executed by a corporate entity in accordance with Texas Insurance Code, Chapter 3503, Subchapter A; the bond: (ii) (iii) be in a form approved by HHSC [DADS]; and clearly and prominently display on the face of (I) the name, mailing address, physical address, and telephone number of the surety company or financial institution to which any notice of claim should be sent; or (II) the toll-free telephone number maintained by the Texas Department of Insurance in accordance Texas Insurance Code, Chapter 521, Subchapter B, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number. (K) If an applicant chooses to provide an irrevocable letter of credit, the irrevocable letter of credit must be issued by a banking institution or similar financial/lending institution. (L) An applicant must notify HHSC [DADS] at least 60 days in advance if: 42 TexReg 5386 October 6, 2017 Texas Register

105 (i) the applicant does not intend to renew its performance bond, surety bond, or irrevocable letter of credit on the annual renewal date; or (ii) the applicant changes the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (M) An applicant may choose a performance bond, surety bond, or irrevocable letter of credit, and may substitute one for the other over the course of development and construction, but regardless of which option is chosen, the performance bond, surety bond, or irrevocable letter of credit must continue in effect until the facility is certified to participate in the Medicaid program; or until paid to HHSC [DADS] after notice provided in accordance with subparagraph (N) of this paragraph. (N) A performance bond, surety bond, or irrevocable letter of credit is immediately due and must be paid to HHSC [DADS] upon receipt of notice from HHSC [DADS] to the issuer of the performance bond, surety bond, or irrevocable letter of credit that: (i) the applicant did not comply with subsection (i)(4)(g) of this section, which may include an extension granted under subsection (i)(6) of this section; (ii) HHSC [DADS] revokes the applicant's waiver; (iii) the applicant did not notify HHSC [DADS] of its intent not to renew the performance bond, surety bond, or irrevocable letter of credit at least 60 days before its automatic annual renewal date; or (iv) the applicant did not notify HHSC [DADS] of a change in the lending institution or surety bond company administering the performance bond, surety bond, or irrevocable letter of credit. (i) Time Limits and Extensions. (1) Medicaid beds transferred in accordance with subsection (f)(2) of this section must be certified within six months after HHSC [DADS] grants the exemption. (2) Time limits applicable to temporary Medicaid beds are specified in subsection (f)(6) of this section. (3) All facilities and beds approved in accordance with waiver provisions of subsection (h) of this section and replacement nursing facilities approved in accordance with subsection (f)(1) of this section, must be constructed, licensed, and Medicaid-certified within 42 months after the waiver or replacement exemption is granted. (4) A recipient of a waiver must provide HHSC [DADS] with evidence of compliance with subparagraphs (A) - (G) of this paragraph. The recipient must submit evidence of compliance on or before the date stated in the subparagraph, including any extensions granted under paragraph (6) of this subsection. (A) The land must be under contract within 12 months after HHSC [DADS] approval of the waiver or replacement. (B) An architect or engineer must be under contract to prepare final construction documents within 15 months after HHSC [DADS] approval of the waiver or replacement. (C) The facility's preliminary plans must be completed within 18 months after HHSC [DADS] approval of the waiver or replacement. (D) The land must be purchased and a progress report submitted to HHSC [DADS] within 24 months after HHSC [DADS] approval of the waiver or replacement. (E) Entitlements (including municipality, planning and zoning, building permit) and the facility's foundation must be completed within six months after land purchase or 30 months after HHSC [DADS] approval of the waiver or replacement, whichever is later. (F) Facility construction must be active and ongoing, as evidenced by a construction progress report submitted to HHSC [DADS] within 12 months after land purchase or 36 months after HHSC [DADS] approval of the waiver or replacement, whichever is later. (G) The facility must be constructed, licensed, and certified within 18 months after land purchase or 42 months after HHSC [DADS] approval of the waiver or replacement, whichever is later. (5) HHSC [DADS], in its sole discretion, may declare the exemption or the waiver void if the applicant fails or refuses to provide evidence of compliance with each benchmark or deadline, or the evidence of compliance submitted to HHSC [DADS] in accordance with paragraph (4) of this subsection contains false or fraudulent information. (6) Waiver or exemption recipients may request an extension of the deadlines in this section. At the discretion of the executive commissioner or the executive commissioner's designee, deadlines specified in this section may be extended. The applicant must substantiate every element of its extension request with evidence of good-faith efforts to meet the benchmarks and construction deadlines or evidence confirming that delays were beyond the applicant's control. (7) Waiver or exemption recipients who receive an extension of their waiver or exemption must submit a progress report every six months after approval of the extension until the nursing facility beds are certified. HHSC [DADS] may declare the waiver or exemption void if the applicant fails or refuses to provide the progress report as required or if the progress report contains false or fraudulent information. (8) HHSC [DADS] may revoke a bed allocation for failure to meet the requirements of this section. (1) Loss of Medicaid beds that are not available to be occupied. (j) Loss of Medicaid Beds. (A) Medicaid nursing facilities must report certified Medicaid beds that do not comply with requirements of of this chapter (relating to Physical Environment) and are not available for occupancy on monthly Medicaid occupancy reports. (B) HHSC [DADS] decertifies and de-allocates Medicaid beds that are intended for use in bedrooms that have been converted to other uses if the rooms are not being used for bedroom occupancy use on two consecutive standard surveys. (C) HHSC [DADS] does not decertify and de-allocate Medicaid beds that are intended for use in rooms that are licensed and certified for multi-occupancy use but are being used for single occupancy only. (D) HHSC [DADS] decertifies and de-allocates Medicaid beds granted through a criminal justice waiver, Alzheimer's waiver, a teaching nursing facility waiver, state veterans home waiver, or a small house waiver that are no longer being used for the intended purpose for which the waiver was granted. (2) Loss of Medicaid beds based on sanctions. (A) A Medicaid nursing facility operated by the person or entity who also owns the property will lose the allocation of all Med- PROPOSED RULES October 6, TexReg 5387

106 icaid beds assigned to the nursing facility property if the nursing facility's license is denied or revoked. (B) A Medicaid nursing facility operated by one person or entity and owned by another person or entity will lose the allocation of Medicaid beds if two or more of the following actions occur within a 42-month period: (i) licensure denial; (ii) licensure revocation; or (iii) Medicaid termination. (C) HHSC [DADS] may waive this loss of allocation of Medicaid beds in order to facilitate a change of ownership or other actions that would protect the health and safety of residents or assure reasonable access to acceptable nursing facility care. icaid beds. (3) Voluntary decertification of Medicaid beds. (A) Facilities may request to voluntarily decertify Med - (B) The licensee must submit written approval of the Medicaid bed reduction signed by the property owner and all physical plant lien holders. (C) HHSC [DADS] reduces the number of allocated Medicaid beds equal to the number of beds voluntarily decertified. (D) Facilities that voluntarily decertify Medicaid beds are eligible to receive an increased allocation of Medicaid beds if the facility qualifies for a bed allocation waiver or exemption. (4) Nursing facility ceases to operate or participate in Medicaid. (A) The property owner of a nursing facility that closes or ceases to participate in the Medicaid program must inform HHSC [DADS] in writing of the intended future use of the Medicaid beds within 90 days after closure or ceasing participation in Medicaid. (B) Unless the Medicaid beds will be used for a replacement nursing facility, the allocated beds must be re-certified within 12 months of the date the Medicaid contract was terminated. (C) Time limits in subparagraphs (A) and (B) of this paragraph may be extended in accordance with subsection (i)(6) of this section. (D) HHSC [DADS] may de-allocate Medicaid beds for failure to meet the requirements of this paragraph. (5) Loss of Medicaid beds based on low occupancy. (A) HHSC [DADS] may review Medicaid bed occupancy rates annually for the purpose of de-allocating and decertifying unused Medicaid beds. The Medicaid bed occupancy reports for the most recent six-month period that HHSC [DADS] has validated are used to determine the bed occupancy rate of each nursing facility. (B) HHSC [DADS] de-allocates and decertifies Medicaid beds in facilities with an average occupancy rate below 70 percent. The number of beds decertified is calculated by subtracting the preceding six-month average occupancy rate of Medicaid-certified beds from 70 percent of the number of allocated certified beds and dividing the difference by 2, rounding the final figure down if necessary. For example, for a facility with 100 Medicaid-certified beds and a 50 percent occupancy rate, the difference between 70 percent (70 beds) and 50 percent (50 beds) is 20 beds, divided by 2, is 10 beds to be decertified. (C) Medicaid beds in a nursing facility that has obtained a replacement nursing facility exemption are not subject to the de-allocation and decertification process. (D) Medicaid beds in a new or replacement physical plant or a newly constructed wing of an existing physical plant are exempt from this de-allocation and decertification process until the new physical plant or new wing has been certified for 24 months. (E) Medicaid beds that have been subject to a change of ownership within the past 24 months are exempt from the de-allocation and decertification process. (F) Medicaid beds in a county or in a precinct in one of the four most populous counties in the state in which a facility approved through the waiver process is constructed are exempt from the de-allocation and decertification process for 24 months after licensure and certification of the facility. (G) Medicaid beds allocated to a closed nursing facility are exempt from this de-allocation and decertification process. (H) Nursing facilities that lose Medicaid beds through this process are eligible to receive an additional allocation of Medicaid beds at a later date if the facility qualifies for a bed allocation waiver or exemption. (I) The de-allocation and decertification of unused beds does not affect the licensed capacity of a nursing facility. (k) Informal review procedures. (1) A waiver or exemption applicant, or a Medicaid nursing facility that has been denied an increase in Medicaid bed allocation or was subject to decertification or de-allocation of Medicaid beds, [Applicants] may request an informal review of HHSC [DADS] actions regarding bed allocations. The request must be submitted within 30 days after the date referenced on the notification of the proposed action. (2) A waiver or exemption [An] applicant or a Medicaid nursing facility that has been denied an increase in Medicaid bed allocation or was subject to decertification or de-allocation of Medicaid beds, must submit a request for an informal review and all documentation or evidence that forms the basis for the informal review in writing. (3) The executive commissioner or the executive commissioner's designee conducts the informal review. (l) Medicaid occupancy reports. (1) Medicaid nursing facilities must submit occupancy reports to HHSC [DADS] each month. (A) The occupancy data must be reported on a form prescribed by HHSC [DADS]. The form must be completed in accordance with instructions and the occupancy data must be accurate and verifiable. The completed report must be received by HHSC [DADS] no later than the fifth day of the month following the reporting period. (B) HHSC [DADS] determines the Medicaid occupancy rate by calculating the monthly average of the number of persons who occupy Medicaid beds. (C) HHSC [DADS] includes all persons residing in Medicaid-certified beds, including Medicaid recipients, Medicare recipients, private-pay residents, or residents with other sources of payment, in the calculation. (D) Failure or refusal to submit accurate occupancy reports in a timely manner may result in the nursing facility's vendor payment being held in abeyance until the report is submitted. 42 TexReg 5388 October 6, 2017 Texas Register

107 (2) HHSC [DADS] determines nursing facility and county occupancy rates based on the data submitted by the nursing facilities. (A) HHSC [DADS] uses the occupancy data to determine eligibility for or compliance with waiver and exemption requirements. HHSC [DADS] also uses the occupancy data to determine if Medicaid beds should be decertified based on low occupancy. (B) HHSC [DADS] makes the occupancy data available to nursing facilities, licensees, property owners, waiver or exemption applicants, and others in accordance with public disclosure requirements. (C) HHSC [DADS] may disqualify a facility that provides inaccurate or falsified occupancy data from eligibility for bed allocation exemptions and waivers. HHSC [DADS] may refuse to accept corrections to bed occupancy data submitted more than six months after the due date of the occupancy report. (m) School-age residents. Any bed allocation waiver or exemption applicant that serves or plans to serve school-age residents must provide written notice to the affected local education agency (LEA) of its intent to establish or expand a nursing facility within the LEA's boundary. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (210) SUBCHAPTER E. 40 TAC RESIDENT RIGHTS The Texas Health and Human Services Commission (HHSC) proposes new , concerning Wheelchair Self-Release Seat Belts. BACKGROUND AND PURPOSE The purpose of the new section is to implement , Texas Health and Safety Code, as added by House Bill 284 of the 85th Legislature, Regular Session, The proposal requires a nursing facility to allow a resident to use a wheelchair self-release seat belt if the resident meets certain conditions. The rule also specifies when a facility is not required to allow a resident to use a wheelchair self-release seat belt. SECTION-BY-SECTION SUMMARY The proposed new requires a nursing facility to allow a resident to use a wheelchair self-release seat belt if the resident or resident's legal guardian requests that the resident use the seat belt, the resident consistently demonstrates the ability to release and fasten the seat belt without assistance, the use of the seat belt complies with the resident's comprehensive care plan, and the facility receives written authorization signed by the resident or the resident's legal guardian for the resident to use the seat belt. The proposed new section also specifies that a facility is not required to allow a resident to use a wheelchair self-release seat belt if a facility advertises itself as a restraint-free facility, the facility provides current and prospective residents a written disclosure stating the facility is restraint-free and is not required to comply with a request to use a wheelchair self-release seat belt, and the facility makes all reasonable efforts to accommodate the concerns of a resident who requests a seat belt. FISCAL NOTE David Cook, HHSC Deputy Chief Financial Officer, has determined that, for the first five years the proposed new rule is in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS Mr. Cook has determined that the new rule will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the rule does not impose any economic requirements on small businesses, micro-businesses, or rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT There are no anticipated economic costs to persons who are required to comply with the rule 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 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 Mary T. Henderson, Associate Commissioner for Long-Term Care Regulation, has determined that, for each year of the first five years the rule is in effect, the public will benefit from the adoption of the rule. The anticipated public benefit is that a facility and its residents are informed of statutory requirements regarding the use of wheelchair self-release seat belts. 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 Long-Term Care Regulation. Written comments on the proposal may be submitted to 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, com- PROPOSED RULES October 6, TexReg 5389

108 ments 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 the 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 40R057" in the subject line. STATUTORY AUTHORITY The new rule 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; Texas Health and Safety Code, , which authorizes licensing of nursing facilities; and Texas Health and Safety Code , which requires a facility to allow a resident to use a wheelchair self-restraint seat belt under certain circumstances. The new rule implements Texas Government Code, and Texas Health and Safety Code, and Wheelchair Self-Release Seat Belts. (a) For the purposes of this section, a "self-release seat belt" is a seat belt on a resident's wheelchair that the resident demonstrates the ability to fasten and release without assistance. A self-release seat belt is not a restraint. (b) Except as provided in subsection (c) of this section, a facility must allow a resident to use a self-release seat belt if: (1) the resident or the resident's legal guardian requests that the resident use a self-release seat belt; (2) the resident consistently demonstrates the ability to fasten and release the self-release seat belt without assistance; (3) the use of the self-release seat belt is documented in and complies with the resident's individual program plan; and (4) the facility receives written authorization, signed by the resident or the resident's legal guardian, for the resident to use the selfrelease seat belt. (c) A facility that advertises as a restraint-free facility is not required to allow a resident to use a self-release seat belt if the facility: (1) provides a written statement to all residents that the facility is restraint-free and is not required to allow a resident to use a self-release seat belt; and (2) makes reasonable efforts to accommodate the concerns of a resident who requests a self-release seat belt in accordance with subsection (b) of this section. (d) A facility is not required to continue to allow a resident to use a self-release seat belt in accordance with subsection (b) of this section if: (1) the resident cannot consistently demonstrate the ability to fasten and release the seat belt without assistance; (2) the use of the self-release seat belt does not comply with the resident's comprehensive care plan; or (3) the resident or the resident's legal guardian revokes in writing the authorization for the resident to use the self-release seat belt. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 90. INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS SUBCHAPTER C. STANDARDS FOR LICENSURE 40 TAC The Texas Health and Human Services Commission (HHSC) proposes new 90.45, concerning Wheelchair Self-Release Seat Belts. BACKGROUND AND PURPOSE The purpose of the new section is to implement , Texas Health and Safety Code, as added by House Bill 284 of the 85th Legislature, Regular Session, The proposal requires an intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID) to allow a resident to use a wheelchair self-release seat belt if the resident meets certain conditions. The rule also specifies when an ICF/IID is not required to allow a resident to use a wheelchair self-release seat belt. SECTION-BY-SECTION SUMMARY The proposed new requires an ICF/IID to allow a resident to use a wheelchair self-release seat belt if the resident or resident's legal guardian requests that the resident use the seat belt, the resident consistently demonstrates the ability to release and fasten the seat belt without assistance, the use of the seat belt complies with the resident's individual program plan, and the ICF/IID receives written authorization signed by the resident or the resident's legal guardian for the resident to use the seat belt. The proposed new section also specifies that an ICF/IID is not required to allow a resident to use a wheelchair self-release seat belt if an ICF/IID advertises itself as a restraint-free facility, the ICF/IID provides current and prospective residents a written disclosure stating the ICF/IID is restraint-free and is not required to comply with a request to use a wheelchair self-release seat belt, and the ICF/IID makes all reasonable efforts to accommodate the concerns of a resident who requests a seat belt. FISCAL NOTE David Cook, HHSC Deputy Chief Financial Officer, has determined that, for the first five years the proposed new rule is in effect, enforcing or administering the rule does not have foreseeable implications relating to costs or revenues of state or local governments. 42 TexReg 5390 October 6, 2017 Texas Register

109 SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS Mr. Cook has determined that the new rule will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the rule does not impose any economic requirements on small businesses, micro-businesses, or rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT There are no anticipated economic costs to person who are required to comply with the rule 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 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 Mary T. Henderson, Associate Commissioner for Long-Term Care Regulation, has determined that, for each year of the first five years the rule is in effect, the public will benefit from the adoption of the rule. The anticipated public benefit is that ICF/IIDs and their residents are informed of statutory requirements regarding the allowance of wheelchair self-release seat belts. 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 Regulatory Services Division. Written comments on the proposal may be submitted to 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 the 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 40R057" in the subject line. STATUTORY AUTHORITY The new rule 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; Texas Health and Safety Code, , which authorizes HHSC to license ICF/IIDs; Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the administration and implementation of Chapter 252; and Texas Health and Safety Code, , which requires a facility to allow a resident to use a wheelchair self-restraint seat belt under certain circumstances. The new rule implements Texas Government Code, ; and Texas Health and Safety Code, , , and Wheelchair Self-Release Seat Belts. (a) For the purposes of this section, a "self-release seat belt" is a seat belt on a resident's wheelchair that the resident demonstrates the ability to fasten and release without assistance. A self-release seat belt is not a restraint. (b) Except as provided in subsection (c) of this section, a facility must allow a resident to use a self-release seat belt if: (1) the resident or the resident's legal guardian requests that the resident use a self-release seat belt; (2) the resident consistently demonstrates the ability to fasten and release the self-release seat belt without assistance; (3) the use of the self-release seat belt is documented in and complies with the resident's individual program plan; and (4) the facility receives written authorization, signed by the resident or the resident's legal guardian, for the resident to use the selfrelease seat belt. (c) A facility that advertises as a restraint-free facility is not required to allow a resident to use a self-release seat belt if the facility: (1) provides a written statement to all residents that the facility is restraint-free and is not required to allow a resident to use a self-release seat belt; and (2) makes reasonable efforts to accommodate the concerns of a resident who requests a self-release seat belt in accordance with subsection (b) of this section. (d) A facility is not required to continue to allow a resident to use a self-release seat belt in accordance with subsection (b) of this section if: (1) the resident cannot consistently demonstrate the ability to fasten and release the seat belt without assistance; (2) the use of the self-release seat belt does not comply with the resident's individual program plan; or (3) the resident or the resident's legal guardian revokes in writing the authorization for the resident to use the self-release seat belt. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PROPOSED RULES October 6, TexReg 5391

110 CHAPTER 92. LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES SUBCHAPTER G. MISCELLANEOUS PROVISIONS 40 TAC The Texas Health and Human Services Commission (HHSC) proposes new , concerning Wheelchair Self-Release Seat Belts. BACKGROUND AND PURPOSE The purpose of the new section is to implement , Texas Health and Safety Code as added by House Bill 284 of the 85th Legislature, Regular Session, The proposal requires an assisted living facility to allow a resident to use a wheelchair self-release seat belt if the resident meets certain conditions. The rule also specifies when an assisted living facility is not required to allow a resident to use a wheelchair self-release seat belt. SECTION-BY-SECTION SUMMARY The proposed new requires an assisted living facility to allow a resident to use a wheelchair self-release seat belt if the resident or the resident's legal guardian requires that the resident use the seat belt, the resident consistently demonstrates the ability to release and fasten the seat belt without assistance, the use of the wheelchair self-release seat belt complies with the resident's individual service plan, and the assisted living facility receives written authorization signed by the resident or the resident's legal guardian for the resident to use the seat belt. The proposed new section also specifies that an assisted living facility is not required to allow a resident to use a wheelchair self-release seat belt if the assisted living facility advertises itself as a restraint-free facility, the assisted living facility provides current and prospective residents a written disclosure stating the facility is restraint-free and is not required to comply with a request to use a wheelchair self-release seat belt, and the assisted living facility makes all reasonable efforts to accommodate the concerns of a resident who requests a seat belt. FISCAL NOTE David Cook, HHSC Deputy Chief Financial Officer, has determined that, for the first five years the proposed new rule is in effect, enforcing or administering the rules does not have foreseeable implications relating to costs or revenues of state or local governments. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS Mr. Cook has determined that the new rule will not have an adverse economic effect on small businesses, micro-businesses, and rural communities because the rule does not impose any economic requirements on small businesses, micro-businesses, or rural communities. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT There are no anticipated economic costs to person who are required to comply with the rule 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 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 Mary T. Henderson, Associate Commissioner for Long Term Care Regulation, has determined that, for each year of the first five years the rule is in effect, the public will benefit from the adoption of the rule. The anticipated public benefit is that an assisted living facility and its residents are informed of statutory requirements regarding the allowance of wheelchair self-release seat belts. 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 Long Term Care Regulation. Written comments on the proposal may be submitted to 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 the 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 40R057" in the subject line. STATUTORY AUTHORITY The new rule 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; Texas Health and Safety Code, , which authorizes the licensing of assisted living facilities; and Texas Health and Safety Code , which requires an assisted living facility to allow residents to use a wheelchair self-release seat belt under certain circumstances. The new rule implements Texas Government Code, ; Texas Health and Safety Code, ; and Texas Health and Safety Code Wheelchair Self-Release Seat Belts. (a) For the purposes of this section, a "self-release seat belt" is a seat belt on a resident's wheelchair that the resident demonstrates the ability to fasten and release without assistance. A self-release seat belt is not a restraint. (b) Except as provided in subsection (c) of this section, a facility must allow a resident to use a self-release seat belt if: (1) the resident or the resident's legal guardian requests that the resident use a self-release seat belt; 42 TexReg 5392 October 6, 2017 Texas Register

111 (2) the resident consistently demonstrates the ability to fasten and release the self-release seat belt without assistance; (3) the use of the self-release seat belt is documented in and complies with the resident's individual program plan; and (4) the facility receives written authorization, signed by the resident or the resident's legal guardian, for the resident to use the selfrelease seat belt. (c) A facility that advertises as a restraint-free facility is not required to allow a resident to use a self-release seat belt if the facility: (1) provides a written statement to all residents that the facility is restraint-free and is not required to allow a resident to use a self-release seat belt; and (2) makes reasonable efforts to accommodate the concerns of a resident who requests a self-release seat belt in accordance with subsection (b) of this section. (d) A facility is not required to continue to allow a resident to use a self-release seat belt in accordance with subsection (b) of this section if: (1) the resident cannot consistently demonstrate the ability to fasten and release the seat belt without assistance; (2) the use of the self-release seat belt does not comply with the resident's individual service plan; or (3) the resident or the resident's legal guardian revokes in writing the authorization for the resident to use the self-release seat belt. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 97. LICENSING STANDARDS FOR HOME AND COMMUNITY SUPPORT SERVICES AGENCIES The Health and Human Services Commission (HHSC) proposes amendments to 97.2, concerning Definitions; 97.13, concerning Application Procedures for an Initial License; 97.17, concerning Application for Renewal License; and new 97.30, concerning Operation of an Inpatient Unit at Parent Agency. BACKGROUND AND PURPOSE The proposal amends Title 40, Chapter 97, Licensing Standards for Home and Community Support Services Agencies, by adding 97.30, which states the requirements that a home and community support services agency (HCSSA) or an applicant for a HCSSA license must meet to operate an inpatient unit at its parent agency. An inpatient unit is a facility where inpatient hospice services are provided. Current rules address operation of an inpatient unit at an alternate delivery site (ADS), but an ADS may not be a parent agency. Specifically, the proposed rules require a HCSSA or an applicant for a HCSSA license to notify HHSC of its intent to operate the inpatient unit; request and allow a Life Safety Code inspection; obtain verification from HHSC that the inpatient unit is in compliance with all requirements; and, unless the applicant is exempt from a health survey, request a health survey after providing services to one client. This new section is proposed in response to inquiries from HCSSAs about the requirements for operating an inpatient unit at a parent agency. The proposal also amends definitions in 97.2, including the definition of "parent agency," a term currently used in Chapter 97 and proposed new The proposal amends and to require an applicant for an initial or renewal license to comply with new to operate an inpatient unit at its parent agency. Other amendments to 97.2, 97.13, and are proposed to improve their accuracy and readability, and to use consistent terminology. SECTION-BY-SECTION SUMMARY The proposed amendment of 97.2, Definitions, changes "DADS," a reference to the Department of Aging and Disability Services, to "HHSC" and adds a definition of "HHSC." These changes reflect the transfer of functions relating to Chapter 97 from DADS to HHSC in accordance with Senate Bill 200, 84th Legislature, The proposed amendment changes the definition of "JCAHO" to reference the "Joint Commission," instead of the "Joint Commission on Accreditation of Healthcare Organizations." This change reflects the current name of the accrediting organization. The proposed amendment changes the definition of "parent agency," a term currently used in Chapter 97 and proposed new 97.30, to clarify that the term is synonymous with the term "principal place of business," which is removed from the definition of "ADS." The proposed amendment to the definition of "personal assistance services" removes the reference to a memorandum of understanding between the Board of Nursing and DADS because the statute requiring the memorandum has been repealed and health-related services that do not constitute the practice of professional nursing are described in Board of Nursing rules. The proposed amendment to the definition of "presurvey conference" more accurately describes the presurvey conference by stating that HHSC staff provide "information," not a "consultation." The proposed amendment of 97.13, Application Procedures for an Initial License, requires an applicant for an initial HCSSA license to comply with new to operate an inpatient unit at a parent agency. In addition, the proposed amendment specifies that an applicant for a license may not provide incorrect or false information on, or withhold information from, an application or attachment to an application. This change is made to clarify the context of the prohibition. The amendment provides that if an applicant provides false or incorrect information or withholds information, HHSC may deny the application as described in The proposed amendment changes "DADS" to "HHSC" throughout the section and makes editing changes to improve the readability of the section. The proposed amendment of 97.17, Application for a Renewal License, requires an applicant for license renewal to comply with to operate an inpatient unit at a parent agency. In addition, the proposed amendment specifies that an applicant for a license renewal may not provide incorrect or false information on, PROPOSED RULES October 6, TexReg 5393

112 or withhold information from, an application or attachment to an application. This change is made to clarify the context of the prohibition. The amendment provides that if an applicant provides false or incorrect information or withholds information, HHSC may deny the renewal application as described in 97.21, and assess an administrative penalty as described in (e)(5). The proposed amendment changes "DADS" to "HHSC" throughout the section and makes editing changes to improve the readability of the section and to use terminology consistent with other sections. Proposed new 97.30, Operation of an Inpatient Unit at Parent Agency, sets forth the requirements for operating an inpatient unit at a parent agency. Specifically, a HCCSA or an applicant for a license must notify HHSC of its intent to operate an inpatient unit at a parent agency; request and receive a Life Safety Code inspection; receive verification of compliance with the requirements for a hospice inpatient unit; admit and provide hospice services to a client in the inpatient unit; and, unless the HC- SSA is exempt from an initial health survey, submit a notification of readiness for an initial health survey, and be determined to be in substantial compliance with licensure requirements. The proposed new section provides that a HCSSA must not have proposed enforcement action pending against the license under which it would operate the inpatient unit at the time it notifies HHSC of its intent to operate the inpatient unit. The proposed new section also sets forth the requirements for being exempt from an initial health survey through accreditation and requires an agency operating an inpatient unit to comply with Texas Health and Safety Code, Chapter 142, and 40 TAC Chapter 97. FISCAL NOTE David Cook, Deputy Chief Financial Officer, has determined that for each year of the first five years that the sections will be in effect, there will be no fiscal implications to state or local governments as a result of enforcing and administering the sections as proposed. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITY IMPACT ANALYSIS David Cook has also determined that there will be no adverse economic effect on small businesses, micro-businesses, or rural communities required to comply with the sections as proposed. ECONOMIC COSTS TO PERSONS AND IMPACT ON LOCAL EMPLOYMENT There are no anticipated economic costs to persons who are required to comply with the sections 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. PUBLIC BENEFIT Mary Henderson, Associate Commissioner, has determined that for each year of the first five years the sections are in effect, the public will benefit from adoption of the sections. The public benefit anticipated as a result of enforcing or administering the sections will be to improve the health and safety of clients who receive services in an inpatient hospice unit located at the parent agency of a HCSSA. TAKINGS IMPACT ASSESSMENT HHSC 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 the Rules Coordination Office, P.O. Box , Mail Code H600, Austin, Texas , or street address 4900 North Lamar Boulevard, 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 before 5:00 p.m. on the last working day of the comment period; or (3) ed by midnight on the last day of the comment period. When submitting comments, please indicate "Comments on Proposed Rule 16R19" in the subject line. SUBCHAPTER A. GENERAL PROVISIONS 40 TAC 97.2 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, Chapter 142, which authorizes the HHSC executive commissioner to adopt rules regulating home and community support services agencies. The amendment implements Texas Government Code, and Texas Health and Safety Code, and Definitions. The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise. (1) Accessible and flexible services--services that are delivered in the least intrusive manner possible and are provided in all settings where individuals live, work, and recreate. (2) Administration of medication--the direct application of any medication by injection, inhalation, ingestion, or any other means to the body of a client. The preparation of medication is part of the administration of medication and is the act or process of making ready a medication for administration, including the calculation of a client's medication dosage; altering the form of the medication by crushing, dissolving, or any other method; reconstitution of an injectable medication; drawing an injectable medication into a syringe; preparing an intravenous admixture; or any other act required to render the medication ready for administration. (3) Administrative support site--a facility or site where an agency performs administrative and other support functions but does not provide direct home health, hospice, or personal assistance services. This site does not require an agency license. (4) Administrator--The person who is responsible for implementing and supervising the administrative polices and operations of a home and community support services agency and for administra- 42 TexReg 5394 October 6, 2017 Texas Register

113 tively supervising the provision of all services to agency clients on a day-to-day basis. (5) ADS--Alternate delivery site. A facility or site, including a residential unit or an inpatient unit: (A) that is owned or operated by an agency providing hospice services; (B) that is not the hospice's [principal place of business, which for the purposes of this definition, means it is not the] parent agency; (C) that is located in the geographical area served by the hospice; and (D) from which the hospice provides hospice services. (6) Advanced practice nurse--an advanced practice registered nurse. (7) Advanced practice registered nurse--a person licensed by the Texas Board of Nursing as an advanced practice registered nurse. The term is synonymous with "advanced practice nurse." (8) Advisory committee--a committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup, established for the purpose of obtaining advice or recommendations on issues or policies that are within the scope of a person's responsibility. that is: (9) Affiliate--With respect to an applicant or license holder (A) a corporation--means each officer, director, and stockholder with direct ownership of at least 5.0 percent, subsidiary, and parent company; (B) a limited liability company--means each officer, member, and parent company; (C) an individual--means: (i) the individual's spouse; (ii) each partnership and each partner thereof of which the individual or any affiliate of the individual is a partner; and (iii) each corporation in which the individual is an officer, director, or stockholder with a direct ownership or disclosable interest of at least 5.0 percent. (D) a partnership--means each partner and any parent company; and (E) a group of co-owners under any other business arrangement--means each officer, director, or the equivalent under the specific business arrangement and each parent company. agency. (10) Agency--A home and community support services (11) Applicant--The owner of an agency that is applying for a license under the statute. This is the person in whose name the license will be issued. (12) Assistance with self-administration of medication--any needed ancillary aid provided to a client in the client's self-administered medication or treatment regimen, such as reminding a client to take a medication at the prescribed time, opening and closing a medication container, pouring a predetermined quantity of liquid to be ingested, returning a medication to the proper storage area, and assisting in reordering medications from a pharmacy. Such ancillary aid includes administration of any medication when the client has the cognitive ability to direct the administration of their medication and would self-administer if not for a functional limitation. (13) Association--A partnership, limited liability company, or other business entity that is not a corporation. (14) Audiologist--A person who is currently licensed under the Texas Occupations Code, Chapter 401, as an audiologist. (15) Bereavement--The process by which a survivor of a deceased person mourns and experiences grief. (16) Bereavement services--support services offered to a family during bereavement. Services may be provided to persons other than family members, including residents of a skilled nursing facility, nursing facility, or intermediate care facility for individuals with an intellectual disability or related conditions, when appropriate and identified in a bereavement plan of care. (17) Biologicals--A medicinal preparation made from living organisms and their products, including serums, vaccines, antigens, and antitoxins. (18) Boarding home facility--an establishment defined in Texas Health and Safety Code (2). (19) Branch office--a facility or site in the service area of a parent agency from which home health or personal assistance services are delivered or where active client records are maintained. This does not include inactive records that are stored at an unlicensed site. (20) Care plan-- (A) a written plan prepared by the appropriate health care professional for a client of the home and community support services agency; or (B) for home dialysis designation, a written plan developed by the physician, registered nurse, dietitian, and qualified social worker to personalize the care for the client and enable long- and short-term goals to be met. (21) Case conference--a conference among personnel furnishing services to the client to ensure that their efforts are coordinated effectively and support the objectives outlined in the plan of care or care plan. (22) Certified agency--a home and community support services agency, or portion of the agency, that: (A) provides a home health service; and (B) is certified by an official of the Department of Health and Human Services as in compliance with conditions of participation in Social Security Act, Title XVIII (42 United States Code (USC) 1395 et seq.). (23) Certified home health services--home health services that are provided by a certified agency. (24) CFR--Code of Federal Regulations. The regulations and rules promulgated by agencies of the Federal government that address a broad range of subjects, including hospice care and home health services. (25) Change of ownership--an event that occurs when an agency's license holder has a different federal taxpayer identification number than a prospective license holder's federal taxpayer identification number, except that the substitution of a personal representative for a deceased license holder is not a change of ownership. (26) CHAP--Community Health Accreditation Program, Inc. An independent, nonprofit accrediting body that publicly certifies PROPOSED RULES October 6, TexReg 5395

114 that an organization has voluntarily met certain standards for home and community-based health care. (27) Chief financial officer--an individual who is responsible for supervising and managing all financial activities for a home and community support services agency. (28) Client--An individual receiving home health, hospice, or personal assistance services from a licensed home and community support services agency. This term includes each member of the primary client's family if the member is receiving ongoing services. This term does not include the spouse, significant other, or other family member living with the client who receives a one-time service (for example, vaccination) if the spouse, significant other, or other family member receives the service in connection with the care of a client. (29) Clinical note--a dated and signed written notation by agency personnel of a contact with a client containing a description of signs and symptoms; treatment and medication given; the client's reaction; other health services provided; and any changes in physical and emotional condition. (30) CMS--Centers for Medicare & Medicaid Services. The federal agency that administers the Medicare program and works in partnership with the states to administer Medicaid. (31) Complaint--An allegation against an agency regulated by HHSC [DADS] or against an employee of an agency regulated by HHSC [DADS] that involves a violation of this chapter or the statute. (32) Community disaster resources--a local, statewide, or nationwide emergency system that provides information and resources during a disaster, including weather information, transportation, evacuation, and shelter information, disaster assistance and recovery efforts, evacuee and disaster victim resources, and resources for locating evacuated friends and relatives. (33) Controlling person--a person with the ability, acting alone or with others, to directly or indirectly influence, direct, or cause the direction of the management, expenditure of money, or policies of an agency or other person. (A) A controlling person includes: (i) a management company or other business entity that operates or contracts with others for the operation of an agency; (ii) a person who is a controlling person of a management company or other business entity that operates an agency or that contracts with another person for the operation of an agency; and (iii) any other individual who, because of a personal, familial, or other relationship with the owner, manager, or provider of an agency, is in a position of actual control or authority with respect to the agency, without regard to whether the individual is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the agency. (B) A controlling person, as described by subparagraph (A)(iii) of this paragraph, does not include an employee, lender, secured creditor, or other person who does not exercise formal or actual influence or control over the operation of an agency. (34) Conviction--An adjudication of guilt based on a finding of guilt, a plea of guilty, or a plea of nolo contendere. (35) Counselor--An individual qualified under Medicare standards to provide counseling services, including bereavement, dietary, spiritual, and other counseling services to both the client and the family. (36) DADS--HHSC [Department of Aging and Disability Service or its successor agency]. (37) Day--Any reference to a day means a calendar day, unless otherwise specified in the text. A calendar day includes weekends and holidays. (38) Deficiency--A finding of noncompliance with federal requirements resulting from a survey. (39) Designated survey office--an HHSC [A DADS] Home and Community Support Services Agencies Program office located in an agency's geographic region. (40) Dialysis treatment record--for home dialysis designation, a dated and signed written notation by the person providing dialysis treatment which contains a description of signs and symptoms, machine parameters and pressure settings, type of dialyzer and dialysate, actual pre- and post-treatment weight, medications administered as part of the treatment, and the client's response to treatment. (41) Dietitian--A person who is currently licensed under the laws of the State of Texas to use the title of licensed dietitian or provisional licensed dietitian, or who is a registered dietitian. (42) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (43) Disaster--The occurrence or imminent threat of widespread or severe damage, injury, or loss of life or property resulting from a natural or man-made cause, such as fire, flood, earthquake, wind, storm, wave action, oil spill or other water contamination, epidemic, air contamination, infestation, explosion, riot, hostile military or paramilitary action, or energy emergency. In a hospice inpatient unit, a disaster also includes failure of the heating or cooling system, power outage, explosion, and bomb threat. (44) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (45) ESRD--End stage renal disease. For home dialysis designation, the stage of renal impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life. (46) Functional need--needs of the individual that require services without regard to diagnosis or label. (47) Habilitation--Habilitation services, as defined by Texas Government Code , provided by an agency licensed under this chapter. (48) Health assessment--a determination of a client's physical and mental status through inventory of systems. (49) HHSC--Texas Health and Human Services Commission or its designee. (50) [(49)] Home and community support services agency--a person who provides home health, hospice, or personal assistance services for pay or other consideration in a client's residence, an independent living environment, or another appropriate location. (51) [(50)] Home health aide--an individual working for an agency who meets at least one of the requirements for home health aides as defined in of this chapter (relating to Home Health Aides). (52) [(51)] Home health medication aide--an unlicensed person issued a permit by HHSC [DADS] to administer medication to 42 TexReg 5396 October 6, 2017 Texas Register

115 a client under the Texas Health and Safety Code, Chapter 142, Subchapter B. (53) [(52)] Home health service--the provision of one or more of the following health services required by an individual in a residence or independent living environment: (A) nursing, including blood pressure monitoring and diabetes treatment; (B) physical, occupational, speech, or respiratory therapy; (C) medical social service; (D) intravenous therapy; (E) dialysis; (F) service provided by unlicensed personnel under the delegation or supervision of a licensed health professional; (G) the furnishing of medical equipment and supplies, excluding drugs and medicines; or (H) nutritional counseling. (54) [(53)] Hospice--A person licensed under this chapter to provide hospice services, including a person who owns or operates a residential unit or an inpatient unit. (55) [(54)] Hospice aide--a person working for an agency licensed to provide hospice services who meets the qualifications for a hospice aide as described in of this chapter (relating to Hospice Aide Qualifications). (56) [(55)] Hospice homemaker--a person working for an agency licensed to provide hospice services who meets the qualifications described in of this chapter (relating to Hospice Homemaker Qualifications). (57) [(56)] Hospice services--services, including services provided by unlicensed personnel under the delegation of a registered nurse or physical therapist, provided to a client or a client's family as part of a coordinated program consistent with the standards and rules adopted under this chapter. These services include palliative care for terminally ill clients and support services for clients and their families that: (A) are available 24 hours a day, seven days a week, during the last stages of illness, during death, and during bereavement; (B) are provided by a medically directed interdisciplinary team; and (C) may be provided in a home, nursing facility, residential unit, or inpatient unit according to need. These services do not include inpatient care normally provided in a licensed hospital to a terminally ill person who has not elected to be a hospice client. For the purposes of this definition, the word "home" includes a person's "residence" as defined in this section. (58) [(57)] IDR--Informal dispute resolution. An informal process that allows an agency to refute a violation or condition-level deficiency cited during a survey. (59) [(58)] Independent living environment--a client's residence, which may include a group home, foster home, or boarding home facility, or other settings where a client participates in activities, including school, work, or church. (60) [(59)] Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (61) [(60)] Individual and family choice and control--individuals and families who express preferences and make choices about how their support service needs are met. (62) [(61)] Individualized service plan--a written plan prepared by the appropriate health care personnel for a client of a home and community support services agency licensed to provide personal assistance services. (63) [(62)] Inpatient unit--a facility, also referred to as a hospice freestanding inpatient facility, that provides a continuum of medical or nursing care and other hospice services to clients admitted into the unit and that is in compliance with: (A) the conditions of participation for inpatient units adopted under Social Security Act, Title XVIII (42 United States Code 1395 et seq.); and (B) standards adopted under this chapter. (64) [(63)] JCAHO--The Joint Commission, previously known as the Joint Commission on Accreditation of Healthcare Organizations. An independent, nonprofit organization for standard-setting and accrediting in-home care and other areas of health care. (65) [(64)] Joint training--training provided by HHSC [DADS] at least semi-annually for home and community support services agencies and HHSC [DADS] surveyors on subjects that address the 10 most commonly cited violations of federal or state law by home and community support services agencies as published in HHSC [DADS] annual reports. (66) [(65)] LAR--Legally authorized representative. A person authorized by law to act on behalf of a client with regard to a matter described in this chapter, and may include a parent of a minor, guardian of an adult or minor, managing conservator of a minor, agent under a medical power of attorney, or surrogate decision-maker under Texas Health and Safety Code, (67) [(66)] License holder--a person that holds a license to operate an agency. (68) [(67)] Licensed vocational nurse--a person who is currently licensed under Texas Occupations Code, Chapter 301, as a licensed vocational nurse. (69) [(68)] Life Safety Code (also referred to as NFPA 101)--The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA). (70) [(69)] Local emergency management agencies--the local emergency management coordinator, fire, police, and emergency medical services. (71) [(70)] Local emergency management coordinator-- The person identified as the emergency management coordinator by the mayor or county judge in an agency's service area. (72) [(71)] Manager--An employee or independent contractor responsible for providing management services to a home and community support services agency for the overall operation of a home and community support services agency including administration, staffing, or delivery of services. Examples of contracts for services that will not be considered contracts for management services include contracts solely for maintenance, laundry, or food services. (73) [(72)] Medication administration record--a record used to document the administration of a client's medications. PROPOSED RULES October 6, TexReg 5397

116 (74) [(73)] Medication list--a list that includes all prescription and over-the-counter medication that a client is currently taking, including the dosage, the frequency, and the method of administration. (75) [(74)] Mitigation--An action taken to eliminate or reduce the probability of a disaster, or reduce a disaster's severity or consequences. (76) [(75)] Multiple location--a Medicare-approved alternate delivery site that meets the definition in 42 CFR (77) [(76)] Notarized copy--a sworn affidavit stating that attached copies are true and correct copies of the original documents. (78) [(77)] Nursing facility--an institution licensed as a nursing home under the Texas Health and Safety Code, Chapter 242. (79) [(78)] Nutritional counseling--advising and assisting individuals or families on appropriate nutritional intake by integrating information from the nutrition assessment with information on food and other sources of nutrients and meal preparation consistent with cultural background and socioeconomic status, with the goal being health promotion, disease prevention, and nutrition education. Nutritional counseling may include the following: (A) dialogue with the client to discuss current eating habits, exercise habits, food budget, and problems with food preparation; (B) discussion of dietary needs to help the client understand why certain foods should be included or excluded from the client's diet and to help with adjustment to the new or revised or existing diet plan; (C) a personalized written diet plan as ordered by the client's physician or practitioner, to include instructions for implementation; (D) providing the client with motivation to help the client understand and appreciate the importance of the diet plan in getting and staying healthy; or (E) working with the client or the client's family members by recommending ideas for meal planning, food budget planning, and appropriate food gifts. (80) [(79)] Occupational therapist--a person who is currently licensed under the Occupational Therapy Practice Act, Texas Occupations Code, Chapter 454, as an occupational therapist. (81) [(80)] Operating hours--the days of the week and the hours of day an agency's place of business is open as identified in an agency's written policy as required by of this chapter (relating to Agency Operating Hours). (82) [(81)] Original active client record--a record composed first-hand for a client currently receiving services. (83) [(82)] Palliative care--intervention services that focus primarily on the reduction or abatement of physical, psychosocial, and spiritual symptoms of a terminal illness. It is client and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and facilitating client autonomy, access to information, and choice. (84) [(83)] Parent agency--an agency's principal place of business; the location where an agency [that] develops and maintains administrative controls and provides supervision of branch offices and alternate delivery sites. (85) [(84)] Parent company--a person, other than an individual, who has a direct 100 percent ownership interest in the owner of an agency. (86) [(85)] Person--An individual, corporation, or association. (87) [(86)] Personal assistance services--routine ongoing care or services required by an individual in a residence or independent living environment that enable the individual to engage in the activities of daily living or to perform the physical functions required for independent living, including respite services. The term includes: (A) personal care; (B) health-related services performed under circumstances that are defined as not constituting the practice of professional nursing by the Texas Board of Nursing [through a memorandum of understanding with DADS in accordance with Texas Health and Safety Code, ]; and (C) health-related tasks provided by unlicensed personnel under the delegation of a registered nurse or that a registered nurse determines do not require delegation. (88) [(87)] Personal care--the provision of one or more of the following services required by an individual in a residence or independent living environment: (A) (B) (C) (D) (E) (F) (G) (H) bathing; dressing; grooming; feeding; exercising; toileting; positioning; assisting with self-administered medications; (I) routine hair and skin care; and (J) transfer or ambulation. (89) [(88)] Pharmacist--A person who is licensed to practice pharmacy under the Texas Pharmacy Act, Texas Occupations Code, Chapter 558. (90) [(89)] Pharmacy--A facility defined in the Texas Occupations Code, (31), at which a prescription drug or medication order is received, processed, or dispensed. (91) [(90)] Physical therapist--a person who is currently licensed under Texas Occupations Code, Chapter 453, as a physical therapist. (92) [(91)] Physician--This term includes a person who is: (A) licensed in Texas to practice medicine or osteopathy in accordance with Texas Occupations Code, Chapter 155; (B) licensed in Arkansas, Louisiana, New Mexico, or Oklahoma to practice medicine, who is the treating physician of a client and orders home health or hospice services for the client, in accordance with the Texas Occupations Code, (b)(4); or (C) a commissioned or contract physician or surgeon who serves in the United States uniformed services or Public Health Service if the person is not engaged in private practice, in accordance with the Texas Occupations Code, (a)(8). 42 TexReg 5398 October 6, 2017 Texas Register

117 (93) [(92)] Physician assistant--a person who is licensed under the Physician Assistant Licensing Act, Texas Occupations Code, Chapter 204, as a physician assistant. (94) [(93)] Physician-delegated task--a task performed in accordance with the Texas Occupations Code, Chapter 157, including orders signed by a physician that specify the delegated task, the individual to whom the task is delegated, and the client's name. (95) [(94)] Place of business--an office of a home and community support services agency that maintains client records or directs home health, hospice, or personal assistance services. This term includes a parent agency, a branch office, and an alternate delivery site. The term does not include an administrative support site. (96) [(95)] Plan of care--the written orders of a practitioner for a client who requires skilled services. (97) [(96)] Practitioner--A person who is currently licensed in a state in which the person practices as a physician, dentist, podiatrist, or a physician assistant, or a person who is a registered nurse registered with the Texas Board of Nursing as an advanced practice nurse. (98) [(97)] Preparedness--Actions taken in anticipation of a disaster. (99) [(98)] Presurvey conference--a conference held with HHSC [DADS] staff and the applicant or the applicant's representatives to review licensure standards and survey documents, and to provide information regarding [consultation before] the survey process. (100) [(99)] Progress note--a dated and signed written notation by agency personnel summarizing facts about care and the client's response during a given period of time. (101) [(100)] Psychoactive treatment--the provision of a skilled nursing visit to a client with a psychiatric diagnosis under the direction of a physician that includes one or more of the following: (A) assessment of alterations in mental status or evidence of suicide ideation or tendencies; (B) teaching coping mechanisms or skills; (C) counseling activities; or (D) evaluation of the plan of care. (102) [(101)] Recovery--Activities implemented during and after a disaster response designed to return an agency to its normal operations as quickly as possible. (103) [(102)] Registered nurse delegation--delegation by a registered nurse in accordance with: (A) 22 TAC Chapter 224 (concerning Delegation of Nursing Tasks by Registered Professional Nurses to Unlicensed Personnel for Clients with Acute Conditions or in Acute Care Environments); and (B) 22 TAC Chapter 225 (relating to RN Delegation to Unlicensed Personnel and Tasks Not Requiring Delegation in Independent Living Environments for Clients with Stable and Predictable Conditions). (104) [(103)] Residence--A place where a person resides, including a home, a nursing facility, a convalescent home, or a residential unit. (105) [(104)] Residential unit--a facility that provides living quarters and hospice services to clients admitted into the unit and that is in compliance with standards adopted under the Texas Health and Safety Code, Chapter 142. (106) [(105)] Respiratory therapist--a person who is currently licensed under Texas Occupations Code, Chapter 604, as a respiratory care practitioner. (107) [(106)] Respite services--support options that are provided temporarily for the purpose of relief for a primary caregiver in providing care to individuals of all ages with disabilities or at risk of abuse or neglect. (108) [(107)] Response--Actions taken immediately before an impending disaster or during and after a disaster to address the immediate and short-term effects of the disaster. (109) [(108)] Restraint--A restraint is: (A) a manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a client in a hospice inpatient unit to move his or her arms, legs, body, or head freely, but does not include a device, such as an orthopedically prescribed device, a surgical dressing or bandage, a protective helmet, or other method that involves the physical holding of the client for the purpose of: test; (i) (ii) conducting a routine physical examination or protecting the client from falling out of bed; or (iii) permitting the client to participate in activities without the risk of physical harm, not including a physical escort; or (B) a drug or medication when used as a restriction to manage a client's behavior or restrict the client's freedom of movement in a hospice inpatient unit, but not as a standard treatment or medication dosage for the client's condition. (110) [(109)] RN--Registered nurse. A person who is currently licensed under the Nursing Practice Act, Texas Occupations Code, Chapter 301, as a registered nurse. (111) [(110)] Seclusion--The involuntary confinement of a client alone in a room or an area in a hospice inpatient unit from which the client is physically prevented from leaving. chapter. (112) [(111)] Section--A reference to a specific rule in this (113) [(112)] Service area--a geographic area established by an agency in which all or some of the agency's services are available. (114) [(113)] Skilled services--services in accordance with a plan of care that require the skills of: (A) (B) (C) (D) (E) (F) (G) (H) (I) a registered nurse; a licensed vocational nurse; a physical therapist; an occupational therapist; a respiratory therapist; a speech-language pathologist; an audiologist; a social worker; or a dietitian. (115) [(114)] Social worker--a person who is currently licensed as a social worker under Texas Occupations Code, Chapter 505. PROPOSED RULES October 6, TexReg 5399

118 (116) [(115)] Speech-language pathologist--a person who is currently licensed as a speech-language pathologist under Texas Occupations Code, Chapter 401. (117) [(116)] Statute--The Texas Health and Safety Code, Chapter 142. (118) [(117)] Substantial compliance--a finding in which an agency receives no recommendation for enforcement action after a survey. (119) [(118)] Supervised practical training--hospice aide training that is conducted in a laboratory or other setting in which the trainee demonstrates knowledge while performing tasks on an individual. The training is supervised by a registered nurse or by a licensed vocational nurse who works under the direction of a registered nurse. (120) [(119)] Supervising nurse--the person responsible for supervising skilled services provided by an agency and who has the qualifications described in (c) of this chapter (relating to Administrator Qualifications and Conditions and Supervising Nurse Qualifications). This person may also be known as the director of nursing or similar title. (121) [(120)] Supervision--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity with initial direction and periodic inspection of the actual act of accomplishing the function or activity. (122) [(121)] Support services--social, spiritual, and emotional care provided to a client and a client's family by a hospice. (123) [(122)] Survey--An on-site inspection or complaint investigation conducted by an HHSC [a DADS] representative to determine if an agency is in compliance with the statute and this chapter or in compliance with applicable federal requirements or both. (124) [(123)] Terminal illness--an illness for which there is a limited prognosis if the illness runs its usual course. (125) [(124)] Unlicensed person--a person not licensed as a health care provider. The term includes home health aides, hospice aides, hospice homemakers, medication aides permitted by DADS, and other unlicensed individuals providing personal care or assistance in health services. (126) [(125)] Unsatisfied judgments--a failure to fully carry out the terms or meet the obligation of a court's final disposition on the matters before it in a suit regarding the operation of an agency. (127) [(126)] Violation--A finding of noncompliance with this chapter or the statute resulting from a survey. (128) [(127)] Volunteer--An individual who provides assistance to a home and community support services agency without compensation other than reimbursement for actual expenses. (129) [(128)] Working day--any day except Saturday, Sunday, a state holiday, or a federal holiday. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER B. CRITERIA AND ELIGIBILITY, APPLICATION PROCEDURES, AND ISSUANCE OF A LICENSE 40 TAC 97.13, 97.17, STATUTORY AUTHORITY 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, Chapter 142, which authorizes the HHSC executive commissioner to adopt rules regulating home and community support services agencies. The amendments and new section implement Texas Government Code, and Texas Health and Safety Code, and Application Procedures for an Initial License. (a) The following staff must complete a presurvey conference training [seminar] before submitting an application for a license: (1) the administrator and alternate administrator [(all license categories)]; and (2) the supervising nurse and alternate supervising nurse of an agency that provides [(]licensed home health services with or without home dialysis designation, licensed and certified home health services with or without home dialysis designation, or [and] hospice services [license categories)]. (b) When applying for a license, an applicant must not[:] [(1)] provide incorrect or false information on an application or an attachment to an application[;] or [(2)] withhold information from an application or an attachment to an application. If an applicant provides incorrect or false information on, or withholds information from, an application or an attachment to an application, HHSC may deny the application as described in of this subchapter (relating to Denial of an Application or a License). (c) Upon request, HHSC [DADS] furnishes a person with an application packet for a license. (d) An applicant may request to be licensed in one or more of the following categories: (1) licensed and certified home health services; (2) licensed and certified home health services with home dialysis designation; (3) licensed home health services; (4) licensed home health services with home dialysis designation; (5) hospice services; or (6) personal assistance services. 42 TexReg 5400 October 6, 2017 Texas Register

119 (e) HHSC [DADS] does not require an agency to be licensed in more than one category if the category for which the agency is licensed includes [covers] the services the agency provides. (f) An applicant must complete and furnish all documents and information that HHSC [DADS] requests in accordance with instructions provided with the application packet. All submitted documents must be notarized copies or originals. (g) After receiving [Upon receipt of] an application packet and license fee, HHSC [DADS] reviews the material to determine if [whether] it is complete and correct. A complete and correct application packet includes all documents and information that HHSC [DADS] requests as part of the application process. If HHSC [DADS] receives no fee or a partial fee, HHSC returns the application packet and the fee [monies are returned] to the applicant. (1) HHSC [DADS] processes the application packet in accordance with time frames established in of this chapter (relating to Time Frames for Processing and Issuing a License). (2) If an applicant decides not to continue the application process for an initial license after submitting the application packet and license fee, the applicant must submit to HHSC [DADS] a written request to withdraw the application. HHSC [DADS] does not refund the license fee. (3) If an applicant receives a notice from HHSC [DADS] that some or all of the information required by this section has been omitted [is missing or incomplete], the applicant must submit the required information to HHSC no later than 30 days after the date of the notice. If an applicant fails to submit the required information within 30 days after the notice date, HHSC [DADS] considers the application packet incomplete and denies the application. If HHSC [DADS] denies the application, HHSC [DADS] does not refund the license fee. (h) An applicant who has requested the category of licensed and certified home health services on the initial license application must also apply to CMS [make an application] for certification [by CMS] as a Medicare-certified agency under the Social Security Act, Title XVIII. (1) While the applicant is waiting for [Pending approval by] CMS to certify it as a Medicare-certified agency[, the applicant]: (A) HHSC issues [receives] an initial license reflecting the category of licensed home health services if the applicant meets the criteria for the [a] license; and (B) the applicant must comply [complies] with the Medicare conditions of participation for home health agencies in 42 Code of Federal Regulations, Part 484, as if the applicant were dually certified. (2) If CMS certifies an agency to participate in the Medicare program during the initial license period, HHSC [DADS] sends a notice to the agency that the category of licensed and certified home health services has been added to the license. If the agency wants to remove [delete] the licensed home health services category from the agency's license after [once] the category of licensed and certified home health services has been added, the agency must submit to HHSC a written request to remove [for deletion of] that category from the agency's license. (3) If CMS denies certification to an agency or an agency [an applicant or if the applicant] withdraws the application for participation in the Medicare program, the agency may retain the category of licensed home health services on its license. (i) An applicant for an initial license must comply with of this subchapter (relating to Operation of an Inpatient Unit at Parent Agency) to operate an inpatient unit at the applicant's parent agency Application Procedures for a Renewal License. (a) An agency license is valid for two years. To [In order to] continue providing services to clients after a license expires, an agency must renew the [its] license. (b) An [When applying for a renewal license an] agency must not provide incorrect [inaccurate] or false information on a renewal application or an attachment to a renewal application [statements] or withhold information from a [the] renewal application or an attachment [and attachments] to a renewal [the] application. If an agency provides incorrect [inaccurate] or false information on a renewal application or an attachment to a renewal application [statements] or withholds information from a renewal application or an attachment to a renewal [the] application, HHSC [DADS] may deny the renewal application as described in of this subchapter (relating to Denial of an Application or a License) and assess an administrative penalty, as described in (e)(5) of this chapter (relating to Administrative Penalties). [assess the same range of penalties against the agency that apply in of this chapter (relating to Application Procedures for an Initial License) for providing inaccurate or false statements or withholding information from an initial application for a license.] (c) For each license period, an agency must provide services to at least one client to be eligible to renew its license. (d) HHSC [DADS] does not require an agency to admit a client under each category of service authorized under the license to be eligible to renew its license [as a condition for renewal of the license]. (e) An agency must document the [provision of] services that the agency provided to a client and keep the documentation readily available for review by an HHSC [a DADS] surveyor. (f) With each renewal application, an accredited agency must submit to HHSC a copy of the accreditation documentation [of its accreditation] that the agency receives from the accreditation organization. (g) HHSC [DADS] sends written notice of expiration of a license to an agency at least 120 days before the expiration date of the license. The written notice includes an application to renew the license and instructions for completing the application. (1) If an agency does not receive notice of expiration from HHSC in accordance with this subsection [DADS at least 90 days before the expiration date of a license], the agency must, at least 90 days before the expiration date of a license, notify HHSC in writing that it has not received notice of expiration [DADS] and [submit a written] request [for] a renewal application. (2) An agency must submit to HHSC [DADS] a complete and correct renewal application and the required license fee specified in 97.3 of this chapter (relating to License Fees), postmarked no later than the 45th day before the expiration date of the license. (3) If an agency submits a renewal application that is postmarked after [later] the 45th day before the expiration date of a license, but before [no later than] the expiration date of the license, HHSC [DADS] assesses the late fee set out in 97.3(b) of this chapter for failure to comply with paragraph (2) of this subsection. (4) An agency must submit [All] documents [submitted] with the renewal application that are [must be] notarized copies or originals. PROPOSED RULES October 6, TexReg 5401

120 (h) After receiving [Upon receipt of] a renewal application and the renewal license fee, HHSC [DADS] reviews the application to determine if [whether] it is complete and correct. A complete and correct renewal application includes all requested documents and[,] information, and the required fee [that DADS requests as part of the application process]. (1) HHSC [DADS] processes the renewal application according to the time frames in of this chapter (relating to Time Frames for Processing and Issuing a License). (2) If an agency decides not to continue [discontinue] the application process for a renewal license after submitting the renewal application and the renewal license fee, the agency must submit to HHSC [DADS] a notarized statement requesting to withdraw the renewal application. HHSC [DADS] does not refund the renewal license fee. (3) HHSC [DADS] notifies an agency, in writing, if an application does not include all documents and[,] information[, or the license fee required by this section]. An agency must submit the missing documents[,] or information[, or fee] to HHSC [DADS] postmarked no later than 30 days after the date of the notice or HHSC [DADS] considers the renewal application incomplete and denies the application. If HHSC [DADS] denies the renewal application, HHSC [DADS] does not refund the renewal license fee. (4) If an agency receives a written notice from HHSC [DADS] that a late fee is assessed in accordance with subsection (g) of this section, the agency's payment of the late fee must be postmarked no later than 30 days after the date of the notice or HHSC [DADS] considers the renewal application incomplete and denies the application. If HHSC [DADS] denies the renewal application, HHSC [DADS] does not refund the renewal license fee. (i) If an agency submits a renewal application to HHSC [DADS] that is postmarked after the expiration date of the license, HHSC [DADS] denies the renewal application and does not refund the renewal license fee. The agency is not eligible to renew the license and must cease operation on the date the license expires. An agency whose license expires must apply for an initial license in accordance with of this subchapter (relating to Application Procedures for an Initial License). (j) If an agency submits a timely renewal application in accordance with this section, and an action to revoke, suspend, or deny renewal of the license is pending at the time of submission, the agency may continue to operate, and the license is valid until the agency has had an opportunity for a formal hearing as described in of this chapter (relating to Enforcement Actions). Until the action to revoke, suspend, or deny renewal of the license is completed, the agency must continue to submit a renewal application in accordance with this section. HHSC [DADS] issues a renewal license only if HHSC [DADS] determines the reason for the proposed action no longer exists. (k) If a license holder fails to submit a timely renewal application in accordance with this section because the license holder is or was on active duty with the armed forces of the United States of America outside the state of Texas, the license holder may renew the license pursuant to this subsection. (1) An individual having power of attorney from the license holder or other authority to act on behalf of the license holder may request renewal of the license. The renewal application must include a current address and telephone number for the individual requesting the renewal. (2) An agency may request a renewal application before or after the expiration of the license. (3) A copy of the official orders or other official military documentation showing that the license holder is or was on active military duty serving outside the state of Texas must be submitted to HHSC [filed with DADS along] with the renewal application. (4) A copy of the power of attorney from the license holder or other authority to act on behalf of the license holder must be submitted to HHSC [filed with DADS along] with the renewal application. (5) A license holder renewing a license under this subsection must pay the required [applicable] renewal fee. (6) A license holder may [is] not [authorized to] operate the agency for which the license was obtained after the expiration of the license unless and until HHSC [the license holder actually] renews the license. (7) This subsection applies to a license holder who is an individual or a partnership comprised of individuals, all of whom are or were on active duty with the armed forces of the United States of America serving outside the state of Texas. (l) An applicant for a renewal license must comply with of this subchapter (relating to Operation of an Inpatient Unit at Parent Agency) to operate an inpatient unit at the applicant's parent agency Operation of an Inpatient Unit at Parent Agency. (a) To operate an inpatient unit at the parent agency, an agency or an applicant for an initial license to provide hospice services must: (1) notify HHSC of its intent to operate an inpatient unit at the parent agency by: (A) indicating its intent on an initial or renewal license application submitted to HHSC; or (B) sending written notice of its intent to HHSC; (2) send written notice to HHSC that it is ready for a Life Safety Code inspection; (3) allow HHSC to conduct an on-site Life Safety Code inspection to determine if the inpatient unit is in compliance with of this chapter (relating to Physical Environment in a Hospice Inpatient Unit); (4) obtain verification from HHSC that the inpatient unit is in compliance with Subchapter H, Division 7 of this chapter (relating to Hospice Inpatient Units) before admitting a client to the inpatient unit; (5) admit and provide hospice services to a client in the inpatient unit; and (6) except as provided in subsection (c) of this section: (A) submit the Notification of Readiness for a Health Survey of a Hospice Inpatient Unit (HHSC Form 2020-A) to HHSC after providing services to at least one client in the inpatient unit; and (B) be determined by HHSC to be in substantial compliance with the statute and this chapter, including Subchapter H of this chapter (relating to Standards Specific to Agencies Licensed to Provide Hospice Services). (b) At the time an agency notifies HHSC in accordance with subsection (a)(1) of this section, the agency must not have enforcement action pending against the license under which the agency would operate the inpatient unit. (c) An agency that provides hospice services is not required to submit the Notification of Readiness for a Health Survey of a Hospice 42 TexReg 5402 October 6, 2017 Texas Register

121 Inpatient Unit (HHSC Form 2020-A) in accordance with subsection (a)(6)(a) of this section if the agency demonstrates that it is exempt from a health survey, as described in of this chapter (relating to Exemption From a Survey). The agency may demonstrate that it is exempt from the initial health survey described in of this chapter (relating to Requirements for an Initial Survey) by submitting the accreditation documentation from an approved organization to the HHSC designated survey office within seven days after the agency receives the accreditation documentation. (d) An agency operating an inpatient unit at a parent agency must comply with the statute and this chapter, including Subchapter H of this chapter. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PART 19. DEPARTMENT OF FAMILY AND PROTECTIVE SERVICES CHAPTER 743. MINIMUM STANDARDS FOR SHELTER CARE SUBCHAPTER B. PERSONNEL AND TRAINING The Texas Health and Human Services Commission (HHSC) proposes the repeal of ; and new in Chapter 743, concerning Minimum Standards for Shelter Care. The purpose of the repeal and new section is to update this chapter to be consistent with the changes to Chapter 745, Subchapter F, Background Checks, which implemented the Child Care and Development Block Grant Act of 2014 and House Bill 4094, 85th Regular Legislative Session. BACKGROUND AND PURPOSE The Child Care Development Block Grant (CCDBG) of 2014 (the "Act") is the first comprehensive revision of the Child Care Development Fund (CCDF) program since (The CCDF is codified in 42 USC 9857 et seq.) The Texas Workforce Commission (TWC) administers the CCDF, which is the primary federal funding source devoted to providing low-income families with access to child care. The Act made significant reforms to the CCDF programs to raise the health, safety, and quality of child care by mandating that states comply with a multitude of additional requirements, including background checks, in order to continue to receive the CCDF funding. Although TWC is the lead agency for determining eligibility and distributing the subsidy monies, HHSC through the Child Care Licensing Division (CCL) is the agency responsible for licensing child care operations, establishing health and safety regulations, and monitoring eligible operations for compliance. Many of the Act's additional requirements relate to the responsibilities of CCL. One of the provisions of the Act that has a significant impact on CCL and this chapter is background checks. One of the Act's requirements related to mandated fingerprint-based criminal history checks for home-based day care providers was implemented last year in a phased-in approach. However, many of the Act's other background check requirements needed significant technological changes. Since those technological changes are now nearing completion, the Act's other background check requirements are being implemented at this time. In regards to background checks, House Bill (HB) 4094, 85th Regular Legislative Session, amended Human Resources Code in order to comply with the Act's requirements. A summary of the background check changes in response to the Act and HB 4094 include: (1) mandating national fingerprint-based criminal history checks every five years; (2) adding new out-of-state criminal history checks, out-of-state child abuse and neglect registry checks, and out-of-state sex offender registry checks for persons who have lived out-of-state in the last five years or where there is a reason to believe an out-of-state check is needed; (3) clarifying which persons require which types of background checks based on federal definitions; (4) waiving the resubmission of fingerprints if CCL has an active subscription to the Federal Bureau of Investigation's (FBI's) national rap back service for the person for whom the submission is required. The FBI national rap back services also requires operations to indicate when a person is no longer associated with an operation; (5) setting a time frame of 45 days for issuing a background check determination; (6) not releasing details of criminal history or child abuse and neglect history, the consequences of which require greater detail regarding the background check determination, what the determination means, and changing who can request a risk evaluation; (7) changing the period for renewing criminal history checks to five years (currently it is two years); (8) establishing a review process if the subject of the background check disputes the accuracy or completeness of the information contained in the results of the background check; (9) clarifying that a risk evaluation must be requested by the subject of the background check (currently this request is made by an operation, but this is changing because operations are now generally not provided with the results of the background check); and (10) in other subchapters updating terminology, cites, and requirements to be consistent with the new changes. In addition, two updates to the rules were made, which were not in response to the Act or HB 4094: (1) requiring all operations except listed family homes to submit requests for background checks through the on-line Licensing website. Currently, licensed child-care homes, registered child-care homes, employer-based child care operations, and shelter care operations may submit requests for background checks manually; and (2) clarifying that Licensing may consider deferred adjudication community supervision as a criminal conviction when revoking a permit. The repeal and new rule clarifies that shelter care operations must comply with Chapter 745, Subchapter F, Background Checks, which are now consistent with the changes required by the Act and HB SECTION-BY-SECTION SUMMARY The proposed repeal of deletes the rule, because the content has been incorporated into the proposed and updated Chapter 745, Subchapter F, Background Checks. PROPOSED RULES October 6, TexReg 5403

122 Proposed new requires shelter care operation to comply with the background check requirements in Chapter 745, Subchapter F, Background Checks, except background checks do not have to be made on persons who reside at the shelter who are not caregivers. FISCAL NOTE Greta Rymal, Deputy Executive Commissioner for Financial Services, has determined that for each of the first five years that the repeal and new section will be in effect there will not be costs or revenues to state or local government as a result of enforcing or administering the sections. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITIES IMPACT ANALYSIS Ms. Rymal has also determined that there is no anticipated adverse impact on small businesses, micro businesses, or rural communities as a result of the proposed rule changes. 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; to receive a source of federal funds or comply with federal law; and to implement legislation that does not specifically state that applies to the rule. PUBLIC BENEFIT Ms. Rymal also has determined that for each of the first five years that the proposed repeal and new section will be in effect, the public benefit anticipated as a result of the rule change will be that (1) more robust background checks will improve the safety and quality of child care; (2) CCL will be in compliance with the Act; (3) CCL will be in compliance with HB 4094 and HRC ; and (4) there will be a better understanding of the requirements relating to Background Checks. TAKING IMPACT ASSESSMENT Ms. Rymal has determined that the proposed repeal and new section 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, do not constitute a taking under , Government Code. PUBLIC COMMENT Questions about the content of the proposal may be directed to Gerry Williams at (512) in the Child Care Licensing Division of HHSC. Electronic comments may be submitted to HHSRulesCoordinationOffice@hhsc.state.tx.us. Written comments on the proposal may be submitted to Gerry Williams, Rules Developer (40R026), Child Care Licensing, Health and Human Services Commission E-550, P.O. Box , Austin, Texas , within 30 days of publication in the Texas Register. 40 TAC STATUTORY AUTHORITY The repeal is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The repeal implements Human Resources Code and What are the background check requirements? 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TAC STATUTORY AUTHORITY The new section is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new section implements Human Resources Code and What are the background check requirements? (a) Shelter care operations must comply with the background check requirements found in Subchapter F of Chapter 745 of this title (relating to Background Checks). (b) You do not have to submit a request for a background check on a person 14 years of age or older who resides at the shelter, as required by (a)(6)(A) of this title (relating to For whom must I submit requests for background checks?), unless the person is otherwise required to have a background check under (a). For example, a caregiver that resides at the shelter would be required to have a background check. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) CHAPTER 745. LICENSING The Texas Health and Human Services Commission (HHSC) proposes amendments to and the repeal of in Division 1 of Subchapter F, Definitions. 42 TexReg 5404 October 6, 2017 Texas Register

123 In Division 2 of Subchapter F, Requesting Background Checks, HHSC proposes new , , and ; repeals and proposes as new , , , , , , , and ; and proposes the repeal of , , , , , , , and HHSC proposes the repeal of Division 3 of Subchapter F, Criminal Convictions and Central Registry Findings of Child Abuse or Neglect, including the proposed repeal of , , , , , , , and HHSC proposes new Division 3 of Subchapter F, Determinations Regarding Background Checks, including proposed new , , , , , , , , , , , , , and HHSC proposes the repeal of Division 4 of Subchapter F, Evaluation of Risk Because of a Criminal Conviction or a Central Registry Finding of Child Abuse or Neglect, including the proposed repeal of , , , , , , , , , , , , , , , , , and HHSC proposes new Division 4 of Subchapter F, Criminal History, Sex Offender Registry, and Child Abuse or Neglect Findings, including proposed new , , , , , , and HHSC proposes the repeal of Division 5 of Subchapter F, Designated and Sustained Perpetrators of Child Abuse or Neglect, including the proposed repeal of , , and HHSC proposes new Division 5 of Subchapter F, Evaluation of Risk Because of Criminal History or a Child Abuse or Neglect Finding, including proposed new , , , , , , , , and HHSC proposes the repeal of Division 6 of Subchapter F, Immediate Threat or Danger to the Health or Safety of Children, including the proposed repeal of and HHSC proposes new Division 6 of Subchapter F, Designated and Sustained Perpetrators of Child Abuse or Neglect, including proposed new HHSC proposes new Division 7 of Subchapter F, Immediate Threat or Danger to the Health or Safety of Children, including proposed new HHSC proposes new Division 8 of Subchapter F, Licensed Administrators, including proposed new HHSC proposes amendments to in Division 5 of Suchapter L. HHSC proposes a name change to Subchapter N, Administrator Licensing. HHSC proposes a name change to Division 4 of Subchapter N, Renewing Your Administrator License. HHSC proposes amendments to , , , , , , , and BACKGROUND AND PURPOSE The Child Care Development Block Grant (CCDBG) of 2014 (the "Act") is the first comprehensive revision of the Child Care Development Fund (CCDF) program since (The CCDF is codified in 42 USC 9857 et seq.) The Texas Workforce Commission (TWC) administers the CCDF, which is the primary federal funding source devoted to providing low-income families with access to child care. The Act made significant reforms to the CCDF programs to raise the health, safety, and quality of child care by mandating that states comply with a multitude of additional requirements, including background checks, in order to continue to receive the CCDF funding. Although TWC is the lead agency for determining eligibility and distributing the subsidy monies, HHSC through the Child Care Licensing Division (CCL) is the agency responsible for licensing child care operations, establishing health and safety regulations, and monitoring eligible operations for compliance. Many of the Act's additional requirements relate to the responsibilities of CCL. One of the provisions of the Act that has a significant impact on CCL and this chapter is background checks. One of the Act's requirements related to mandated fingerprint-based criminal history checks for home-based day care providers was implemented last year in a phased-in approach. However, many of the Act's other background check requirements needed significant technological changes. Since those technological changes are now nearing completion, the Act's other background check requirements are being implemented at this time. In regards to background checks, House Bill (H.B.) 4094, 85th Regular Legislative Session, amended Human Resources Code in order to comply with the Act's requirements. A summary of the background check changes in response to the Act and H.B include: (1) mandating national fingerprint-based criminal history checks every five years; (2) adding new out-of-state criminal history checks, out-of-state child abuse and neglect registry checks, and out-of-state sex offender registry checks for persons who have lived out-of-state in the last five years or where there is a reason to believe an out-of-state check is needed (See ); (3) clarifying which persons require which types of background checks based on federal definitions (See , , , and ); (4) waiving the resubmission of fingerprints if CCL has an active subscription to the Federal Bureau of Investigation's (FBI's) national rap back service for the person for whom the submission is required. The FBI's national rap back service also requires operations to indicate when a person is no longer associated with an operation (See and ); (5) setting a time frame of 45 days for issuing a background check determination (See ); (6) not releasing details of criminal history or child abuse and neglect history, the consequences of which require greater detail in rules regarding the background check determination, what the determination means, and changing who can request a risk evaluation (See , , and ); (7) changing the period for renewing criminal history checks to five years; currently the requirement is two years (See (b)); (8) establishing a review process if the subject of the background check disputes the accuracy or completeness of the information contained in the results of the background check (See and ); (9) clarifying that a risk evaluation must be requested by the subject of the background check. Currently this request is made by an operation, but this is changing because operations are now generally not provided with the results of the background check (See ); and (10) in other subchapters updating terminology, cites, and requirements to be consistent with the new changes (See , , , , , and , , , and ). In addition, two updates to the rules were made, which were not in response to the Act or H.B. 4094: (1) requiring all operations except listed family homes to submit requests for background checks through the online Licensing website. Currently licensed child-care homes, registered child-care homes, employer-based PROPOSED RULES October 6, TexReg 5405

124 child care operations, and shelter care operations may submit requests for background checks manually (See ); and (2) clarifying that Licensing may consider deferred adjudication community supervision as a criminal conviction when revoking a permit (See (b)). SECTION-BY-SECTION SUMMARY Regarding Subchapter F, Background Checks: The proposed amendment of : (1) adds definitions for "Central Registry", "client in care", "criminal history", "DFPS", "DPS", "FBI", "HHSC", "Licensing", "present at an operation", "subject", and "sustained finding"; (2) deletes the definitions for "continuous stay" (which has been incorporated into the definition for "regularly or frequently present at an operation"), "non-continuous visit" (which has been incorporated into the definition for "regularly or frequently present at an operation"), and "owner" (which has been incorporated into proposed new (a)(1)); (3) updates the definitions for "CBCU", "initial background check", "regularly or frequently present at an operation", "renewal background check", "risk evaluation", "substitute employee", and "unsupervised access"; and (4) renumbers the definitions accordingly. The proposed repeal of deletes the rule, because the content has been added with updates to a new definition for "present at an operation" in the proposed amendment of (12). Proposed new : (1) adds portions of the content from the proposed repeal of (a) and (d) regarding on whom must an operation submit requests for background checks; (2) reorganizes the list of persons who require a background check; (3) incorporates the definition of "owner" from the proposed amendment of ; (4) adds the content from the proposed repeal of to clarify that a background check is only required for a board member or officer of a governing body that is involved in the everyday management of the operation; (5) adds that any person that provides direct care and supervision of children in care must have a background check; and (6) adds in subsection (b) a specific list of persons for whom an operation does not have to submit a request for a background check. Proposed new : (1) adds the content from the proposed repeal of regarding the types of background checks with some non-substantive clarifications to the title and description for each type of background check; (2) adds out-ofstate criminal history checks and out-of-state sex offender registry checks as two new types of background checks; and (3) improves the readability and understanding of the rule by placing the information in a chart. Proposed new describes the different types of background checks that are required for persons at an operation. This rule incorporates portions of the content from the proposed repeal of (b) and (c), with many substantive changes required by the Act. The changes include requiring a national fingerprint-based criminal history check, a Texas and national sex offender registry check, and in certain situations an out-of-state criminal history check, child abuse and neglect registry check, and sex offender registry check. The proposed repeal of deletes the rule, because the content regarding the types of background checks has been added to proposed new with two additional types of background checks. Proposed new describes which persons at an operation are required to have a fingerprint-based criminal history check or a name-based criminal history check. This rule incorporates portions of the content from the proposed repeal of (b), with clarifications that a fingerprint-based criminal history check is always required if the person resided outside of Texas within the last five years or there is reason to believe the person has a criminal history in another state. The proposed repeal of deletes this rule as no longer necessary, because the purpose of a background check is selfevident. Proposed new requires all persons required to have a background check and who have lived outside of Texas in the last five years to have an out-of-state criminal history check, out-ofstate child abuse and neglect registry check, and out-of-state sex offender registry check, except persons at a residential child care operation do not have to have an out-of-state criminal history check. This rule incorporates portions of the content from the proposed repeal of (c), with substantive clarifications required by the Act. The proposed repeal of deletes the rule, because the content regarding: (1) on whom must an operation submit requests for background checks has been added with substantive and non-substantive changes to proposed new ; and (2) what types of background checks are required for persons has been added with substantive changes to proposed new , , , and Proposed new describes the different types of background checks that are required for persons at a listed family home that only provides care to related children, employer-based child care operations, and shelter care operations. This rule incorporates the content from the proposed repeal of (b)(1). The proposed repeal of deletes the rule as no longer necessary, because it is a transitional rule that expires on December 31, This is the rule that mandated fingerprint-based criminal history checks for home-based day care providers, which was implemented last year in a phased-in approach and was discussed previously under the Background and Justification section. The proposed repeal of deletes the rule as no longer necessary, because proposed new clarifies that background checks are only required for persons who are regularly and frequently present at an operation and so are not required for persons associated with another business or service that is located in the same large office building. However, on the CCL provider website the online version of Subchapter F, Background Checks, will have a Helpful Information box that further clarifies this issue. Proposed new describes how operations must submit a request for a background check, which incorporates the proposed repeal of (b) - (d). However, the new rule now requires licensed child-care homes, registered child-care homes, employer-based child care operations, and shelter care operations (all operations except listed family homes) to submit requests for background checks through the online Licensing website. Though this change is not required by the Act or H.B 4094, this new requirement will speed up the background check process for these newly included operations, besides allowing for a more streamlined and efficient review of background checks. In addition, more and more homes and operations have 42 TexReg 5406 October 6, 2017 Texas Register

125 access to a computer or a smart phone by which the online submission of requests for background checks can be made. The proposed repeal of deletes this rule as no longer necessary, because the content of the rule is clarified in the new definition for "client in care" in the proposed amendment of (3). The new definition clarifies that a "client in care" includes foster children, and proposed new (b)(1) clarifies that an operation does not have to submit a background check for a "client in care." Proposed new describes a list of identifying information that must be included in a request for a background check. This incorporates the proposed repeal of (a) and adds to the rule what has already been required in practice: the role of the person at the operation, including the person's title and job duties, whether the person will be supervised by a caregiver counted in the child-to-caregiver ratio, and the ages of the children the person will be caring for. The proposed repeal of deletes the rule as no longer necessary, because proposed new (a)(1)(C) clarifies that a background check is only required for a board member or officer of a governing body that is involved in the everyday management of the operation. Proposed new adds the content from the proposed repeal of regarding when must a request for an initial or renewal background check be submitted. However, the deadlines for submission have been updated to coincide with the new federal requirements: (1) renewal background checks must be submitted within five years from the date of the last fingerprint-based criminal history check; (2) name-based checks must be submitted within two years from the date of the last named-based criminal history check; (3) new requests must be submitted when there has been a change in the person's state of residence; and (4) new requests must be submitted when there is a change in the person's role at the operation that requires a fingerprint-based check instead of a name-based check. The proposed repeal of deletes the content of this rule and moves: (1) subsection (a) regarding what information must be included in a request for a background check to proposed new with additions; and (2) subsections (b) - (d) regarding how to submit a background check to with substantive changes. Proposed new adds the content from the proposed repeal of regarding how to submit fingerprints for a fingerprint-based check with non-substantive changes to the wording of the rule to improve readability and understanding. The proposed repeal of deletes this rule regarding when must a request for an initial or renewal background check be submitted, because the content of this rule has been added to with substantive changes regarding the deadlines for submission. Proposed new adds the content from the proposed repeal of regarding whether new fingerprints must be submitted with substantive changes to clarify that new fingerprints are not required if the CBCU has an active subscription or can reactivate a subscription to the FBI's national rap back service for the person. The proposed repeal of deletes this rule, because it is no longer accurate. The process regarding what information will be released to an operation has changed, which also changes the answer to when a person can be present at an operation. The updated question and response is in proposed new Proposed new adds a maximum timeframe (as soon as possible, but no later than 45 days) for when the operation and the subject of the background check will be notified of the background check determination. The proposed repeal of deletes the rule regarding how to submit fingerprints for a fingerprint-based check, because the content of the rule has been added to with non-substantive changes. Proposed new adds four types of background check determinations (provisionally eligible with conditions, eligible, eligible with conditions, and ineligible) and a description for each one. These determinations are now needed, because the Act does not allow for the actual release of criminal history and child abuse and neglect findings directly to an operation. The proposed repeal of deletes this rule regarding whether new fingerprints must be submitted, because the content of the rule has been added to with substantive changes. The proposed repeal of deletes this rule regarding whether background checks must be completed before Licensing issues a permit, because the content of the rule has been added to with substantive and non-substantive changes. Proposed new adds the content from the proposed repeal of regarding whether conditions or restrictions may be placed on a person's presence at an operation with: (1) non-substantive changes to make the wording of the rule consistent with the new changes in this subchapter; and (2) a substantive addition to clarify that the CBCU may place conditions or restrictions on a person when the person's out-of-state checks are pending and there is no information that renders the person ineligible to be present at the operation. The proposed repeal of deletes this rule regarding whether background checks must be completed on foster homes and adoptive homes before a child-placing agency (CPA) may verify a home, because the content is not consistent with the changes in this subchapter. However, a similar question has been added at with an updated answer. Proposed new describes the information that will be included in a notice letter to an operation regarding the subject of a background check. The notice letter will include the background check determination related to whether the person may be present at an operation and any conditions or restrictions placed on the subject. This is substantially different from previous notifications, because the Act does not allow the release of criminal history and child abuse and neglect findings directly to operations. The one exception is background checks in foster or adoptive homes, for which the CPA will be given specific information regarding criminal history and child abuse and neglect findings, because the CPA must conduct home screenings on foster and adoptive homes. The proposed repeal of deletes this rule regarding whether an operation can conduct their own background checks, because the rule has been added to the proposed new with non-substantive changes. Proposed new describes what actions an operation must take regarding a subject's background check determina- PROPOSED RULES October 6, TexReg 5407

126 tion, and the actions that may be taken against an operation when conditions or restrictions are not followed. This proposed new rule includes the content from the proposed repeal of with non-substantive changes. The proposed repeal of deletes this rule regarding what information may be obtained from Licensing's records on a person's previous history at an operation, because the rule has been added to the proposed new with non-substantive changes. Proposed new describes the information that will be included in a notice letter to the subject of the background check. Proposed new describes how soon a person may be present at an operation after the submission of a request for a background check. Proposed new explains how a subject can dispute the accuracy and completeness of the results from a background check. Proposed new explains how a subject can request a review of the background check determination. Proposed new adds the content from the proposed repeal of regarding whether background checks must be completed before Licensing issues a permit with: (1) a substantive change in new subsection (b) to clarify that background checks must be completed on owners before a permit may be issued; and (2) non-substantive changes were made to improve readability and understanding of the rule. Proposed new adds a similar question as the proposed repeal of regarding whether background checks must be completed on foster homes and adoptive homes before a CPA may verify a home. The answer is now consistent with the changes being made in this subchapter, specifically a CPA cannot verify a home until the CPA receives notification from CBCU that all household members are eligible or eligible with conditions to be present at the home. Proposed new adds new requirements for operations to indicate when a person is no longer associated with an operation. The FBI does not allow continued access to the FBI's national rap back service once a person is no longer associated with the operation, so this information needs to be updated immediately and regularly (every three months for all operations except day care homes - which is once a year). Proposed new adds the content from the proposed repeal of regarding whether an operation can conduct their own background checks with non-substantive changes to improve the readability and understanding of the rule. Proposed new adds the content from the proposed repeal of regarding what information may be obtained from Licensing's records on a person's previous history at an operation with non-substantive changes to update the wording of the rule and to improve the readability and understanding of the rule. The proposed repeal and new : (1) updates the wording of the rule to be consistent with the definition for "present at an operation"; (2) moves a website from the rule to a Helpful Information box that will be included in the in the online version of Subchapter F, Background Checks, on the CCL provider website; and (3) updates the wording of the rule to be consistent with the fact that CCL is moving to HHSC. Proposed new adds the content from the proposed repeal of regarding whether criminal convictions include deferred adjudication with: (1) non-substantive changes, including changing "deferred adjudication" to the legally correct term "deferred adjudication community supervision"; and (2) the substantive change of allowing any deferred adjudication community supervision to be used in the revocation of a permit because it is currently allowed in Article 42A.111(d)(2) and Article 42A.701(f)(2) of the Code of Criminal Procedure. The proposed repeal of deletes this rule regarding the release of non-enumerated crimes as no longer necessary, because the rule is no longer accurate. In the limited situations when non-enumerated crimes may be released to CPAs for foster and adoptive parents, this information is now located in proposed new Proposed new adds the content from the proposed repeal of regarding what an operation should do if a person is the subject of a criminal investigation with non-substantive changes to update the wording of the rule to be consistent with the other changes made in this subchapter. The proposed repeal of deletes this rule regarding whether criminal convictions include deferred adjudication, because the content of the rule has been added to proposed new with non-substantive changes and a substantive change. Proposed new adds the content from the proposed repeal of regarding when a person that is charged with a crime may be present at an operation with non-substantive changes to clarify the CBCU now makes this determination. The proposed repeal and new adds that a person required to register as a sex offender in another state or territory may not be present at an operation. The proposed repeal and new : (1) clarifies that this rule also applies to findings in out-of-state child abuse and neglect registries; (2) updates the wording of the rule to be consistent with the definition for "present at an operation"; (3) adds how a risk evaluation would be handled for a child abuse or neglect finding that has not been sustained and has not been determined to be an immediate threat; and (4) updates the wording of the rule to be consistent with the fact that CCL is moving to HHSC. The proposed repeal of deletes this rule as no longer necessary, because much of the content is no longer accurate. Any information that is accurate, was added to proposed new Proposed new adds the content from the proposed repeal of regarding what an operation should do if a person is the subject of a child abuse or neglect investigation with non-substantive changes to update the wording of the rule to be consistent with the other changes made in this subchapter. The proposed repeal of deletes the rule regarding what operation actions are required when there is criminal history or child abuse or neglect history, because the content is outdated. However, a similar question with updated requirements has been added at The proposed repeal of deletes the rule as no longer necessary, because the rule has been replaced by proposed new and regarding how a subject can dispute the accuracy and completeness of the results from a background 42 TexReg 5408 October 6, 2017 Texas Register

127 check and request a review of the background check determination, respectively. Proposed new requires that the subject of the background check must request a risk evaluation. The proposed repeal of deletes the rule as no longer necessary, because the contents of the rule are no longer accurate. Proposed new is a similar question with an updated answer. Proposed new describes when the subject of a background check may request a risk evaluation. The proposed repeal of deletes the rule as no longer necessary, because the contents of the rule are no longer accurate. Proposed new is a similar question with an updated answer. Proposed new adds a time frame for when the subject of a background check may request a risk evaluation. The proposed repeal and new clarifies the wording of the rule to improve readability and understanding, including the addition of two cites. The proposed repeal of deletes the rule as no longer necessary, because the contents of the rule are no longer accurate. Proposed new is a similar question with an updated answer. The proposed repeal and new regarding what must be included in a request for a risk evaluation based on criminal history: (1) clarifies the wording of the rule to be consistent with other changes made to this subchapter and to improve readability and understanding of the rule; (2) adds a requirement to provide an official copy of the police report regarding the circumstances of the arrest; (3) deletes the requirement to provide information regarding the subject's role at the operation, because most of this information is being provided by the operation at the time of the submission of the request for a risk evaluation; and (4) the deletion of a valid rationale from the operation as to why the subject would not pose a risk to the health and safety of children (except for a foster or adoptive placement), because the subject is now submitting the request for a risk review (not the operation). The proposed repeal and new regarding what must be included in a request for a risk evaluation based on a child abuse or neglect finding: (1) clarifies the wording of the rule to be consistent with other changes made to this subchapter and to improve readability and understanding of the rule; (2) deletes the requirement to provide information regarding the subject's role at the operation, because most of this information is being provided by the operation at the time of the submission of the request for background check; and (3) the deletion of a valid rationale from the operation as to why the subject would not pose a risk to the health and safety of children (except for a foster or adoptive placement), because the subject is now submitting the request for a risk review (not the operation). The proposed repeal of deletes the rule regarding whether conditions or restrictions may be placed on a person's presence at an operation, because the content of the rule has been added to the proposed new with non-substantive changes and one substantive change. Proposed new adds the content from the proposed repeal of regarding who makes the final decision on a risk evaluation with non-substantive changes. The proposed repeal of deletes the rule regarding whether an operation must follow conditions or restrictions, because the content has been added to proposed new with non-substantive changes. The requirement that Licensing may put in a safety plan when conditions are not followed was deleted, because safety plans are only implemented during investigations and not in response to an operation not following conditions or restrictions. Proposed new adds: (1) the content of the proposed repeal of regarding the basis of a risk evaluation decision; (2) non-substantive changes to improve the readability and understanding of the rule, including breaking the rule into numbered paragraphs; and (3) a criminal history, child abuse and neglect findings, and any other relevant factors as a basis of the risk evaluation decision. The proposed repeal of deletes the rule regarding what criminal history and Central Registry findings are relevant to a person's ability to be a licensed administrator, because the content of the rule was added to proposed new with substantive changes. Proposed new adds requirements for when and how a subject can request a review of a risk evaluation decision, including that a request may be made any time there is new information available, the process for requesting the review, and the time frame for CBCU to respond (30 days). The proposed repeal of deletes the rule regarding whether criminal history or Central Registry findings prohibit a person from becoming a licensed administrator, because the content of the rule was added to proposed new with substantive changes. The proposed repeal of deletes the rule as no longer necessary, because the content of the rules is not accurate and has been subsumed by proposed new , which is also more consistent with the Act's requirements for an appeal process for the background check determinations. The proposed repeal of deletes the rule regarding what an operation should do if a person is the subject of a criminal investigation, because the content of the rule has been added to proposed new with non-substantive changes. The proposed repeal of deletes the rule regarding when a person that is charged with a crime may be present at an operation, because the content of the rule has been added to proposed new with non-substantive changes. The proposed repeal of deletes the rule as no longer necessary, because the content of the rule was redundant and has been answered by several other rules. The proposed repeal of deletes the rule regarding what an operation should do if a person is the subject of a child abuse or neglect investigation, because the content of the rule has been added to proposed new with non-substantive changes. The proposed repeal of deletes the rule regarding who makes the final decision on a risk evaluation, because the content of the rule has been added to proposed new with non-substantive changes. The proposed repeal of deletes the rule regarding the basis of a risk evaluation decision, because the content of the rule has been added to proposed new with non-substantive changes and the substantive addition of several factors. PROPOSED RULES October 6, TexReg 5409

128 The proposed repeal of deletes the rule as no longer necessary, because the content of the rules is not accurate and has been subsumed by proposed new The proposed repeal and new moves the rule from Division 5 to Division 6. No changes are made to the rule heading or content. The proposed repeal of deletes the rule as no longer necessary, because the content is either: (1) no longer accurate; (2) already covered in Subchapter K, Inspections and Investigations, Division 3, Confidentiality, of this title; or (3) already covered at proposed new , regarding what information is in a notice letter sent to an operation. The proposed repeal of deletes the rule as no longer necessary, because the content is either: (1) no longer accurate; (2) already covered at proposed new and , regarding what information is in a notice letter sent to an operation and a subject; or (3) unnecessary and irrelevant to background checks. The proposed repeal and new clarifies that the immediate threat decisions may be made by the CBCU (when it relates to background checks and risk evaluations) or by Licensing (when conducting a child abuse or neglect investigation). The proposed repeal of deletes the rule as no longer necessary, because the content of the rule is no longer accurate, and the issue has been clarified and updated at proposed new and Proposed new adds the content from the proposed repeal of and regarding what criminal history and child abuse and neglect history impact a person's ability to be a licensed administrator, with non-substantive changes to improve readability and understanding and substantive changes that state: (1) all background check requirements must be complied with; (2) operations must also submit a request for a background check on Licensed Administrators even though the Licensed administrator had a background check conducted through the licensure process; and (3) being on a sex offender registry will prohibit a person from being a licensing administrator. Regarding Subchapter L, Enforcement Actions: The proposed amendment of deletes an outdated cite and updates when a monetary penalty may be imposed before imposing a corrective action to be consistent with the new changes in Subchapter F. The proposed amendment of Subchapter N, Administrator's Licensing, updates the title to the subchapter. The proposed amendment of simplifies and clarifies that to qualify for a Child-Care Administrator's License (CCAL), the applicant must be in compliance with Subchapter F, including not having a criminal history or child abuse or neglect finding that would prohibit the applicant from working in residential child-care operation. The proposed amendment of simplifies and clarifies that to qualify for a Child-Placing Agency Administrator's License (CPAAL), the applicant must be in compliance with Subchapter F, including not having a criminal history or child abuse or neglect finding that would prohibit the applicant from working in residential child-care operation. The proposed amendment of updates terminology and outdated cites. The proposed amendment of : (1) deletes outdated cites; and (2) simplifies and clarifies that to renew an administrator's license, the administrator must be in compliance with Subchapter F. The proposed amendment of updates the wording of the rule to improve readability and understanding; and deletes an outdated requirement to submit background check forms every two years. The proposed amendment of updates terminology an outdated cite. The proposed amendment of updates terminology and outdated cite. The proposed amendment of simplifies that Licensing can take remedial action against an administrator's license when the administrator does not comply with Subchapter F, Background Checks. FISCAL NOTE Greta Rymal, Deputy Executive Commissioner for Financial Services, has determined that for each year of the first five years the proposed rule is in effect, there will be a savings to state government; specifically $74,364 General Revenue (GR) ($1,532,987 All Funds (AF)) for State Fiscal Year (SFY) 2018, $111,547 GR ($2,299,481 AF) for SFY 2019, $111,547 GR ($2,299,481 AF) for SFY 2020, $111,547 GR ($2,299,481 AF) for SFY 2021, and $111,547 GR ($2,299,481 AF) SFY There will be a reduction in cost to the state for name-based criminal history checks. The proposed rule changes remove the need for CCL to complete a name-based criminal history check for a person who already has a fingerprint background check on file. CCL anticipates there will be a reduction in name-based searches, since the majority of the licensing population already has a fingerprint background check on file. SMALL BUSINESS, MICRO-BUSINESS, AND RURAL COM- MUNITITIES IMPACT ANALYSIS Ms. Rymal has determined that there is no anticipated adverse impact to rural communities as a result of the proposed rule changes. Ms. Rymal has determined that the only anticipated adverse impact on small or micro businesses is as a result of the proposed rule changes to and Ms. Rymal has also determined that the new requirements under Government Code, do not apply because the changes to: (1) are necessary to protect the health, safety, and welfare of the children of this state; and (2) are necessary to receive the CCDF and comply with the Act, protect the health, safety, and welfare of children in this state, and implement H.B The proposed change to will impact licensed child-care homes, registered child-care homes, employer-based child care operations, and shelter care operations that meet the definition of a small and micro-business that do not already have a computer or smart phone to access the online Licensing website. The proposed change to will impact any child care operation (excluding listed family homes that only care for related children, employer-based child care operations, and shelter care operations) that has had a person (employee, foster parents, etc.) fingerprinted before June 1, TexReg 5410 October 6, 2017 Texas Register

129 According to the DFPS FY 2016 Annual Report and Data Book as of August 31, 2016, there were 7,957 licensed child-care centers, 1,567 school age and before or after-school programs, 1,738 licensed child-care homes, 4,433 registered child-care homes, 4,485 listed family homes (only a very few of the listed homes only provide care for related children), ten employer-based child care operations, eleven shelter care operations, 242 General Residential Operations (GROs), and 242 CPAs with 9629 agency foster homes and foster group homes, in Texas. Independent foster homes and foster group homes are not included here because there are only five of them and no more independent foster homes may be verified after September 1, It is not anticipated that either rule will impact independent foster homes. Chapter 2006 of the Government Code defines a small business as one that is for-profit, independently owned, and has fewer than 100 employees or less than six million dollars in annual gross receipts. A small business that has no more than 20 employees is also defined as a micro-business. A 2010 survey conducted by CCL indicated that approximately 55% of licensed child-care centers, including school age and before or after-school programs, are for-profit business [(7, ,567) X 70% = 5,238)]. Of those, 70% are independently owned (5,238 X 70% = 3,666), and 98% of those (3,666 X 98% = 3,592) have fewer than 100 employees and 68% (3,666 X 68% = 2,492) have fewer than 20 employees. CCL is assuming that virtually all licensed child-care homes, registered child-care homes, listed family homes (only a very few of the listed homes only provide care for related children), and employer-based child care operations are small and micro-businesses. It is estimated that only 25% of GROs (242 X 25% = 60) are small businesses and only 16% (242 X 16% = 38) micro businesses. Of the CPAs and shelter care operations, it is estimated that only 10 % fall within the definition of a small or micro-business, because only 22 of them are for-profit businesses. Of those 22, it is estimated that most of them are small businesses and half of them are micro-businesses. Licensing staff developed the methodologies used to calculate the fiscal impact of these rules. The impacts were calculated using cost research conducted by staff and assumptions regarding child-care practices. The key assumptions and methodologies are described in detail below, as these underlie the individual impact calculations for the rule that is projected to have a fiscal impact. Fiscal Impact for Proposed : This section requires licensed child-care homes, registered child-care homes, employer-based child care operations, and shelter care operations to submit requests for background checks through the online Licensing website, which would require a basic computer (low functioning, no gaming required) or smart phone to submit the requests. It is anticipated that this change will only affect a small number of homes or operations. While a little less than a third of the licensed child-care homes (527) and little less than half of the registered child-care homes (2093) do not currently have provider accounts through the online Licensing website, only 98 combined licensed child-care homes and registered child-care homes do not have contact addresses. While several of the employer-based child care operations and shelter care operations do not currently have provider accounts through the online Licensing website, all of them have contact addresses. The assumption is that the vast majority of these homes and operations have access to a computer or smart phone. The Pew Foundation in a 2015 study found that 73% of homes have a laptop or desktop computer and 68% have a smartphone. However, for those homes or operations that do not currently have a computer or smartphone, the costs would be a one-time cost and relatively small. While computers can be expensive, only a very modest computer is needed to access the online Licensing website. A pocket computer could be bought for as low as $99. Other low functioning laptops can be bought for $200 - $ 400. CCL is assuming that a maximum of 98 home providers will need to make a one-time purchase for a computer to access the online Licensing website at an average cost of $ per computer. Regulatory Flexible Analysis: The projected fiscal impact on small and micro-businesses for is addressed in the foregoing sections. CCL did consider allowing homes to continue to submit requests for background checks through a manual process. However, though this change is not required by the Act or H.B 4094, this new requirement will speed up the background check process for these newly included homes and operations, be safer for children, and allow for a more streamlined and efficient review of background checks. CCL also considered instituting a grandfather clause. However, with only approximately 98 homes not having access to a computer, a grandfather clause was determined to be unnecessary. Fiscal Impact for Proposed : One of the changes to the background check rules is to require a FBI national fingerprint-based criminal history check every five years, which CCL has decided to do by instituting the FBI national fingerprint-based rap back service for all individuals working in child care. This service would allow CCL to be immediately informed if there was a crime committed by an individual working for a child care operation. In addition, continued fingerprinting would not be required. The current costs for an individual to be fingerprinted is approximately $40. This cost is paid for by either the individual or the child care operation. For individuals that will be fingerprinted in the future or for individuals that were originally fingerprinted after 6/1/15, there will be no additional costs and no additional fingerprints in the future. Since 6/1/15, all fingerprints processed for CCL have been retained at the FBI level and CCL will be able to subscribe to the national rap back for these individuals without further costs. However, for the individuals fingerprinted prior to 6/1/15, a new fingerprint-based check will be required when a renewal background check is required in five years. It is estimated that there are 22,750 individuals that were fingerprinted prior to 6/1/15 that will need to be re-fingerprinted for a fingerprint-based criminal history check over the next five years. The $40 costs per individual will need to be paid for by the individual or the operation. Since these individuals cross all operation types, it is impossible to know the net effect on each operation type or individual operation. However, by allowing the fingerprint-based checks to be conducted over a five year period, the costs for an individual or costs associated with each operation will be extended over as much time as allowed by the Act. Regulatory Flexible Analysis: The projected fiscal impact on small and micro-businesses for is addressed in the foregoing sections. A requirement to have a national FBI fingerprint-based check every five years is mandated by the Act to improve the safety and quality of child care. CCL considered requiring new fingerprints immediately or over the next two years, but ultimately determined that allowing these costs to be spread over a five year period, depending upon when each individual's renewal background check will be due, was the most PROPOSED RULES October 6, TexReg 5411

130 efficient method to obtain fingerprints for the national rap back service with the least cost impact. This change will increase safety for children. 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; to receive a source of federal funds or comply with federal law; and to implement legislation that does not specifically state that applies to the rule. PUBLIC BENEFIT Ms. Rymal also has determined that for each of the first five years that the proposed sections will be in effect, the public benefit anticipated as a result of the rule change will be that (1) more robust background checks will improve the safety and quality of child care; (2) CCL will be in compliance with the Act; (3) CCL will be in compliance with H.B and HRC ; and (4) there will be a better understanding of the requirements relating to Background Checks. TAKING IMPACT ASSESSMENT Ms. Rymal has determined that the proposed amendments, repeals, and new sections do 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, do not constitute a taking under , Government Code. PUBLIC COMMENT Questions about the content of the proposal may be directed to Gerry Williams at (512) in the Child Care Licensing Division of HHSC. Electronic comments may be submitted to HH- SRulesCoordinationOffice@hhsc.state.tx.us. Written comments on the proposal may be submitted to Gerry Williams, Rules Developer (40R026), Child Care Licensing, Health and Human Services Commission E550, P.O. Box , Austin, Texas , within 30 days of publication in the Texas Register. SUBCHAPTER F. BACKGROUND CHECKS DIVISION 1. DEFINITIONS 40 TAC STATUTORY AUTHORITY The repeal is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeal implements Human Resources Code and Who does DFPS consider to be present at an operation while children are in care? 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 2. REQUESTING BACKGROUND CHECKS 40 TAC , , , , , , , , , , , STATUTORY AUTHORITY The repeals are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeals implement Human Resources Code and What are background checks? What is the purpose of background checks? On whom must I request background checks? Transitional rule for requesting fingerprint-based criminal history checks for listed family homes, registered child-care homes, and licensed child-care homes as required by the 84th Texas Legislature If my operation is located in a large building that includes other businesses or services, must I request a background check on people working in the building who are not involved in my operation? For a registered child-carehome that is also a foster home, must I request background checks on foster children who are over 14 years old? Must I request background checks on board members of corporations or associations who own or govern the operation? How do I request a background check? When must I submit a request for an initial or renewal background check? How soon after I request a background check on a person can that person provide direct care or have direct access to a child? How do I submit fingerprints for a fingerprint-based criminal history check? If a fingerprint-based criminal history check has already been completed on a person, must that person submit new fingerprints at the time my initial or renewal background check on that person is due? Must Licensing complete the background check(s) before issuing my permit? Can a child-placing agency (CPA) verify a foster home, foster group home, or adoptive home prior to receiving the results of the background checks? Can I do my own criminal history background checks? What information may I obtain from Licensing's records regarding a person's previous history in a child-care operation? 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 5412 October 6, 2017 Texas Register

131 Filed with the Office of the Secretary of State on September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 3. CRIMINAL CONVICTIONS AND CENTRAL REGISTRY FINDINGS OF CHILD ABUSE OR NEGLECT 40 TAC , , , , , STATUTORY AUTHORITY The repeals are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeals implement Human Resources Code and What types of criminal convictions may affect a person's ability to be present at an operation? If a criminal history check reveals a criminal conviction other than those enumerated in the relevant chart listed in of this title (relating to What types of criminal convictions may affect a person's ability to be present at an operation?), will Licensing notify me of the results? Do criminal convictions include deferred adjudication for an offense that may affect a person's ability to be present at an operation? Will a requirement that a person register with the Texas Sex Offender Registry affect the person's ability to be present at an operation? What types of Central Registry findings may affect a person's ability to be present at an operation? What will happen if a person at my child-care operation has a criminal conviction or a Central Registry finding? What must I do after Licensing notifies me that a person at my operation has one of these types of criminal convictions or Central Registry findings? What if the person with the criminal conviction or central registry finding believes the information obtained is incorrect? 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 4. EVALUATION OF RISK BECAUSE OF A CRIMINAL CONVICTION OR A CENTRAL REGISTRY FINDING OF CHILD ABUSE OR NEGLECT 40 TAC , , , , , , , , , , , , , STATUTORY AUTHORITY The repeals are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeals implement Human Resources Code and When may I request a risk evaluation? Who is responsible for submitting a request for a risk evaluation? How do I submit a request for a risk evaluation? What are the time frames for requests for a risk evaluation? What must I include in my request for a risk evaluation based on criminal history? What must I include in my request for a risk evaluation based on a Central Registry finding? May conditions or restrictions be placed on a person's presence at an operation? Must I follow conditions or restrictions that have been placed on a person's presence at an operation? What criminal history and Central Registry findings are relevant to a person's ability to be a licensed administrator? Does having a criminal history or Central Registry finding prohibit me from becoming a licensed administrator? Is an approved risk evaluation permanent? What should I do if a person in my child-care operation is currently the subject of a criminal investigation? May a person arrested or charged with a crime be present at an operation while children are in care? If I have knowledge that a person has a criminal conviction or Central Registry finding, can the person be present at my operation while children are in care? What must I do if a person in my child-care operation is the subject of an abuse or neglect investigation? Who makes the final decision on a risk evaluation? What is the basis of the risk evaluation decision? What can I do if I disagree with the risk evaluation decision? PROPOSED RULES October 6, TexReg 5413

132 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 5. DESIGNATED AND SUSTAINED PERPETRATORS OF CHILD ABUSE OR NEGLECT 40 TAC , , STATUTORY AUTHORITY The repeals are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeals implement Human Resources Code and What are designated perpetrators and sustained perpetrators of child abuse or neglect? Will Licensing release a central registry finding on a designated perpetrator or sustained perpetrator to my operation? What notice will Licensing send a designated perpetrator or a sustained perpetrator working at an operation? 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 6. IMMEDIATE THREAT OR DANGER TO THE HEALTH OR SAFETY OF CHILDREN 40 TAC , STATUTORY AUTHORITY The repeals are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by the health and human services agencies, including the Department of Family and Protective Services. The repeals implement Human Resources Code and What factors does Licensing consider when determining if a person or an operation is an immediate threat to the health or safety of children? How will I know whether Licensing has determined that a person or my operation poses an immediate threat or danger to the health or safety of children? 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 1. DEFINITIONS 40 TAC STATUTORY AUTHORITY The amendment is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amendment implements Human Resources Code and What words must I know to understand this subchapter? These words have the following meanings: (1) CBCU--The Centralized Background Check Unit is a subdivision [division] of Licensing [DFPS] that conducts background checks and risk evaluations [for various DFPS divisions, including Licensing]. (2) Central Registry--A DFPS database of persons who have been found by Licensing or an investigations division within DFPS to have abused or neglected a child. [Continuous stay--staying overnight or consecutive nights at an operation.] (3) Client in care--a child, young adult, or adult in the care of your operation, including foster children or young adults for whom your operation is receiving foster care payments, adults in care through the Health and Human Services System, court-ordered placements, and kinship care. A biological or adopted child is not a client in care. (4) Criminal history--includes arrests, dispositions, and deferred adjudication community supervision. Criminal history does not include expunged criminal history or non-disclosure history. It does not include juvenile history, although the CBCU may determine that a person poses an immediate threat or danger to the health or safety of 42 TexReg 5414 October 6, 2017 Texas Register

133 children based on a juvenile adjudication that the CBCU receives with the person's criminal history. (5) DFPS--Department of Family and Protective Services. (6) DPS--Department of Public Safety. (7) [(3)] Direct care or direct access--being counted in the child-to-caregiver ratio or having any responsibility that requires contact with children in care. (8) FBI--Federal Bureau of Investigation. (9) HHSC--Health and Human Services Commission. (10) [(4)] Initial background check--the first background check that your operation submits for [requests on] a person required to have a background check, as specified in of this title (relating to For whom must I submit requests for background checks?). [who is required to undergo a background check, as provided in this subchapter.] [(5) Non-continuous visit--being physically present at an operation for a period of time of less than 24 hours. Multiple or periodic visits to an operation within the same day is one visit.] [(6) Owner--A person who owns a child-care operation. An owner includes:] [(i) Has a role in the everyday operation of the facility;] [(A) A sole proprietor;] [(B) A partner in a partnership; or] [(C) An officer of the governing body if the officer:] [(ii) Participates in making policies that address the everyday operation of the child-care operation or DFPS requirements; or] [(iii) Signs background check requests or requests risk evaluations for the operation.] (11) Licensing--Child Care Licensing, a division of HHSC. (12) Present at an operation--a person is present at an operation if the person has or may have contact with children in care as follows: (A) The person is physically present at an operation while any child is in care; (B) The person has responsibilities that may require the person to be present at an operation while any child is in care; (C) The person resides at an operation or is present at an operation on a regular or frequent basis; or (D) The person provides direct care or has direct access to any child in care, including supervised or unsupervised direct access to any child. (13) [(7)] Regularly or frequently present at an operation-- The definition means: (A) A person is regularly or frequently present at an operation if the person [is at an operation]: basis; (i) Is present at an operation on [On] a scheduled (ii) Visits the operation [For] three or more times [non-continuous visits] in a 30-day period, with "isit"meaning being present at an operation for a period of time of less than 24 hours, and multiple or periodic visits to an operation within the same day counting as one visit; (iii) Stays or resides at the operation for more than [For one continuous stay that exceeds] seven consecutive days; or (iv) Stays or resides at the operation [For] three or more times [continuous stays] per year, and the duration of each stay exceeds 48 hours. (B) For foster homes, the following persons are not considered to be regularly or frequently present at a foster home: (i) foster home unless: child; or (I) A child unrelated to a foster parent who visits the The child is responsible for the care of a foster (II) There is a reason to believe that the child has a criminal history or previously abused or neglected a [another] child; and (ii) An adult unrelated to a foster parent who visits the foster home unless: in care; or (I) The adult has unsupervised access to children (II) There is a reason to believe that the adult has a criminal history or previously abused or neglected a child. (C) For a child day-care operation, parents are not regularly or frequently present at an operation solely because they are visiting their child, which may include dropping off or picking up their child, eating lunch with their child, visiting or observing their child, or consoling their child. However, a parent may be regularly or frequently present at an operation if he or she volunteers at an operation or is otherwise present at an operation for a reason other than visiting his or her child. (14) [(8)] Renewal background check--a subsequent [recurring] background check that your operation submits for a person who has already had an initial background check at [must request for someone periodically after] your operation as required in of this title [submits an initial background check for that person, as provided in this subchapter]. (15) [(9)] Risk evaluation--a process conducted by the CBCU that is initiated by a person with a criminal history or child abuse and neglect history. [an operation whereby the Centralized Background Check Unit (CBCU)] During this process the CBCU reviews information and determines whether a person with a criminal conviction or child abuse or neglect [Central Registry] finding or a person who has been arrested or charged with a crime poses a risk to the health or safety of children in a particular operation. (16) Subject--The subject of a background check. (17) [(10)] Substitute employee--a person present at an [on the premises of a child-care] operation usually for the purpose of fulfilling an absent employee or caregiver role [in the absence of an employee or caregiver usually present at the operation]. (18) Sustained finding--a child abuse or neglect finding against a person on the Central Registry where the person has already been offered rights to an administrative review and due process hearing, and the: (A) Designated perpetrator's rights to the administrative review and due process hearing have expired; or PROPOSED RULES October 6, TexReg 5415

134 (B) Child abuse or neglect finding was upheld in the due process hearing. (19) [(11)] Unsupervised access--the person is allowed to be with children without the presence of a [qualified] caregiver that is counted in the child-to-caregiver ratio and meets the minimum education requirements, work experience, training qualifications, and background check requirements. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 2. REQUESTING BACKGROUND CHECKS 40 TAC , , , , , , , , , , STATUTORY AUTHORITY The new rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rules implement Human Resources Code and For whom must I submit requests for background checks? (a) You must submit a request for a background check for: (1) The owner of the operation, including: (A) A sole proprietor; (B) Each partner in a partnership; and (C) A board member or an officer of a governing body that is involved in the everyday management of the operation, including participating in the development of policies that address the Licensing requirements or the everyday running of the operation, or submitting requests for background checks for the operation; (2) Each person employed at the operation, including: (A) All directors and administrators of the operation; (B) Prospective employees; and (C) Substitutes, unless you confirm that the organization providing the substitute has: (i) Submitted a request for a background check for the substitute through the CBCU within the last five years; and (ii) You have a copy of the background check determination that allows the substitute to be present at an operation; (3) Each current or prospective foster parent providing foster care through a child-placing agency; (4) Each prospective adoptive parent seeking to adopt through a child-placing agency; (5) Each person 14 years of age or older, including a contract employee, self-employed person, or volunteer who: (A) Is counted in the child-to-caregiver ratio in accordance with the relevant minimum standards; (B) Provides direct care or supervision to children in care; or (C) Has unsupervised access to children in care; (6) Each person 14 years of age or older, who: (A) Resides in the operation; or (B) Will reside in a prospective adoptive home if the adoption is through a child-placing agency; and (7) Each person 14 years of age or older, who is regularly or frequently present at an operation or prospective adoptive home. (b) You do not have to submit a request for a background check on: (1) A client in care; (2) A professional who is licensed or is required to have a background check to meet compliance with another governmental entity's requirements, so long as: (A) You do not employ or contract with the professional; (B) The professional will only be present at an operation in an official capacity; and (C) For day care operations, you obtain written parental consent before allowing the professional to have unsupervised access to a child in care; and (3) Controlling persons who do not fulfill a role specified in subsection (a) of this section, such as a board member of a corporation or association that owns or governs the operation What are the different types of background checks? There are six types of background checks: Figure: 40 TAC What types of background checks are required for persons at my operation? (a) Except as described in subsection (b) of this section, persons required to have a background check under of this title (relating to For whom must I submit requests for background checks?) must have the following types of background checks: (1) As further described in of this title (relating to Which persons at my operation are subject to either a fingerprint-based criminal history check or a name-based Texas criminal history check?), either a: (A) Fingerprint-based criminal history check, with a Texas sex offender registry check; or (B) Name-based Texas criminal history check, with a Texas sex offender registry check; (2) A Central Registry check; and (3) As further described in of this title (relating to Which persons at my operation are subject to the out-of-state criminal 42 TexReg 5416 October 6, 2017 Texas Register

135 history check, out-of-state child abuse and neglect registry check, and out-of-state sex offender registry check?), for certain persons, an: (A) Out-of-state criminal history check; (B) Out-of-state child abuse and neglect registry check; and (C) Out-of-state sex offender registry check. (b) This rule does not apply to listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations. See of this division (relating to What types of background checks are required for persons at listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations?) Which persons at my operation are subject to either a fingerprint-based criminal history check or a name-based Texas criminal history check? (a) Except as described in subsection (b) of this section, a person required to have a background check under: (1) (a)(1) - (6) of this title (relating to For whom must I submit requests for background checks?) must have a fingerprint-based criminal history check; and (2) (a)(7) of this title is only required to have a name-based Texas criminal history check, except the person must have a fingerprint-based criminal history check if: (A) The person has resided outside of Texas any time during the five-year period prior to the date you submit a request for a background check; or (B) There is reason to believe the person has criminal history in another state. (b) This rule does not apply to listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations. See of this title (relating to What types of background checks are required for persons at listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations?) Which persons at my operation must have an out-of-state criminal history check, an out-of-state child abuse and neglect registry check, and an out-of-state sex offender registry check? (a) Except as described in subsections (d) and (e) of this section, a person required to have a background check under of this title (relating to For whom must I submit requests for background checks?) must have an out-of-state criminal history check, an out-of-state abuse and neglect registry check, and an out-of-state sex offender registry check, if: (1) The person has lived outside of Texas any time during the five-year period prior to the date you submit a request for a background check, including a check in each state where the person resided during the preceding five-year period; or (2) There is reason to believe the person has criminal history, has abuse or neglect history, or is a registered as sex offender in another state. (b) The out-of-state criminal history check must be a fingerprint-based criminal history check if the person currently resides in a state outside of Texas, but is employed at an operation regulated by Licensing. (c) The CBCU will inform a person when the person requires any out-of-state checks. The person must ensure that the person's own out-of-state criminal history check and out-of-state child abuse and neglect registry check are provided to the CBCU. The CBCU will conduct the person's out-of-state sex offender registry check. (d) A person does not have to have an out-of-state criminal history check if the operation submitting the request for a background check is a residential child-care operation, including a child-placing agency, agency foster home, or general residential operation. (e) This rule does not apply to listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations. See of this title (relating to What types of background checks are required for persons at listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations?) What types of background checks are required for persons at listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations? For listed family homes that only provide care to related children, employer-based child care operations, and shelter care operations, persons required to have a background check under of this title (relating to For whom must I submit requests for background checks?) must have the following types of background checks: (1) A name-based Texas criminal history check with a Texas sex offender registry check, except the person must have a fingerprint-based criminal history check if: (A) The person has resided outside of Texas any time during the five-year period prior to the date you submit a request for a background check; or (B) There is reason to believe the person has criminal history in another state; and (2) A Central Registry check How do I submit a request for a background check? (a) The process for submitting a request for a background check depends on the type of operation submitting the request: Figure: 40 TAC (b) You do not have to submit a request for a background check for a person who requires a background check under this subchapter because of the person's responsibilities as a DFPS employee or volunteer or a Licensing employee. The person will have a background check conducted by DFPS or HHSC as part of the person's application to become an employee or volunteer What information must be included when an operation submits a request for a background check? You must verify and send the following information to the CBCU for every person required to have a background check under of this title (relating to For whom must I submit requests for background checks?): (1) Name (first, middle, and last), including any maiden or married names or aliases; (2) Social security number, if one exists; (3) Driver's license or a state issued identification card number; (4) Date of birth; (5) Sex; (6) Ethnicity and race (this information does not have to be verified); PROPOSED RULES October 6, TexReg 5417

136 (7) Current and previous addresses in Texas; (8) The city and state of each residence where the person has lived outside of the state of Texas any time during the five-year period prior to the date you submit a request for a background check; (9) An address for the person, if available; and (10) The role of the person at the operation, including: (A) The person's title and job duties; (B) Whether the person will be supervised by a caregiver counted in the child-to-caregiver ratio; and (C) The ages of children the person will be caring for When must I submit a request for an initial or renewal background check for a person? (a) You must submit a request for an initial background check for each person required to have a background check under of this title (relating to For whom must I submit requests for background checks?): (1) When you submit your application for a permit to us; (2) When you hire someone; (3) When you contract with someone who requires a background check; (4) When a person applies to be a foster or adoptive parent; (5) When a resident 14 years or older moves into your home or operation; (6) Between 90 days before and 90 days after a resident living in your home or operation becomes 14 years old; and (7) When you become aware of anyone requiring a background check under of this title, on whom you have not previously submitted a request for a background check. (b) You must submit a request for a renewal background check for each person required to have a background check under of this title: (1) No later than: (A) Five years from the date you last submitted a request for an initial or renewal background check on a person that had a fingerprint-based criminal history check; or (B) Two years from the date you last submitted a request for an initial or renewal background check on a person that only had a name-based Texas criminal history check; (2) When you become aware that a person has had a change in the person's state of residence; and (3) When there is a change in the person's role at the operation that requires the person to have a fingerprint-based criminal history check instead of a previously conducted name-based Texas criminal history check How does a person submit fingerprints for a fingerprintbased criminal history check? After you submit a request for an initial or renewal background check to the CBCU for a person required to have a fingerprint-based criminal history check, the CBCU will send the person a notification with information on how to schedule an appointment to submit fingerprints with the DPS approved fingerprinting vendor Does a person who has already undergone a fingerprintbased criminal history check have to submit new fingerprints? (a) When you submit a request for a background check for a person who has previously undergone a fingerprint-based criminal history check, the CBCU will determine whether the previous fingerprint-based criminal history check remains valid or whether the person must resubmit fingerprints for a new fingerprint-based criminal history check. (b) A previously completed fingerprint-based criminal history check remains valid, and Licensing will waive the requirement to submit new fingerprints, if the CBCU has an active subscription or can reactivate a subscription to the FBI's national rap back service for the person. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 3. DETERMINATIONS REGARDING BACKGROUND CHECKS 40 TAC , , , , , , , , , , STATUTORY AUTHORITY The new rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rules implement Human Resources Code and How soon will the subject of the background check and I be notified of the determination of the background check? The CBCU will notify the subject of the background check and the operation with a written determination of the background check as soon as possible, but no later than 45 days from the date the background check was submitted What are the possible determinations for the subject of a background check? There are four possible determinations regarding a background check: Figure: 40 TAC In what situations may the CBCU place conditions or restrictions on a person's presence at an operation? The CBCU may place conditions or restrictions on a person's presence at an operation that the CBCU determines to be necessary to protect the health or safety of children in the following situations: (1) While a person's out-of-state criminal history and/or out-of-state child abuse or neglect registry checks are pending, if ap- 42 TexReg 5418 October 6, 2017 Texas Register

137 plicable, and the CBCU has not received information that renders the person ineligible to be present at an operation; (2) Pending the outcome of a risk evaluation for an eligible criminal conviction, child abuse and neglect finding, or crime for which the person has been arrested or charged; or (3) For an approved risk evaluation What information will a notice letter that the CBCU sends to an operation include? (a) The notice letter that the CBCU sends to an operation regarding the subject of the background check will include the following information: (1) A determination of whether the subject may be present at an operation, as defined in of this title (relating to What are the possible determinations for the subject of a background check?); and (2) Any conditions or restrictions placed on the subject's presence at an operation, if applicable. (b) If the subject of the background check is required to undergo a background check in a current or prospective foster or adoptive home, including a current or prospective foster or adoptive parent, the notice letter to the child-placing agency will also include: (1) The sources of information that were used for the background check, as specified in of this subchapter (relating to What are the different types of background checks?); (2) Any criminal history, if applicable; (3) Any sustained Central Registry finding listed in of this title (relating to What types of findings from the Central Registry or out-of-state child abuse and neglect registries may affect a person's ability to be present at an operation?), if applicable; (4) Whether the subject is eligible to request a risk evaluation, if applicable, and whether the subject may be present at your operation pending the outcome of the risk evaluation; and (5) Any Central Registry finding of child abuse or neglect that is not sustained, if the CBCU has determined the subject is ineligible to be present at the operation. The notification letter will inform you that this subject has not at this time had any due process regarding this matter; however, you must immediately remove the subject from being present at the operation. The CBCU will subsequently notify you of any future determination regarding this matter, such as the subject is now eligible to be present at the operation because the child abuse or neglect finding was overturned What must I do after the CBCU notifies my operation of the subject's background check determination? (a) If the subject's determination is: (1) Eligible, you do not need to take any further action; (2) Ineligible, you must immediately remove the subject from being present at your operation and confirm to the CBCU the receipt of the CBCU notice letter; or (3) Provisionally eligible with conditions or eligible with conditions, you must restrict the person's duties in a manner that follows the conditions and/or restrictions that the CBCU has placed on subject's presence at your operation. (b) If you do not follow the conditions and restrictions that the CBCU has placed on a subject's presence at an operation, then: (1) The CBCU may amend, deny, or rescind the risk evaluation; and/or (2) Licensing may take an enforcement action against you What information will a notice letter that the CBCU sends to the subject of a background check include? The notice letter that the CBCU sends to the subject of the background check will include the following information: (1) The sources of information that were used for the background check, as specified in of this title (relating to What are the different types of background checks); (2) Whether the CBCU needs any additional information to complete the background check and when the information is due; (3) Any criminal history, if applicable; (4) Any sustained Central Registry finding listed in of this title (relating to What types of findings from the Central Registry or out-of-state child abuse and neglect registries may affect a person's ability to be present at an operation?), if applicable; (5) Whether the subject is eligible to request a risk evaluation, if applicable, and whether the subject may be present at an operation pending the outcome of the risk evaluation; (6) A determination of whether the subject may be present at an operation, as defined in of this title (relating to What are the possible determinations for the subject of a background check?); (7) Any conditions or restrictions placed on a subject's presence at an operation, if applicable; (8) Any Central Registry finding of child abuse or neglect that is not sustained, and when the CBCU has determined the presence of the subject at an operation: (A) Does not pose an immediate threat or danger to the health or safety of children, the notification letter will also state: (i) That the subject is provisionally eligible with conditions to be present at the operation; (ii) That the subject may request a hearing before the State Office of Administrative Hearings (SOAH); and (iii) Whether the subject is entitled to a risk evaluation regarding the finding pending a hearing before SOAH; or (B) Poses an immediate threat or danger to the health or safety of children, the notification letter will also state that the subject: (i) (ii) Is ineligible to be present at the operation; and May request a hearing before SOAH; and (9) The rights the subject has to dispute the accuracy or completeness of the results of the background check and to request a review of the background check determination How soon after I submit a request for a background check on a person can that person be present at an operation? You must receive notification from the CBCU that a person is eligible, eligible with conditions, or provisionally eligible with conditions before allowing the person to be present at your operation How can the subject of the background check dispute the accuracy or completeness of the information contained in the results of the background check? If the subject disputes the accuracy or completeness of the information contained in the results of the background check: (1) The subject should first work with the CBCU representative that made the background check determination to provide updated disposition information or additional documentation; and PROPOSED RULES October 6, TexReg 5419

138 (2) If the subject is unable to resolve the dispute in this manner, then the subject may seek resolution of the issue from the agency that provided the results upon which the CBCU background check determination was made How can the subject request that the CBCU review the background check determination? (a) The subject may request that the CBCU review the background check determination, if the subject: (1) Disputes the determination; or (2) Has new information that was not previously available at the time of the determination. (b) The subject may request that the CBCU review the background check determination: (1) Within 30 days from the date on the notice letter from the CBCU that informs the subject of the determination; or (2) Anytime the subject can provide new information that was not previously available at the time of the determination. (c) The request for the CBCU to review the background check determination must: (1) Be in writing; (2) Be addressed to the CBCU staff member that issued the determination; (3) Include: (A) The name of the subject of the background check; (B) The date the CBCU issued the background check determination; (C) The reason the subject disputes the background check determination, if applicable; and (D) Any new information that was not previously available at the time of the determination, if applicable; and (4) Be sent by , regular mail, or fax to the specified address or fax number. (d) The CBCU has 30 days to provide the subject with a written response regarding the review of the background check determination. The CBCU may extend the 30-day time period for good cause. (e) While conducting the review, the CBCU will consider any reason noted for the dispute, any new information provided, and whether the rules in this subchapter were followed. A review will have a limited ability to look at issues of accuracy and completeness, because the CBCU does not have control over the background check results from other agencies. As much as possible, subjects should resolve those issues at the agency that provided the results upon which the background check determination was made, see of this title (relating to How can the subject of the background check dispute the accuracy or completeness of the information contained in the results of the background check?). (f) If the subject disagrees with the CBCU's review determination, the subject may request that the Director of the CBCU review the accuracy of the CBCU's determination. The CBCU Director may conduct this review or assign the review to a designee that was not previously involved in the background check determination. The determination by the CBCU Director or designee is final Must the CBCU complete the background checks before Licensing issues my permit? (a) If you are applying to operate a licensed child-care home, a registered child-care home, or a listed family home, the CBCU must have made a determination that all household members who must have a background check under of this title (relating to For whom must I submit requests for background checks?) are eligible or eligible with conditions before issuing you a permit. (b) Except as described in subsection (a) of this section, Licensing may issue a permit to an applicant after the CBCU has made a determination that any owner who must have a background check under (a)(1) of this title is eligible or eligible with conditions Can a child-placing agency (CPA) verify a foster family home or approve an adoptive home prior to receiving the background check determinations? No, a CPA must receive notification from the CBCU that all household members of a foster family home who must have a background check under of this title (relating to For whom must I submit requests for background checks?) are eligible or eligible with conditions before verifying the home Am I required to indicate when a person is no longer associated with my operation? Yes, you must indicate that a person is no longer associated with your operation by: (1) Inactivating the person within seven days of when the person is no longer associated with your operation; and (2) Validating your current list of persons associated with your operation: (A) Every three months through the Licensing website for all operations except licensed child-care homes, registered childcare homes, and listed family homes; and (B) Once a year through the: (i) Licensing website for licensed child-care homes and registered child-care homes; and (ii) Licensing website or your local Licensing office for listed family homes Can I do my own criminal history background checks? Yes, but any background checks you conduct on your own will not replace the requirement to complete background checks through the CBCU. You must still complete the background check requirements in this subchapter What information may I obtain from Licensing's records regarding a person's previous history at an operation? The CBCU will provide you with a list of each operation that has submitted a request for a background check on the person and when the operation submitted the 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TexReg 5420 October 6, 2017 Texas Register

139 DIVISION 4. CRIMINAL HISTORY, SEX OFFENDER REGISTRY, AND CHILD ABUSE OR NEGLECT FINDINGS 40 TAC , , STATUTORY AUTHORITY The new rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rules implement Human Resources Code and What types of criminal convictions may affect a person's ability to be present at an operation? (a) A felony or misdemeanor conviction under Texas law, the laws of another state, or federal law may affect a person's ability to be present at an operation. There are three charts with information regarding specific crimes that may affect a person's ability to be present at an operation. Each chart specifies whether a conviction permanently or temporarily bars a person from being present at an operation, whether a person is eligible for a risk evaluation, and whether a person who is eligible for a risk evaluation may be present at an operation pending the outcome of the risk evaluation. The three charts are: (1) Licensed or Certified Child Care Operations: Criminal History Requirements; (2) Foster or Adoptive Placements: Criminal History Requirements; and (3) Registered Child Care Homes and Listed Family Homes: Criminal History Requirements. (b) The three charts listed in subsection (a) of this section will be reviewed and updated annually, published every January as an "In Addition" document in the Texas Register, and are available on the Licensing provider website. (c) A person currently on parole for a felony offense must have an approved risk evaluation prior to being present at an operation. (d) For any felony offense that is not specifically enumerated in the relevant chart listed in subsection (a) of this section, a person convicted within the past 10 years for the offense must have an approved risk evaluation prior to being present at an operation. (e) Substantially similar federal offenses and offenses in other states will be treated the same as the similar Texas offense. (f) This rule does not apply to a person who requires a background check under this subchapter because of the person's responsibilities as a DFPS employee or volunteer or a Licensing employee. The person will have a background check determination conducted under the criteria used by the Human Resources Division of DFPS or HHSC, as part of the person's application to become an employee or volunteer Do criminal convictions include deferred adjudication community supervision for an offense that may affect a person's ability to be present at an operation? (a) Except as provided under subsection (b) of this section, a criminal conviction includes deferred adjudication community supervision unless the court has dismissed the proceedings and discharged the defendant. (b) For permit holders, when Licensing is issuing, denying, or revoking a permit a criminal conviction includes deferred adjudication community supervision regardless of whether the court has dismissed the proceedings and discharged the defendant What must I do if a person at my operation is currently the subject of a criminal investigation? If you have knowledge that a person at your operation has been arrested or charged with a crime, you must report the investigation to Licensing and the CBCU immediately. The person may be present at the operation unless the CBCU notifies you that the person is ineligible to be present at the operation How will the CBCU determine whether a person arrested or charged with a crime may be present at an operation? (a) A person arrested or charged with a crime may not be present at an operation if: (1) A conviction for the arrest or charged offense would: (A) Bar the person from being present at an operation permanently or on a time-limited basis; or (B) Prohibit the person from being present at an operation pending the outcome of a risk evaluation; or (2) The CBCU determines that the person poses an immediate threat to the health or safety of children. (b) The CBCU may place conditions or restrictions on a person's presence at an operation as the CBCU finds necessary to protect the health or safety of children for a person arrested or charged with a crime: not: (1) If a conviction for the arrest or charged offense does (A) Bar the person from being present at an operation permanently or on a time-limited basis; or (B) Prohibit the person from being present at an operation pending the outcome of a risk evaluation; and (2) The CBCU does not determine that the person poses an immediate threat to the health or safety of children Will a requirement that a person register with the Texas Sex Offender Registry or an out-of-state sex offender registry affect the person's ability to be present at an operation? Yes, a person who is required to register as a sex offender in Texas or any other state or territory may not be present at an operation What types of findings from the Central Registry or out-ofstate child abuse and neglect registries may affect a person's ability to be present at an operation? (a) Except for a person described in subsection (b) of this section, the following chart lists the types of findings from the Central Registry and out-of-state child abuse and neglect registries that may affect a person's ability to be present at an operation. The chart specifies whether a person with a finding is barred from being present at an operation or is eligible for a risk evaluation, and whether a person eligible for a risk evaluation may be present at an operation pending the outcome of the risk evaluation: Figure: 40 TAC (b) Any person that is required to undergo a background check in a current or prospective foster or adoptive home is eligible for a risk evaluation for a sustained finding of physical abuse, if: (1) It has been more than five years since the date of the physical abuse finding; and PROPOSED RULES October 6, TexReg 5421

140 (2) The prospective foster or adoptive parent is related to or has a significant longstanding relationship with the foster or adoptive child. (c) This rule does not apply to a person who requires a background check under this subchapter because of the person's responsibilities as a DFPS employee or volunteer or a Licensing employee. The person will have a background check determination conducted under the criteria used by the Human Resources Division of DFPS or HHSC, as part of the person's application to become an employee or volunteer What must I do if a person at my operation is the subject of an abuse or neglect investigation? If you have knowledge that DFPS or a similar agency in another state is conducting an investigation of child abuse or neglect on a person at your operation, you must report the investigation to Licensing and the CBCU immediately. The person under investigation may be present at your operation unless the CBCU notifies you that the person is ineligible to be present at the operation. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 5. EVALUATION OF RISK BECAUSE OF CRIMINAL HISTORY OR A CHILD ABUSE OR NEGLECT FINDING 40 TAC , , , , , , , , STATUTORY AUTHORITY The new rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rules implement Human Resources Code and Who is responsible for requesting a risk evaluation? The subject of a background check must request the risk evaluation When may the subject of a background check request a risk evaluation? The subject of a background check may request a risk evaluation when the CBCU has provided the subject with written notice that the subject is eligible for a risk evaluation for a criminal conviction, child abuse or neglect finding, or crime for which the person has been arrested or charged How long does the subject of the background check have to request a risk evaluation? The subject of the background check must submit a request for a risk evaluation within 30 calendar days from when the request for a background check was submitted by the operation. The CBCU will provide in a notice letter the due date by which the subject may request a risk evaluation How does the subject of a background check request a risk evaluation? The subject of a background check must submit a completed risk evaluation packet to the CBCU by , regular mail, or fax to the specified address or fax number. The risk evaluation packet must include the completed risk evaluation request form and all required supporting documentation, as specified in of this title (relating to What must a request for a risk evaluation based on criminal history include?) or of this title (relating to What must a request for a risk evaluation based on a child abuse or neglect finding include?) What must a request for a risk evaluation based on criminal history include? The subject of the background check must include the following in a request for a risk evaluation based on criminal history: (1) A completed Form 2974, Request for Risk Evaluation Based on Past Criminal History or Child Abuse or Neglect Findings; (2) A copy of the police report regarding the circumstances of the arrest; (3) An official copy of the final record of judicial finding or conviction (signed by a judge and file stamped); (4) If the subject was incarcerated: (A) A copy of local, state, or federal release order; (B) The date the subject was released from incarceration; and (C) If applicable, the terms and conditions of parole; (5) If the subject was given a probated sentence (including deferred adjudication community supervision), the dates of the probation and information related to the terms and conditions of the probation, including documentation regarding whether or not the subject successfully completed the terms of probation and paid all court costs, supervision fees, and court-ordered restitution and fines. If the subject is presently on probation, a statement from the subject's probation officer regarding the status of the subject's probation; (6) Age of the subject at the time the crime was committed; (7) A detailed, signed statement from the subject regarding the nature and seriousness of the crime for which the subject was arrested, charged, or convicted, including: (A) Why the subject was arrested; (B) Where the subject was when arrested; (C) Who else was involved in the criminal incident; (D) Whether anyone was injured; (E) The extent and nature of other arrests within the subject's past criminal history; (F) What has changed for this subject since the time of the arrest; and (G) Why the subject does not feel that he or she poses a risk to children in care; (8) Evidence of rehabilitative effort; 42 TexReg 5422 October 6, 2017 Texas Register

141 (9) The work history of the subject over the past 10 years, including names of employers, dates of employment, and positions held; (10) At least three reference letters from persons who are not related to the subject (professionals, employers, law enforcement, etc.) and who have knowledge about the subject's character and, if applicable, the subject's ability to work with children; (11) If the risk evaluation is for a foster or adoptive placement, then: (A) The names and dates of birth of any foster or adoptive children who have been or are expected to be placed in the home (if known); (B) A description of the foster or adoptive parent's relationship to each child; (C) A copy of a home assessment or home screening, if one has been completed; and (D) A valid rationale from the child-placing agency's owner, executive director, administrator, or some other similar position of authority explaining why the subject does not pose a risk to the health or safety of children; and (12) Any additional items requested by the CBCU Manager to assist with the risk evaluation decision What must a request for a risk evaluation based on a child abuse or neglect finding include? The subject of a background check must include the following in a request for a risk evaluation based on a child abuse or neglect finding: (1) A completed Form 2974, Request for Risk Evaluation Based on Past Criminal History or Child Abuse or Neglect Findings; (2) Age of the subject at the time of the abuse or neglect; (3) The amount of time that has elapsed since the subject's last abuse or neglect finding; (4) A detailed, signed statement from the person regarding the nature and seriousness of the abuse and/or neglect finding, including: (A) The circumstances involved in the abuse and/or neglect incident and investigation; (B) The extent and nature of the subject's past abuse and/or neglect history; (C) What has changed for this subject since the time of the abuse or neglect finding; and (D) Why the subject does not feel that he or she poses a risk to children in care; (5) Evidence that factors which impact the risk of future abuse or neglect have changed; (6) At least three reference letters from persons who are not related to the subject (professionals, employers, caseworkers, etc.) and who have knowledge about the subject's character and, if applicable, the subject's ability to work with children; (7) The work history of the subject over the past 10 years, including names of employers, dates of employment, and positions held; (8) If the risk evaluation is for a foster or adoptive placement, then: (A) The names and dates of birth of any foster or adoptive children who have been or are expected to be placed in the home (if known); (B) A description of the foster or adoptive parent's relationship to each child; (C) A copy of a home assessment or home screening, if one has been completed; and (D) A valid rationale from the child-placing agency's owner, executive director, administrator, or some other similar position of authority explaining why the subject does not pose a risk to the health or safety of children; and (9) Any additional items requested by the CBCU Manager to assist with the risk evaluation decision Who makes the final decision on a risk evaluation? A manager of the CBCU or a designee reviews the request for a risk evaluation and decides whether or not a person poses a risk to the health or safety of children in a particular operation What is the basis of the risk evaluation decision? The CBCU bases the risk evaluation decision upon: (1) All of the information submitted under or of this title (relating to What must a request for a risk evaluation based on criminal history include? and What must a request for a risk evaluation based on a child abuse or neglect finding include?, respectively); (2) The compliance history and regulatory status of the operation; (3) The role and responsibility of the person; (4) The criminal conviction, child abuse and neglect finding, or crime for which the person has been arrested or charged; (5) Any federal requirements regarding criminal history and child abuse and neglect findings; and (6) Any other relevant factor Can a subject request that the CBCU review a risk evaluation? (a) The subject of the background check may request that the risk evaluation decision, including conditions or restrictions, be reviewed if there is new information that was not previously available at the time of the risk evaluation decision. (b) The request for the CBCU to review the risk evaluation decision must: (1) Be in writing; (2) Be addressed to the CBCU staff member that issued the decision; (3) Include: (A) The name of the subject of the background check; (B) The date the CBCU issued the risk evaluation decision; and (C) Any new information that was not previously available at the time of the decision; and (4) Be sent by , regular mail, or fax to the specified address or fax number. (c) The Director of the CBCU or a designee has 30 days to provide the subject with a written response regarding the review of PROPOSED RULES October 6, TexReg 5423

142 the risk evaluation decision. The CBCU may extend the 30-day time period for good cause. While conducting the review, the CBCU will consider any new information provided. The decision by the CBCU Director or designee is final. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 6. DESIGNATED AND SUSTAINED PERPETRATORS OF CHILD ABUSE OR NEGLECT 40 TAC STATUTORY AUTHORITY The new rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rule implements Human Resources Code and What are designated perpetrators and sustained perpetrators of child abuse or neglect? (a) A designated perpetrator is a person on the DFPS central registry found by DFPS to have abused or neglected a child, but who has not exhausted his right to an administrative review or due process hearing. See Subchapter M of this chapter (relating to Administrative Reviews and Due Process Hearings). (b) A sustained perpetrator is also a person on the DFPS central registry found by DFPS to have abused or neglected a child, but who has already been offered his rights to an administrative review and due process hearing, and the: (1) Designated perpetrator's rights to the administrative review and due process hearing have expired; or (2) Finding was upheld in the due process 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 7. IMMEDIATE THREAT OR DANGER TO THE HEALTH OR SAFETY OF CHILDREN 40 TAC STATUTORY AUTHORITY The new rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rule implements Human Resources Code and What factors do the CBCU or Licensing consider when determining if a person or an operation is an immediate threat to the health or safety of children? The CBCU or Licensing considers the following: (1) The severity of the deficiency, including abuse or neglect; (2) The circumstances surrounding the deficiency, including abuse or neglect: (3) The seriousness of any injuries to children; (4) The length of time since the deficiency, including abuse or neglect, occurred; (5) Whether the deficiency has been repeated; (6) The compliance history of the operation; (7) The current regulatory status of the operation; (8) How quickly corrections to the deficiency can be made; (9) If any corrections have already been made: (10) The role of the person in the abuse or neglect; (11) The current position, role, and responsibilities of the person; and (12) The degree and/or immediacy of the threat or danger. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TexReg 5424 October 6, 2017 Texas Register

143 DIVISION TAC STATUTORY AUTHORITY LICENSED ADMINISTRATORS The new rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The new rule implements Human Resources Code and Does having a criminal history or a child abuse or neglect finding prohibit a person from becoming a licensed administrator? (a) A licensed administrator must comply with all of the background check requirements in this subchapter. Even though as a Licensed Administrator a background check was previously conducted, an operation is also required to submit a request for a background check on the administrator, as required by of this title (relating to For whom must I submit requests for background checks?). (b) In addition to complying with the relevant criminal history requirements in this subchapter, a licensed administrator is also monitored for offenses related to financial crimes, including all Title 7 Offenses Against Property, Title 8 Offenses Against Administration, and Title 11 Organized Crime offenses in the Penal Code. you: (c) You are prohibited from being a licensed administrator if (1) Have a criminal history or a child abuse or neglect finding that would bar you from being present at an operation; (2) Are on a sex offender registry; or (3) Have a felony conviction of a financial crime, as specified in subsection (b) of this section, within the past 10 years. (d) You are not prohibited from being a licensed administrator if you have a felony conviction of a financial crime older than 10 years or a misdemeanor conviction of a financial crime. However, these crimes do require a risk evaluation and Licensing may place restrictions on your license. You must have an approved risk evaluation before you may be present at an operation. (e) You are not prohibited from being a licensed administrator if you have a criminal history or a child abuse or neglect finding that only requires a risk evaluation. However, Licensing may place restrictions on your license. You must have an approved risk evaluation before you may be present at an operation. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) SUBCHAPTER L. ENFORCEMENT ACTIONS DIVISION 5. MONETARY ACTIONS 40 TAC STATUTORY AUTHORITY The amended rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rule implements Human Resources Code and When may Licensing impose a monetary penalty before a corrective action? We may impose a monetary penalty before imposing a corrective action any time we find: (1) A [a] violation of a high risk standard, as identified on the DFPS public website, along with the Licensing enforcement methodology; or (2) One [one] of the following: (A) A [a] failure to timely submit the information required to conduct a background [and criminal history] check under Subchapter F of this chapter (relating to Background Checks) on two or more occasions; (B) You knowingly allow a person to be present at your operation before you receive notification from the CBCU that a person is eligible, eligible with conditions, or provisionally eligible with conditions to be present at your operation; [except as provided in of this title (relating to How soon after I request a background check on a person can that person provide direct care or have direct access to a child?), you knowingly allow a person to be present in your child-care operation before you have received the results of the person's background and criminal history check;] (C) You knowingly allow a person to be present at your operation after you have received notification from the CBCU that the person is ineligible to be present at your operation; [in your child-care operation after you have received the person's background and criminal history check, if the results contain criminal history or central registry findings that preclude the person from being present in the child-care operation;] or (D) You violate a condition or restriction that the CBCU has [we have] placed on a person's presence at your [child-care] operation as part of the CBCU background check determination or a Licensing safety plan. [a pending or approved risk evaluation of the person's background and criminal history or central registry findings.] 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PROPOSED RULES October 6, TexReg 5425

144 SUBCHAPTER N. ADMINISTRATOR LICENSING DIVISION 1. OVERVIEW OF ADMINISTRA- TOR'S LICENSING 40 TAC , STATUTORY AUTHORITY The amended rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rules implement Human Resources Code and Do I qualify for a CCAL? You qualify for a CCAL if you: (1) Pass an examination, which is offered by DFPS, that demonstrates competence in the field of child-care administration; (2) Be in compliance with Subchapter F of this chapter (relating to Background Checks), including not having a criminal history or child abuse or neglect finding that would prohibit you from working in a residential child-care operation; [Undergo a criminal history and central registry background check and do not have a criminal history or central registry history that would prohibit you from working in a residential child-care operation, as specified in Subchapter F of this chapter (relating to Background Checks);] (3) Have one year of full-time experience in management or supervision of personnel and programs as specified in of this title (relating to What qualifies as one year of experience in management or supervision of personnel and programs?); and (4) Have one of the following qualifications: (A) A master's or doctor of philosophy degree in social work or other area of study; or (B) A bachelor's degree and two years' full-time experience in residential child care or a closely related field Do I qualify for a CPAAL? You qualify for a CPAAL if you: (1) Pass an examination, which is offered by DFPS, that demonstrates competence in the field of child-placing administration; (2) Be in compliance with Subchapter F of this chapter (relating to Background Checks), including not having a criminal history or child abuse or neglect finding that would prohibit you from working in a residential child-care operation; [Undergo a criminal history and central registry background check and do not have a criminal history or central registry history that would prohibit you from working in a residential child-care operation, as specified in Subchapter F of this chapter (relating to Background Checks);] (3) Have one year of full-time experience in management or supervision of personnel and programs as specified in of this title (relating to What qualifies as one year of experience in management or supervision of personnel and programs?); and (4) Have one of the following qualifications: (A) A master's or doctor of philosophy degree in social work or other area of study; or (B) A bachelor's degree and two years' full-time experience in residential child care or a closely related field. 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 2. SUBMITTING YOUR APPLICATION MATERIALS 40 TAC STATUTORY AUTHORITY The amended rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rule implements Human Resources Code and What other actions must I take to become a licensed administrator? In addition to submitting the background check request form required by of this title (relating to What does a complete application to become a licensed administrator include?), you must submit fingerprints for a fingerprint-based criminal history check, as specified in [provided under ] of this title (relating to How does a person [do I] submit fingerprints for a fingerprint-based criminal history check?), unless the CBCU determines that you have previously undergone a fingerprint-based criminal history check that remains valid, as specified in [provided under ] of this title (relating to Does a person who has already undergone [If] a fingerprint-based criminal history check have to [has already been completed on a person, must that person] submit new fingerprints [at the time my initial or renewal background check on that person is due]?). 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) TexReg 5426 October 6, 2017 Texas Register

145 DIVISION 4. RENEWING YOUR ADMINISTRATOR LICENSE 40 TAC , STATUTORY AUTHORITY The amended rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rules implement Human Resources Code and Am I eligible to renew my administrator's license? [(a)] must: To be eligible to renew your administrator's license, you (1) Be in current compliance with all applicable laws, including these rules; (2) Have completed 15 clock hours of continuing education each year during the two-year period before renewal; (3) Be in compliance with Subchapter F of this chapter (relating to Background Checks), including not having [Undergo a new name-based criminal history and central registry background check and may not have] a criminal history or child abuse or neglect finding [central registry history] that would prohibit you from working in a residential child-care operation[, as specified in Subchapter F of this chapter (relating to Background Checks)]; and (4) Submit the appropriate renewal fee. [(b) In addition to undergoing a name-based background check as provided under subsection (a) of this section, you must submit fingerprints for a fingerprint-based criminal history check, as provided under of this title (relating to How do I submit fingerprints for a fingerprint-based criminal history check?), unless you have previously undergone a fingerprint-based criminal history that remains valid, as provided under of this title (relating to If a fingerprint-based criminal history check has already been completed on a person, must that person submit new fingerprints at the time my initial or renewal background check on that person is due?).] What are the renewal requirements if I have both a CCAL and a CPAAL? [(a)] You must: (1) Pay [pay] the appropriate renewal fee for each license;[.] (2) [(b)] Complete [You must complete] the renewal form for each license; and[.] [(c) You must submit a completed background check form and fee every two years, or present evidence every two years of your cleared criminal history and central registry checks as required in Subchapter F of this chapter (relating to Background Checks).] (3) [(d)] Submit [You must submit] evidence that you have completed 15 clock hours of continuing education each year during the two-year renewal period for each license. The same training hours may be counted toward both licenses only if the training appropriately applies to both license types. (For example, training on adoption law would count toward renewal of a Child-Placing Agency Administrator's License but not a Child Care Administrator's License, whereas training on federal equal employment opportunity hiring requirements and guidelines would count toward renewal of both licenses.) 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 5. MILITARY MEMBERS, MILITARY SPOUSES, AND MILITARY VETERANS 40 TAC , STATUTORY AUTHORITY The amended rules are proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rules implement Human Resources Code and What special considerations can Licensing give to a military member, military spouse, or military veteran that applies for an administrator's license? (a) The following special considerations are applicable to a military member, military spouse, or military veteran that applies for an administrator's license: (1) In addition to Licensing's authority to waive prerequisites for an administrator's license in of this title (relating to Can my licensure in another state qualify me for an administrator's license?), the Assistant Commissioner for Licensing or a designee may waive any prerequisite to get an administrator's license if you held an administrator's license in Texas within five years preceding the application date and your credentials provide compelling justification that your experience and education qualifies you to act as a licensed administrator; (2) In place of the experience or educational qualifications described in this subchapter, the Assistant Commissioner for Licensing or a designee may: (A) Credit a military member or military veteran for verified military service, training, or education; or (B) Substitute any demonstrated competency a military member, military spouse, or military veteran has that in the opinion of the Assistant Commissioner or a designee meets the qualifications; (3) Licensing will waive the application and examination fees for: PROPOSED RULES October 6, TexReg 5427

146 (A) A military member or military veteran whose military service, training, or education substantially meets all of the qualifications for an administrator's license; or (B) A military member, military spouse, or military veteran who holds a current license issued by another state whose license requirements are substantially equivalent to those in Texas. (b) If Licensing issues you an administrator's license under subsection (a)(1) or (2) of this section, the license will be a full license and not a provisional license. (c) To be eligible for any special consideration under subsection (a)(1) or (2) of this section, you may not be prohibited from being a licensed administrator, as specified in (c) [have criminal history or central registry history that would prohibit you from obtaining an administrator's license, as provided by ] of this title (relating to Does having a criminal history or a child abuse or neglect [Central Registry] finding prohibit a person [me] from becoming a licensed administrator?) What special considerations may apply to the renewal of a military member's administrator's license? (a) The following special considerations are applicable to the renewal of a military member's administrator's license: (1) Your administrator's license will no longer be valid after two years, but the license will be considered dormant until you request Licensing to renew it or for two additional years, whichever comes first; (2) No continuing education will be required prior to renewal; and (3) Licensing will waive late renewal fees required under (a)(2) and (3) of this title (relating to How much is the renewal fee?) if you establish that your failure to renew the license in a timely manner was due to your service as a military member. (b) To be eligible for any special consideration [as provided] under this section, you may not be prohibited from being a licensed administrator, as specified in (c) [have criminal history or central registry history that would prohibit you from obtaining an administrator's license, as provided by ] of this title (relating to Does having a criminal history or a child abuse or neglect [Central Registry] finding prohibit a person [me] from becoming a licensed administrator?). 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) DIVISION 6. REMEDIAL ACTIONS 40 TAC STATUTORY AUTHORITY The amended rule is proposed under Human Resources Code (HRC) and Government Code , which provide that the Health and Human Services Executive Commissioner shall adopt rules for the operation and provision of services by health and human services agencies. The amended rule implements Human Resources Code and Under what circumstances may Licensing take remedial action against my administrator's license or administrator's license application? (a) We may take remedial action against your administrator's license or administrator's license application if you: (1) Violate Chapter 43 of the Human Resources Code or a rule of DFPS; (2) Circumvent or attempt to circumvent the requirements of Chapter 43 of the Human Resources Code or a Licensing rule; (3) Engage in fraud or deceit related to the requirements of Chapter 43 of the Human Resources Code or a Licensing rule; (4) Provide false or misleading information to us during the application or renewal process for your own or someone else's application or license; (5) Make a statement about a material fact during the license application or renewal process that you know or should know is false; (6) Do not comply with [Have a criminal history or central registry record that:] [(A)] [Would prohibit you from working in a facility as specified in] Subchapter F of this chapter (relating to Background Checks); [or] [(B) Is relevant to the duties of a licensed administrator, as outlined in of this title (relating to What criminal history and central registry findings are relevant to a person's ability to be a licensed administrator?);] (7) Use or abuse drugs or alcohol in a manner that jeopardizes your ability to function as an administrator; (8) Perform your duties as a licensed administrator in a negligent manner; or (9) Engage in conduct that makes you ineligible to: (A) Receive a permit under Human Resources Code (HRC) ; or (B) Be employed as a controlling person or serve in that capacity in a facility or family home under HRC (b) If we revoke your administrator's license, you are not eligible to apply for another administrator's license for five years after the date the license was revoked. (c) If you have both a Child Care Administrator's License and a Child-Placing Agency Administrator's License, remedial action may be taken against both licenses. If we take remedial action against both of your licenses, you will be notified that the action applies to both licenses. In such a case, any administrative review and/or due process hearing for both licenses may be combined at our discretion. (d) If we revoke or do not renew your license, you must return your license certificate to us. 42 TexReg 5428 October 6, 2017 Texas Register

147 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 September 22, TRD Karen Ray Chief Counsel Department of Family and Protective Services Earliest possible date of adoption: November 5, 2017 For further information, please call: (512) PROPOSED RULES October 6, TexReg 5429

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149 TITLE 1. ADMINISTRATION PART 15. TEXAS HEALTH AND HUMAN SERVICES COMMISSION CHAPTER 355. REIMBURSEMENT RATES The Texas Health and Human Services Commission (HHSC) adopts two new rules: , concerning Reimbursement for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS); and , concerning Reimbursement for Physical, Occupational, and Speech Therapy Services. HHSC adopts the repeal and new , concerning Reimbursement for Home Health Services. HHSC adopts amendments to , concerning Reimbursement Methodology for Customized Equipment; , concerning Reimbursement Methodology for Telemedicine, Telehealth, and Home Telemonitoring Services; , concerning Reimbursement Methodology for Physicians and Other Practitioners; , concerning Reimbursement Methodologies for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services; and , concerning Reimbursement Methodology for Family Planning Services. New , the repeal and new , and the amendments to , , , and are adopted without changes to the proposed text published in the March 24, 2017, issue of the Texas Register (42 TexReg 1303), and the text of the rules will not be republished. New and amended are adopted with changes to the proposed text published in the March 24, 2017, issue of the Texas Register (42 TexReg 1303) and will be republished. Section (Reimbursement Methodology for Physical, Occupational, and Speech Therapy) is adopted with changes based on the General Appropriations Act, Senate Bill 1, 85th Legislature, Regular Session, 2017 (Article II, HHSC, Rider 218) that directed HHSC to phase in the reductions for therapy assistant services. Rider 218 pends implementation of reductions related to services provided by therapy assistants until December 1, 2017, and September 1, A reduction of rates paid for services delivered by therapy assistants to 85 percent of the rate paid to a licensed therapist will be effective December 1, 2017, and a further reduction to 70 percent of the rate paid to a licensed therapist will be effective September 1, As a result of Rider 218, was amended to add effective dates of December 1, 2017, and September 1, 2018, with the respective percentage reduction as noted above. BACKGROUND AND JUSTIFICATION The new rules and separate home health services and durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) into unique rule sections and update outdated references to reflect current methodologies. As a result of these changes, changes for the following rules are administrative updates to rule references and formatting clean-up: , , and The amendments to include additional language related to reimbursement for services provided by licensed psychology interns and fellows. As of January 1, 2017, Medicaid reimburses for services provided by licensed psychology interns and fellows; therefore, this rule is amended to reflect recent reimbursement updates. The new outlines the current reimbursement methodology for therapy services and defines the reimbursement percentage for services provided by therapy assistants at a percentage of the rate for a licensed therapist. Medicaid currently reimburses for services provided by physical, occupational and speech therapy assistants at the same rate as a licensed therapist. The amendments to include updating rule references based on the changes outlined above and clarification of existing reimbursement methodologies. All rule sections are updated to incorporate a reference to , concerning Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission, which indicates that notwithstanding any other provision of Chapter 355, HHSC may adjust fees, rates, and charges paid for medical assistance as described under the provisions of (d) and (e) of the Texas Government Code. COMMENTS The 30-day comment period for the new, repealed, and amended rules ended April 24, During the comment period, HHSC received comments from: A to Z Pediatric Therapy Action Therapy Services All about Kids Home Health Angel Kisses Occupational Therapy Angels of Care Anna's Speech Therapy Services, PLLC Aptus Therapy Services At Home Healthcare Atlas Pediatric Therapy Aveanna (PSA Healthcare) Carousel Pediatrics ADOPTED RULES October 6, TexReg 5431

150 Child's Play Therapeutic Homecare Circle of Care Coalition for Nurses in Advanced Practice Cole Health Children's Health Home Care Collab Therapeutic Services, LLC Communication Circle Communication Essentials Communication Helpers of South Houston, Inc. Cornerstone Pediatric Therapy Countryside Therapy Group Easter Seals Epic Health Services Gulf Coast Therapy Services Himmel Home Health Houston Pediatric Therapy Independent Therapy Providers Association (IPTA) Jump Start Physical Therapy KidsCare Therapy Kids Developmental Clinic Kids Developmental Therapy Life Skills Therapy Lifespan Assessment Speech Therapy Little Angels Therapy Little Engine Home Care Medcare Pediatric Therapy and Nursing Mercy Kids Rehab Milestone Therapy Services Pediatric Occupational Therapy Services Premier Pediatric Therapy Sage Care Therapy Small Hands, Big Hearts Pediatric Therapy Management Speech Therapy Unlimited Step by Step Home Care Texas Association of Home Care and Hospice Texas Occupational Therapy Association Texas Physical Therapy Association Texas Society of Anesthesiologists Texas Speech-Language and Hearing Association Therapy Circles Tyler Junior College Occupational Therapy Assistant Program Staff Below is a summary of the comments received and HHSC s responses. No changes were made to the proposed rules as a result of the comments. Related to , concerning Reimbursement Methodology for Customized Equipment. Comment: One commenter expressed the belief that this rule change would negatively impact the ability of individuals who depend on powered mobility equipment to lead their daily lives because the rule change would make the equipment more difficult to obtain. The commenter suggested Medicaid coverage of powered adaptive wheelchairs is inappropriately subjected to the whims of budgetary factors. Response: HHSC disagrees with this comment because the rule does not change the eligibility requirements for wheeled mobility equipment. Related to , concerning Reimbursement Methodology for Telemedicine, Telehealth, and Home Telemonitoring Services. Comment: One commenter suggested combining (b)(3) and (b)(4) because certified nurse midwives are advanced practice registered nurses (APRNs). The commenter also recommended adding APRNs to (f) as eligible providers because APRNs might provide telemedicine in a school-based setting or potentially be a child s primary care provider. Response: HHSC disagrees that the changes suggested by the commenter are necessary or appropriate. Subsections (b)(3) and (b)(4) in are separated because they each reference a different reimbursement methodology specific to APRNs ( ) or certified nurse midwives ( ). The reimbursement methodology for APRNs is summarized in rule , Reimbursement Methodology for Nurse Practitioners and Clinical Nurse Specialists; therefore, HHSC believes it is unnecessary to add APRNs to rule Related to , concerning Reimbursement Methodology for Home Health Services Comment: Several commenters opposed the language in (c) because it seems too broad and subjective. The commenters requested clarifying language. Response: HHSC understands the concerns related to (c). Prior to implementation of any new Medicaid reimbursement rate, a public rate hearing would be held to collect comments on the proposed rate. This is an important step in the Medicaid reimbursement rate process that allows the State to receive additional input on proposals prior to implementation and, if required, adjust the proposal. In addition, new Medicaid reimbursement rates require submission and approval of a State Plan Amendment to the Centers for Medicare and Medicaid (CMS). Subsection (c) in provides flexibility to implement reimbursement rate changes as required to maintain access to care for services where other listed methodologies may not be sufficient. Related to Rule , concerning Reimbursement Methodology for Physicians and Other Practitioners. Comment: Several commenters requested language related to surveying the cost of provider services be added back to (a) in place of new language that includes an analysis of fees paid by commercial insurance. 42 TexReg 5432 October 6, 2017 Texas Register

151 Response: HHSC does not collect certified cost reports from acute care therapy providers; therefore, this language was removed to reflect current practice. HHSC will retain the reference to commercial insurance because it typically pays more than Medicaid for the same service. Comment: Two commenters indicated they believed CMS pricing for anesthesia should not be used as a basis for rate determination. The commenters also supported consideration of commercial rates for anesthesia before other options. Response: HHSC disagrees that CMS pricing Medicare should not be a basis for rate determination in Medicaid. Both Medicare and Medicaid rates are dependent on approval from CMS; therefore, the Medicare rates are a valid benchmark for Medicaid rate comparisons. A reference to commercial rates is included in (2)(c) but is not considered before other options because Medicaid typically reimburses at a percentage of the Medicare rate as approved in the State Plan. Comment: One commenter suggested including APRNs to the list of eligible providers in (b), because physicians are not the only practitioners administering drugs in offices, clinics, or other settings. The commenter noted that the Texas Department of Insurance has also changed two of its pharmacy benefits, 28 TAC (c)(3)(C) and (c)(2), to read "physician- or practitioner-administered setting." The commenter also recommends similar revisions to (e) and (e)(6) to change "physician-administered drugs" to "physician- or practitioner-administered drugs." Response: The reimbursement methodology for APRNs is summarized in rule , Reimbursement Methodology for Nurse Practitioners and Clinical Nurse Specialists; therefore, HHSC believes it is unnecessary to add APRNs to rule HHSC chooses to use "physician-administered drugs" to maintain consistency with terminology used Section 1927 of the Social Security Act. Related to , concerning Reimbursement for Physical, Occupational, and Speech Therapy Services. Comment: Several commenters stated there is a shortage of qualified therapists across the country. The commenters further stated therapy assistants are vital members of the therapy workforce in the state of Texas and play a valuable role in the provision of therapy services to Medicaid clients. Response: HHSC agrees with the commenters statements. The proposed therapy assistant reimbursement rate is not intended to diminish the importance of therapy assistants but to fulfill HHSC s responsibility to provide payments that are consistent with efficiency, economy, and quality of care. Comment: Several commenters stated they believed the 70 percent reimbursement for therapy assistants does not account for supervision, time, or travel for therapy assistants. Other commenters similarly expressed a belief that the 70 percent reimbursement for therapy assistants does not sufficiently account for administrative costs, policy and regulatory requirements, claims processing, referral tracking, securing physician signatures, and searching for authorizations. Response: HHSC disagrees that the proposed rates do not sufficiently account for overhead and other expenses as described by the commenters. The 70 percent reimbursement for therapy assistants is based on the salary ratio between therapists and therapy assistants as reported by the United States Bureau of Labor and Statistics, and the existing reimbursement rate for therapists is sufficient to account for a reasonable margin for administrative expenses. Comment: Several commenters stated there is no difference between the service provided by a therapy assistant and a therapist, so they should not be reimbursed differently. Response: HHSC disagrees with the commenters statement because there is a difference in both education and scope of practice between therapy assistants and therapists. Reimbursing therapists and therapy assistants at different rates on this basis is reflective of reimbursement rates for other types of medical providers in Texas Medicaid. For example, physician assistants are reimbursed at 92 percent of the rate paid to a physician for the same service; and licensed clinical social workers, licensed professional counselors, and licensed marriage and family therapists are reimbursed at 70 percent of the rate paid to psychologists or psychiatrists for the same service. Comment: Several commenters suggested therapy assistants be reimbursed at 92 percent of the rate reimbursed for licensed therapists, similar to the methodology for physicians and physician assistants. Response: HHSC was unable to find a justifiable basis for reimbursing therapy assistants at 92 percent of the therapists rate when researching either the national salary data for therapy services or other states Medicaid rates that supported the salary data. The commenters did not submit additional documentation to support the position that therapy assistants should be reimbursed at 92 percent of the therapists rate. Comment: Several commenters requested a study of the UB modifier implemented May 1, 2016, denoting services provided by therapy assistants to be conducted prior to implementation of the 70 percent reimbursement methodology for therapy assistants. Response: HHSC reviewed claims data for the UB modifier to identify services provided by therapy assistants for dates of service May 1, 2016, to July 31, 2016, to estimate the proportion of services provided by therapy assistants prior to publication of the proposed rule. Comment: Several commenters theorized that reducing therapy assistant reimbursement to 70 percent of the published rate for therapists would result in reduced access to care due to one or more of the following claims: (1) reduced ability to hire therapy assistants in rural areas leading to a disparate negative impact on the availability of services to rural populations; (2) reduced supply of bilingual therapists who are difficult to find, in high demand, and play a pivotal role in meeting the needs of a large segment of the Medicaid pediatric therapy population; (3) therapy assistants currently make 15 percent below the national average of the wages for the combination of occupational therapy, physical therapy, and speech therapy assistants and a 30 percent reduction would force many to seek employment elsewhere or leave the industry completely; and (4) waiting lists for those waiting to receive services may increase. Several parents also raised concerns about maintaining existing access to care if therapy assistants are reimbursed less than therapists. Response: Both HHSC and CMS have statutory responsibility to provide payments that are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under Medicaid at least to the extent that such care and services are available to the general population in the geographic area. HHSC routinely monitors ADOPTED RULES October 6, TexReg 5433

152 access to care. HHSC will continue to monitor for access to care issues in all areas of the state following adoption of the rule and will address any issues as they arise. Comment: Several commenters requested adding language in (b) that would allow HHSC to review fees for therapy services based surveying the cost of provider services rather than the language in (b)(3) allowing HHSC to review fees for therapy services based on the analysis of fees paid by commercial insurers. Response: HHSC will retain the reference to commercial insurance because it typically pays more than Medicaid for the same service. In addition, HHSC does not collect certified cost reports from acute care therapy providers; therefore, surveying the cost of provider services is not an option available for use as a basis for reimbursement rates. Comment: Several commenters requested HHSC strike the language in (b)(3) concerning review of what commercial insurers pay in the private market, stating it is not a comparable methodology. Response: HHSC disagrees with commenters statement. Commercial insurance reimburses for physical, occupational, and speech therapy services. HHSC did not receive any evidence supporting the position that therapy received by a child with private insurance is not comparable to the same type of therapy received by a child with Medicaid. Comment: Several commenters focused on issues related to services provided in managed care. The commenters stated their contracts with managed care organization (MCOs) are lower than the published Medicaid rates and that a further reduction would not be sustainable. Response: HHSC does not believe these comments are relevant to the proposed rule. The rule applies to reimbursement for services provided in fee-for-service Medicaid. Further, HHSC does not dictate the contractual terms between Medicaid MCOs and their subcontracted providers. This negotiation process is a confidential matter between the MCO and the provider. Comment: One commenter asserted that because Medicarecertified home health agencies and Medicare-certified Comprehensive Outpatient Rehabilitation Facilities and Outpatient Rehabilitation Facilities (CORFs/ORFs) participate in Texas Medicaid, Medicare requirements for therapy assistants, including all billing-related requirements, must be met. The commenter further asserted that Medicare certification prohibits payment for services provided by speech therapy assistants even if licensed by the state. Response: HHSC interprets the comment to be related to conditions for participation for home health agencies, which is beyond the scope of the proposed rule. Comment: One commenter stated it was difficult to assess the overall negative impact of this rule change without the details of other proposed therapy policy initiatives because only a summary of these other initiatives had been released at the time of public comment on the proposed rule. Response: HHSC understands this statement to be a comment on the rulemaking process rather than on the proposed rule change. Comment: One commenter indicated that they understand the need for inclusion of other data sources or methodologies as outlined in proposed (c) but raised a concern that unless the methodologies applied are those commonly used in the healthcare industry, this exception to typical rate methodology provides an unchecked avenue for excessive rates that jeopardize federal matching funds and unintentionally alter the healthcare markets. Response: HHSC understands the concerns related to (c). Prior to implementation of any new Medicaid reimbursement rate, a public rate hearing would be held to collect comments on the proposed rate. This is an important step in the Medicaid reimbursement rate process that allows the State to receive additional input on proposals prior to implementation and, if required, adjust the proposal. In addition, new Medicaid reimbursement rates require submission and approval of a State Plan Amendment to CMS. Subsection (c) in , provides flexibility to implement reimbursement rate changes as required to maintain access to care for services where other listed methodologies may not be sufficient. Related to , concerning Reimbursement Methodologies for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services. Comment: One commenter requested HHSC strike the language in concerning review of what commercial insurers pay in the private market because it is not a comparable methodology and recommends replacement with "a survey of costs reported by Medicaid providers." Response: HHSC does not collect certified cost reports from acute care EPSDT providers; therefore, this language was removed to reflect current practice. HHSC will retain the reference to commercial insurance because it typically pays more than Medicaid for the same service. Related to Rule , concerning Reimbursement Methodology for Family Planning Services. Comment: One commenter suggested amending "physician-administered" in (a)(1) to read, "physician- or practitioner-administered." Response: HHSC chooses to use "physician-administered drugs" to maintain consistency with terminology used Section 1927 of the Social Security Act. SUBCHAPTER C. REIMBURSEMENT METHODOLOGY FOR NURSING FACILITIES 1 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32. 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 5434 October 6, 2017 Texas Register

153 Filed with the Office of the Secretary of State on September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) SUBCHAPTER G. ADVANCED TELECOM- MUNICATIONS SERVICES AND OTHER COMMUNITY-BASED SERVICES 1 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32. 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) SUBCHAPTER J. PURCHASED HEALTH SERVICES DIVISION 2. MEDICAID HOME HEALTH PROGRAM 1 TAC STATUTORY AUTHORITY The repeal is adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32. 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TAC , STATUTORY AUTHORITY The new rules are adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32. 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) DIVISION 5. GENERAL ADMINISTRATION 1 TAC , STATUTORY AUTHORITY The amendment and new rule are adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) ADOPTED RULES October 6, TexReg 5435

154 program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter Reimbursement Methodology for Physical, Occupational, and Speech Therapy Services. (a) Introduction. This section describes the Texas Medicaid reimbursement methodology that the Texas Health and Human Services Commission (HHSC) uses to calculate payments for covered therapy services provided by home health agencies, comprehensive outpatient rehabilitation facilities or outpatient rehabilitation facilities, independent therapists (including Early Childhood Intervention) and physicians and other practitioners. (b) HHSC reviews the fees for individual services at least every two years based upon: (1) analysis of Medicare fees for the same or similar item or service; (2) analysis of Medicaid fees for the same or similar item or service in other states; and (3) analysis of fees paid under commercial insurance for the same or similar item or service. (c) HHSC may use data sources or methodologies other than those listed in subsection (b) of this section to establish Medicaid fees for physical, occupational, and speech therapy services when HHSC determines that those methodologies are unreasonable or insufficient. (d) Medicaid reimbursement methodologies for other applicable provider types are as follows: (1) freestanding psychiatric facilities, under of this subchapter (relating to Reimbursement Methodology for Freestanding Psychiatric Facilities); and (2) outpatient hospitals, under of this subchapter (relating to Outpatient Hospital Reimbursement). (e) Reimbursement for services provided under the supervision of a licensed physical therapist, licensed occupational therapist, or licensed speech language pathologist. Reimbursement for services provided by a physical therapy assistant, occupational therapy assistant, or speech language pathologist assistant under the supervision of a licensed physical therapist, licensed occupational therapist, or licensed speech language pathologist is reimbursed at 85 percent of the fee paid to a licensed therapists for the same service provided on and after December 1, 2017 and at 70 percent of the fee paid to the licensed therapist for the same service provided on or after September 1, (f) Fees for physical, occupational, and speech therapy services are adjusted within available funding as described in of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission). 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) DIVISION 23. EARLY AND PERIODIC SCREENING, DIAGNOSIS, AND TREATMENT (EPSDT) 1 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter Reimbursement Methodologies for Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) Services. (a) The following are reimbursement methodologies for services provided under the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program, delivered to Medicaid clients under age 21, also known as Texas Health Steps (THSteps) and the THSteps Comprehensive Care Program (CCP). Reimbursement methodologies for services provided to all Medicaid clients, including clients under age 21, are located elsewhere in this chapter. (1) Counseling and psychotherapy services are reimbursed to freestanding psychiatric facilities in accordance with of this subchapter (relating to Reimbursement Methodology for Freestanding Psychiatric Facilities). (2) Durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) are reimbursed in accordance with of this subchapter (relating to Reimbursement Methodology for Durable Medical Equipment, Prosthetics, Orthotics and Supplies(DMEPOS)). (3) Nursing services, including, but not limited to, private duty nursing, registered nurse (RN) services, licensed vocational nurse/licensed practical nurse (LVN/LPN) services, skilled nursing services delegated to qualified aides by RNs in accordance with the licensure standards promulgated by the Texas Board of Nursing, and nursing assessment services, are reimbursed the lesser of the provider's billed charges or fees established by the Texas Health and Human Services Commission (HHSC) for each of the applicable provider types as follows: (A) Independently enrolled RNs and LVNs/LPNs, under of this subchapter (relating to Reimbursement Methodology for Physicians and Other Practitioners); (B) Home health agencies (HHAs), under of this subchapter (relating to Reimbursement Methodology for Home Health Services); and 42 TexReg 5436 October 6, 2017 Texas Register

155 (C) Advanced Practice Registered Nurses (APRNs), under (a) of this subchapter (relating to Reimbursement Methodology for Nurse Practitioners and Clinical Nurse Specialists). (4) Physician Assistants (PA), under of this subchapter (relating to Reimbursement Methodology for Physician Assistants). (5) Physical therapy services are reimbursed in accordance with the Medicaid reimbursement methodologies for the applicable provider type as follows: (A) independently enrolled therapists, under of this subchapter; (B) HHAs, under of this subchapter; (C) Medicare-certified outpatient facilities known as comprehensive outpatient rehabilitation facilities (CORFs) and outpatient rehabilitation facilities (ORFs), under of this subchapter; (D) freestanding psychiatric facilities, under of this subchapter; and (E) outpatient hospitals, under of this subchapter (relating to Outpatient Hospital Reimbursement). (6) Occupational therapy services are reimbursed in accordance with the Medicaid reimbursement methodologies for the applicable provider type as follows: (A) independently enrolled therapists, under of this subchapter; (C) CORFs and ORFs, under of this subchapter; (B) HHAs, under of this subchapter; (D) freestanding psychiatric facilities, under of this subchapter; and (E) outpatient hospitals, under of this subchapter. (7) Speech-language pathology services are reimbursed in accordance with the Medicaid reimbursement methodologies for the applicable provider type as follows: (A) independently enrolled therapists, under of this subchapter; (C) CORFs and ORFs, under of this subchapter; (B) HHAs, under of this subchapter; (D) freestanding psychiatric facilities, under of this subchapter; and (E) outpatient hospitals, under of this subchapter. (8) Nutritional services provided by licensed dietitians are reimbursed the lesser of the provider's billed charges or fees determined by HHSC in accordance with of this subchapter. (9) Providers are reimbursed for the administration of immunizations the lesser of the provider's billed charges or fees determined by HHSC in accordance with of this subchapter. (10) Vaccines are reimbursed the lesser of the provider's billed charges or the fees determined by HHSC in accordance with of this subchapter. (11) Dental services are reimbursed in accordance with the following Medicaid reimbursement methodologies: (A) Dental services provided by enrolled dental providers are reimbursed in accordance with of this subchapter. (B) Dental services provided by federally qualified health centers (FQHCs) are reimbursed in accordance with of this subchapter (relating to Federally Qualified Health Center Services Reimbursement). (C) Subject to approval by the Centers for Medicare and Medicaid Services, for services provided on or after March 1, 2012, publicly owned dental providers may be eligible to receive Uncompensated Care payments for dental services under the Texas Healthcare Transformation and Quality Improvement 1115 Waiver. For purposes of this section, Uncompensated Care ("UC") payments are payments intended to defray the uncompensated costs of services that meet the definition of "medical assistance" contained in 1905(a) of the Social Security Act. HHSC will calculate UC payments using the following methodology: (i) Eligible dental providers must submit an annual cost report based on the federal fiscal year. HHSC will provide the cost report form with detailed instructions to enrolled dental providers. Cost reports are due to HHSC 180 days after the close of the applicable reporting period. Providers must certify that expenditures submitted on the cost report have not been claimed on any other cost report. (ii) Payments to eligible providers will be based on cost and payment data reported on the cost report along with supporting documentation. As defined in the cost report and detailed instructions, a cost-to-billed-charges ratio will be used to calculate total allowable cost. The total allowable cost minus any payments will be the UC payment due to the provider. The UC payment is calculated yearly and is contingent on receipt of funds as specified in clause (iii) of this subparagraph. (iii) The funding for the state share of UC payments is limited to, and obtained through, intergovernmental transfers of funds from the governmental entity that owns and operates the dental provider. An intergovernmental transfer that is not received in the manner and by the date specified by HHSC may not be accepted. (iv) UC payments are limited by the publicly owned dental provider pool aggregate limit as determined by of this subchapter (relating to Waiver Payments to Hospitals for Uncompensated Care). (v) If actual UC costs for all eligible publicly owned dental providers is greater than the publicly owned dental provider pool aggregate limit as described in clause (iv) of this subparagraph, then HHSC will reduce the UC payments for all eligible publicly owned dental providers proportionately. (vi) If a UC payment results in an overpayment or if the federal government disallows federal financial participation related to the receipt or use of supplemental payments under this section, HHSC may recoup an amount equal to the federal share of supplemental payments overpaid or disallowed. To satisfy the amount owed, HHSC may recoup from any current or future Medicaid payments. (12) Personal care services (PCS) are reimbursed in accordance with the following Medicaid reimbursement methodologies for the applicable provider type: (A) School districts delivering PCS under School Health and Related Services (SHARS) are reimbursed in accordance ADOPTED RULES October 6, TexReg 5437

156 with of this division (relating to Reimbursement Methodology for School Health and Related Services (SHARS)); and (B) Providers other than school districts delivering PCS are reimbursed as follows: (i) PCS and PCS delivered in conjunction with delegated nursing services are reimbursed fees determined by HHSC. HHSC reviews the fees for individual services at least every two years based upon: (I) analysis of Medicare fees for the same or similar item or service; (II) analysis of Medicaid fees for the same or similar item or service in other states; or (III) analysis of commercial fees for the same or similar item or service. (ii) HHSC may use data sources or methodologies other than those listed in clause (i) of this subparagraph to establish Medicaid fees for physicians and other practitioners when HHSC determines that those methodologies are unreasonable or insufficient. (iii) PCS delivered through the Consumer Directed Services payment option are reimbursed in accordance with of this chapter (relating to Consumer Directed Services Payment Option). (b) Fees for EPSDT services are adjusted within available funding as described in of this title (relating to Establishment and Adjustment of Reimbursement Rates by the Health and Human Services Commission) 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) DIVISION TAC STATUTORY AUTHORITY FAMILY PLANNING The amendment is adopted under Texas Government Code , which authorizes the Executive Commissioner of HHSC to adopt rules necessary to carry out HHSC s duties; Texas Human Resources Code and Texas Government Code (a), which provide HHSC with the authority to administer the federal medical assistance (Medicaid) program in Texas; and Texas Government Code (b), which establishes HHSC as the agency responsible for adopting reasonable rules governing the determination of fees, charges, and rates for medical assistance payments under the Texas Human Resources Code, Chapter 32. 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 September 19, TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Effective date: December 1, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TITLE 19. EDUCATION PART 2. TEXAS EDUCATION AGENCY CHAPTER 105. FOUNDATION SCHOOL PROGRAM SUBCHAPTER A. DEFINITIONS 19 TAC The State Board of Education (SBOE) adopts an amendment to 105.1, concerning the Foundation School Program. The amendment is adopted without changes to the proposed text as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3731) and will not be republished. The adopted amendment ensures that the definition of tax collections for purposes of the Texas Education Code (TEC), , and as used in issuing additional state aid for ad valorem tax credits under the TEC, , complies with Texas Tax Code, Chapter 313. REASONED JUSTIFICATION. The rule in 19 TAC Chapter 105, Subchapter A, establishes definitions for tax collections used to calculate state aid under the TEC, Chapters 42 and 46, and to implement the wealth-equalizing provisions of the TEC, Chapter 41. Specifically, 19 TAC establishes maintenance and operations (M&O) tax collections as those taxes collected during the fiscal year that are associated with the levy of local M&O tax rates, including current and delinquent taxes and any delinquent taxes related to former county education districts, but not including penalties and interest that accrue on delinquent M&O tax levies. The adopted amendment to updates the rule to comply with Texas Tax Code, Chapter 313, and excludes Chapter 313 tax credits from tax collections used to calculate state aid under TEC, Chapter 42, and recapture under TEC, Chapter 41. Additional state aid for ad valorem tax credits issued under the TEC, , would be issued in accordance with Texas Tax Code, Chapter 313. The SBOE approved the amendment for first reading and filing authorization at its June 23, 2017 meeting and for second reading and final adoption at its September 15, 2017 meeting. In accordance with the TEC, 7.102(f), the SBOE approved the amendment for adoption by a vote of two-thirds of its members to specify an effective date earlier than the beginning of the TexReg 5438 October 6, 2017 Texas Register

157 2019 school year. The earlier effective date will implement the latest policy in a timely manner. SUMMARY OF COMMENTS AND RESPONSES. No public comments were received on the proposal. STATUTORY AUTHORITY. The amendment is adopted under the Texas Education Code (TEC), , which requires the commissioner of education, in accordance with the rules of the State Board of Education, to take such action and require such reports consistent with the TEC, Chapter 42, as may be necessary to implement and administer the Foundation School Program. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education 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 September 25, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Effective date: October 15, 2017 Proposal publication date: July 28, 2017 For further information, please call: (512) CHAPTER 150. COMMISSIONER'S RULES CONCERNING EDUCATOR APPRAISAL SUBCHAPTER AA. TEACHER APPRAISAL 19 TAC The Texas Education Agency adopts an amendment to , concerning teacher appraisal. The amendment is adopted without changes to the proposed text as published in the July 7, 2017, issue of the Texas Register (42 TexReg 3457) and will not be republished. The adopted amendment clarifies language relating to measures of student performance to reflect an agreement between the commissioner and concerned stakeholders. REASONED JUSTIFICATION. 19 TAC Chapter 150, Subchapter AA, describes the current state-recommended appraisal system for teachers, the Texas Teacher Evaluation and Support System (T-TESS), which has been in place since July The adopted amendment to 19 TAC clarifies and solidifies interpretation of the phrase "the performance of teachers' students" in the Texas Education Code, (a)(2), as a measure of student growth at the individual teacher level, a required component of both the state-recommended teacher appraisal system and any locally developed teacher appraisal system beginning with the school year. The adopted amendment also clarifies the flexibility a school district has in choosing and weighting student growth measures for teacher appraisal. The rules do not restrict additional factors a school district may consider. So in addition to considering how the individual teacher's students progress, under the local appraisal system school districts may also consider how teachers' students progress as a group. For example, a school district can have an additional collective component for eighth grade English teachers considering how all eighth grade English students have progressed. Under the local appraisal system, there is no required weighting for each measure. If districts are providing a single overall summative rating to teachers, they can weight each component, including student growth, at a level determined by the district. Districts can also adopt an appraisal system that does not provide a single, overall summative rating. SUMMARY OF COMMENTS AND AGENCY RESPONSES. The public comment period on the proposal began July 7, 2017, and ended August 7, No public comments were received. STATUTORY AUTHORITY. The amendment is adopted under the Texas Education Code (TEC), , which requires the commissioner of education to adopt a state-recommended appraisal process for teachers, and the TEC, , which details the local role for school districts as it relates to teacher appraisal, including locally adopted appraisal processes and appraisal timelines and frequency. CROSS REFERENCE TO STATUTE. The amendment implements the Texas Education 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 September 20, TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Effective date: October 10, 2017 Proposal publication date: July 7, 2017 For further information, please call: (512) TITLE 22. EXAMINING BOARDS PART 22. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY CHAPTER 507. EMPLOYEES OF THE BOARD 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 507.6, concerning Employee Training and Education Assistance Program, without changes to the proposed text as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3735) and will not be republished. The amendment to no longer lists a specific dollar amount but clarifies that the fees will be established by the Board. No comments were received regarding adoption of the amendment. ADOPTED RULES October 6, TexReg 5439

158 The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: October 11, 2017 Proposal publication date: July 28, 2017 For further information, please call: (512) CHAPTER 525. CRIMINAL BACKGROUND INVESTIGATIONS 22 TAC The Texas State Board of Public Accountancy adopts an amendment to 525.1, concerning Applications for the UCPAE, Issuance of the CPA Certificate, or Initial License, without changes to the proposed text as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3735). The rule text will not be republished. The amendment to incorporates language from Chapter 53 of the Occupations Code regarding criminal convictions with additional revisions so that the rule addresses only individuals applying to take the UCPAE. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is 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 September 21, TRD J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: October 11, 2017 Proposal publication date: July 28, 2017 For further information, please call: (512) TAC The Texas State Board of Public Accountancy adopts an amendment to 525.2, concerning Applications for or Renewal of a License for Applicants or Licensees with Criminal Backgrounds, with changes to the proposed text as published in the July 28, 2017, issue of the Texas Register (42 TexReg 3737) and will be republished. The word "Article" will be added to subsection (c) before The amendment to incorporates language from Chapter 53 of the Occupations Code regarding criminal convictions with additional revisions so that the rule addresses licensees applying for license renewal. No comments were received regarding adoption of the amendment. The amendment is adopted under the Public Accountancy Act (Act), Texas Occupations Code, which provides the agency with the authority to amend, adopt and repeal rules deemed necessary or advisable to effectuate the Act. No other article, statute or code is affected by the adoption Applications for or Renewal of a License for Licensees with Criminal Backgrounds. (a) The following procedure shall apply when renewing a license annually. (1) Each licensee shall be asked to respond, under penalty of perjury, to the question if he or she has ever been convicted of a felony or misdemeanor of which the board has not previously been informed. If the licensee responds in the negative and pays the required license fee, a renewal license shall be issued in accordance with established procedures. If the licensee responds affirmatively and pays the required license fee, the board may submit identifying information to the Texas Department of Public Safety and other appropriate agencies requesting conviction records on the licensee. (2) The board shall review the conviction records and either approve or deny the application for a renewal license as the evidence warrants. The board shall refund any renewal fee submitted if the application is denied. The board may suspend or revoke or refuse to renew an annual license on the basis of a prior conviction pursuant to a hearing as provided for in the Act. (b) The board may suspend the license or revoke the certificate as a result of a licensee's prior conviction of a crime relevant to the license and/or certificate following the opportunity for a hearing as provided for in the Act. The board shall notify the person in writing of the reasons for the suspension, revocation, denial or disqualification. (c) The board shall revoke a certificate for a felony offense that does not relate to the duties and responsibilities of a licensee when the felony conviction occurred less than five years before the date the person applies for a license renewal or the board becomes aware of the conviction and shall revoke a certificate for an offense listed in Article 42A.054 of the Code of Criminal Procedure or a sexually violent offense as defined in Article of the Code of Criminal Procedure. 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 September 21, TRD TexReg 5440 October 6, 2017 Texas Register

159 J. Randel (Jerry) Hill General Counsel Texas State Board of Public Accountancy Effective date: October 11, 2017 Proposal publication date: July 28, 2017 For further information, please call: (512) TITLE 30. ENVIRONMENTAL QUALITY PART 1. TEXAS COMMISSION ON ENVIRONMENTAL QUALITY CHAPTER 101. GENERAL AIR QUALITY RULES SUBCHAPTER H. EMISSIONS BANKING AND TRADING The Texas Commission on Environmental Quality (TCEQ, agency, or commission) adopts amendments to , , , , , and Sections , , , , and are adopted with changes to the proposed text as published in the March 24, 2017, issue of the Texas Register (42 TexReg 1335). Section is adopted without change to the proposed text and, therefore, will not be republished. A correction of error notice regarding the proposal was published in the March 31, 2017, issue of the Texas Register (42 TexReg 1809). The amended sections will be submitted to the United States Environmental Protection Agency (EPA) as revisions to the state implementation plan (SIP). Background and Summary of the Factual Basis for the Adopted Rules The Emissions Banking and Trading (EBT) program rules in Chapter 101, Subchapter H include market-based programs that provide sites with additional flexibility for complying with air regulations, such as the offset requirements in nonattainment new source review (NNSR) permits or the unit-specific emission limits in various state rules. Two of the EBT programs are voluntary programs designed to incentivize emissions reductions beyond regulatory requirements. In 1993, the commission adopted the emission reduction credit (ERC) rules in Subchapter H, Division 1 to allow sources in nonattainment areas to generate, bank, trade, and use credits from permanent reductions in emissions. In 1997, the commission adopted the discrete emission reduction credit (DERC) rules in Subchapter H, Division 4 to allow sources throughout the state to generate, bank, trade, and use credits from emission reductions that exceed regulatory requirements. Because the programs are market-based, the costs associated with trades of credits are not controlled. In response to recent increases in the cost and lack of availability of credits, there has been considerable interest from the regulated community for alternatives that facilitate credit generation and for flexibility in credit use, including options provided in the existing EBT rules that have historically not been used. Specifically, there has been interest in generating credits by reducing emissions from area (nonpoint) and mobile sources. However, staff research on the feasibility of generating area and mobile source credits indicated the need to address issues associated with ensuring that area and mobile source credits would meet EPA and federal Clean Air Act (FCAA) requirements. As part of a prior rulemaking, based on the identified implementation issues, on December 10, 2014, the commission proposed to remove the provisions for generating ERCs and DERCs from area and mobile sources. The commission requested comment on the proposed removal and the associated impacts of removing the potential for generation of area source credits. Additionally, the commission requested comment from individuals who support retaining an area source credit program specifically regarding suggestions for how an area source ERC or DERC program could be implemented in a manner consistent with EPA and FCAA requirements and minimize the burden to applicants. The commission subsequently received significant public comment opposing the removal of these area and mobile source credit provisions; however, although the commission asked for ideas for how we might implement the area or mobile source generation, none were received. At the June 3, 2015 Agenda, the commission retained the rules that allow area and mobile sources to generate credits. The commission emphasized that significant issues remain with generating credits from area and mobile sources in a manner consistent with federal requirements. In addition, the commission directed staff to identify potential viable options for generating credits from area and mobile sources or bring the issue back before them for potential removal. The commission also indicated that interested parties should engage with staff to discuss issues and potential options that would help to make retaining the area and mobile source generation of credits feasible. In meeting the commission's direction, staff worked with external parties, including the EPA, to identify a potentially viable solution for some area and mobile sources to generate credits. Staff also held open-participation meetings in July and December of 2016, and February and March of 2017, to present potentially viable approaches for area and mobile sources credit generation. Input from the meetings and received comments were taken into consideration in developing the adopted rulemaking. Generating Credits from Area Sources To meet federal requirements, ERCs must be generated from emissions reductions that are demonstrated to be real, quantifiable, permanent, enforceable, and surplus to the SIP and all applicable rules, and DERCs must be generated from reductions that are real, quantifiable, and surplus to the SIP and all applicable rules. Though the existing rules allow an area source to generate emissions credits, the current methods for quantifying and authorizing area emissions make it challenging to demonstrate that the emissions reductions from area sources relied on for credits meet federal requirements. Under the existing EBT rules, an area source is a stationary source that is not required to submit an annual emissions inventory (EI) under based on the quantity of emissions from the source (e.g., an account that emits less than 10 tons per year (tpy) of volatile organic compounds (VOC) or 25 tpy of nitrogen oxides (NO X ) in an ozone nonattainment area). Examples of area sources include, but are not limited to, upstream oil and gas production, small painting operations, gasoline stations, dry cleaners, and residential fuel combustion. Although emissions from area sources are relatively small, area sources are numerous enough to collectively emit significant quantities and must be ADOPTED RULES October 6, TexReg 5441

160 accounted for in SIP planning and modeling. Area sources are too small and/or too numerous to be inventoried individually. For this reason, emissions from area sources are typically estimated using county-level information such as population, emission factors, and activity or production data. County-level emission estimates pose difficulties in demonstrating that a particular emission reduction from area sources is surplus to the emissions in the SIP modeling. To effectively implement an area source EBT program, area source applicants would be required to submit facility-specific emissions information with their application to be eligible to generate credits. To generate an ERC, an area source would be required to make the emissions reductions federally enforceable through permitting actions or other federally enforceable means. Many of these area sources are typically authorized with a permit by rule, which may not currently require registration. Satisfying these requirements may create a significant regulatory and financial responsibility for these area sources, which are typically small businesses. Additionally, processing and modeling these individual sources for air quality purposes would be extremely resource intensive due to the significant number of sources. The commission adopts the rules to implement an area source program that is consistent with EPA and FCAA federal requirements. Generating Credits from Mobile Sources The existing rules allow a mobile source to generate ERCs from emissions reductions that are demonstrated to be real, quantifiable, permanent, enforceable, and surplus to the SIP and all applicable rules, and DERCs from reductions that are real, quantifiable, and surplus to the SIP and all applicable rules. Mobile sources are categorized as on-road and non-road sources. The on-road sources include automobiles, buses, trucks, and other vehicles traveling on local and highway roads. Non-road sources are any mobile combustion sources typically used off road, such as locomotives, marine vessels, off-road motorcycles, snowmobiles, lawn/garden equipment, and farm, construction, and industrial equipment. The mobile source EI used in attainment demonstration SIP revisions relies on historical and future-year emission estimates. Since there are several million mobile sources in the state, it is unrealistic to have source-specific emission estimates in the SIP for each one. Also, since there is no registration database for non-road equipment, it is impossible to obtain a comprehensive set of source-specific data such as individual equipment owners, hours of use, model years of new purchases, ages of in-use equipment, etc. Instead, the commission uses computer models, such as the EPA's Motor Vehicle Emission Simulator and Texas NONROAD, to estimate the emissions from mobile sources based on fleet-average characteristics. The models used account for emissions reductions from mobile sources that are subject to the EPA rules for engine manufacturers. For these sources, the future-year emission estimates are usually lower than the historical emissions because of the ongoing fleet turnover benefits from replacing older higher-emitting engines with newer lower-emitting units that meet more stringent standards. Proving that an emission reduction from a specific mobile source is surplus to the SIP and not accounted for through fleet turnover poses challenges for potential applicants. Federal law allows only the EPA and the State of California to establish engine certification standards for mobile sources. In the 1990s, when the EBT rules were first adopted, it was feasible to generate ERCs and DERCs from mobile sources because California standards were more stringent than the EPA standards, and there was not a requirement for California-certified vehicles or equipment to be used in Texas. However, changes in federal emission standards have essentially aligned the EPA and California standards in regards to emissions certification for mobile sources. In addition, the burden of meeting on-road vehicle and non-road equipment emission standards falls with the manufacturer and not the purchaser. As long as the vehicle or equipment met the standards in place at the time it was manufactured, the owner may operate it in most parts of Texas for years without demonstrating that the equipment consistently meets the original emissions certification standards, although annual emissions testing is required for certain on-road sources in some areas. The commission adopts this rulemaking to implement a mobile source program that addresses the legal and technical issues with generating credits from mobile sources. Meeting Federal Requirements: Surplus The adopted rulemaking revises the EBT program rules in Chapter 101 to address the implementation issues associated with crediting emissions reductions from area and mobile sources. The adopted rules ensure that area and mobile source credits are surplus to the emissions estimates used for SIP modeling by accounting for uncertainty in verifying the SIP emissions for an individual source. This uncertainty in verifying SIP emissions is produced by non-point EI estimation techniques, which do not quantify emissions on a source-level basis, and by mobile source fleet turnover assumptions used in the SIP. The EPA requires source-specific integrity elements to be a part of any economic incentive program, like the commission's EBT program (See Improving Air Quality with Economic Incentive Programs EPA-452/R ). During the development of the adopted rule amendments, questions were raised about what makes emissions surplus for purposes of generating emission credits. Surplus means that source-specific emissions reductions adopted for credit generation are not relied upon in the current SIP, or are not required by some other legal requirement, like a consent decree, permit requirement, or rule. Specifically, baseline emissions cannot exceed emissions in the most recent modeling in the attainment demonstration or the EI for other types of SIP revisions. These emissions are represented in an attainment demonstration primarily in the EI. The EI can be broken down into the point source EI, the area source EI, and the mobile source EI. Due to different requirements for the different types of sources, each EI is developed differently. Point sources are required to keep records and report their actual emissions for the point source EI on an annual basis to the TCEQ. The area source EI is developed from activity data, surveys, and population-based estimates; consequently, this EI has more general information about the types of area sources located in the nonattainment area instead of source-specific information. The mobile source EI is developed from EPA models and refined by the state. The inputs for these models are developed from various contract activities and surveys. Just as in the area source EI, the mobile EI does not contain specific information about specific sources; rather, it has more general information about the types of mobile sources located in the nonattainment area. To generate credits, facilities must demonstrate that the achieved emissions reductions are surplus to the emissions 42 TexReg 5442 October 6, 2017 Texas Register

161 accounted for in the attainment demonstration (that they are "surplus to the SIP"). For facilities at point sources, this generally means the emissions that are reported to the commission and included in the EI that is used in the attainment demonstration modeling for the nonattainment area. Therefore, a facility at a point source may not generate a credit for more emissions than were included in the attainment demonstration EI for that particular facility. For area and mobile sources, however, the comparison is more complicated because these sources are not individually accounted for in the SIP EI. Instead, the commission has developed strategies in this adopted rulemaking to address these issues. For area and mobile sources, the adopted rule has a two-tiered system to provide flexibility for sources that may want to generate credits, while ensuring that any reductions used to generate credits are surplus to the SIP, as required. First, the adopted rule will limit the total amount of credits that are available from the represented area and mobile source inventories in the applicable nonattainment area. Reserving a portion of the area and mobile EI that will not be eligible for credit generation ensures that the commission does not issue credits in excess of emissions estimates utilized in the SIP. The second tier may require the total amount of credits an area or mobile source can generate from their emission reduction to be adjusted based on the reduction strategy and the quality of emission estimation data, if such a strategy must be sent to EPA for approval. This accounts for the uncertainty in area and mobile source emission estimates as well as potentially different recordkeeping and reporting requirements for these sources. The two tier approach is also intended to account for uncertainty related to the possibility that a similar source may replace the shutdown facility in the airshed. Unlike point sources, area sources (as defined in the EBT rules) and mobile sources do not have to report annual emissions to the commission. Additional requirements are being instituted for mobile sources, which have an inherently limited useful life that is already specifically accounted for in the mobile source EI through factors such as fleet turnover, which ultimately result in future emissions reductions. Meeting Federal Requirements: Real, Permanent, Enforceable, and Quantifiable The adopted rules ensure that the reductions used to generate area and mobile source credits are real by restricting credit generation from inelastic sources (i.e., gas stations, dry cleaners, restaurants, etc.) and disallowing credit generation from certain activities that do not result in actual emissions reductions, such as the replacement of a mobile source that is not capable of being operated as intended. To account for the potential overall increase in nonattainment area emissions from shifting activity to meet market demand vacated by a source that generated credits, the adopted rules also require an adjustment to the issued credits. The adopted rules ensure that the reductions used to generate area and mobile source credits are permanent and enforceable by requiring that credited reductions are certified through federally enforceable agency documentation processes. The adopted rules ensure that area and mobile source credits are quantifiable by accounting for the uncertainty in the emission calculation techniques adopted for area and mobile sources. Section by Section Discussion General Revisions The commission adopts grammatical, stylistic, and other non-substantive changes to update the rules in accordance with current Texas Register style and format requirements, improve readability, establish consistency in the rules, and conform to the standards in the Texas Legislative Council Drafting Manual, August These non-substantive changes are not intended to alter the existing rule requirements in any way and are not specifically discussed in this preamble. Division 1: Emission Reduction Credit Program , Definitions An amendment to (4), the definition for "Baseline emissions," is adopted for more consistent use of terminology. The adopted amendment conforms the definition to the program's current practice of assessing credit generation possibilities based on the emissions reduction at a particular facility. The definition for emission reduction at (9) is modified for clarity. In response to comments, the definition for facility at (12) is modified to clarify that in-kind replacements are allowed and to allow multiple emissions points with common characteristics to be grouped and considered as a single facility for the purpose of generating emissions reduction credits at an area source. Under certain circumstances, multiple emission points are treated as a single unit equivalent to a facility and may certify credits from the grouped emission points so long as the total grouping has emissions equal to or greater than 0.1 tpy, even if points within the group have emissions of less than 0.1 tpy. Examples include, but are not limited to, some coating operations, storage tanks that are routed to a joint control device, and other groupings of similar equipment. The definitions for "Historical adjusted emissions," "Mobile emission reduction credit," "Mobile source," and "Mobile source baseline emissions" at (14) - (16) and (18), respectively, are amended to facilitate program implementation by increasing consistency in the procedures used for stationary and mobile sources. The revised definition for historical adjusted emissions would apply to both stationary and mobile sources. The revised definition for mobile emission reduction credit (MERC) requires that MERCs be expressed in tenths of a tpy and allows MERCs to be generated from groups of mobile sources. A mobile source is defined as any source included in the agency EI under the mobile source category, and mobile source baseline emissions are defined as the lowest of the source's historical adjusted emissions or SIP emissions. A definition of "Point source" is adopted as (21) to specify sources that are not area or mobile. A point source is defined as any facility included in the agency's EI under the point source category. A definition of "Primarily operated" is adopted as (22) to specify how to determine when a mobile source is operated often enough in a specific nonattainment area for reductions to be creditable. To provide operators some flexibility while still focusing program activity on sources that impact the relevant air shed, mobile sources are to be considered primarily operated in a specific nonattainment area if at least 75% of their activity occurs in that area. In response to comments, the percentage that mobile sources are to be considered primarily operated in a specific nonattainment area is changed from at least 85% at proposal to at least 75% for adoption. ADOPTED RULES October 6, TexReg 5443

162 A definition for "Projection-base year" is adopted as (23) to clarify the year in which a point source facility must be in operation in order to potentially qualify to generate an emissions credit. The subsequent definitions are renumbered accordingly. At renumbered (26), the definition of "Real reduction" is amended to clarify that reductions from the following are not creditable: lowering the permit allowable emission limit without a physical change or change in method of operation; shifting a vent gas stream or other pollution or waste stream to another site; a mobile source that is not capable of being operated as intended; or a change in the emissions factor or emissions calculation equation. The purpose for this adopted revision is to ensure that emissions from credited reductions are real and do not return to the air shed from the generating source or by redirecting the source of the emissions to another site. At (30), the definition of "State implementation plan (SIP) emissions" is replaced to clarify that the definition applies to facilities at point or area sources and to mobile sources. The adopted changes to this definition are not intended to alter how SIP emissions are determined for point sources except in cases without an applicable SIP revision. For newly designated nonattainment areas, in the interim before a SIP revision has been submitted for that area, the SIP emission year would be the year of the National Emissions Inventory (NEI) most recently submitted to the EPA prior to that area's nonattainment designation. It should be noted that any credits generated prior to a SIP revision for a newly designated nonattainment area could potentially be devalued if the SIP submission for that nonattainment area relies on a different emissions year. The adopted changes establish that, for area and mobile sources, SIP emissions are actual emissions in the year of the latest TCEQ-generated NEI used to support the applicable SIP revision. In addition, the definition of SIP emissions is revised to specify that, for area and mobile sources, credits will only be generated for actual emissions from each source, as verified by records provided with or reviewed for the application. Emission credits will not be issued beyond the amount of actual emissions from a source during the latest NEI year used to support modeling in the applicable SIP revision, not to exceed any applicable local, state, or federal requirement, as calculated using the best available data. For example, the latest NEI year used to support SIP modeling for both the Dallas-Fort Worth (DFW) and Houston-Galveston-Brazoria (HGB) nonattainment areas is from Thus, the SIP emissions for an area or mobile source would be the source's actual emissions from Calendar Year As such, an area or mobile source must have been operated during 2014 to be eligible for credit generation under the current applicable SIP revision. For the area, on-road mobile, and non-road mobile source categories, the commission reduced the total amount of SIP emissions eligible for credit generation to mitigate uncertainties associated with the emission estimates, which are generally not based on source-specific data. In practice, the commission will determine the SIP emissions available for potential credit generation by reducing the total value in the applicable SIP revision by: 25% for area (excluding residential) and non-road mobile sources (75% of SIP emissions for these categories is available for credit generation); and 15% for the on-road mobile source category (85% of SIP emissions for this category is available for credit generation). After the initial set-aside is accounted for, the commission will make the pool of remaining emissions available for credit generation. Finally, the SIP emissions definition is revised to establish that the applicable SIP revision for determining the SIP emissions will be set in the order of SIP revisions listed in adopted (30)(B) and (E). This will facilitate program implementation by setting the applicable SIP revision for area and mobile sources in a manner that is consistent with the treatment of point sources , General Provisions Amended (a)(1) and (2) are adopted to facilitate program implementation by increasing consistency in the procedures used for stationary and mobile sources as both types of emission credits (ERCs and MERCs) are adopted to be eligible for inter-pollutant trading as provided by (d). Amended (b)(1) and (3) are adopted, respectively, to clearly specify that facilities at point sources are eligible to generate emission credits and that this provision applies to both point and area sources. In response to comments, adopted (b)(4) specifies: that facilities at area sources, including those comprised of multiple emission points as allowed under (12), are eligible to generate emissions credits; that credit generation from grouped emission points cannot exceed the lower of the group s actual emissions in the SIP emissions year or the historical adjusted emissions; that facilities comprised of grouped emission points may include equipment that was not operational during the SIP emissions year or the historical adjusted emissions years as long as emissions from the group were present during the SIP emissions year; and examples of criteria the commission may consider when allowing multiple emissions points to be grouped and considered as a single facility. Language is adopted in (c)(1) - (3) to specify that the following types of sources cannot generate credits: residential sources; on-road mobile sources that are not part of an industrial, commercial, nonprofit, institutional, or municipal/government fleet; and mobile sources that do not primarily operate within a specific nonattainment area; resulting in the subsequent subsections being re-lettered. These categories are restricted from generating credits as these sources are not expected to meet the federal requirements regarding emissions reductions being real, surplus, and quantifiable. An exception is provided to the ineligibility requirement related to primarily operating in a specific nonattainment area to allow flexibility for generating credits from marine and locomotive sources that use capture and control emissions reduction systems. The language proposed at (c)(2) and (c)(2), "facilities or mobile sources that do not have records for approved or approvable methods to quantify emissions," was not adopted because it was considered to potentially create an unintentionally broad class of entities and sources that could not participate in generating credits. Instead, the requirement for emissions quantification-related records is codified at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). Re-lettered (d)(1) and (2) is revised to introduce the acronyms ERC and MERC in this section. To ensure creditable emissions reductions are surplus as required, language is revised at re-lettered (d)(1)(C) and (2)(C) - (E) to specify, respectively, that facilities and mobile sources cannot generate credits unless the reduction occurred during or after the SIP emissions year and mobile sources were operated in 42 TexReg 5444 October 6, 2017 Texas Register

163 the applicable nonattainment area during the SIP emissions year. In response to comments, the proposed language at (d)(1)(C), "Individual facilities that were not operated during the SIP emissions year may not be used to generate ERCs" was not adopted. Comments indicated that the sentence in (d)(1)(C) and (d)(1)(C) resulted in a restrictive reading regarding what actions are available to the commission. As noted elsewhere in this preamble, under certain circumstances, multiple emission points are treated as a single unit equivalent to a facility and the commission may consider grouped emission points and like kind replacement equipment to be a single facility for the purposes of generating an ERC or DERC for an area source. To ensure creditable emissions reductions are quantifiable as required, language is adopted in re-lettered (e)(1)(C) to specify that, except as specified in (e)(1)(A) and (B), the owner or operator of a source subject to 30 TAC Chapter 106 or a permit issued under 30 TAC Chapter 116 must use the required testing and monitoring methodologies that apply to its facilities to show compliance with the applicable requirements. The subsequent subparagraphs are re-lettered. To facilitate efficient program implementation, language is added as adopted (f)(1) to specify that the minimum credit the commission will issue will be 0.1 ton per year. A facility, aggregated fugitive emissions, or aggregated mobile sources (for the same pollutant and reduction date) incapable of generating at least 0.1 ton per year of credit after all adjustments are applied cannot generate emission credits. In response to comments, the word "individual" was removed in adopted (f)(1). As discussed elsewhere in this preamble, comments indicated that the word "individual" at (f)(1) and (g)(1) resulted in a restrictive reading regarding what actions are available to the commission. As noted elsewhere in this preamble, under certain circumstances, multiple emission points are treated as a single unit equivalent to a facility and the commission may consider grouped emission points to be a single facility for the purposes of generating an ERC or DERC for an area source. It is also adopted that fugitive emissions or mobile source emissions aggregated to meet the requirement that emission reductions be certified for at least 0.1 ton per year must be represented on the same application and will have an application deadline and credit expiration date determined by the earliest emission reduction date among the aggregated sources. Language is added as adopted (f)(2) to facilitate program implementation by increasing consistency in the procedures used for ERCs and MERCs. In (f)(3), a citation is updated to reflect adopted changes elsewhere in the rule. To assist in facilitating efficient submittal and processing of credit applications language is added as adopted (g) to specify that, beginning January 1, 2018, all credit applications must be electronically submitted through the State of Texas Environmental Reporting System (STEERS) unless an applicant receives prior approval from the executive director for an alternative form of application submission, that the executive director may specify monitoring, testing, recordkeeping, or other requirements, and that the generator must comply with all conditions specified by the executive director once the credit is certified. The records required could include documentation of the characteristics taken into consideration to estimate emissions, such as activity level, emission flow rate, pollutant concentration, etc. For area and mobile sources without NNSR permits, credit certification may be contingent upon implementation of monitoring, testing, recordkeeping, and reporting that would be documented and made federally enforceable as special conditions in an EBT certification form. Lack of compliance with a special condition documented in an EBT certification form constitutes a violation and could result in an enforcement action against the credit generator, including but not limited to, the need to provide additional emissions reductions to replace the voided emissions credits. For example, if an emissions credit is issued for a mobile source that has been destroyed, and the vehicle/equipment is later discovered back in that area, the generator would be considered in violation of a federally enforceable special condition listed in their EBT certification. In this case, the generator could be liable to replace the emissions credits and potentially be subject to other penalties for noncompliance. To ensure that creditable emissions reductions are permanent and enforceable as required, language is adopted in re-lettered (i) to specify that records necessary to verify the certified emissions reduction must be kept for a minimum of five years. This is intended to include records associated with the credit generation application as well as any records required to demonstrate implementation of any monitoring, testing, or other special conditions included on an EBT certification. Maintaining these records is necessary to show on-going compliance with a credit-related special condition, and the credit generator may be required to create records for the life of the reduction strategy. For example, an EBT certification may require on-going tracking of vehicle usage for the useful life of the credit-generating vehicle by the credit generator. The generator in this case would be required to maintain records of the vehicle usage for five years after the date each record was created. For records in conjunction with the ERC life being expanded to 72 months, the records associated with generating the ERC would be required to be kept for six years and this requirement would be annotated on the EBT certification. These records must be kept longer than the minimum of five (or six) years, if necessary on a case-by-case basis as specified in an Emissions Banking and Trading Certification of Emission Reductions Form (Form EBT-CERT) to ensure compliance. An amendment to re-lettered (n)(2) is adopted to use consistent units throughout the rules and implement consistent requirements regarding emission credits being issued for no less than 0.1 ton per year, which is adopted to apply after any adjustments , Emission Reduction Credit Generation and Certification To ensure creditable emissions reductions are real and not associated with the shifting of activity from one source to another, language is adopted as (a)(2)(D). The adopted requirement prohibits credit generation from the shutdown of area source types that are inelastic, highly interchangeable, and driven by population needs. The assessment of what constitutes a source that is driven by population needs will consider characteristics such as, but not limited to, whether this type of source commonly closes when population declines in its vicinity or if this source ceased operations, would another source of this type open to meet population needs. This requirement is adopted for area sources because the regulatory requirements are potentially less stringent for the markets they serve. In many cases, there are more significant economic (capital cost) or regulatory (emission offset, registration requirements, etc.) ADOPTED RULES October 6, TexReg 5445

164 requirements for markets served by point sources making it less likely that a new source will readily open (and re-introduce emissions) to meet market demand created from the closure of another source. Examples of source categories that the commission considers to be inelastic sources include gas stations, restaurants, dry cleaners, and concrete batch plants. However, the commission cannot provide an exhaustive list of all possible inelastic area sources at this time. Additionally, the commission acknowledges that owners of area sources need a reasonable means of knowing which area sources are eligible for credit generation and which are not. Therefore, subparagraph (D) directs the executive director to maintain a list of area sources considered to be inelastic and not eligible for credit generation. The adoption implements a process in which the list of inelastic area source types will be made available to the public on the commission's website; any person may submit a written petition to the executive director requesting to add or remove a category from the list; within 60 days of receiving a petition the executive director will prepare a draft revised list or propose denial of the petition by preparing a draft denial statement supporting denial of the petition; the executive director will make the draft revised list, or draft denial statement, available for public comment for 30 days; within 30 days of the public comment period ending, the executive director will issue a proposed final list or a proposed final denial statement for consideration and approval by the commission; the commission will approve, modify, or deny the proposed revisions to the list of inelastic area sources categories made by the executive director; the commission will approve, modify, or remand to the executive director for further consideration a recommendation to deny a petition submitted by the executive director; and an ERC would not be issued or denied for an area source category petitioned to be added or removed from the inelastic list until final determination of the petition is made by the commission. Through this rulemaking the commission is establishing the initial list of inelastic sources that are ineligible to generate emissions credits for shutdowns as gas stations, restaurants, dry cleaners, and concrete batch plants. In (b)(2), language changes are adopted to specify that the activity and emission rate used to calculate historical adjusted emissions must be determined from the same two consecutive calendar years for facilities at both point and area sources. Adopted language is added to require that the "lookback" for area sources be the five years immediately before the emissions reduction is achieved unless detailed operational records are available for more than five years. The lookback period for an area source may be up to ten years immediately before the emissions reduction when detailed operational records are available for those years. If an applicant has ten years of detailed records, the lookback period could be ten years, but if the applicant only has eight years of detailed records, then the lookback period would only be eight years. This distinction between the lookback period for point and area sources is intended to ensure that the air shed realizes actual emissions reductions from the actions used to generate credits by reducing the circumstances in which credits could be issued for inherent emissions reductions and to address the uncertainties associated with emissions estimations for area sources, which are generally not required to have a case-by-case air authorization and do not perform annual EI reporting. As (c) is expanded, existing (c) is re-lettered as (c)(1) for clarity. Language is adopted in (c)(2) to establish a 15% adjustment to the amount of credits generated for area source shutdown actions, with an adopted minimum reduction of 0.1 ton per year. Language is adopted in (c)(3) to establish a 15% adjustment for records to support approved alternative methods to quantify emissions (minimum 0.1 ton per year reduction). No adjustment would be required when the area source has the same type of emissions records that are required to be maintained by regulation or authorization for a facility operating as a point source or as a component of a point source. Non-substantive clarifying changes from the proposed (c)(3) regarding the use of the term "facility" and to add a more specific crossreference are made to the adopted paragraph. Language is adopted as (c)(4) to establish that the total combined adjustment shall be at least 0.1 ton per year and no more than 20%, if the facility is subject to an adjustment based on both the reduction strategy being a shutdown and the quality of the data used to quantify the emissions. The total adjustment is limited to 20% to prevent the adjustment from becoming a disincentive to participation in credit generation. As with the exclusion of inelastic (highly interchangeable) area sources whose activity is driven by population based market demand, the adjustment to the quantity of credits issued for the shutdown of an area source is adopted as a means to account for the potential overall increase in nonattainment area emissions from potential shifting of activity. This adjustment is adopted to account for the possibility that some unanticipated or undetected shifting of emissions may occur from the shutdown of sources that are not inelastic. The adjustment to the quantity of credits issued based on the quality of the data used to determine the emissions is adopted as a means to account for the uncertainty associated with emissions estimation techniques for area sources. In (d)(1), language reorganization and changes are adopted to specify that applications for ERCs must be signed by an authorized account representative and submitted in most cases no more than two years after the reduction in the facility's actual emissions occurs. The existing provisions of (d)(1) regarding review to determine creditability and certification of reductions are relocated to adopted (d)(1)(A). The language at (d)(1)(B) is adopted to facilitate program implementation by ensuring that credit generation possibilities are assessed in most cases based on when the emissions reduction occurs at a particular facility. To facilitate program implementation, the facility-specific emissions reduction date will be used in most cases to set both that facility's credit application deadline and the credit expiration date. For example, when an oil and gas production site ceases operation, the emissions from the various facilities (compressors, dehydrators, and sweeteners, tanks, fugitives, etc.) usually end at different times, potentially resulting in multiple credit application deadlines and expiration dates. Specifically, when gas production stops, the compressor, dehydrator, and sweetener would soon stop being used and emitting. The crude oil, condensate, and produced water tanks would stop having flash gas and working loss emissions soon after production stops, but breathing losses would continue until they are cleaned or removed. Breathing losses would decline after the product or waste is removed, corresponding to the final disposition date reported to the Railroad Commission of Texas. After that, the only breathing losses would be from residual material volatizing. Fugitive emissions would continue until piping is drained. The date each facility's emissions ended would set that facility's credit application deadline and expiration date. The generator could choose to consolidate the credits into one application and/or ERC cer- 42 TexReg 5446 October 6, 2017 Texas Register

165 tificate by using the earliest emission reduction date if all the grouped facilities use the same baseline years. Well plugging may be completed after the application deadline. However, to ensure compliance with the federal requirements for demonstrating that credited emissions reductions are real and permanent, the closure of individual facilities at an oil and gas production site that is ceasing operations cannot be credited until the well is plugged. The credit application deadline and expiration date will be set in the same manner as described earlier when emissions are reduced at an individual facility that is part of a site with on-going operations. For example, if a tank at an oil and gas production site that is still producing is taken out of service and the material is piped to another authorized tank, the emission reduction associated with the first tank's removal, less any emissions increase from the second tank, could be credited. In this case, because operations are on-going, well plugging would not be required. The commission is adopting incentives for emission credit generation from oil and gas production sites that expeditiously plug wells. To encourage expedited oil and gas well plugging, the adopted rule includes a limited exception, at (d)(1)(C), to the standard requirements for credit application deadlines. Adopted (d)(1)(C) also provides an exception to the standard credit life when specific criteria are met. Oil and natural gas production is a significant portion of the Texas economy and is highly dependent on the price volatility of oil and natural gas, leading in some cases to operators abandoning wells without plugging them. The problem of abandoned unplugged wells is a state priority primarily addressed by the Railroad Commission of Texas through bonding requirements which provide funding for state directed plugging for abandoned wells that are causing or may cause pollution. Because abandoned wells have potential environmental consequences to air and groundwater in addition to other nuisance conditions, the commission has determined that it is appropriate to provide additional incentives in the EBT program to assist in mitigating the number of wells that are abandoned and not plugged. The adopted provision at (d)(1)(C) allows credit generation applications for facilities affected by a complete production site shutdown to be submitted two years after the site's production well is plugged (as opposed to two years after the individual facility's emission reduction date) when the well is plugged in accordance with the technical specifications required by the Railroad Commission of Texas and when the plugging is completed within one year of final production being reported to the Railroad Commission of Texas. Emission credits certified under this exception are adopted to be available for use for 72 months from the date well plugging is completed. The "lookback" for establishing historical adjusted emissions will be set based on the same date used to set the credit application deadline and expiration. Use of the well plugging date instead of each facility's individual emission reduction date to set the credit application deadline and expiration date provides significant flexibility and efficiency to the applicant. In addition, the opportunity for an additional year of use may add to the market value of the credit. The adopted provisions at (d)(1)(D)(i) and (ii) establish the following temporary application deadline provisions for area source facilities: for emissions reductions that occurred after June 1, 2013 and prior to January 1, 2015, the application for ERCs must be submitted by December 31, 2017; and for emissions reductions that occurred between January 1, 2015 and January 1, 2017, the application for ERCs may be submitted up to three years after the reduction in the facility's actual emissions occurs. As adopted in (d)(1)(D)(iii), these temporary application deadline extensions will no longer apply after December 31, Adopted (d)(1)(D)(iv) allows emission credits certified under these temporary application deadline extensions or certified for area source emission reductions occurring and included on an application submitted, but not acted on, before January 1, 2017 to be available for use for 72 months from the date of the emission reduction in lieu of the 60 months outlined in (b)(2). These temporary extensions of the credit application deadline and availability are adopted to support the transition to the adopted requirements, which provide a viable path for processing area and mobile source credit applications. The adopted specific dates are based on the anticipated effective date of this adopted rule revision and the timeframe in which review of area and mobile source credit generation applications has been deferred. In December 2014, the commission proposed, but did not adopt, to remove the provisions for generating ERCs and DERCs from area and mobile sources and the agency has not processed area and mobile source credit generation applications since that time. Some potential applicants have communicated that they did not invest in developing credit generation application materials because the agency is not processing area and mobile source applications. Prior to the December 2014 proposed rule revisions, the deadline for application submission was 180 days from the emission reduction. Thus, emission reductions that occurred prior to June 1, 2013 should have already been included in a submitted application by the point at which the deferral of application processing began, so an extension of the application deadline is not appropriate for these situations. The end date for emissions reductions covered by (d)(1)(D)(i) (January 1, 2015) and the application deadline for emissions reductions covered by (d)(1)(D)(i) (December 31, 2017) are based on the intention of providing potential applicants who may have been influenced by the deferral of application review since December 2014 with a reasonable amount of time to prepare a technically complete application following the completion of this rulemaking. The additional year adopted to be allowed for emissions reductions that occurred between January 1, 2015 and January 1, 2017 in (d)(1)(D)(ii) is included to facilitate program implementation. While potential applicants with emission reductions in this time period may be able to prepare adequate applications by the two-year application deadline based on the requirements in this adoption, it is anticipated that providing additional application preparation time after rule adoption to those who may have been influenced by the deferral of application review will result in more technically complete application packages, facilitating efficient review. As the market value of a credit can be influenced by the time remaining until the credit expires, the temporary credit availability extension adopted at (d)(1)(D)(iv) is included to avoid penalizing applicants influenced by the deferred application processing. The temporary extensions of the credit application deadlines and availability are intended to improve the viability of credit generation for applicants influenced by the deferred application processing. The commission does not expect that these limited exceptions to the standard application and credit use deadlines will result in adverse air quality impacts because they will result in only a small number of credits being generated (given the requirement for the timing of the emission reduction and the limited ADOPTED RULES October 6, TexReg 5447

166 timeframe for the exceptions). In addition, the commission expects that any air quality impacts of these limited exceptions will be minimal because all area and mobile source applications that experienced deferred application review will be subject to the requirements adopted as a result of this rulemaking. In (d)(2), citations are updated to reflect adopted changes elsewhere in the rule. As previously discussed elsewhere in this preamble, language to require records for approved or approvable methods to quantify emissions was removed from proposed (c)(2) and (c)(2) and is adopted at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). The types of records expected include documentation of the characteristics taken into consideration to estimate emissions, such as activity level, emission flow rate, pollutant concentration, etc. The approved or approvable methods required include previously EPA-approved protocols or protocols submitted to EPA for approval under adopted (e). Language is adopted in (d)(3)(E) to clarify that the requirement to include self-reported EI data for the years used to determine the SIP and historical adjusted emissions is only for point sources, as area sources are not required to report to the EI. In (d)(4)(C), language changes are adopted to replace agreed orders with a new EBT certification form to make credited emissions reductions enforceable. The new form will be required whenever a New Source Review permit is not available to document the special conditions associated with the creditable emissions reduction and may be used with a Certification of Emission Limits (Form APD-CERT) when a Form APD-CERT is used to certify an emissions limit. The EBT certification form is being adopted to facilitate more efficient program implementation, rather than the use of agreed orders, which require individual commission actions. Point and area source applicants that are not authorized by a NNSR permit and use Form APD-CERT to certify an emissions limit for credit generating purposes will now be required to submit that form via the commission's e-permitting system. This new requirement, to submit the Form APD-CERT via the commission's e-permitting system, facilitates credit generation application processing since the e-permitting system automatically assigns a registration number to the applicant. The certification made in a permit modification or on Form APD-CERT and an EBT certification form makes the reductions federally enforceable , Mobile Emission Reduction Credit Generation and Certification Language is revised at (a)(1) to make MERC requirements consistent with ERC requirements, which allow the executive director, instead of the commission, to approve an ERC certification. Language is adopted as (a)(2)(D) to specify that MERCs cannot be generated from the shutdown or replacement of a mobile source unless that source is rendered permanently inoperable or permanently removed from North America to ensure that the credited emissions reduction is real and permanent. Allowing the operators of a mobile source to make the source permanently inoperable or permanently removed from North America provides flexibility for resale while minimizing the risk to the requirement that the credit emissions reduction be real and permanent. Language is adopted to replace existing (b)(2), and add (b)(3) and (4), to specify the timing and location considerations for setting the SIP and historical adjusted emissions for a mobile source. These restrictions are adopted to ensure that credited emissions reductions meet the requirements to be real in terms of the relevant air shed by limiting baseline emissions to those that occurred within a specific nonattainment area. Existing (b)(3) is renumbered as subsection (b)(5). The mobile source historical adjusted emissions must be determined from the activity and emission rates for the same two consecutive calendar years. Language is adopted to require that the lookback be the five years immediately before the emissions reduction is achieved unless detailed operational or emissions records are available for more than five years. The lookback period for a mobile source may be up to ten years immediately before the emissions reduction when detailed operational records are available for those years and do not demonstrate decreasing use due to vehicle age or inoperability. If an applicant has eight years of detailed operational records, the lookback period would only be eight consecutive years. The adopted lookback period requirement for mobile sources is intended to ensure that the air shed realizes actual emissions reductions from the actions used to generate credits by reducing the circumstances in which credits could be issued for inherent emissions reductions (such as diminished use of an older vehicle) and to address the uncertainties associated with emission estimation for mobile sources, which are not required to have an air authorization or perform annual EI reporting. In addition, it is adopted that a single year of data might be used with executive director approval for vehicles with less than two years use in the nonattainment area. Language is revised in (c) to specify that strategic emissions are based on when the source is operating in a specific nonattainment area. The revision also adds adjustments to the MERC calculation related to the reduction strategy being a shutdown or the quality of the data used to quantify the emissions. The revisions to (c) are adopted as a means to account for the potential overall increase in nonattainment area emissions from shifting activity and to account for the uncertainty associated with emissions estimation methods for mobile sources. Language is adopted as (c)(1) to establish a reduction of 15% or 0.1 ton per year, whichever is greater, to the amount of credits generated for mobile source shutdown actions. Language is adopted as (c)(2) to establish a reduction of 15% or 0.1 ton per year, whichever is greater, for records supporting approved alternative methods for quantifying emissions. Non-substantive clarifying changes are made at adoption to (c)(2) to more specifically cross-reference the provision regarding alternative methods. Language is adopted as (c)(3) to establish that the total combined reduction will be 20% or 0.1 ton per year, whichever is greater, if the mobile source is subject to an adjustment based on both the reduction strategy being a shutdown and the quality of the data used to quantify the emissions. The total adjustment is limited to 20% to prevent the adjustment from becoming a disincentive to participation in credit generation. The adjustment to the quantity of credits issued for the shutdown of a mobile source is adopted as a means to account for the potential overall increase in nonattainment area emissions from shifting of activity. The adjustment to the quantity of credits issued based on the quality of the data used to determine the emissions is adopted as a means to account for the uncertainty associated with emissions estimation techniques for mobile sources. 42 TexReg 5448 October 6, 2017 Texas Register

167 In (e)(1), language reorganization and changes are adopted to specify that applications for MERCs must be signed by an authorized account representative and submitted in most case no more than two years after the reduction in the mobile sources actual emissions occurs. The existing provisions of (e)(1) regarding review to determine creditability and certification of reductions are relocated to (e)(1)(A). The adopted provision at (e)(1)(B) conforms the application deadline requirement to the program's current practice of assessing credit generation possibilities based on when the emissions reduction occurs for the mobile sources. The adopted provisions at (e)(1)(C)(i) and (ii) establishes the following temporary application deadline provisions for mobile sources: for emissions reductions that occurred after June 1, 2013 and prior to January 1, 2015, the application for MERCs must be submitted by December 31, 2017; and for emissions reductions that occurred between January 1, 2015 and January 1, 2017, the application for MERCs may be submitted up to three years after the reduction for the mobile sources actual emissions occurs. As adopted in (e)(1)(C)(iii), these temporary application deadline extensions will no longer apply after December 31, Adopted (e)(1)(C)(iv) allows emission credits certified under these temporary application deadline extensions or certified for mobile source emission reductions occurring and included on an application submitted, but not acted on, before January 1, 2017 to be available for use for 72 months from the date of the emission reduction in lieu of the 60 months outlined in (b)(2). The adopted provisions in (e)(1)(C)(i) - (iv) for mobile sources are consistent with the adopted changes in (d)(1) for area sources. As discussed in the Section by Section Discussion portion of this preamble regarding (d)(1), the adopted limited extensions for credit applications and availability are intended to support the transition to the adopted requirements, which provide a viable path for processing area and mobile source credit applications. As with adopted (d)(1), the dates in adopted (e)(1) are based on the anticipated effective date of this rule revision and the timeframe in which area and mobile source credit application review has been deferred following the December 2014 commission proposal to remove the provisions for area and mobile source ERCs and DERCs. The temporary extensions of the credit application deadlines and availability are intended to improve the viability of credit generation for applicants influenced by the deferred application processing. The commission does not expect that these limited exceptions to the standard application and credit use deadlines will result in adverse air quality impacts because they would result in only a small number of credits being generated (given the requirement for the timing of the emission reduction and the limited timeframe for the exceptions). In addition, the commission expects that any air quality impacts of these limited exceptions would be minimal because all area and mobile source applications that experienced deferred application review will be subject to the requirements adopted as a result of this rulemaking. In (e)(2), language changes are adopted to update references. Language is adopted as (e)(3) to specify that the amount of credits issued for an individual mobile source will be adjusted based on its remaining useful life to ensure the credits are surplus to the fleet turnover assumptions used in the applicable SIP revision. The amount of credits certified for the mobile source emissions reduction is adopted to be annualized over 25 years. This requirement is adopted based on program experience that most credits are used to comply with stationary source offset requirements. The 25 years used to annualize the total emissions reductions is a reasonable amount of time that represents the expected operation of a generic point source. This process simplifies program implementation by ensuring that MERCs are eligible to be used as offsets, the most common use. The expected remaining useful life is determined based on assumptions included in the applicable SIP revision, such as, but not limited to, parameters used in the on-road mobile model and in the Texas non-road model for calculating fleet turnover. While the commission anticipates that nearly all types of mobile sources are reflected in the models, any mobile source not reflected in these models will be handled on a case-by-case basis, as approved by the executive director. Language is adopted as (e)(4) to provide an exception to the requirements to consider the expected remaining useful life of the mobile source and to annualize the emissions reduction over 25 years if a capture and control system is used to reduce mobile source emissions. Section (e)(4)(A) establishes that, for these capture and control system projects, as appropriate, the MERC calculation will consider: the mobile source emissions that are not captured; any emissions not controlled by the system; and any emissions caused by or as a result of operating and/or moving the system. Section (e)(4)(B) is adopted to require that the initial owner of the MERCs is the owner or operator of the capture and control system. The provisions in (e)(4) are adopted to facilitate program implementation regarding use of capture and control systems for mobile sources as stakeholders have expressed interest in using these types of controls, which have historically been primarily applicable to stationary sources. The subsequent paragraphs are renumbered. Language changes are adopted in renumbered (e)(5) to remove the name of the application form (to avoid future rulemaking if the name changes), clarify that the application is to be signed by an authorized account representative, and require that the supporting documentation include records to characterize the source's historical adjusted and SIP emissions estimates. In addition, as previously discussed elsewhere in this preamble, language to require records for approved or approvable methods to quantify emissions was removed from proposed (c)(2) and (c)(2) and is adopted at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). The types of records expected include documentation of the characteristics taken into consideration to estimate emissions, such as activity level, emission flow rate, pollutant concentration, etc. The approved or approvable methods required include previously EPA-approved protocols or protocols submitted to EPA for approval under adopted (e). In renumbered (e)(6), language changes are adopted to specify that an EBT certification form will replace agreed orders as the method to document special conditions associated with credited emissions reductions, such as, but not limited to, written certification and photographs when a replaced or shutdown mobile source is made permanently inoperable, for an on-road mobile source, a certified or duplicate Texas Nonrepairable Vehicle Title when a replaced or shutdown mobile source is made permanently inoperable, a bill of sale and bill of lading when a replaced or shutdown mobile source is permanently removed from North America; and a new maxi- ADOPTED RULES October 6, TexReg 5449

168 mum allowable emissions limit for mobile sources that are not replaced or shutdown. The EBT certification form is adopted to be the mechanism to ensure emissions reductions from mobile sources are permanent and federally enforceable as it will ease program implementation relative to the use of agreed orders for this purpose , Emission Credit Use In existing (c)(1) and (2), there are different deadlines for submitting an application to use ERCs and MERCs. The differences arose in the previous rule project because the provisions for MERCs were not changed when the repeal of was not adopted. However, there is no reason to have different deadlines for applications for using ERCs and MERCs, so the commission removed the provisions specific only to MERCs and to make the provisions for ERCs apply to both ERCs and MERCS. Similarly, the provisions added in the prior rulemaking on restrictions of the earliest date that a use application can be submitted are needed for MERCs for the same reasons they are needed for ERCs: the applicant must have the emission credit in the portfolio of the site where the offsets are needed for the use application to be processed; and to avoid circumvention of the provision of emission credits expiring, applicants will not be allowed to submit an application for using emission credits as offsets until an application for the permit or amendment is determined to be administratively complete. Additionally, the requirement to identify the MERCs to be used as offsets before permit issuance is deleted to allow additional time for obtaining the MERCs and to avoid the need to modify the permit if different MERCs are used as offsets than were originally intended. A deadline for submitting a MERC use application before the start of operation, rather than before construction as in existing (c)(2)(A), is consistent with NNSR requirements for the new or modified facility to obtain offsets before beginning operation. It is also consistent to remove the requirement in existing (c)(2)(A) for users to identify MERCs prior to permit issuance because this is not a requirement in the commission's NNSR permit program in Chapter 116, Subchapter B. However, any facility using MERCs as NNSR offsets could not start operation until the use of the MERCs as an offset is approved, as is provided for ERCs. The provision in existing (c)(2)(B) is removed because the provision that users must keep records is also in With these adopted changes, (c)(1) no longer differentiates between ERC and MERC use applications, and existing paragraph (3) is renumbered as paragraph (2). In (d), the commission expanded the inter-pollutant use of ERCs to include MERCs by replacing the acronym "ERCs" with the term "emission credits" throughout the subsection. The restriction on inter-pollutant use of emission credits as offsets for NNSR permits, the requirements for modeling to demonstrate that the overall air quality and the regulatory design value in the nonattainment area of use will not be adversely affected by the substitution (as required under the FCAA), and the requirement that the user receive approval from the executive director and the EPA before inter-pollutant use occurs are retained for both types of emission credits. Division 4: Discrete Emission Credit Program , Definitions An amendment to (4), the definition for "Baseline emissions," is adopted for more consistent use of terminology. The adopted amendment conforms the definition to the program's current practice of assessing credit generation possibilities based on the emissions reduction at a particular facility. The definition for "Emission reduction" at (10) is revised for clarity. In response to comments, the definition for facility at (12) is modified to clarify that in-kind replacements are allowed and to allow multiple emissions points to be considered as a single facility for the purpose of generating DERCs at an area source. As discussed elsewhere in this preamble, multiple emission points are treated as a single unit equivalent to a facility and certify credits from the grouped emission points. The definition of "Generation period" at (13) is revised to apply to both DERCs and mobile discrete emission reduction credits (MDERCs). The definitions for "Historical adjusted emissions," "Mobile discrete emission reduction credit," "Mobile source," and "Mobile source baseline emissions" at (15) - (17) and (19), respectively, are amended to facilitate program implementation by increasing consistency in the procedures used for stationary and mobile sources. The revised definitions make historical adjusted emissions apply to both stationary and mobile sources, MDERCs be expressed in tenths of a ton and be generated from groups of mobile sources, a mobile source be any source included in the agency's EI under the mobile source category, and mobile source baseline emissions the lowest of the source's historical adjusted emissions or SIP emissions. A definition of "Point source" is adopted as (22) to specify that for the purpose of the EBT programs, "point sources" are sources that are not area or mobile. A definition of "Primarily operated" is adopted as (23) to specify how to determine when a mobile source is operated often enough in a specific nonattainment area for reductions to be creditable. As discussed elsewhere in the Section by Section Discussion of this preamble related to ERCs, mobile sources are adopted to be considered primarily operated in a specific nonattainment area if at least 75% of their activity occurs in that area. In response to comments, the percentage in which mobile sources are to be considered primarily operated in a specific nonattainment area is changed from at least 85% at proposal to at least 75% for adoption. A definition for "Projection-base year" is adopted as (24) to clarify the year in which a point source facility must be in operation in order to potentially qualify to generate an emissions credit. The subsequent definitions are renumbered. At renumbered (27), the definition of "Real reduction" is revised to clarify that reductions from the following are not creditable: lowering the permit allowable emission limit without a physical change or change in method of operation; shifting a vent gas stream, or other pollution or waste stream, to another site; a mobile source that is not capable of being operated as intended; or a change in the emissions factor or emissions calculation equation. The purpose for this adopted change is to ensure that emissions from credited reductions are real and do not return to the air shed from the generating source or by redirecting the source of the emissions to another site. At renumbered (31), the definition of "State implementation plan (SIP) emissions" is revised to clarify that the definition applies to facilities at point or area sources and to mobile sources. The adopted changes to this definition are not intended to alter how SIP emissions are determined for point 42 TexReg 5450 October 6, 2017 Texas Register

169 sources. The adopted changes establish that, for area and mobile sources, SIP emissions are actual emissions in the year of the latest TCEQ-generated NEI used to develop modeling included in the applicable SIP revision. Furthermore, the definitions of SIP emissions in (30) and (31) were intended to be the same. However, at proposal, certain changes to the definition were inadvertently omitted in (31) that were included in (30). To aid in program implementation and for consistency as intended, clarifying changes are made at adoption to the definition of SIP emissions at renumbered (31)(A) and (B) to make these provisions consistent with the definition of SIP emissions at (30). The definition of SIP emissions is revised to specify that, for area and mobile sources, credits will only be generated for actual emissions from each source, as verified by records provided with the application. Emission credits will not be issued beyond the amount of actual emissions from a source during the latest NEI year used to support modeling in the applicable SIP revision, not to exceed any applicable local, state, or federal requirement, as calculated using the best available data. For example, the latest NEI year used to support SIP modeling for both the DFW and HGB nonattainment areas is Thus, the SIP emissions for an area or mobile source will be the source's actual emissions from Calendar Year As such, an area or mobile source must have been operated during 2014 to be eligible for credit generation under the current applicable SIP revision. For the area, on-road mobile, and non-road mobile source categories, the commission reduced the total amount of SIP emissions eligible for credit generation to mitigate uncertainties associated with the emission estimates, which are generally not based on source-specific data. In practice, the commission will determine the SIP emissions for potential credit generation by reducing the total value in the applicable SIP revision by: 25% for area (excluding residential) and non-road mobile sources (75% of SIP emissions for these categories is available for credit generation); and 15% for the on-road mobile source category (85% of SIP emissions for this category is available for credit generation). After the initial set-aside is accounted for, the commission will make the pool of remaining emissions available for credit generation. Finally, the definition is revised to establish that the applicable SIP revision for determining the SIP emissions will be set in the order of SIP revisions listed in adopted (31)(B) and (E). This will facilitate program implementation by setting the applicable SIP revision for area and mobile sources in a manner that is consistent with the treatment of point sources , General Provisions Amended (a)(1) and (2), and the deletion of existing (a)(2) are adopted to facilitate program implementation by increasing consistency in the procedures used for stationary and mobile sources as both types of discrete emission credits (DERCs and MDERCs) are adopted to be eligible for inter-pollutant trading as provided by Amended (b) is adopted to clearly specify that point, area, and mobile sources are eligible to generate discrete emission credits. In response to comments, adopted (b)(4) specifies: that facilities at area sources, including those comprised of multiple emission points as allowed under (12), are eligible to generate emissions credits; that credit generation from grouped emission points cannot exceed the lower of the group s actual emissions in the SIP emissions year or the historical adjusted emissions; that facilities comprised of grouped emission points may include equipment that was not operational during the SIP emissions year or the historical adjusted emissions years as long as emissions from the group were present during the SIP emissions year; and examples of the criteria the commission may consider when allowing multiple emissions points to be grouped and considered as a single facility. Language is adopted as (c) to specify that the following types of sources cannot generate credits: residential sources; on-road mobile sources that are not part of an industrial, commercial, nonprofit, institutional, or municipal/government fleet; and mobile sources that do not primarily operate within the nonattainment area. These categories are adopted to be restricted from generating credits as the sources cannot be expected to meet the federal requirements regarding emissions reductions being real, surplus, and quantifiable. An exception is provided to the ineligibility requirement related to primarily operating in a specific nonattainment area to allow flexibility for generating credits from marine and locomotive sources that use capture and control emissions reduction systems. The subsequent subsections are re-lettered. As previously discussed elsewhere in this preamble, the language proposed at (c)(2) and (c)(2), "facilities or mobile sources that do not have records for approved or approvable methods to quantify emissions," was not adopted as it was considered to potentially create an unintentionally broad class of entities and sources that could not participate in generating credits. Instead, the requirement for emissions quantification-related records is codified at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). The proposed language at (d)(1)(C), "Individual facilities in a nonattainment area that were not operated during the year of the SIP emissions may not be used to generate DERCs" was not adopted. Comments indicated that this sentence in (d)(1)(C) resulted in a restrictive reading regarding what actions are available to the commission. As noted elsewhere in this preamble, the commission may consider grouped emission points and like kind replacement equipment to be a single facility for the purposes of generating DERCs for an area source. The proposed deletion of "reported before implementation of the emission reduction strategy" is adopted because only point sources are required to report emissions, and the requirement, as previously stated, excluded area sources from generating DERCs. To ensure creditable emissions reductions are surplus as required, language is revised at re-lettered (d)(2)(B) - (D) to specify, respectively, that mobile sources cannot generate credits unless the reduction occurred during or after the SIP emissions year and the sources were operated in an applicable nonattainment area during the SIP emissions year. To ensure creditable emissions reductions are quantifiable as required, language is adopted as (e)(1)(C) to specify that, except as specified in (e)(1)(A) and (B), the owner or operator of a source subject to Chapter 106 or a permit issued under Chapter 116 must use the required testing and monitoring methodologies that apply to its facilities to show compliance with the applicable requirements. The subsequent subparagraphs are re-lettered. To assist in facilitating efficient submittal and processing of credit applications, language is adopted at (f) to specify that ADOPTED RULES October 6, TexReg 5451

170 beginning January 1, 2018 all credit applications must be electronically submitted through STEERS unless an applicant receives prior approval for an alternative form of application submission. The subsequent subsections are re-lettered. To facilitate efficient program implementation, language is adopted at re-lettered (g)(1) to specify that a facility, aggregated fugitive emissions, and aggregated mobile sources (for the pollutant and reduction date) incapable of generating at least 0.1 ton of credit after all adjustments are applied cannot generate discrete emission credits. In response to comments, the word "individual" was removed at adopted (g)(1). As discussed elsewhere in this preamble, comments indicated that the word "individual" at (f)(1) and (g)(1) resulted in a restrictive reading regarding what actions are available to the commission. As noted elsewhere in this preamble, under certain circumstances, multiple emission points are treated as a single unit equivalent to a facility and the commission may consider grouped emission points to be a single facility for the purposes of generating an ERC or DERC for an area source. It is also adopted that fugitive emissions or mobile source emissions aggregated to meet the requirement that emission reductions be certified for at least 0.1 ton must be represented on the same application and will have an application deadline date determined by the earliest emission reduction date among the aggregated sources. At adoption particulate matter with diameters less than or equal to 10 micrometers (PM ) was re-added at renumbered (h)(6) because it was inadvertently removed at proposal , Discrete Emission Reduction Credit Generation and Certification In (b)(2), language changes are adopted to specify that the emission and activity rates used to calculate historical adjusted emissions must be determined from the same two consecutive calendar years for facilities at both point and area sources. Language is adopted to require that the "lookback" for area sources be the five years immediately before the emissions reduction is achieved unless detailed operational records are available for more than five years. The lookback period for an area source may be up to ten years immediately before the emissions reduction when detailed operational records are available for those years. If an applicant has ten years of detailed records, then the lookback period could be ten years, but if the applicant only has eight years of detailed records, then the lookback period could only be eight years. This distinction between the lookback for point and area sources is intended to ensure that the air shed realizes actual emissions reductions from the actions used to generate credits by reducing the circumstances in which credits could be issued for inherent emissions reductions and to address the uncertainties associated with emission estimation for area sources, which are generally not required to have a case-by-case air authorization or perform annual EI reporting. Language is adopted as (c)(2) to establish a credit reduction of 15% or 0.1 ton, whichever is greater, for records to support approved alternative methods for quantifying emissions. No reduction will be required when records for quantifying emissions are the same type of records that are required to be maintained by regulation or authorization for a facility operating as a point source or as a component of a point source. The adjustment to the quantity of credits issued based on the quality of the data used to determine the emissions is adopted as a means to account for the uncertainty associated with emissions estimation techniques for area sources. These adopted changes result in the subsequent paragraphs being renumbered. Non-substantive clarifying changes regarding the use of the term "facility" and to add a more specific cross-reference were made at adoption to (c)(2). In (d)(1), language changes are adopted to specify that the application must be signed by an authorized account representative. References are updated in (d)(2). As previously discussed elsewhere in this preamble, language to require records for approved or approvable methods to quantify emissions was removed from proposed (c)(2) and (c)(2) and is adopted at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). The types of records expected include documentation of the characteristics taken into consideration to estimate emissions, such as activity level, emission flow rate, pollutant concentration, etc. The approved or approvable methods required include previously EPA-approved protocols or protocols submitted to EPA for approval under adopted (e). In addition, language is adopted in (d)(3)(F) to clarify that the requirement to include self-reported EI data for the years used to determine the SIP revision and historical adjusted emissions is only for point sources as area sources are not required to report to the EI , Mobile Discrete Emission Reduction Credit Generation and Certification Language is adopted in (a)(1) to clarify that MDERCs are subject to approval by the executive director and that the number of years that an emissions reduction can be used for generating MDERCs is limited by the expected remaining useful life of the mobile source. As described previously in the preamble for MERCs, the expected remaining useful life is generally determined based on assumptions included in the applicable SIP revision, such as, but not limited to, parameters used in the on-road mobile model and in the Texas non-road model to calculate fleet turnover. An exception to the requirement to consider the expected remaining useful life of the mobile source is included if a capture and control system is used to reduce mobile source emissions. Language is replaced at (b)(2) and added at (b)(3) and (4) to specify the timing and location considerations for setting the SIP and historical adjusted emissions for a mobile source. These restrictions are adopted to ensure that emission reductions meet the requirements to be real in terms of the relevant air shed. The mobile source historical adjusted emissions must be determined from the emission and activity rates during the same two consecutive calendar years. Language is adopted to require that the lookback be the five years immediately before the emissions reduction is achieved unless detailed operational records are available for more than five years. The lookback period for a mobile source may be up to ten years immediately before the emissions reduction when detailed operational records are available for those years and do not demonstrate decreasing use due to vehicle age or inoperability. If an applicant has eight years of detailed records, then the lookback period would be eight consecutive years. The adopted lookback period requirement for mobile sources is intended to ensure that the air shed realizes actual emissions reductions from the actions used to generate credits by reducing the circumstances in which credits could be issued 42 TexReg 5452 October 6, 2017 Texas Register

171 for inherent emissions reductions (such as diminished use of an older vehicle) and to address the uncertainties associated with emissions estimation for mobile sources, which are not required to have an air authorization or perform annual EI reporting. In addition, it is adopted that a single year of data might be used with executive director approval for vehicles with less than two years use in a nonattainment area. The subsequent paragraph is renumbered. Language is adopted in (c)(1) to establish a reduction of 15% or 0.1 ton, whichever is greater, to the amount of credits generated for mobile source shutdown actions. Language is adopted in (c)(2) to establish a reduction of 15% or 0.1 ton, whichever is greater, for records supporting approved alternative methods for quantifying emissions. Non-substantive clarifying changes to more specifically cross-reference are made at adoption to (c)(2). Language is adopted in (c)(3) to establish that the total combined adjustment shall be at least 0.1 ton and no more than 20% if the mobile source is subject to an adjustment based on both the reduction being a shutdown and the quality of the data used to quantify the emissions. The total adjustment is limited to 20% to prevent the adjustment from becoming a disincentive to participation in credit generation. The adjustment to the quantity of credits issued for the shutdown of a mobile source is adopted as a means to account for the potential overall increase in nonattainment area emissions from the shifting of emissions location. The adjustment to the quantity of credits issued based on the quality of the data used to determine the emissions is adopted as a means to account for the uncertainty associated with emissions estimation techniques for mobile sources. Language is adopted as (c)(4) to establish that for capture and control system projects, as appropriate, MDERCs calculation will consider: the mobile source emissions that are not captured; any emissions not controlled by the system; and any emissions caused by or as a result of operating and/or moving the system. In addition, (c)(4) requires that the initial owner of the MDERCs is the owner or operator of the capture and control system. The provisions in (c)(4) are adopted to facilitate program implementation regarding use of capture and control systems for mobile sources as stakeholders have expressed interest in using these types of controls, which have historically been primarily applicable to stationary sources. In (e)(1), the adopted changes include substituting the generic wording "designated application form" in place of the specific form name and designation (to avoid future rulemaking if the name changes), as well as requiring the application to be signed by an authorized account representative. Adopted language also includes replacing "discrete emission reduction strategy activity has been completed" with "end of the generation period," replacing "the first" with "each," and removing the last sentence to simplify the requirement to submit an application to generate MDERCs within 90 days after each 12-month generation period and 90 days after the generation period ends, regardless of length. This submission schedule is consistent with the definition of "generation period" in the current and revised rules because each generation period cannot exceed 12 months. A separate application is needed to generate MDERCs from each generation period. In (e)(2), the reference is changed due to the referenced subsection being re-lettered. Language changes are adopted to (e)(3) to remove the name of the application form (to avoid future rulemaking if the name changes), clarify that the application must be signed by an authorized account representative, and to require that supporting documentation be provided with the credit generation application form. In addition, as previously discussed elsewhere in this preamble, language to require records for approved or approvable methods to quantify emissions was removed from proposed (c)(2) and (c)(2) and is adopted at (d)(3)(D), (e)(5)(D), (d)(3)(E), and (e)(3)(D). The types of records expected include documentation of the characteristics taken into consideration to estimate emissions, such as activity level, emission flow rate, pollutant concentration, etc. The approved or approvable methods required include previously EPA-approved protocols or protocols submitted to EPA for approval under adopted (e) , Discrete Emission Credit Use In existing (a)(6), the acronym "DERC" is replaced with the term "discrete emission credit" to clarify that neither DERCs or MDERCs can be used before the credits are available in the compliance account of the use site. The commission removed existing (b)(2)(C) for the same reasons as discussed previously in the Section by Section Discussion portion of this preamble regarding the changes to (c)(1) and (2). This change has the provisions for DERCs in existing (b)(2)(D), which is re-lettered as (b)(2)(C), apply to both DERCs and MDERCs by removing the phrase "for the use of DERCs" in existing (b)(2)(D); these provisions will require the user of MDERCs used as offsets to submit an application form specified by the executive director at least 90 days before the start of operation and before continuing operation for any subsequent period for which the offset requirement was not covered under the initial application. The adopted changes align the MDERC and DERC submission requirements; these adopted submission requirements are also consistent with corresponding provisions in the ERC Program. In (c)(4), the phrase "DERC or mobile DERC" is changed to "discrete emission credits" for consistency with the phrasing in the rest of the section. In (d)(1)(B)(ii) and (iii), the commission removed the acronym "DERC" because both DERCs and MDERCs can be used for compliance with the Mass Emissions Cap and Trade Program and as offsets for new source review permits. In (d)(1)(B)(iii), a citation changed by this rulemaking is also adopted in its revised form. For consistency in subparagraph (B), the term "discrete emission credit" is removed from (d)(1)(B)(iv). In (d)(1)(D)(viii) - (x), the phrasing relating to credits that will be acquired is removed because it conflicts with the revised provision in (a)(6) that credits must be in the compliance account of the site before use occurs. In the existing equations in (d)(2)(A)(i) and (ii) and (C), the commission changed the designation of the variable "DERCs" to "DECs" for clarity. The calculations can be used for either DERCs or MDERCs, so the general term for the credits is more appropriate, and this change will have no effect on the use of the equations. The reference to "commission" at (e)(3), is changed to "executive director" to conform with current rule drafting policy. In (g), the commission expanded the inter-pollutant use of DERCs (i.e., the substitution of a credit certified for one ozone precursor for the other precursor) to include MDERCs by replacing the acronym "DERCs" with the term "discrete emission cred- ADOPTED RULES October 6, TexReg 5453

172 its" throughout the subsection. The restriction on inter-pollutant use of discrete emission credits to offsetting for NNSR permits, the requirements for modeling to demonstrate that the overall air quality and the regulatory design value in the nonattainment area of use will not be adversely affected by the substitution (as required under the FCAA), and the requirement that the user receive approval from the executive director and the EPA before inter-pollutant use occurs are retained for both types of discrete emission credits. Final Regulatory Impact Determination The commission reviewed the adopted rulemaking in light of the regulatory impact analysis requirements of Texas Government Code, , and determined that the adopted rulemaking does not meet the definition of a "major environmental rule" as defined in that statute, and in addition, if it did meet the definition, would not be subject to the requirement to prepare a regulatory impact analysis. A "major environmental rule" means a rule, the specific intent of which is to protect the environment or reduce risks 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 the state or a sector of the state. The adopted rules amend a voluntary program to generate ERCs to improve the flexibility and functionality of these rules, and do not impose requirements that regulated entities must participate in the program. Additionally, the adopted rulemaking does not meet any of the four applicability criteria for requiring a regulatory impact analysis for a major environmental rule, which are listed in Texas Government Code, (a). Texas Government Code, , applies only 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. The EBT rules in Chapter 101, Subchapter H define several market-based programs that provide sites with additional flexibility for complying with air regulations, such as the offset requirements in NNSR permits or the unit-specific emission limits in various state rules. These programs include the ERC Program rules in Division 1 that allow sources in nonattainment areas to generate, bank, trade, and use credits from permanent reductions in emissions and the DERC Program rules in Division 4 to allow sources statewide to generate, bank, trade, and use credits from reductions in emissions below regulatory requirements. Because these programs are market-based, the costs associated with trades of credits and allowances are not controlled. In recent years, the cost of credits has risen substantially. In response, there has been significant interest in the regulated community for alternatives that facilitate generation and for flexibility in use. This increased interest has uncovered several implementation issues in the existing EBT rules. This rulemaking revises the EBT rules in Chapter 101 to respond to these issues and improve the workability and functionality of the rules. The adopted rulemaking implements requirements of 42 United States Code (USC), 7410, which requires states to adopt a SIP that provides for the implementation, maintenance, and enforcement of the National Ambient Air Quality Standard (NAAQS) in each air quality control region of the state. While 42 USC, 7410 generally does not require specific programs, methods, or reductions in order to meet the standard, the SIP must include enforceable emission limitations and other control measures, means or techniques (including economic incentives such as fees, marketable permits, and auctions of emissions rights), as well as schedules and timetables for compliance as may be necessary or appropriate to meet the applicable requirements of this chapter (42 USC, Chapter 85, Air Pollution Prevention and Control). The provisions of the FCAA recognize that states are in the best position to determine what programs and controls are necessary or appropriate in order to meet the NAAQS. This flexibility allows states, affected industry, and the public, to collaborate on the best methods for attaining the NAAQS for the specific regions in the state. Even though the FCAA allows states to develop their own programs, this flexibility does not relieve a state from developing a program that meets the requirements of 42 USC, States are not free to ignore the requirements of 42 USC, 7410, and must develop programs to assure that their contributions to nonattainment areas are reduced so that these areas can be brought into attainment on schedule. The adopted rulemaking will revise the EBT rules in Chapter 101 to respond to issues with flexibility and use of the rules, and to improve the workability and functionality of the rules. The requirement to provide a fiscal analysis of adopted regulations in the Texas Government Code was amended by Senate Bill (SB) 633 during the 75th Legislature, The intent of SB 633 was to require agencies to conduct a regulatory impact analysis of extraordinary rules. These are identified in the statutory language as major environmental rules that will have a material adverse impact and will exceed a requirement of state law, federal law, or a delegated federal program, or are adopted solely under the general powers of the agency. With the understanding that this requirement would seldom apply, the commission provided a cost estimate for SB 633 concluding that "based on an assessment of rules adopted by the agency in the past, it is not anticipated that the bill will have significant fiscal implications for the agency due to its limited application." The commission also noted that the number of rules that would require assessment under the provisions of the bill was not large. This conclusion was based, in part, on the criteria set forth in the bill that exempted adopted rules from the full analysis unless the rule was a major environmental rule that exceeds a federal law. As discussed earlier in this preamble, the FCAA does not always require specific programs, methods, or reductions in order to meet the NAAQS; thus, states must develop programs for each area contributing to nonattainment to help ensure that those areas will meet the attainment deadlines. Because of the ongoing need to address nonattainment issues, and to meet the requirements of 42 USC, 7410, the commission routinely proposes and adopts SIP rules. The legislature is presumed to understand this federal scheme. If each rule adopted for inclusion in the SIP was considered to be a major environmental rule that exceeds federal law, then every SIP rule would require the full regulatory impact analysis contemplated by SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Board (LBB) in its fiscal notes. Since the legislature is presumed to understand the fiscal impacts of the bills it passes, and that presumption is based on information provided by state agencies and the LBB, the commission believes that the intent of SB 633 was only to require the full regulatory impact analysis for rules that are extraordinary in nature. While the SIP rules will have a broad impact, the impact is no greater than is necessary or appropriate 42 TexReg 5454 October 6, 2017 Texas Register

173 to meet the requirements of the FCAA. For these reasons, rules adopted for inclusion in the SIP fall under the exception in Texas Government Code, (a), because they are required by federal law. The commission has consistently applied this construction to its rules since this statute was enacted in Since that time, the legislature has revised the Texas Government Code but left this provision substantially unamended. It is presumed that "when an agency interpretation is in effect at the time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." Central Power & Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue, 960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.W.2d 353, 357 (Tex. App. Austin 1990, no writ). Cf. Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884, 893 (Tex. App. Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App. Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. Trinity Portland Cement Div., 563 S.W.2d 916 (Tex. 1978). The commission's interpretation of the regulatory impact analysis requirements is also supported by a change made to the Texas Administrative Procedure Act (APA) by the legislature in In an attempt to limit the number of rule challenges based upon APA requirements, the legislature clarified that state agencies are required to meet these sections of the APA against the standard of "substantial compliance." The legislature specifically identified Texas Government Code, , as falling under this standard. The commission has substantially complied with the requirements of Texas Government Code, The specific intent of the adopted rulemaking is to revise the EBT rules in Chapter 101 to respond to issues with flexibility and use of the rules and to improve the workability and functionality of the rules. The adopted rulemaking does not exceed a standard set by federal law or exceed an express requirement of state law. No contract or delegation agreement covers the topic that is the subject of this adopted rulemaking. Therefore, this adopted rulemaking is not subject to the regulatory analysis provisions of Texas Government Code, (b), because the adopted rulemaking does not meet the definition of a "major environmental rule," and also does not meet any of the four applicability criteria for a major environmental rule. The commission invited public comment regarding the Draft Regulatory Impact Analysis Determination during the public comment period. No comments were received on the Draft Regulatory Impact Analysis Determination. Takings Impact Assessment The commission completed a takings impact assessment for this rulemaking action under Texas Government Code, The primary purpose of the rulemaking is to revise the EBT rules in Chapter 101 to respond to issues with flexibility and use of the rules, and to improve the workability and functionality of the rules. Promulgation and enforcement of the amendments will not burden private real property. The rules do not affect private property in a manner that restricts or limits an owner's right to the property that would otherwise exist in the absence of a governmental action. Additionally, the ERCs and DERCs that would be affected by these rules are not property rights (see adopted (k) and (l)). Because these credits are not property, rules that revise how these credits are generated and used does not constitute a taking. Consequently, this rulemaking action does not meet the definition of a takings under Texas Government Code, (5). Consistency with the Coastal Management Program The commission reviewed the adopted rulemaking and found the adoption is a rulemaking identified in the Coastal Coordination Act Implementation Rules, 31 TAC (b)(2), relating to rules subject to the Coastal Management Program, and will, therefore, require that goals and policies of the Texas Coastal Management Program (CMP) be considered during the rulemaking process. The commission reviewed this adopted rulemaking for consistency with the CMP goals and policies in accordance with the regulations of the Coastal Coordination Advisory Committee and determined that the adopted amendments are consistent with CMP goals and policies. The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and enhance the diversity, quality, quantity, functions, and values of coastal natural resource areas (31 TAC (1)). No new sources of air contaminants will be authorized and the revisions will maintain the same level of emissions control as previous rules. The CMP policy applicable to this rulemaking action is the policy that the commission's rules comply with federal regulations in 40 Code of Federal Regulations (CFR), to protect and enhance air quality in the coastal areas (31 TAC (q)). This rulemaking action complies with 40 CFR Part 51, Requirements for Preparation, Adoption, and Submittal of Implementation Plans. Therefore, in accordance with 31 TAC (e), the commission affirms that this rulemaking action is consistent with CMP goals and policies. The commission invited public comment regarding the consistency with the CMP during the public comment period. No comments were received regarding the consistency with the CMP. Effect on Sites Subject to the Federal Operating Permits Program The requirements of 42 USC, 7410 are applicable requirements of 30 TAC Chapter 122. Facilities that are subject to the Federal Operating Permits Program will be required to obtain, revise, reopen, and renew their federal operating permits as appropriate in order to include the adopted rules. Public Comment The commission offered public hearings in Houston on April 18, 2017; in Arlington on April 19, 2017; and in Austin on April 20, 2017, and received no oral comments. The comment period closed on April 24, The commission received comments from the Environmental Defense Fund (EDF); Lloyd Gosselink Attorneys at Law (Gosselink) on behalf of the Solid Waste Association of North America, City of Houston, City of San Antonio, City of Denton, City of Irving, Freedom CNG, and NOVUS Wood Group LP; Green Environmental Consulting, Inc. (GEC); Houston-Galveston Area Council (H-GAC) on behalf of H-GAC, EDF, ExxonMobil, Advance Environmental Group, Railserve, Rightship, Caterpillar Inc., EMD Power Products, Element Markets, and Port of Houston Authority; Texas Pipeline Association (TPA); and the Trades, which include the Texas Association of Business, Texas Association of Manufacturers, Texas Chemical Council, Texas Industry Project, Texas Oil and Gas Association, and TPA. General support for the rule revision was received from all commenters although specific changes to the rules were suggested in 14 comments. ADOPTED RULES October 6, TexReg 5455

174 Response to Comments General comments Comment EDF commented that it is particularly concerning that historically, the majority of users of VOC ERCs have also had significant amounts of unauthorized emissions, not only for criteria air pollutants, but also for hazardous air pollutants. Thus, the TCEQ should not allow facilities with a demonstrated history of unauthorized emission events to participate in these programs. Response The primary purpose of this rulemaking is to facilitate credit generation by area and mobile sources. Changes to the requirements for participation in the program, other than those directly related to characteristics of a participant as an area or mobile source, are beyond the scope of this rulemaking. The release of unauthorized emissions is addressed through the agency's enforcement process, not the EBT program. No change to the rules was made in response to this comment. Comment Gosselink commented that under the existing EBT rules, MERCs have a limited life of five years between the date they are generated and the date they are used. This limited life should be extended to at least ten years, if not eliminated altogether. There is no basis for this restriction, and the restriction is detrimental to the MERCs (and more broadly to the ERCs) program, particularly in light of the amount of time it often takes to get the MERC (or ERC) certified. Response The established five-year lifespan for ERCs and MERCs was set prior to this rulemaking based on criteria outlined in the federal economic incentive program guidance (EPA-452/R ) and federal statute of limitations. This rulemaking aligns MERC application due dates and historical adjusted emission periods with those for ERCs and establishes limited situations in which the lifespan of an ERC or MERC may be as long as six years. Historically, ERCs have been used primarily for offsetting in NNSR permits, and it is anticipated that the same will be true for MERCs. To meet NNSR program criteria, credits used as offsets should be from recent emission reductions. To facilitate program implementation, it is important to keep the MERC and ERC lifespans the same to avoid any constraints on their use for offsets. No change to the rules was made in response to this comment. Comment GEC commented that this proposed rulemaking does not allow the generation of ERCs and DERCs from a facility, fugitive emissions from aggregated facilities, or aggregated mobile sources that cannot generate at least 0.1 ton per year of credit after all adjustments are applied. GEC agreed that the 0.1 ton per year increment is appropriate and considered it important that the increment not be limited further. Many small facilities may generate small amounts of ERCs and/or DERCs in the future, and these need to remain viable credits for sale to other small facilities. It is often difficult to purchase small incremental credits from larger banked amounts. GEC commented that the proposed rulemaking does not appear to address the quantity or increment of ERCs and DERCs that may be sold or transferred, and requested that, either by future rulemaking or guidance, the TCEQ not limit the quantities or increments of ERCs and/or DERCs that may be sold or transferred. This is important for small facilities that may need to purchase small amounts of ERCs. Response The commission agrees that the 0.1 ton per year increment is the appropriate minimum unit for credit generation. Since two-step conventional rounding is used for ERC generation, a facility can reduce emissions by or greater ton per year and the potential ERC generated would be rounded to 0.1 ton per year. For consistency purposes, processing, and tracking, the commission requires all credit transactions to be in 0.1 ton per year increments. This rulemaking does not change the minimum increment of credits allowed for transfer. No changes have been made to the rules or are currently planned to further limit the increment in which credits can be generated, transferred, or used. Comment TPA commented that they support the TCEQ's proposal for a longer look-back period of up to 10 years for establishing baseline emissions. Response The commission appreciates the support for this aspect of the rulemaking. Comment The Trades commented that the TCEQ should use a rule amendment process, rather than the proposed petition process, for changes to the inelastic source list. A rule change, rather than a change on an executive director list, is legally preferable for determining ineligibility to generate area and mobile credits. Response The commission disagrees that a rule amendment process is necessary or legally preferable for determining ineligibility to generate area and mobile credits. As discussed in the Section by Section Discussion portion of this preamble, like the rulemaking process, the proposed petition process includes public notification, the opportunity for public comment, and formal commission action. Parties who wish to be assured of notification regarding potential changes to the inelastic source list should register for notifications at "Gov delivery" notifications will be sent to those registered for the Emissions Banking and Trading listserv whenever any changes to the inelastic source list are available for public review. No change to the rules was made in response to this comment. Comment The Trades commented that the TCEQ should clarify the type of documentation necessary to satisfy the burden of proof requirements. The Trades are concerned that the documentation process will operate as another mechanism by which the TCEQ can deny ERC generation, even if documentation can be demonstrated for the overall area source, and commented that the TCEQ should take steps to ensure efficient and consistent interpretation from program staff, as well as to better prepare area source applicants as to agency expectations regarding appropriate documentation. The Trades commented that the TCEQ should also recognize that it is unreasonable to require the level of sophistication in recordkeeping of area sources that is required of point sources and should taper its expectations accordingly. 42 TexReg 5456 October 6, 2017 Texas Register

175 Response The commission appreciates the concerns raised regarding the documentation that will be necessary to sufficiently document baseline and strategic emissions, and thus quantify emission reductions for credit. At the stakeholder meetings held in December 2016, agency staff presented examples of the types of records that would typically be used to support emissions quantification for different types of facilities and mobile sources. The agency anticipates providing further guidance on this topic shortly after this rulemaking becomes effective. This guidance is expected to help credit generation applicants prepare complete applications and ensure efficient and consistent application review by program staff. The records used to support emissions quantification are intended to be the minimum necessary to document that the emission reduction is, in fact, surplus, real, quantifiable, permanent, and enforceable, as federally required for all types of sources. No change to the rules was made in response to this comment. Comment H-GAC requested that the TCEQ address how the proposed rulemaking outlines the following critical elements of a successful program: creditable, air quality, and economic growth and jobs. Response The EBT program rules in Chapter 101, Subchapter H include market-based programs that provide flexibility for complying with air regulations, such as the offset requirements in NNSR permits or the unit-specific emission limits in various state rules. This rulemaking addresses the two voluntary emission credit programs designed to incentivize emissions reductions beyond regulatory requirements. The purpose of this rulemaking is to facilitate credit generation and allow for flexibility in credit use by area and mobile sources. By providing increased flexibility, this rulemaking can be expected to indirectly support economic growth and job creation in those areas of the state where NNSR offset requirements apply. The rules are structured to meet the federal requirements that emission reductions be surplus, real, quantifiable, permanent, and enforceable, and thus may result in air quality benefits. Additionally, the emissions offset ratio, as determined by an area's nonattainment classification, is greater than one-for-one. These additional offsets for NNSR permits may result in further air quality benefits. No change to the rules was made in response to this comment. Health Concerns Comment EDF commented that the use of significant numbers of ERCs or DERCs by industrial facilities in environmental justice communities could further exacerbate the disproportionate health impact on the residents of these communities. EDF commented that to better address environmental justice considerations in the proposed rulemaking, the TCEQ should prioritize projects with significant potential for reduction of health pollutants, in addition to reduction of ozone precursors. As an example, EDF stated that particulate matter 2.5 microns or less in diameter (PM 2.5 ) has been linked to numerous adverse health outcomes and also happens to be an emission from internal combustion of diesel (and other petroleum based fuels) engines. EDF stated that projects demonstrating significant emission reductions from PM 2.5, in addition to NO X, could improve air quality for neighboring communities, while also providing an ERC opportunity for businesses. EDF commented that the TCEQ could reduce the risk for pollution hotspots by incorporating into the EBT program a requirement for co-locating where credits are generated with where they are used. EDF stated a number of studies have reported that pollution hotspots can be created if EBT programs are not developed carefully and that requiring co-location of credit generation and use along the Houston Ship Channel would be one way to mitigate the potential for hotspots. EDF commented that the TCEQ should use and publicize the results of an environmental justice screen or similar assessment of projects to evaluate community impacts and benefits, for any purchase of ERCs greater than 10 tons. EDF stated that the EBT program is currently designed only with business flexibility in mind, but businesses in the HGB region operate in close proximity to neighborhoods and their operations can affect the lives of people on a daily basis. EDF further stated that the TCEQ's mission to "protect {the} state's public health and natural resources consistent with sustainable economic development" does require the agency to consider public health implications for rules, and to date, the agency has not provided indication that these critically important elements have been considered. Response These comments are outside the scope of this rulemaking. The primary purpose of this rulemaking is to facilitate credit generation by area and mobile sources in a manner that is consistent with federal requirements. However, the commission notes that use of emission credits in the NNSR program involves an "environmental contribution" included as part of the more than one-to-one offset ratio for nonattainment areas. By generating credits from controls and shutdowns and then using the credits in NNSR permits to exceed the amount of emissions that are permitted, fewer total emissions enter the airshed. No change to the rules was made in response to these comments. Comment EDF commented that the TCEQ should also remove the allowance of inter-basin trading in the program unless a comprehensive demonstration of no adverse impact can be conducted. Response This comment is outside the scope of this rulemaking. For interbasin trading, the current rules are written to require executive director and EPA approval and demonstrations that show the county of use is not negatively impacted. No change to the rules was made in response to this comment. SIP/EI Comment The Trades commented that a protocol that is sufficient for submission of EI data should be considered to be an appropriate demonstration for these EBT rules. The Trades further stated concern over the rule's requirement that applicants use applicable emissions quantification protocols in Chapters 106, 115, 116, and 117 for credit generation emissions estimation. Given the TCEQ's significant concerns about SIP integrity, the Trades recommended the TCEQ add a provision stating that applicants can follow the protocols identified in the TCEQ's EI guidance for purposes of generating emissions credits under this program. Response The EBT rules reference the protocols in the TCEQ rules that implement control strategies for Texas nonattainment areas (e.g., ADOPTED RULES October 6, TexReg 5457

176 30 TAC Chapters 115 and 117) because these are considered the most accurate protocols for the types of facilities regulated by those chapters. This aspect of the EBT rules is not revised by this rulemaking and has been approved by the EPA and incorporated into Texas' SIP. The current TCEQ EI guidance reflects the Chapters 115 and 117 protocols as closely as possible for the types of facilities regulated by these chapters. This rulemaking adds the requirement that facilities subject to a requirement under Chapter 106 or a permit issued under Chapter 116 use the testing and monitoring methodologies in those requirements to demonstrate compliance. This rulemaking is intended to facilitate credit generation by area sources and the addition of the requirement to use methodologies from applicable requirements in Chapters 106 and 116 is intended to provide direction to area sources who are subject to such requirements. Area sources are generally not subject to EI reporting requirements, and thus would not be expected to be familiar with EI protocols. The EBT rules allow that applicants use the most conservative method for replacing missing data when the data supporting the protocols in Chapters 106, 115, 116, and 117 are unavailable. In essence, this results in the rules already allowing the use of EI protocols in certain circumstances. When EI guidance has changed after a report was filed, the change is to increase the accuracy of subsequent reports; because credits must be based on accurate calculations of real reductions, the revised protocol is used in the calculations for credits, with an upper limit of the reported value to ensure that the SIP attainment demonstration is not adversely affected. In some cases, applicants request to use calculation methods that are different from those used for the EI reports, and these protocols may be allowed, with an upper limit of the EI reported value to ensure that the SIP attainment demonstration is not adversely affected. No change to the rules was made in response to this comment. Comment EDF and H-GAC expressed serious concerns that the HGB SIP has significantly underestimated the large amount of marine and locomotive emissions in and around the Houston Ship Channel. In addition to the air quality implications, this may also have a negative impact on the economic viability of the EBT program, as market-based programs rely on accurate information to be able to provide real environmental (and economic) benefits. EDF also commented that a recent engine survey by Caterpillar and a review of the 2014 commercial marine vessel inventory (commissioned by TCEQ and completed by a third party consultant) for ocean-going vessels hoteling assumptions clearly demonstrates the need to update the SIP inventory. Moreover, the incorrect assumptions in the SIP appear to be causing a substantial underrepresentation of the emission reduction opportunity (and economic incentive for locomotive and tug owners) associated with upgrade to Tier 4 engines. The commenters concluded that the TCEQ should work with the EPA and stakeholders to ensure that EIs used in the SIP are accurately representing local emissions, and that tug and locomotive owners are given credit for all emission reductions. Response These comments are outside the scope of this rulemaking. The TCEQ develops its EIs in accordance with EPA reporting requirements and works closely with the EPA to ensure the inventory is accurate, updated, and comprehensive. Data that may be useful to improve future EIs for use in future SIP revisions may be submitted to the agency's Emissions Assessment Section. No change to the rules was made in response to these comments. Comment The Trades expressed concern that the SIP modeling process appears to be driving the offset NNSR banking rules so that, instead of having a rule that serves an administrative function to benefit all sides in identifying appropriate offsets for use in NNSR permitting, the rule has evolved into one that functions to disallow reductions otherwise allowed in other states under federal law. The Trades commented that this places Texas industry at a competitive disadvantage and results in projects which would have come to Texas being built elsewhere because needed offsets are unavailable. In Attachment A of the comment submitted by the Trades on April 17, 2017, the Trades provided example scenarios under which they believed the rule would allow credit generation and scenarios where they interpreted that the rule as proposed would be expected to prohibit credit generation. The Trades indicated that the scenarios in Attachment A provide examples of the proposed rule's practical effect on area source credit generation. The majority of the scenarios described in Attachment A relate to the replacement of equipment between the SIP emissions year and the time of the potentially credit generating emission reduction. Response SIP modeling is an integral part of determining whether emissions reductions are surplus for purposes of meeting federal economic incentive program requirements and is an EPA approved requirement of the Texas program. Reported point source and estimated mobile and area source emissions are the primary inputs for the SIP modeling used to demonstrate anticipated NAAQS attainment by federal deadlines. Credits must be based on emissions that were included in the most recent SIP modeling; otherwise, the attainment demonstration would be compromised by increasing actual emissions beyond those that were used in the attainment demonstration modeling. This rulemaking is intended to increase the amount of credits available by implementing changes to the EBT programs for generating credits from area and mobile sources. Several of the scenarios in Attachment A of the Trades' April 17, 2017 comment letter describe situations where the emissions reductions were not expected to generate credits because equipment was replaced between the SIP emissions year and the time of the emissions reduction. The Trades interpret the proposed rule as disallowing the generation of credits in these scenarios because the replacement equipment was not present in the SIP year. The TCEQ disagrees with this interpretation. When an "in-kind" equipment replacement occurs, it is common practice for TCEQ to ensure the replacement equipment is the same as or functionally equivalent to the equipment that was operational in the SIP emissions year and that no shifting of emissions has occurred as a result of the change. If it can be demonstrated that the replacement equipment is the same as or functionally equivalent to the equipment that was operational in the SIP emissions year and that no shifting of emissions has occurred due to the equipment replacement, credits may be issued based on the original equipment and the replacement equipment being considered the same facility. In response to these comments, the commission added language to the definition of "Facility" to specifically note that 42 TexReg 5458 October 6, 2017 Texas Register

177 original equipment and replacement-in-kind equipment that are the same as or functionally equivalent are considered the same facility. Comment The Trades commented that the TCEQ should clarify and be explicit in the rules that the percentage reduction in (c)(3) and (c)(2) may be adjusted downward with improved data. In addition, the Trades commented that the TCEQ should clarify and be explicit in the rules that that the percentage reduction for the overall airshed discount may be adjusted downward with future SIP cycles as data about such sources becomes more reliable. Response In the future, the commission may choose to change the overall creditable emissions available and/or the discounts applied to individual credit applications. If this happens, rulemaking will be necessary, with public notice and an opportunity for public comment. For this rulemaking, the commission determined the SIP emissions available for potential credit generation by reducing the total emissions value in the applicable SIP revision by: 25% for area (excluding residential) and non-road mobile sources; and 15% for the on-road mobile source category. The commission also established the 15% discount for records to support approved alternative methods to quantify emissions (minimum 0.1 ton per year reduction). The commission may decide to reduce the discount amounts as uncertainties decline; however, the commission has determined that it is unnecessary for this to be explicitly stated in the rule itself. The commission always has the ability to adjust TCEQ regulatory requirements in response to improved information within the limitations of federal rules and statutes. No change to the rules was made in response to this comment. Comment The Trades commented that there are several state-only provisions within the rules that they believe are likely areas for future rule changes for which federal approval could add a significant time delay. These portions of the rules are not necessary for SIP approval and therefore should remain out of the SIP so that, if future circumstances warrant changes, SIP approval is not a bottleneck to effectuating change. The Trades proposed the following provisions be excluded from the SIP: (a)(2)(D) and (c)(2) - (4); (a)(2)(D), (c)(1) - (3), and (e)(3) - (4); (c); (c)(2); and (c)(1) - (3). Response The commission disagrees that several provisions within the rule are not necessary for SIP approval and should remain out of the SIP. In order for credits to be used for programs included in the SIP (e.g., offsets for permitting purposes in nonattainment areas or compliance flexibility under other SIP rules), the credits must be federally enforceable and be generated through a SIP-approved program which contains requirements adequate to ensure that SIP approvability criteria are met. While meeting these requirements, the established limitations ensure that allowing credit generation from sources that are estimates and not actual counts still provide flexibility to credit generators. The commission has determined that it is appropriate to submit these provisions to EPA as changes to the SIP so that area and mobile credits may be used as offsets for major NNSR permits. It is necessary to have requirements that provide the kind of limitations that ensure ERCs are real, quantifiable, permanent, enforceable, and surplus. The listed provisions make up only part of the whole of the program, but nonetheless provide important boundaries that help to ensure the integrity of the EBT program and the Texas SIP. Furthermore, the commenter has failed to provide specific reasons why these provisions are not necessary for SIP approval. No change to the rules was made in response to this comment. Permanent and Enforceable Comment The Trades commented that the TCEQ should clarify the types of monitoring, testing, or other requirements that the agency intends to set as a condition to ERC generation and rely on pre-existing certification forms, such as the APD-CERT and PI-7-CERT, instead of creating Form EBT-CERT. The Trades also commented that TCEQ has proposed compliance requirements to "ensure that emissions reductions associated with credits are real {and} enforceable." And that the proposed rule language in (g)(2) states: "As a condition for the certification of a credit, the executive director may specify monitoring, testing, recordkeeping, or other requirements through an Emissions Banking and Trading Certification of Emission Reductions Form (Form EBT-CERT), or other forms considered equivalent by the executive director." The Trades commented that it is unclear whether this provision allows the executive director to specify substantive conditions, or require specific actions, after the ERC is generated. The Trades expressed concern that, as written, the proposed language appears to be a broadening of the agency's existing authority with the potential to create a significant compliance burden on ERC generation. The Trades requested that this language be removed from the final rule. Response The commission appreciates the concern regarding uncertainty as to the types of monitoring, testing, or other compliance requirements that may be put in place as conditions of credit generation to ensure the credited emission reductions are real and enforceable. The commission anticipates primarily relying on standard text already in use for special conditions included in NNSR permits. The Form EBT-CERT is necessary to document these conditions in circumstances when special conditions are not included on the APD-CERT or PI-7-CERT. In order for an action to generate an ERC, the emission reduction must be permanent. For ERCs generated by point sources, the requirement to permanently reduce emissions can be documented in a special condition in the applicable NNSR permit (i.e., meeting operational specifications of a control device or not re-starting a facility that was shut down to generate credits). Since few area and no mobile sources are authorized via source-specific NNSR permits, the requirements for area and mobile sources to permanently maintain the credited emissions reductions will be documented in an EBT-CERT or other forms considered equivalent by the executive director. The commission does not anticipate that the burden for demonstrating on-going compliance will be any different because the requirement is documented in an EBT-CERT instead of an NNSR permit. No change to the rules was made in response to these comments. Definitions Comment ADOPTED RULES October 6, TexReg 5459

178 The Trades commented that the proposed definition of "Point source" in (21) is inconsistent with common usage. The commenter urged the TCEQ not to compound the problems already inherent in these rules by previous wholesale substitution of phrases ("stationary source" to "source" to "facility") and instead omit the definition and revisit the offset program requirements at a future date to discuss rule simplification and clarification of appropriate terminology. Response The commission understands that there may be some confusion that is created with the use of common terms that have multiple meanings in the context of air quality laws, rules, authorizations, SIPs, and conversational interactions. However, the commission disagrees that this definition should be omitted. The definition of "Point source" is consistent with, although not identical to, the EPA's definition of point source in the Air Emissions Reporting Requirements, 40 CFR Part 51, Subpart A. Specifically, 40 CFR defines a point source as a "large, stationary (non-mobile), identifiable sources of emissions that release pollutants into the atmosphere." Prior to this rulemaking, the EBT rules already had a definition of "area source" that was different, but not inconsistent with the common use of the term in air quality applications. To meet the primary objective of this rulemaking, facilitating credit generation by area and mobile sources, the commission considers it useful to clearly distinguish what will constitute a point, area, and mobile source for purposes of credit generation. Since an emission reduction must be surplus to the SIP to be creditable, the commission chose to make the point, area, and mobile distinction with a clear link to the EIs that are used as the basis for SIP modeling. The commission has not applied these definitions beyond the EBT rules in Chapter 101, Subchapter H. The offset program requirements are beyond the scope of this rulemaking. No change to the rules was made in response to this comment. Comment The Trades commented that the proposed definition of "Primarily operated" in (22) should allow for more flexibility. The Trades commented that the TCEQ should amend (22) to allow for discretion by the executive director in setting the percentage as follows: "When activity is at least 75% within a specific nonattainment area, or as approved by the executive director." Response The commission generally agrees with the commenter and has changed the definition for primarily operated to "at least 75% within a specific nonattainment area." This change would align the requirement with other TCEQ programs, such as the Texas Emissions Reduction Program (TERP). However, to facilitate program implementation and avoid the potential resource drain associated with case-by-case considerations, the commission did not revise the definition to allow case-by-case executive director approval of other activity demonstrations. Comment The Trades commented that the definition of "State implementation plan (SIP) emissions" in (30) is too complex and needs clarity to ensure area and mobile source ERC viability. The Trades commented that the TCEQ should clarify that its choice to use a new SIP EI year would not devalue previously issued emissions credits. Response The commission appreciates the concern that the definition of SIP emissions is complex and has attempted to fully explain how this definition is intended to be interpreted in this rulemaking preamble. A new SIP EI year alone would not devalue previously issued credits as long as the EBT bank is modeled while demonstrating attainment and there are no new applicable rules. In the past, the agency has undertaken efforts to notify interested parties of a SIP EI year change so that generators have an opportunity to generate credits before a new SIP EI year change occurs and has included banked credits in SIP modeling to avoid the credits being potentially devalued. No change to the rules was made in response to this comment. Area Sources Comment TPA commented that they support the TCEQ's decision not to discount credits generated by an area source when the area source has records for quantifying emissions that are the same type of records that are required to be maintained by a point source. Response The commission appreciates the support for this aspect of the rulemaking. Comment TPA and the Trades commented that a FIN-by-FIN approach is contra to the concept of an area source emission credit program and unnecessarily hampers area source credit generation. The Trades commented that a unit-level structure would negate the opportunity for many area sources to generate credits. The Trades stated that area sources, by definition, have small emissions and those emissions are not reported as individual equipment emissions into the inventory. In addition, the Trades stated that stringent application of FIN-by-FIN recordkeeping requirements could result in many real reductions being determined as ineligible for ERC generation. Rather than restricting area source generation to facility-level increments, the Trades recommended the TCEQ allow area sources to meet the 0.1 ton per year threshold requirement at the area source level and not require area source owners to "prove up" which individual pieces of equipment were operating in the baseline SIP year used for the EI. TPA also commented that modifying the current FIN-by-FIN approach to allow for aggregation of reductions across the area source is of vital importance in ensuring that any area source credits program that is finalized is workable and beneficial in real-world practice. The Trades commented that in addition to the FIN-by-FIN approach not being legally required, it is not an efficient use of resources to add the same onerous and time-consuming requirements on the area source application process. The Trades also commented that the "reasoned justification" given by the TCEQ for developing a FIN-by-FIN baseline SIP year comparison for point sources (which was the practical result of the two changes made in the 2000 and 2001 rulemaking), does not apply to area sources. The Trades stated that the area source SIP model does not utilize equipment-specific EI information and that area source inventories are based on higher level data (generally countylevel estimates from the Texas Air Emissions Repository), utilizing an emission factor (emissions per unit of activity). Response 42 TexReg 5460 October 6, 2017 Texas Register

179 The commission disagrees that a FIN-by-FIN approach is contra to the concept of an area source emission credit program and unnecessarily hampers area source credit generation. The EPA's economic incentive program guidance (EPA-452/R ) for open market trading programs requires emissions reductions to be quantifiable, in addition to real, surplus, permanent, and enforceable. This EPA guidance specifically states, "The generation or use of emission reductions by a source or group of sources is quantifiable if they can reliably calculate the amount of emissions and/or emission reductions occurring during implementation of the program, and replicate the calculations." The area source EI is developed for specific source categories that are defined by the EPA. In practice, these EPA source categories can represent either activities (e.g., automobile painting, commercial fuel combustion) or specific types of sources (e.g., natural gas dehydrators, compressor engines greater than 50 but less than 500 horsepower, landfills) at the county-level. Although the data represented in the SIP is an estimate, the requirement that sources seeking to generate credits must demonstrate emission reductions are real and quantifiable still applies. Such a demonstration requires information about emissions from facilities at a source, i.e., a FIN-by-FIN approach. The commissions disagrees that the FIN-by-FIN approach is not an efficient use of resources. Emission reductions are calculated on a FIN-by-FIN approach in point source applications because this approach ensures that reduced emissions were calculated accurately. This need also exists for area source applications. Even where aggregating emissions is allowed (i.e., fugitive emissions and increased efficiency of a control device for multiple facilities), the calculation for each facility's contribution still must be done accurately. Under certain circumstances, multiple emission points are treated as a single unit equivalent to a facility. For the purposes of generating an ERC or DERC for an area source, the commission may consider grouped emission points to be a single facility, and may certify credits from the grouped emission points so long as the total grouping has emissions equal to or greater than 0.1 ton or tpy, even if points within the group have emissions of less than 0.1 ton or tpy. Credit generation cannot exceed the group s actual emissions in the SIP emissions year or the historical adjusted emissions years and such a group may include equipment that was not operational during the SIP emissions year or the historical adjusted emissions years. The emissions estimation methods small sources are likely to use (testing, emissions factors, and mass balance) all have some inherent uncertainty. The accuracy of testing data depends on the type of analysis performed and the techniques used. Manufacturer's emissions factor data is generally from the specification of the upper limit of emissions that a facility would be expected to emit as manufactured. Mass balance data is based on changes in weight during a process or operation and generally assumes that all weight lost was from emitting the pollutant, which may not be correct. The commission has determined that the requirements in this rulemaking balance the uncertainty associated with these emission estimation methods and the need to ensure credited emission reductions are "real." In addition, the commission's experience with prior credit generation applications from area sources indicates that this will result in an area source credit program that is expected to be workable and beneficial in real-world practice. In response to the comments as described elsewhere in the preamble, the following changes were made to the rule to clarify that the commission may consider grouped emission points and like kind replacement equipment as a single facility for the purposes of generating an ERC or DERC for an area source: the definition of "Facility" was expanded to include a reference to grouped emission points; the general provisions were expanded to include specifications for grouping emissions points; proposed language requiring that individual facilities not operated during the SIP emissions year may not be used to generate ERCs or DERCs was not adopted; and the word "individual" was not included in adopted (f)(1) and (g)(1). Comment The Trades commented that the TCEQ is already proposing to cap the area source inventory and to apply multiple discounts which reduce the amount of area source emissions credits that can be generated in order to address uncertainties about the accuracy of the EI used in the SIP baseline year modeling. The Trades commented that there is no need to require area sources to also produce records and "prove-up" every discrete piece of equipment at the area source during a SIP baseline year in order to generate credits and that facility-level data is not in the SIP baseline inventory and was not relied upon by the TCEQ in its modeling efforts. Response This rulemaking will impose a limit on the amount of creditable area source SIP emissions and apply discounts to area source credit applications for shutdowns or in the very rare circumstance in which a new data quantification method must be sent to EPA for approval. These discounts are necessary to address uncertainties regarding area source SIP emissions, emissions shifting, and new emissions quantification procedures. These safeguards are unrelated to the requirement to quantify emissions on a FIN-by-FIN basis and provide FIN-specific records. The requirement for equipment records is intended to ensure that each specific potentially creditable emission reduction is real and quantifiable, consistent with the federal economic incentive program guidelines. No change to the rules was made in response to these comments. Comment The Trades commented that conflicting usage of the term area source and facility leads to confusion and recommends the definition of "Area source" (and "Mobile source") to reflect that the term can cover one or more facilities at area sources (or sources in the case of mobile sources). Response The commission understands that reviewers found that the usage of the terms "Area source" and "Facility" in the proposal confusing. Nonsubstantive clarifying changes have been made to the rule language in some cases to add additional consistency and clarity. However, the commission does not agree that the definition of "Area source" should be changed to reflect that the term can cover one or more facilities at an area source. This definition existed prior to the rulemaking and this rulemaking is not intending to change how this definition is applied. The term "Mobile source" is intended to reflect an individual vehicle or piece of equipment, such as an individual bus, tractor, locomotive, etc. No changes were made to the definition of "Area source" or "Mobile source" based on this comment. Comment The Trades commented that the TCEQ has the flexibility to take a different approach for area sources and that no other state has a program like Texas' program. The Trades stated that over ADOPTED RULES October 6, TexReg 5461

180 time, the Texas program has evolved to include very state-specific SIP "true-up" provisions and has also become a mandatory program, as there is no other mechanism by which companies can obtain offsets from other companies to comply with Chapter 116 NNSR permitting requirements. The Trades commented that thus, the current program sometimes functions to disallow reductions otherwise allowed in other states under federal law, which places Texas industry at a competitive disadvantage and results in projects that would have come to Texas being built elsewhere because needed offsets are unavailable. While acknowledging that it is beyond the scope of these comments and this rulemaking to address ERCs generated by stationary sources with emissions included in the Texas EI, the commenter requested that TCEQ not impose the same restrictions on area sources. Response The Texas program is different and often more flexible than other such programs. For example, the Louisiana program only allows credits to be generated from sources that can demonstrate reductions of at least one ton per year, a ten-fold increase over the 0.1 ton per year reduction minimum that the Texas rule allows. Because Texas has an incentive program and not just a credit program, the requirements of the federal economic incentive program guidance (EPA-452/R ) have to be met. Since the comment did not provide specific details regarding how the current program may disallow reductions otherwise allowed in other states under federal law, the commission cannot evaluate any particular specific requirement that may need to be considered for revision. Although it is true that major sources who need offsets for major NNSR nonattainment permitting often obtain those offsets through the EBT program, no individual source is required to participate in this program to generate or use such offsets. There are other options for offsets, including netting and cap and trade allowances for some sites and discrete emission credits for all sites. Individual area sources are not required to participate in this program but can choose to do so. This rulemaking was undertaken at the request of, and with the active participation of many stakeholders who plan to participate in the program and generate credits from emission reductions at sources that have been unable to participate. For these sources to generate credits that can be useful for offsetting purposes, the program has been modified to ensure that reductions from such sources will be real, quantifiable, and surplus to all applicable rules, regulations, and the SIP, as well as enforceable and permanent. No change to the rules was made in response to this comment. Comment The Trades commented that the TCEQ should not use the protocols and methodologies in these rules, combined with the agency's focus on the SIP EI, to exclude otherwise creditable area-source reductions from participating in the program. The Trades expressed concern that the TCEQ is entirely focused on "facilities" (as specific pieces of equipment at a site or account) for which creditable emissions must be determined by following specific protocols. The Trades commented that at present, none of these protocols specifically include approval of the very methodologies by which companies are to submit EI data per TCEQ EI guidance, but that for purposes of determining whether a "facility" is in the area source or point source inventory, TCEQ looks at overall emissions from the "site" or "account" comprising the point or area source (as those terms are utilized in the EI rules). The Trades commented that this can create situations where facilities at accounts previously considered to be area sources turn out to aggregate to, for example, more than 10 tons of VOC emissions using EBT-approved protocols. The Trades stated that they understand that TCEQ's position is that such facilities at such sources then become ineligible to generate ERCs, based on the logic that the account or site is now a "point source" and the emissions from the facility were not included in the appropriate point source EI, resulting in a "SIP baseline" of zero. The Trades stated that this means that facilities at an area source that collectively add up to nine tpy using EBT protocols can generate ERCs, provided all requirements for the rules are met, but the same facilities at an area source that collectively add up to 11 tpy using the EBT protocols now are completely excluded from the program. The Trades commented that the same is true if emission calculation methodologies change--tceq's position would have the effect of excluding needed ERC generation because improved data methodologies would be applied to decisions made years ago regarding permitting or EI submission requirements. Response The commission is not intending to use the protocols and methodologies in the EBT rules to exclude otherwise creditable reductions at area source facilities from generating credits. The protocols required in the EBT rules at (e)(2) closely reflect the current EI methods and guidance. The EBT program historically has not issued credits for point source credit generation when a point source did not report to the emissions inventory. If a site met the EI reporting threshold in (e.g., 10 tpy of VOC or 25 tpy NO X emissions for sites located in an ozone nonattainment area) for the given SIP EI year using that year's TCEQ EI guidance, but did not submit the required EI, then credits were not eligible to be generated. It is the site's responsibility to self-report emissions per the rule. In a few very limited instances, a site's emissions would not meet the EI reporting thresholds for the SIP EI year when determined using TCEQ EI guidance, but would meet the EI reporting thresholds when determined using EBT protocols. Under these circumstances, applications will be reviewed on a case-by-case basis to determine whether credit(s) can be issued in keeping with EPA guidance and TCEQ rules. No change to the rules was made in response to these comments. Mobile Sources Comment Gosselink commented that MERC applications have been submitted under the current rules that the TCEQ had not yet taken action and that these applications should be allowed to be amended in accordance with the new rules, and MERCs issued where appropriate. Response The commission agrees with the commenter that any in-house MERC applications that have not been acted on should be allowed to be amended in accordance with the new rules. Program staff have reached out to applicants with pending applications, both MERCs and MDERCs, requesting additional information in order to process the applications for a final determination upon adoption of this rulemaking. The rules also address the impact of the processing delays associated with the rulemaking on the 42 TexReg 5462 October 6, 2017 Texas Register

181 life of credits. No change to the rules was made in response to this comment. Comment Gosselink commented that MERC users should be required to purchase some multiple of the anticipated emissions increase so that the surplus tonnage can be retired. Gosselink commented that this could achieve air quality improvement from this program and that a ratio, or discount rate, similar to but slightly higher than the ratios used for ERCs would be appropriate. Gosselink suggested a discount rate of 1.1 to 1.0 because any higher discount rate crosses over into an area of mathematical disincentive for the seller. Gosselink requested the commission identify the mathematical model that was used to establish the proposed discount rate. Response The commission does not agree that an additional discount rate is warranted for the buyers of MERCs in order to achieve air quality improvements from the EBT program since this program is not a reduction strategy. The EBT program is an economic incentive program to allow flexibility to the regulated community that in turn stimulates growth in nonattainment areas without increasing emissions. The commission did not use a mathematical model to establish the discounts. In the pre-proposal stakeholder process a range of discount rates to mitigate the uncertainty in area and mobile source emission estimates and the possibility of emissions shifting from area source shutdowns was discussed. One of the major concerns staff received during the stakeholder process was that the preliminary discount rates were too onerous and would discourage area and mobile ERC generation. No change to the rules was made in response to these comments. Comment EDF commented that the proposed EBT regulations and administrative procedures may adversely impact industry adoption of advanced NO X control technologies like those that can control ocean-going vessel hoteling emissions ("stack bonnet technology"), as well as adoption of Tier 4 marine and locomotive engines. Response The commission does not agree with the commenter that the EBT regulations and administrative procedures may adversely impact industry adoption of advanced NO X control technologies. The EBT program is designed to meet the requirements as outlined in the federal economic incentive program guidance (EPA-452/R ). The commission has addressed the concerns with controlling ocean-going vessel hoteling emissions in response to stakeholders' input. As with all credit generation applications, applications including adoption of Tier 4 marine and locomotive engines must demonstrate that reductions are real, quantifiable, permanent, enforceable, and surplus to the SIP and all applicable rules. In such cases the determination of what constitutes surplus to the SIP and applicable rules would include a review of whether the new engine meets or exceeds the current required tier level and whether the old engine has remaining useful life in regards to SIP modeling. No change to the rules was made in response to this comment. Comment EDF and H-GAC commented that the TCEQ needs to provide clear guidance on the authorizations needed to operate both stack bonnet technologies (e.g., AMECS or METS-1) and shorepower technologies and that without this information, businesses may not have enough information to be able to justify investment (expected to be in the millions) and communities may not understand how projects are being implemented. H-GAC and the Trades also requested that the TCEQ specify in the rulemaking or other formal process how any residual emissions from implementation of these control technologies would be treated. Response The requirements for the authorization of stack bonnet and shorepower technologies are beyond the scope of this rulemaking. The TCEQ supplied general guidance on how the authorization of the stake bonnet technology would be implemented based on current permitting practices in a posting to stakeholders on April 20, To this point, stakeholders have not provided information that could be used to issue guidance on shorepower technologies. No change to the rules was made in response to these comments. Comment EDF commented that the proposed regulations, as currently written, incorrectly use the term "useful life" and should use the term "service life" because useful life is defined in EPA regulations as "the period during which the engine is designed to properly function in terms of reliability and fuel consumption, without being remanufactured {and} during which an engine is required to comply with all applicable emission standards." (See 40 CFR ) EDF commented that a large (>500 horsepower (hp)) diesel engine is normally remanufactured five or more times at the end of its ten-year or 20,000 operational hours useful life. EDF commented that the TCEQ should delete the references to useful life and substitute the term service life. Response The commission understands the commenter's concerns regarding the term useful life, but does not agree that the term should be replaced with service life. As stated in the rule preamble, the expected useful life is determined based on assumptions included in the applicable SIP revision, such as, but not limited to, parameters used in the on-road mobile model and in the Texas non-road model for calculating fleet turnover. While the commission anticipates that nearly all types of mobile sources are reflected in the models, any mobile source not reflected in these models will be handled on a case-by-case basis, as approved by the executive director. As useful life is necessary to determine if a mobile source emissions reduction is surplus to the SIP, EBT staff will provide guidance on how useful life is determined and the associated mileage or hours for each type of vehicle or equipment. No change to the rules was made in response to this comment. Comment EDF commented that while median life is useful for measuring emission projections for a fleet of vessels or locomotives in the SIP, there is still a major problem using it for individual vessels or locomotives in the EBT program and that Caterpillar survey data demonstrated that the service life of tug and switcher engines can easily exceed 50+ years. EDF stated that this is not inconsistent with the 23-year median life for Category 2 marine engines because, by the EPA definition, only 50% of the fleet is scrapped by that 23-year period which means that 50% last ADOPTED RULES October 6, TexReg 5463

182 longer than 23 years. EDF stated that it appears, again based on the Caterpillar and Rail Inc. data, that EPA underestimated the median life for these large (>500 hp) engines. EDF commented further that, even in cases where a tug owner must replace a Category 2 engine, in most cases they are allowed by EPA to replace the entire engine with a pre-tier 4 engine because of space limitations in the engine room. EDF and H-GAC recommended that the TCEQ use a 50-year life for these marine and locomotive engines and require an independent engineering assessment of the tug or switcher engine to determine whether the specific vessel or locomotive engine has the potential to remain in service for this period of time. Response The commission understands the commenters' concerns regarding the useful life determination for locomotive and commercial marine vessels but does not agree that the TCEQ should use a 50-year life for commercial marine vessels and locomotives and require an independent engineering assessment. There are specific vehicle or engine life lookup tables from the EPA for the on-road and non-road categories, but not for the large engine categories such as locomotive and commercial marine vessels. The fleet turnover effects modeled by the EPA (in the March 2008 EPA document called Regulatory Impact Analysis: Control of Emissions of Air Pollution from Locomotive Engines and Marine Compression Ignition Engines Less than 30 Liters Per Cylinder, EPA420-R ), was included in the modeling work. It has been brought to the attention of TCEQ staff that the EPA might have data beyond the defaults of ten years or 20,000 hours for these engines. TCEQ staff are working with stakeholders to verify the data used in the regulatory impact analysis and will consider adjusting the useful life based on the findings. Since the useful life will be provided by guidance, no change to the rules was made in response to these comments. Comment H-GAC commented that the rule proposal should accurately reflect mobile source baseline emissions that do not assume upgrades were made if they were not legally required of the owner or operator. Response Mobile source baseline emissions do not include an assumption that upgrades were made if they were not legally required of the owner or operator. The definition for "Mobile source baseline emissions" is "the mobile source's actual emissions, in tons per year, occurring prior to a mobile emission reduction strategy calculated as the lowest of the historical adjusted emissions or state implementation plan emissions." Assumptions regarding engine upgrades are inputs to the SIP modeling that is the basis for the total quantity of potentially creditable mobile source emissions and the consideration of remaining useful life for each category of equipment. The SIP modeling is based on the best information available to the commission at the time of SIP development. Modeling inputs regarding equipment upgrades are generally based on information supplied by the EPA and beyond the scope of this rulemaking. No change to the rules was made in response to this comment. Comment EDF commented that credit adjustments play an important role in ensuring that the emission reductions meet the FCAA requirements, but in the case of unregulated, Tier 0 and Tier 1 tug and locomotive engines, upgrading these engines to Tier 4 will result in ERCs or DERCs equivalent to only 50% of the actual reductions due to the surplus to SIP requirements. As an example, EDF stated that an unregulated switcher emits 17.4 grams per brake horsepower-hour (g/bhp-hr), but it can only get credit for reductions equivalent to a Tier 2 switcher, which is 8.1 g/bhp-hr. EDF commented that, while the TCEQ cannot change the SIP or surplus to the SIP requirements with the proposed rulemaking, in determining what type of credit adjustments to make for tugs and locomotives the TCEQ should consider that these projects provide an additional 50% reduction in emissions. Response The commission understands the commenter's concerns that an applicant reducing emissions with certain types of equipment might not be able to generate credit for the total amount of emissions reduction due to the federal requirement that the emissions be surplus to the SIP. However, the commission does not anticipate that the credit adjustments for shutdowns or use of an alternative protocol are likely to be applied to these types of emission reduction projects. As adopted, there are no other types of credit adjustments. No change to the rules was made in response to this comment. Comment EDF commented that owners of marine vessel and locomotive fleets should be given the option to aggregate their emission reductions across their entire fleets for the generation of ERCs. EDF stated this would be consistent with the existing point source regulations that allow fugitive emissions to be classified under one facility and more importantly, it would provide fleet owners needed flexibility to reposition assets, while still meeting their emission reduction obligations under the EBT program. EDF commented that fleets that want to aggregate their emission reductions should be required to meet a higher standard for monitoring the location of their fleets, e.g., such as Global Positioning Systems, and that the TCEQ should revise the proposal to allow fleets to aggregate their emissions and require location monitoring to ensure reductions are occurring in the area. Response The adopted rules allow aggregation of mobile sources to meet the requirement that emission reductions be certified for at least 0.1 ton per year but the mobile sources must be represented on the same application and will have an application deadline and credit expiration date determined by the earliest emission reduction date among the aggregated sources. Any applicable monitoring requirements will be determined on a case-by-case basis and documented in the EBT-CERT for a particular credit certificate. Fleet aggregation may be one of the factors considered in setting case-specific monitoring requirements. No change to the rules was made in response to this comment. Comment EDF commented that the TCEQ could be overwhelmed with numerous applications for small credit generation projects and suggested the TCEQ review existing TERP programs and assist in developing opportunities for the smaller mobile source projects, which could reduce the administrative burden on the EBT program. Response While the commission encourages participation in voluntary emission reduction programs such as TERP, expanding or 42 TexReg 5464 October 6, 2017 Texas Register

183 revising guidance or other aspects of TERP is beyond the scope of this rulemaking. No change to the rules was made in response to this comment. Comment Gosselink commented that one way to encourage replacement or conversion of significantly more vehicles is to permit one vehicle to receive both TERP money (or other grant money) and have a MERC certified for the same conversion/replacement. Response Texas Health and Safety Code (THSC), prohibits generating emissions credits on projects funded by TERP. An exception exists at THSC, , which allows someone in HGB or DFW to generate emission credits from a TERP-funded project if they contribute $75,000 per ton of emissions and meet other statutory requirements. In addition, in accordance with federal economic incentive program guidance (EPA-452/R ), EBT rules do not allow credits to be generated from reductions funded through state or federal programs, unless specifically allowed under that program. The EPA guidance indicates that, to generate a credit, a reduction must be surplus to all existing requirements. A TERP grant would be an existing requirement for the grantee as long as the TERP contract is in place. To be creditable, an emission reduction would have to exceed the reduction required under the TERP grant and occur after the TERP contract expired. TERP is intended to fund emissions reductions. If an emission credit is generated from a TERP-funded reduction, the use of the credit would mean the TERP reduction, with the exception of the amount required by the offset ratio, would not be realized by the airshed. This would weaken the impact of TERP on air quality as well as TERP's effectiveness as an emission reduction strategy. No change to the rules was made in response to this comment. Comment Gosselink commented that one significant obstacle that prevents TERP from attracting more applicants is its requirement to destroy the engine or vehicle or ship it out of North America. Gosselink stated that a similar requirement for MERCs not only misses an important and significant funding source (the resale value of the vehicle) that could further incentivize conversions and replacements, but fails to encourage replacing high-emitting vehicles before the end or near-end of their useful lives. Gosselink commented that the fact that the TCEQ will approve shipment of a MERCs vehicle somewhere else rather than require destruction of the engine indicates even the TCEQ concedes destruction is not the only solution. However, the bar (shipping a diesel vehicle to South America, Africa, or Asia) is unrealistically burdensome financially. Gosselink stated that shipping costs will exceed $10,000 per truck. Rather than requiring the destruction of the engine or shipping the engine or vehicle out of North America, Gosselink suggested that the MERC program require only that the vehicle be relocated outside of the nonattainment area. Response The commission understands that there are large costs involved in transporting vehicles out of North America and that making a mobile source inoperable might be a disincentive to some potential applicants. While TERP is an emission reduction strategy, the EBT program is a voluntary program designed to provide flexibility in meeting state and federal rules. As mentioned elsewhere in the Response to Comments portion of this preamble, all ERCs must be real, permanent, enforceable, quantifiable, and surplus to all applicable rules, regulations, and the SIP. To minimize the risks to end users, such as Title V permit holders, and to minimize tracking and recordkeeping for credit generators, the commission requires that mobile sources be made permanently inoperable or permanently removed from North America. No change to the rules was made in response to this comment. Comment Gosselink commented that there is no EPA requirement to destroy the engine and that San Diego County has a rule which the EPA reviewed and approved which expressly allows relocation. Gosselink commented that Texas should take the same approach, or explain why this approach is not applicable in Texas. Response The commission agrees with the commenter that there is no EPA requirement to destroy the engine, although the EBT program must meet the criteria of permanent and enforceable as required in the federal economic incentive program guidance (EPA-452/R ). TCEQ staff have researched and not been able to confirm that the approved San Diego project was ever actually implemented or used. In addition, discussions with EPA Region 6 staff indicated that this would not be a viable option to meet the permanent and enforceable requirement. No change to the rules was made in response to this comment. Comment Gosselink commented that contractual and regulatory obligations are deemed fully enforceable in the legal system and in all other TCEQ regulatory arenas and that they are sufficient for the purpose of relocation of mobile sources that participate in the EBT program. Gosselink questioned what part of the proposed contract enforcement protections does the TCEQ believe are unworkable and why. Response The commission understands that contractual and regulatory obligations are deemed fully enforceable in the Texas legal system and in all other TCEQ regulatory arenas. In the absence of mechanisms to track and enforce the compliance with such agreements, the commission does not agree that contracts are sufficient in this case to ensure that the reductions used to generate credits would be real, permanent, and enforceable. As discussed in a previous response, in order to be approvable, emission reductions must be real, permanent, enforceable, quantifiable, and surplus to all applicable rules, regulations, and the SIP. Additionally, the commission is required under the FCAA to enforce the SIP or be faced with federal enforcement and potential sanctions. The commission has determined that the adopted rules provide the most efficient and practicable mechanisms to address the SIP approvability criteria in order to ensure that the emission reductions and their use remain state and federally enforceable. No change to the rules was made in response to this comment. Comment Gosselink commented that there may be certain types of entities that can be inherently trusted to not bring used vehicles back into nonattainment areas, such as a municipality. Gosselink stated that certain types of vehicles are not likely to be relocated back into the nonattainment area and once these vehicles have been relocated, there should be no need to prove that the equipment ADOPTED RULES October 6, TexReg 5465

184 is still outside of the nonattainment area. Gosselink suggested that self-certification should be acceptable to demonstrate that the reduction is permanent in these cases. Response The commission understands that there may be some entities that would pose less risk of bringing vehicles back to a nonattainment area, but does not agree that self-certification could be used as an alternative to requiring the vehicle or equipment be made permanently inoperable. Once the mobile source is sold to another party, self-certification would not be an option. Requiring tracking, monitoring, and site visits to ensure compliance is not feasible and once a noncompliance issue arises, the credit end user would then be out of compliance. No change to the rules was made in response to this comment. Comment Gosselink commented that applicants should have the flexibility to choose to be issued either MDERCs or MERCs. Response The EBT program has historically differentiated between MERCs and MDERCs to reflect the essential difference in the actions used to reduce emissions. MERCS are generated from permanent emissions reductions (and thus issued in tpy) while MDERCs are generated from temporary emissions reductions (and issued in tons). As long as the other requirements are met, MDERCs may be issued for emission reductions that have occurred in the past and are no longer occurring. In addition, MERCs can only be generated in nonattainment areas while MDERCS can be generated in both attainment and nonattainment areas. The commission's practice has been that permanent emission reductions are evaluated as MERCs to be consistent with federal economic incentive guidelines. No change to the rules was made in response to this comment. Comment Gosselink commented that in the event that destruction of the vehicle or engine is elected, that it be clear that the non-emission parts of the vehicle (body, suspension, frame, etc.) could still be salvaged and sold. Response The commission agrees with the commenter that non-emission parts of the vehicle could still be salvaged and sold. The rules do not prohibit this practice. No change to the rules was made in response to this comment. Comment Gosselink commented that in addition to the contractual enforcement mechanisms, the TCEQ, in conjunction with the Texas Department of Motor Vehicles (TxDMV), could implement certain regulatory requirements to deter potential violators from re-importing the vehicle that was sold and shipped out of the nonattainment airshed. The applicant would place a cloud on the title of the vehicle, similar in nature to a salvage title, and could be combined with an easily identifiable license plate. Gosselink stated that a system already exists to add one more "brand" or cloud on a title through the National Motor Vehicle Title Information System which provides all state's motor vehicle titling agencies access to title histories. Gosselink stated that states consult this national database prior to issuing new titles within the state and that Texas maintains a parallel tracking system, called the Registration and Title System. Gosselink stated that through these systems, the vehicle can be tracked even if it is sold and registered in another state. Gosselink also commented that if the TCEQ is concerned that a buyer might re-register the vehicle in a different state while, nonetheless, operating it in Texas, a vehicle with a MERC cloud on its title could be required to have an easy to spot marking (decal, painting, license plate, large lettering or some more technically sophisticated device) in the same way that many vehicles are presently "branded" with decals. Gosselink requested the TCEQ explain why wouldn't this system provide a solution that sufficiently protects the nonattainment area from the risk that trucks will be reimported back into the nonattainment region in a quantity to actually impact air quality enough to impact SIP compliance. Response The commission does not have authority to require rulemaking by other agencies, and implementing the Gosselink suggested approach would require coordination with and potentially rulemaking by other agencies. Because the commission did not propose such an option, which would have fiscal implications for the TCEQ, other state agencies, and other affected parties that were not reflected in the proposed rule's fiscal note, these entities have not had the opportunity to comment on the suggested approach or the costs associated with it. Such an approach might be able to limit reentry of vehicles into the nonattainment area to a level that would not impact SIP compliance, however, the fiscal implications could be significant. Without adequate resources to implement the suggested approach with sufficient oversight, the commission's ability to ensure that the federal economic incentive program requirements of permanent reductions would be in question. No change to the rules was made in response to these comments. Comment Gosselink commented that the TCEQ could pursue violators (of alternatives to vehicle or engine destruction) as an environmental crime and/or lobby for increased fines and vehicle impoundment. Response State agencies are prohibited from lobbying, per Texas Government Code, The TCEQ can only enforce against violators that can be identified and there would be additional resource implications of adequately overseeing this type of enforcement mechanism. The fiscal implications could be significant and without adequate resources to implement this enforcement option with sufficient oversight, the commission's ability to ensure that the federal economic incentive program requirement of permanent reductions would be in question. No change to the rules was made in response to this comment. Comment Gosselink commented that a program already exists that could be used to prevent a waste vehicle from being reintroduced to a nonattainment area in that the TCEQ's municipal solid waste registration team already has in place a registration requirement for municipal sludge(s) and similar wastes, and that similar registration obligations exist at the city level too (e.g. City of Houston). Gosselink stated that if a city's registration requirement does not already apply to waste vehicles, it would be very easy to add these trucks to the list of waste vehicles that must be registered. When a waste vehicle is added to a fleet in a nonattainment area, the TCEQ and/or the city could easily check the VIN number against a list of vehicles that have been replaced and awarded 42 TexReg 5466 October 6, 2017 Texas Register

185 MERCs. Gosselink requested that the TCEQ explain what about this idea or process makes it unenforceable or unlikely to provide the desired deterrent. Response The waste vehicle registration program described by the commenter does not appear to apply to all engines and related equipment and thus would only provide a partial solution to tracking credit generating mobile sources. The commenter provides no information regarding compliance with current limited registration requirements, how a registration requirement would ensure that a vehicle or piece of equipment was not relocated back into a nonattainment area, the potential burden on owners of waste equipment that currently don't have to be registered, or an assessment of the administrative burden for commission staff to audit or enforce such a registration system. In the absence of mechanisms to track and enforce the compliance with such agreements, the commission does not agree that the agreements are sufficient to ensure that the reductions used to generate credits would be real, permanent, and enforceable. Additionally, the adopted rules provide adequate alternatives for ensuring that the emission reductions meet SIP approvability requirements. No change to the rules was made in response to this comment. Comment Gosselink commented that drayage trucks have a disproportionately significant impact on ozone concentrations in the HGB area because of the location of the Port of Houston southeast of downtown and because many of the approximately 3,000 vehicles are older models (some 50 years old) with significantly higher rates of emission. Gosselink stated these combined factors make converting and/or replacing drayage vehicles a high priority, if emission reductions is the goal and MERCs should be part of the solution. Gosselink stated special consideration about how to include drayage trucks in the MERCs program past the end of their normal useful lives needs to be developed. Gosselink requested that the TCEQ explain what other programs will the TCEQ use to reduce emissions from drayage vehicles that are different from existing programs, since the existing programs only provide marginal improvement in NO X emission reductions. Response The commission disagrees with the commenter's assertion that drayage trucks may have a disproportionately significant impact on ozone concentrations in the HGB area. The EPA conducted a study that tracked approximately half a million vehicle movements at the Port of Houston from The study results indicated that only 0.3% of this truck activity was performed by trucks older than 25 years. Since the overall population of older, higher-emitting trucks is extremely small, disproportionate impacts to HGB area ozone concentrations are unlikely to occur. In regards to allowing special considerations for including drayage trucks in the MERC program, vehicles that are past their normal useful or operational life are accounted for in fleet turnover which means those vehicles' emissions reductions are not surplus to the SIP, a requirement of the federal economic incentive program guidance (EPA-452/R ). In addition, the EBT program is an economic incentive program, not an emissions reduction strategy. However, the TCEQ Drayage Truck Incentive program is an emission reduction strategy that is available to provide financial incentives for the replacement of older drayage trucks operating at seaports and Class I rail yards in areas of Texas designated as nonattainment areas under the FCAA. For more information, please visit: No change to the rules was made in response to these comments. Comment Gosselink commented that the current version of the EPA Motion Vehicle Emission Simulator (MOVES) model contains the following HGB area vehicle populations between 10 and 30 years old: 1,069 drayage trucks; 1,625 waste-hauling vehicles, and 611 transit buses. Gosselink stated that they have not sought to verify the number of actual vehicles on the road, but that there is consensus among "Fleet Commenters" that these MOVES model estimates are too low with respect to both the number of vehicles on the road and their relative age. Gosselink attached a November 23, 2016 memo from the Zephyr Environmental Corporation as the source of these 2006-and-older vehicle population estimates and asked if the TCEQ disputes the number of vehicles listed by the MOVES model. Response The commission is unable to validate the commenter's claim because neither the commenter nor the Zephyr memo provided sufficient information about the original source of these vehicle population estimates for the TCEQ to be able to confirm validity. When run in default mode, the MOVES model does generate output containing vehicle population estimates by model year. In accordance with EPA guidance, the TCEQ does not use default vehicle population estimates from the MOVES model when developing emission inventories for SIPs. Instead, MOVES is used to generate emission rates that are separately multiplied by local activity data inputs such as vehicle miles traveled (VMT), vehicle population, etc. The raw source of the vehicle population inputs used by the TCEQ are registration database queries done by the TxDMV. The December 2016 HGB area attainment SIP estimated that there are 1,380 transit buses from 2006-and-earlier model years operating in eight-county HGB during This is more than double the 611 transit bus figure referenced by the commenter. The 2006-and-older estimate for refuse trucks is 2,476 compared with the 1,625 figure referenced by the commenter. Since neither the MOVES model nor the TxDMV registration database has a line-item code for "drayage trucks," it is impossible to confirm or deny that there are 1,069 drayage trucks operating in HGB from the 2006-and-earlier model years. Instead, drayage trucks are typically "eighteen-wheelers" that are locally operated to/from ports rather than being used for "long-haul" activity. This makes drayage vehicles a subset of the MOVES combination short-haul truck short use types that is defined as having a majority of its operation within 200 miles of a home base. It is estimated that there are 11,677 combination short-haul trucks from the 2006-and-older model years operating in the HGB area during A subset of 1,069 drayage trucks from 2006-and-older model years could plausibly be included under this broader category. No changes were made in response to this comment. Comment Gosselink attached a November 23, 2016, memo from Zephyr Environmental Corporation entitled "Truck Emission Rates" and asked if the TCEQ disputes the accuracy of the calculations for the annual tons of NO X that could be reduced from the reported vehicle replacement scenarios. Gosselink requested the TCEQ explain how any existing program will better incentivize replacement of these vehicles. ADOPTED RULES October 6, TexReg 5467

186 Response The commission is unable to confirm or deny the accuracy of the reported NO X replacement benefits because the Zephyr memo provided by the commenter does not provide sufficient information. For such an analysis, the following minimum information needs to be provided: the emission rate for the "old" vehicle to be replaced; the emission rate for the "new" replacement vehicle; and the VMT accumulated on either a daily or annual basis. Although this comment is out of the scope of this rulemaking, to address incentivizing replacements of these types of vehicles, through August 2016, the commission has spent over $1 billion under the TERP on projects to replace or upgrade on-road vehicles, non-road equipment, marine vessels, locomotives, and certain stationary equipment. These projects are estimated to reduce NO X emissions by over 170,000 tons. Through TERP, there are multiple programs that specifically provide financial incentives for heavy-duty trucks and TERP is a viable alternative as an emissions reduction strategy. No changes were made in response to this comment. Comment Gosselink strongly recommended that the no vehicle minimum be included in the MERCs rules. Response The commission agrees with the commenter that no vehicle minimum should be included in the MERCs rules. The rules do not provide a vehicle minimum in order to participate in generating MERCs. No change to the rules was made in response to this comment. Oil and Gas Comment EDF commented that since production equipment (e.g., tanks) often have dramatic declining throughput as the wells that feed them age and production declines, using historical baselines of emissions to project emission reductions could easily result in overstating achievable reductions. EDF stated emission sources directly influenced by declining well production levels should either be disallowed from utilizing EBT credits, or the TCEQ should develop an emission discount that accurately reflects the source's emissions during the time of credit use. Response The commission acknowledges that upstream oil and gas production can experience variable production levels throughout the lifespan of a well. However, all wells do not necessarily experience dramatic declines in production. Since wells are significant economic investments (costing approximately $4 to $8 million to drill, complete, and initially produce), companies can perform one or more well workovers or in the case of shale wells, refractures, to increase production during the life of a well. Similar equipment life spans and similar variation in production activity can also be observed at other types of industrial emissions sources, often in response to local, regional, or national economic growth and contraction. Regarding the development of a discount for upstream oil and gas sources, per TCEQ rule, the ERC amount for a facility is limited to the lower of the facility's historical adjusted emissions or SIP year emissions. Although a facility's baseline emissions may exceed its current emissions due to market conditions or other economic considerations, the credit issued will not exceed its SIP year emissions. This fulfills the EPA requirement that the credited emissions reduction is surplus to the SIP. No change to the rules was made in response to this comment. Comment EDF commented that to generate an area source credit, the TCEQ should require that operators demonstrate oversight practices that ensure a 95% performance or an additional discount needs to be applied for expected underperformance and/or system malfunction. Response The commission does not agree that the rules should require that operators demonstrate oversight practices that ensure a 95% performance or that an additional discount should be applied for underperformance and/or system malfunction. The commission does not consider these requirements necessary as the rules require that credit generators comply with special conditions that will be enumerated in the site's authorization or the EBT-CERT. The purpose of an EBT-CERT is to set in place any requirements that are necessary to ensure that the credited emission reduction remains real, quantifiable, and permanent. Thus, the EBT program staff evaluating credit applications will establish the requirements necessary to ensure that the credited emission reduction is maintained on a case-by-case basis, and those requirements will be documented with a federally enforceable mechanism. No change to the rules was made in response to this comment. Comment The Trades supported the agency's efforts to incentivize well plugging, but because the TCEQ is currently proposing that creditable area source emissions be determined on a per-equipment basis, there is a conflict between the oil and gas shutdown provision and TCEQ's proposed FIN-by-FIN policy. The Trades stated that the TCEQ should allow the one year plugging requirement to serve as an alternate governing trigger date for emissions reduction credit applications, in addition to individual equipment shutdown dates; alternatively, TCEQ should clarify that the one year plugging requirement takes precedent over a FIN-by-FIN analysis. Response The commission appreciates the support of the provisions designed to incentivize well plugging. To clarify, the adopted well plugging incentive provision at (d)(1)(C) takes precedence over the usual FIN-by-FIN application and credit expiration deadlines. A FIN-by-FIN analysis is still required to calculate the quantity of credits to be certified. The adopted provision at (d)(1)(C) allows credit generation applications for facilities affected by a complete production site shutdown to be submitted two years after the site's production well is plugged (as opposed to two years after the individual facility's emission reduction date) when the well is plugged in accordance with the technical specifications required by the Railroad Commission of Texas and when the plugging is completed within one year of final production being reported to the Railroad Commission of Texas. In addition, the "lookback" for establishing historical adjusted emissions would also be set based on the date the well is plugged. Emission credits certified under this exception would be available for use for 72 months from the date well plugging is completed for the site. No change to the rules was made in response to this comment. 42 TexReg 5468 October 6, 2017 Texas Register

187 DIVISION 1. EMISSION CREDIT PROGRAM 30 TAC , , Statutory Authority The amended sections are adopted under Texas Water Code (TWC), 5.102, concerning General Powers, TWC, 5.103, concerning Rules, and TWC, 5.105, concerning General Policy, that authorize the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under Texas Health and Safety Code (THSC), , concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The rulemaking is adopted under THSC, , concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; THSC, , concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; THSC, , concerning State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; THSC, , concerning Emission Inventory, that authorizes the commission to require a person whose activities cause air contaminant emissions to submit information to enable the commission to develop an emissions inventory; THSC, , concerning Monitoring Requirements; Examination of Records, that authorizes the commission to prescribe requirements for owners or operators of sources to make and maintain records of emissions measurements; and THSC, , concerning Sampling Methods and Procedures, that authorizes the commission to prescribe the sampling methods and procedures to determine compliance with its rules. The amended sections are also adopted under THSC, , concerning Orders, and THSC, , concerning Cooperation and Assistance. The rulemaking is also adopted under Federal Clean Air Act, 42 United States Code, 7401, et seq., which requires states to submit state implementation plan revisions that specify the manner in which the national ambient air quality standard will be achieved and maintained within each air quality control region of the state. The adopted amendments implement THSC, , , , , , , , and Definitions. Unless specifically defined in the Texas Clean Air Act or in 3.2 or of this title (relating to Definitions), the terms used by the commission have the meanings commonly ascribed to them in the field of air pollution control. In addition, the following words and terms, when used in this division, have the following meanings, unless the context clearly indicates otherwise. (1) Activity--The amount of activity at a facility or mobile source measured in terms of production, use, raw materials input, vehicle miles traveled, or other similar units that have a direct correlation with the economic output and emission rate of the facility or mobile source. (2) Actual emissions--the total emissions during a selected time period, using the facility's or mobile source's actual daily operating hours, production rates, or types of materials processed, stored, or combusted during that selected time period. (3) Area source--any facility included in the agency emissions inventory under the area source category. (4) Baseline emissions--the facility's emissions, in tons per year, before implementation of an emission reduction calculated as the lowest of the facility's historical adjusted emissions or state implementation plan emissions. (5) Certified--Any emission reduction that is determined to be creditable upon review and approval by the executive director. (6) Curtailment--A reduction in activity level at any facility or mobile source. (7) Emission credit--an emission reduction credit or mobile emission reduction credit. (8) Emission rate--the facility's rate of emissions per unit of activity. (9) Emission reduction--a reduction in actual emissions from a facility or mobile source. (10) Emission reduction credit--a certified emission reduction, expressed in tenths of a ton per year, that is created by eliminating future emissions and quantified during or before the period in which emission reductions are made from a facility. (11) Emission reduction strategy--the method implemented to reduce the facility's or mobile source's emissions beyond that required by state or federal law, regulation, or agreed order. (12) Facility--As defined in of this title (relating to General Definitions). Original equipment and replacement-in-kind equipment that are the same or functionally equivalent are considered the same facility. For the purpose of generating an emission reduction credit at an area source, multiple emissions points with common characteristics may be grouped in order to be considered as a single unit equivalent to a facility as long as the total grouping has emissions equal to or greater than 0.1 tons per year (tpy), even if emission points within the group have emissions of less than 0.1 tpy. (13) Generator--The owner or operator of a facility or mobile source that creates an emission reduction. (14) Historical adjusted emissions--the emissions occurring before implementation of an emission reduction strategy and adjusted for any local, state, or federal requirement, calculated using the following equation. Figure: 30 TAC (14) (15) Mobile emission reduction credit--a certified emission reduction from a mobile source or group of mobile sources, expressed in tenths of a ton per year, that is created by eliminating future emissions and quantified during or before the period in which reductions are made from that mobile source or group of mobile sources. (16) Mobile source--a source included in the agency's emissions inventory under the mobile source category. (17) Mobile source baseline activity--the level of activity of a mobile source based on an estimate for each year for which the credits are to be generated. After the initial year, the annual estimates should reflect: (A) the change in the mobile source emissions to reflect any deterioration in the emission control performance of the participating source; (B) the change in the number of mobile sources resulting from normal retirement or attrition, and the replacement of retired mobile sources with newer and/or cleaner mobile sources; (C) the change in usage levels, hours of operation, or vehicle miles traveled in the participating population; and ADOPTED RULES October 6, TexReg 5469

188 (D) the change in the expected useful life of the participating population. (18) Mobile source baseline emissions--the mobile source's actual emissions, in tons per year, occurring prior to a mobile emission reduction strategy calculated as the lowest of the historical adjusted emissions or state implementation plan emissions. (19) Mobile source baseline emission rate--the mobile source's rate of emissions per unit of mobile source baseline activity during the mobile source baseline emissions period. (20) Permanent--An emission reduction that is long-lasting and unchanging for the remaining life of the facility or mobile source. Such a time period must be enforceable. (21) Point source--a facility included in the agency's emissions inventory under the point source category. (22) Primarily operated--when the activity is at least 75% within a specific nonattainment area. (23) Projection-base year--the year of the emissions inventory used to project or forecast future-year emissions for modeling point sources in a state implementation plan revision. (24) Protocol--A replicable and workable method of estimating emission rate or activity level used to calculate the amount of emission reduction generated or credits required for facilities or mobile sources. (25) Quantifiable--An emission reduction that can be measured or estimated with confidence using replicable methodology. (26) Real reduction--a reduction in which actual emissions are reduced. Emissions reductions that result from any of the following are not considered a real reduction: (A) lowering the allowable emission limit in a permit without a physical change or change in method of operation; (B) shifting a vent gas stream or other pollution or waste stream to another site; (C) a mobile source that is not capable of being operated as intended; or (D) a change in an emissions factor or emissions calculation equation. (27) Shutdown--The permanent cessation of an activity producing emissions at a facility or mobile source. (28) Site--As defined in of this title (relating to General Definitions). (29) State implementation plan--a plan that provides for attainment and maintenance of a primary or secondary national ambient air quality standard as adopted in 40 Code of Federal Regulations Part 52, Subpart SS. (30) State implementation plan (SIP) emissions--sip emissions are determined as follows. (A) For point sources, SIP emissions are facility-specific values based on the emissions data in the state's annual emissions inventory (EI) for the year used to develop the projection-base year inventory for the modeling included in an attainment demonstration (AD) SIP revision, used for the attainment inventory for a maintenance plan SIP revision, or used in an EI SIP revision, as applicable under subparagraph (B)(i) - (iii) of this paragraph. For area and mobile sources, SIP emissions are calculated values based on actual operations during the latest triennial National Emissions Inventory (NEI) year used to support an AD SIP revision, used for the attainment inventory for a maintenance plan SIP revision, or used in an EI SIP revision, as applicable under subparagraph (B)(i) - (iii) of this paragraph. For point, area, and mobile sources located in a nonattainment area without an applicable SIP as determined under subparagraph (B)(i) - (iii) of this paragraph, SIP emissions are based on the year of the most recent NEI submitted to the United States Environmental Protection Agency (EPA) preceding that area's nonattainment designation for the current National Ambient Air Quality Standard (NAAQS). (B) The applicable SIP revision must be for the nonattainment area where the facility is located, or for mobile sources where the mobile source is primarily operated, and must be for the criteria pollutant, or include the precursor pollutant, for which the applicant is requesting credits. The applicable SIP revision is: (i) an AD SIP revision or a maintenance plan SIP revision, whichever was most recently submitted to the EPA for the current NAAQS; (ii) if the SIP revisions identified in clause (i) of this subparagraph have not been submitted to the EPA, an AD SIP revision or a maintenance plan SIP revision, whichever was most recently submitted to the EPA for an earlier NAAQS issued in the same averaging time and the same form as the current NAAQS; or (iii) if the SIP revisions identified in clauses (i) and (ii) of this subparagraph have not been submitted to the EPA, the most recent EI SIP revision submitted to the EPA. (C) The total amount of SIP emissions available for credit generation will be set for area, non-road mobile, and on-road mobile source categories. (i) Total creditable area source emissions are 75% of the total area source emissions excluding residential area sources in the applicable SIP revision. (ii) Total creditable non-road mobile source emissions are 75% of the total non-road mobile source emissions in the applicable SIP revision. (iii) Total creditable on-road mobile source emissions are 85% of the total on-road mobile source emissions in the applicable SIP revision. (D) The SIP emissions for a facility or mobile source may not exceed any applicable local, state, or federal requirement. (E) The year used to determine SIP emissions is as specified in subparagraph (A) of this paragraph, unless a different year is specifically identified otherwise by the commission in the most recent SIP revision adopted after December 31, (31) Strategic emissions--a facility's or mobile source's new allowable emission limit, in tons per year, following implementation of an emission reduction strategy. (32) Surplus--An emission reduction that is not otherwise required of a facility or mobile source by any applicable local, state, or federal requirement and has not been otherwise relied upon in the state implementation plan. (33) User--The owner or operator of a facility or mobile source that acquires and uses emission credits to meet a regulatory requirement, demonstrate compliance, or offset an emission increase General Provisions. (a) Applicable pollutants. 42 TexReg 5470 October 6, 2017 Texas Register

189 (1) An emission credit may be generated from a reduction of a criteria pollutant, excluding lead, or a precursor of a criteria pollutant for which an area is designated nonattainment. (2) An emission credit generated from the reduction of one pollutant or precursor may not be used to meet the requirements for another pollutant or precursor, except as provided by (d) of this title (relating to Emission Credit Use). (b) Eligible generator categories. The following categories are eligible to generate emission credits: (1) point source facilities; (2) mobile sources; (3) any facility, including both point and area sources, or mobile source associated with actions by federal agencies under 40 Code of Federal Regulations Part 93, Subpart B, Determining Conformity of General Federal Actions to State or Federal Implementation Plans; and (4) area source facilities, including those comprised of multiple emission points as allowed under (12) of this title (relating to Definitions). Credit generation from grouped emission points cannot exceed the lower of the group s actual emissions in the state implementation plan (SIP) emissions year or the historical adjusted emissions. Facilities comprised of grouped emission points may include equipment that was not operational during the SIP emissions year or the historical adjusted emissions years as long as the emissions from the group were present during the SIP emissions year. Characteristics that may be considered to determine if emission points qualify for consideration as a single facility for the purposes of generating emission credits, include but are not limited to: (A) source classification codes; (B) primary standard industrial classification code; (C) location, origin of, characteristics of, controls on the emissions; and (D) other credit calculation-related characteristics, such as fuel, equipment type, emissions reduction strategy, and quantification protocol. (c) Ineligible generator categories. The following categories are not eligible to generate emission credits: (1) residential area sources; (2) on-road mobile sources that are not part of an industrial, commercial, nonprofit, institutional, or municipal/government fleet; and (3) mobile sources that are not primarily operated within a specific nonattainment area with the exception of marine and locomotive sources that use capture and control emissions reduction systems. (d) Emission credit requirements. (1) An emission reduction credit (ERC) is a certified emission reduction that: (A) must be enforceable, permanent, quantifiable, real, and surplus; (B) must be surplus at the time it is created, as well as when it is used; and (C) must occur after the state implementation plan (SIP) emissions year for the facility. (2) Mobile emission reduction credits (MERCs) are certified reductions that meet the following requirements: (A) reductions must be enforceable, permanent, quantifiable, real, and surplus; (B) the certified reduction must be surplus at the time it is created, as well as when it is used; (C) in order to become certified, the reduction must have occurred after the SIP emissions year; and (D) the reduction must be from a mobile source that operated during the SIP emissions year. (3) Emission reductions from a facility or mobile source that are certified as emission credits under this division cannot be recertified in whole or in part as credits under another division within this subchapter. (e) Protocol. (1) All generators or users of emission credits shall use a protocol that has been submitted by the executive director to the United States Environmental Protection Agency (EPA) for approval, if existing for the applicable facility or mobile source, to measure and calculate baseline emissions. If the generator or user wishes to deviate from a protocol submitted by the executive director, EPA approval is required before the protocol can be used. Protocols must be used as follows. (A) The owner or operator of a facility subject to the emission specifications under , , , , , , , or of this title (relating to Emission Specifications for Attainment Demonstration; Emission Specifications for Eight-Hour Attainment Demonstration; and Emission Specifications) shall use the testing and monitoring methodologies required under Chapter 117 of this title (relating to Control of Air Pollution from Nitrogen Compounds) to show compliance with the emission specification for that pollutant. (B) The owner or operator of a facility subject to the requirements under Chapter 115 of this title (relating to Control of Air Pollution from Volatile Organic Compounds) shall use the testing and monitoring methodologies required under Chapter 115 of this title to show compliance with the applicable requirements. (C) Except as specified in subparagraphs (A) and (B) of this paragraph, the owner or operator of a facility subject to the requirements under Chapter 106 of this title (relating to Permits by Rule) or a permit issued under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) shall use the testing and monitoring methodologies required under Chapter 106 of this title or a permit issued under Chapter 116 of this title to demonstrate compliance with the applicable requirements. (D) The executive director may approve the use of a methodology approved by the EPA to quantify emissions from the same type of facility or mobile source. (E) Except as specified in subparagraph (D) of this paragraph, if the executive director has not submitted a protocol for the applicable facility or mobile source to the EPA for approval, the following requirements apply: (i) the amount of emission credits from a facility or mobile source, in tons per year, will be determined and certified based on quantification methodologies at least as stringent as the methods used to demonstrate compliance with any applicable requirements for the facility or mobile source; ADOPTED RULES October 6, TexReg 5471

190 (ii) the generator shall collect relevant data sufficient to characterize the facility's or mobile source's emissions of the affected pollutant and the facility's or mobile source's activity level for all representative phases of operation in order to characterize the facility's or mobile source's baseline emissions; (iii) the owner or operator of a facility with a continuous emissions monitoring system or predictive emissions monitoring system in place shall use this data in quantifying emissions; (iv) the chosen quantification protocol must be made available for public comment for a period of 30 days and must be viewable on the commission's website; (v) the chosen quantification protocol and any comments received during the public comment period must be submitted to the EPA for a 45-day adequacy review; and (vi) quantification protocols may not be accepted for use with this division if the executive director receives a letter objecting to the use of the protocol from the EPA during the 45-day adequacy review or the EPA adopts disapproval of the protocol in the Federal Register. (2) If the monitoring and testing data specified in paragraph (1) of this subsection is missing or unavailable, the generator or user shall determine the facility's emissions for the period of time the data is missing or unavailable using the most conservative method for replacing the data and these listed methods in the following order: (A) continuous monitoring data; (B) periodic monitoring data; (C) testing data; (D) manufacturer's data; (E) EPA Compilation of Air Pollution Emission Factors (AP-42), September 2000; or (F) material balance. (3) When quantifying actual emissions in accordance with paragraph (2) of this subsection, the generator or user shall submit the justification for not using the methods in paragraph (1) of this subsection and submit the justification for the method used. (f) Credit certification. (1) The amount of emission credits in tons per year will be determined and certified to the nearest tenth of a ton per year. Credits will not be issued for a facility, fugitive emissions from aggregated facilities, or aggregated mobile sources that cannot generate at least 0.1 ton per year of credit after all adjustments are applied. Fugitive emissions or mobile source emissions aggregated to meet the requirement that emission reductions be certified for at least 0.1 ton per year must be represented on the same application and will have an application deadline and credit expiration date determined by the earliest emission reduction date among the aggregated sources. (2) The executive director shall review an application for certification to determine the credibility of the reductions. Each ERC or MERC certified will be assigned a certificate number. A new number will be assigned when an ERC or MERC is traded or partly used. Reductions determined to be creditable and in compliance with all other requirements of this division will be certified by the executive director. (3) The applicant will be notified in writing if the executive director denies the emission credit application. The applicant may submit a revised application in accordance with the requirements of this division. If a facility's or mobile source's actual emissions exceed any applicable local, state, or federal requirement, reductions of emissions exceeding the requirement may not be certified as emission credits. An application for certification of emission credit from reductions quantified under subsection (e)(1)(e) of this section may only be approved after the EPA's 45-day adequacy review of the protocol. (g) Credit application submission and conditions. (1) Beginning January 1, 2018, an application to certify credits must be submitted through the State of Texas Environmental Reporting System unless the applicant receives prior approval from the executive director for an alternative means of application submission. (2) As a condition for the certification of a credit, the executive director may specify monitoring, testing, recordkeeping, or other requirements through an Emissions Banking and Trading Certification of Emission Reductions Form (Form EBT-CERT), or other forms considered equivalent by the executive director. (3) The generator must comply with all conditions specified in a Form EBT-CERT, or other forms considered equivalent by the executive director, once the credit is certified. (h) Geographic scope. Except as provided in of this title (relating to Emission Reductions Achieved Outside the United States), only emission reductions generated in nonattainment areas can be certified. An emission credit must be used in the nonattainment area in which it is generated unless the user has obtained prior written approval of the executive director and the EPA; and (1) a demonstration has been made and approved by the executive director and the EPA to show that the emission reductions achieved in another county or state provide an improvement to the air quality in the county of use; or (2) the emission credit was generated in a nonattainment area that has an equal or higher nonattainment classification than the nonattainment area of use, and a demonstration has been made and approved by the executive director and the EPA to show that the emissions from the nonattainment area where the emission credit is generated contribute to a violation of the national ambient air quality standard in the nonattainment area of use. (i) Recordkeeping. The generator shall maintain a copy of all notices and backup information submitted to the executive director and all records required or necessary to verify the certified emissions reduction for a minimum of five years. The user shall maintain a copy of all notices and backup information submitted to the executive director from the beginning of the use period and for at least five years after. The user shall make the records available upon request to representatives of the executive director, EPA, and any local enforcement agency. The records must include, but not necessarily be limited to: (1) the name, emission point number, and facility identification number of each facility or any other identifying number for each mobile source using emission credits; (2) the amount of emission credits being used by each facility or mobile source; and (3) the certificate number of emission credits used for each facility or mobile source. (j) Public information. All information submitted with notices, reports, and trades regarding the nature, quantity, and sales price of emissions associated with the use, generation, and transfer of an emission credit is public information and may not be submitted as confidential. Any claim of confidentiality for this type of information, or failure to submit all information, may result in the rejection of the emis- 42 TexReg 5472 October 6, 2017 Texas Register

191 sion credit application. All nonconfidential information will be made available to the public as soon as practicable. (k) Authorization to emit. An emission credit created under this division is a limited authorization to emit the pollutants identified in subsection (a) of this section, unless otherwise defined, in accordance with the provisions of this section, 42 United States Code, 7401 et seq., and Texas Health and Safety Code, Chapter 382, as well as regulations promulgated thereunder. An emission credit does not constitute a property right. Nothing in this division may be construed to limit the authority of the commission or the EPA to terminate or limit such authorization. (l) Program participation. The executive director has the authority to prohibit a person from participating in emission credit trading either as a generator or user, if the executive director determines that the person has violated the requirements of the program or abused the privileges provided by the program. (m) Compliance burden. A user may not transfer their compliance burden and legal responsibilities to a third-party participant. A third-party participant may only act in an advisory capacity to the user. (n) Credit ownership. The owner of the initial emission credit shall be the owner or operator of the facility or mobile source creating the emission reduction. The executive director may approve a deviation from this subsection considering factors such as, but not limited to: (1) whether an entity other than the owner or operator of the facility or mobile source incurred the cost of the emission reduction strategy; or (2) whether the owner or operator of the facility or mobile source lacks the potential to generate 0.1 ton per year of credit after all adjustments are applied Emission Reduction Credit Generation and Certification. (a) Emission reduction strategy. (1) An emission reduction credit (ERC) may be generated using one of the following strategies or any other method that is approved by the executive director: (A) the permanent shutdown of a facility that causes a loss of capability to produce emissions; (B) the installation and operation of pollution control equipment that reduces emissions below baseline emissions for the facility; (C) a change in a manufacturing process that reduces emissions below baseline emissions for the facility; (D) a permanent curtailment in production that reduces the facility's capability to produce emissions; or (E) pollution prevention projects that produce surplus emission reductions. (2) An ERC may not be generated from the following strategies: (A) reductions from the shifting of activity from one facility to another facility at the same site; (B) that portion of reductions funded through state or federal programs, unless specifically allowed under that program; (C) reductions from a facility without state implementation plan (SIP) emissions; or (D) reductions from the shutdown of specific types of inelastic area sources that are driven by population needs. The executive director shall maintain a public list of area source categories determined to be inelastic categories. (i) The list of inelastic area source categories will be made available to the public on the commission's website. (ii) Any person may submit a written petition requesting that the executive director add or remove a category from the list. (iii) Within 60 days of receiving a petition under clause (ii) of this subparagraph, the executive director shall prepare a draft revised list or propose denial of the petition by preparing a draft denial statement supporting denial of the petition. (iv) The executive director may on its own motion propose revisions to the list by preparing a draft revised list. (v) The executive director's draft revised list, or draft denial statement, under clauses (iii) and (iv) of this subparagraph shall be made available for public comment for 30 days. (vi) Within 30 days of the public comment period ending, the executive director shall issue a proposed final list or a proposed final denial statement for consideration and approval by the commission. (vii) The commission shall approve, modify, or deny the proposed revisions to the list of inelastic area sources categories made by the executive director under clauses (iii) and (iv) of this subparagraph. (viii) The commission shall approve, modify, or remand to the executive director for further consideration a recommendation to deny a petition submitted by the executive director under clause (iii) of this subparagraph. (ix) The shutdown of an area source category that falls into one of the categories on the list under clause (i) of this subparagraph is ineligible for emissions reduction credit generation. (b) ERC baseline emissions. (1) The baseline emissions may not exceed the facility's SIP emissions. (2) The activity and emission rate used to calculate the facility's historical adjusted emissions must be determined from the same two consecutive calendar years. (A) For point sources, the historical adjusted emissions must be based on two consecutive calendar years from the ten consecutive years immediately before the emissions reduction is achieved. (B) For area sources, the historical adjusted emissions must be based on two consecutive years from the five consecutive years immediately before the emissions reduction is achieved unless detailed operational records are available for more than five years. The historical adjusted emissions may be determined from two consecutive calendar years up to six to ten consecutive years immediately before the emissions reduction is achieved when detailed operational records are available for those years. (3) For a facility in existence less than 24 months or not having two complete calendar years of activity data, a shorter period of not less than 12 months may be considered by the executive director. (c) ERC calculation. ADOPTED RULES October 6, TexReg 5473

192 (1) The quantity of ERCs is determined by subtracting the facility's strategic emissions from the facility's baseline emissions, as calculated in the following equation. Figure: 30 TAC (c)(1) (2) For area sources generating credits from the permanent shutdown of a facility, the amount of ERCs calculated will be reduced by 15% or 0.1 ton per year, whichever is greater. (3) For an area source facility, the amount of ERCs calculated will be adjusted to account for the quality of the data used to quantify the emissions. The adjustment will be: (A) no reduction for the same type of records that are required to be maintained for a point source facility; or (B) 15% or 0.1 ton per year, whichever is greater, reduction for records supporting alternative methods approved according to (e)(1)(E) of this title (relating to General Provisions). (4) If the facility is subject to both of the adjustments in paragraphs (2) and (3) of this subsection, the total combined adjustment to the amount of ERCs issued will be a reduction of 20% or 0.1 ton per year, whichever is greater. (d) ERC certification. (1) The owner or operator of a facility with potential ERCs shall submit an application form specified by the executive director and signed by an authorized account representative as specified in subparagraphs (A) - (D) of this paragraph. (A) Applications will be reviewed to determine the credibility of the reductions. Reductions determined to be creditable will be certified by the executive director and an ERC will be issued to the owner. (B) The application for ERCs must be submitted no more than two years after the facility's emissions reduction date, except as provided by subparagraphs (C) and (D) of this paragraph. (C) The application for ERCs from all facilities affected by a complete site shutdown of an oil and gas production site may be submitted no more than two years after the site's production well is plugged in accordance with requirements of the Railroad Commission of Texas if the plugging is completed within one year of final production being reported to the Railroad Commission of Texas. Emission credits certified under this exception will be available for use for 72 months from the date well plugging is completed in lieu of the provisions outlined in (b)(2) of this title (relating to Emission Credit Banking and Trading). (D) For an area source facility, the application for ERCs may be submitted as follows. (i) For emission reductions that occurred after June 1, 2013 and prior to January 1, 2015, the application for ERCs must be submitted by December 31, (ii) For emissions reductions that occurred between January 1, 2015 and January 1, 2017, the application for ERCs may be submitted up to three years after the facility's emissions reduction date. (iii) The application deadline exceptions specified in clauses (i) and (ii) of this subparagraph no longer apply after December 31, (iv) Emission credits certified under the application deadline exceptions specified in clauses (i) and (ii) of this subparagraph or certified for area source emission reductions occurring before and included on an application submitted, but not acted on, before January 1, 2017 shall be available for use for 72 months from the date of the emission reduction in lieu of the provisions outlined in (b)(2) of this title. (2) ERCs must be quantified in accordance with (e) of this title. The executive director shall have the authority to inspect and request information to assure that the emissions reductions have actually been achieved. (3) An application for ERCs must include, but is not limited to, a completed application form specified by the executive director signed by an authorized representative of the applicant along with the following information for each pollutant reduced at each applicable facility: strategy; (A) (B) a complete description of the emission reduction the amount of ERCs generated; (C) for volatile organic compound reductions, a list of the specific compounds reduced; (D) documentation, including records for approved or approvable methods to quantify emissions, supporting the activity, emission rate, historical adjusted emissions, SIP emissions, baseline emissions, and strategic emissions; (E) for point sources, emissions inventory data for the years used to determine the SIP emissions and historical adjusted emissions; (F) the most stringent emission rate and the most stringent emission level, considering all applicable local, state, and federal requirements; (G) a complete description of the protocol used to calculate the emission reduction generated; and (H) the actual calculations performed by the generator to determine the amount of ERCs generated. (4) ERCs will be made enforceable by one of the following methods: (A) amending or altering a new source review permit to reflect the emission reduction and set a new maximum allowable emission limit; (B) voiding a new source review permit when a facility has been shut down; or (C) for any facility without a new source review permit that is otherwise authorized by commission rule, certifying the emission reduction and the new maximum emission limit on one or more forms specified by the executive director, including a Certification of Emission Limits (Form APD-CERT) submitted through e-permitting and an Emissions Banking and Trading Certification of Emission Reductions Form (Form EBT-CERT), or other forms considered equivalent by the executive director Mobile Emission Reduction Credit Generation and Certification. (a) Methods of generation. (1) Mobile emission reduction credits (MERC) may be generated by any mobile source emission reduction strategy that creates actual mobile source emission reductions under these rules and subject to the approval of the executive director. (2) MERCs may not be generated from the following strategies: 42 TexReg 5474 October 6, 2017 Texas Register

193 (A) that portion of reductions funded through a state or federal program, unless specifically allowed under that program; (B) through the transfer of emissions from one mobile source to another mobile source within the same nonattainment area and under common ownership or control; (C) reduction strategies resulting in secondary emissions increases that exceed limits established under state or federal rules or regulations; or (D) the shutdown or replacement of a mobile source unless that source is rendered permanently inoperable or permanently removed from North America. (b) MERC baseline emissions. (1) Mobile source baseline emissions shall be calculated with either measured emissions of an appropriately sized sample of the participating mobile sources using a United States Environmental Protection Agency (EPA)-approved test procedure, or by estimating emissions of the participating mobile sources using the most recent edition of the EPA on-road or non-road mobile emissions factor models or other model as applicable. (2) The historical adjusted emissions and state implementation plan emissions may only include actual emissions that occurred when the mobile source was operating inside a specific nonattainment area. (3) The activity and emissions rate data used to calculate the mobile source's historical adjusted emissions must be determined from two consecutive calendar years from the five consecutive years immediately before the emissions reduction is achieved unless detailed operational records are available for more than five years. If these detailed operational records are available and do not demonstrate decreasing use due to vehicle age or inoperability, the historical adjusted emissions for a mobile source may be determined from two consecutive calendar years up to six to ten consecutive years immediately before the emissions reduction is achieved. (4) For a mobile source in existence less than 24 months or not having two complete calendar years of activity data, a shorter period of not less than 12 months may be approved by the executive director. (5) Baseline emissions for quantifying MERCs should include, but not be limited to, the following information and data as appropriate: (A) the emission standard to which the mobile source is subject or the emission performance standard to which the mobile source is certified; (B) the estimated or measured in-use emissions levels per unit of use from all significant mobile source emissions sources; group; (C) the number of mobile sources in the participating (D) the type or types of mobile sources by model year; (E) the actual or projected activity level, hours of operation, or miles traveled, by type and model year; and (F) the projected remaining useful life of the participating group of mobile sources. (c) MERC calculation. The quantity of MERCs must be calculated from the difference between the mobile source baseline emissions and the strategic emissions. The strategic emissions must be based on the best estimate of the actual in-use emissions of the modified or substitute on-road or non-road vehicles or transportation system that will occur when the mobile source is operating inside a specific nonattainment area. Any estimate of a strategic emissions level based on an assumption of reduced consumer service or transportation service would not be allowed without the support of a convincing analytical justification of the assumption. (1) For mobile sources generating credits from a shutdown, the amount of MERCs generated will be reduced by 15% or 0.1 ton per year, whichever is greater. (2) The amount of MERCs generated will be adjusted to account for the quality of the data used to quantify the emissions. The reduction will be 15% or 0.1 ton per year, whichever is greater, for records supporting alternative methods approved according to (e)(1)(E) of this title (relating to General Provisions). (3) If the mobile source is subject to an adjustment based on both the reduction strategy being a shutdown and the quality of the data used to quantify the emissions, the total combined reduction to the amount of MERCs generated will be 20% or 0.1 ton per year, whichever is greater. (d) Emission offsets. Mobile source reduction strategies that reduce emissions in one criteria pollutant or precursor for which an area is designated nonattainment, yet result in an emissions increase of another criteria pollutant or precursor for which that same area is nonattainment and from the same mobile source, must be required to offset the resulting increase at a 1:1 ratio with ERCs or MERCs. (e) MERC certification. (1) The generator of the reduction from a mobile source with potential MERCs shall submit an application form specified by the executive director and signed by an authorized account representative. (A) Applications will be reviewed to determine the credibility of the reductions. Reductions determined to be creditable will be certified by the executive director and a MERC will be issued to the owner of the mobile source except as specified in (n) of this title. (B) The application for MERCs must be submitted no more than two years after the date of the emissions reduction, except as provided by subparagraph (C) of this paragraph. (C) For a mobile source, the application for MERCs may be submitted as follows. (i) For emission reductions that occurred after June 1, 2013 and prior to January 1, 2015, the application for MERCs must be submitted by December 31, (ii) For emissions reductions that occurred between January 1, 2015 and January 1, 2017, the application for MERCs may be submitted up to three years after the date of the emissions reduction. (iii) The application deadline exceptions specified in clauses (i) and (ii) of this subparagraph no longer apply after December 31, (iv) Emission credits certified under the application deadline exceptions specified in clauses (i) and (ii) of this subparagraph or certified for mobile source emission reductions occurring before and included on an application submitted, but not acted on, before January 1, 2017 shall be available for use for 72 months from the date of the emission reduction in lieu of the provisions outlined in (b)(2) of this title (relating to Emission Credit Banking and Trading). (2) MERCs will be determined and certified in accordance with (e) of this title using: ADOPTED RULES October 6, TexReg 5475

194 (A) EPA methodologies, when available; (B) actual monitoring results, when available; (C) calculations using the most current EPA mobile emissions factor model or other model as applicable; or (D) calculations using creditable emission reduction measurement or estimation methodologies that satisfactorily address the analytical uncertainties of mobile source emissions reduction strategies. (3) The expected remaining useful life of the mobile source shall be determined based on the assumptions used in the models in the applicable state implementation plan (SIP) revision or on a case-bycase basis approved by the executive director when a type of mobile source is not reflected in these models. Except as provided in paragraph (4) of this subsection, the amount of MERCs certified for a given emissions reduction will be determined by the emissions reduction for the expected remaining useful life of the mobile source(s), annualized over 25 years. (4) The requirement to consider the expected remaining useful life of the mobile source and to annualize the emissions reduction over 25 years, as described in paragraph (3) of this subsection, does not apply if a capture and control system is used to reduce mobile source emissions. Instead, the MERC calculation will include the following. (A) The strategic emissions used in the MERC calculation must include the mobile source emissions that are not captured by the capture and control system. In addition, the strategic emissions must also include any emissions that are not controlled by the system after capture and any emissions caused by or as a result of operating the system. (B) The initial owner of the MERCs is the owner or operator of the capture and control system. (5) An application for MERCs must include, but is not limited to, a form specified by the executive director that is signed by an authorized account representative, along with the following information for each pollutant reduced by each applicable mobile source: (A) the date of the reduction; (B) a complete description of the generation strategy; (C) the amount of emission credits generated; (D) documentation, including records for approved or approvable methods to quantify emissions, supporting the mobile source baseline activity, mobile source baseline emission rate, historical adjusted emissions, SIP emissions, mobile source baseline emissions, and the mobile source strategy emissions; (E) a complete description of the protocol used to calculate the emission reduction generated; (F) the actual calculations performed by the generator to determine the amount of emission credits generated; and (G) a demonstration that the reductions are surplus to all local, state, and federal rules and to emission modeled in the SIP. (6) MERCs will be made enforceable with an Emissions Banking and Trading Certification Form (Form EBT-CERT), or equivalent form approved by the executive director, that may contain special conditions including, but not limited to: (A) written certification and photographs for mobile sources that are made permanently inoperable for replacement or shutdown; (B) where applicable, a certified or duplicate Texas Nonrepairable Vehicle Title for mobile sources that are made permanently inoperable for replacement or shutdown; (C) a bill of sale and bill of lading for mobile sources that are permanently removed from North America for replacement or shutdown and any additional information required by the executive director; and limit. (D) a new maximum allowable mobile source emission 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 September 22, TRD Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: October 12, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) DIVISION 4. DISCRETE EMISSION CREDIT PROGRAM 30 TAC , , Statutory Authority The amended sections are adopted under Texas Water Code (TWC), 5.102, concerning General Powers, TWC, 5.103, concerning Rules, and TWC, 5.105, concerning General Policy, that authorize the commission to adopt rules necessary to carry out its powers and duties under the TWC; and under Texas Health and Safety Code (THSC), , concerning Rules, that authorizes the commission to adopt rules consistent with the policy and purposes of the Texas Clean Air Act. The rulemaking is adopted under THSC, , concerning Policy and Purpose, that establishes the commission's purpose to safeguard the state air resources, consistent with the protection of public health, general welfare, and physical property; THSC, , concerning General Powers and Duties, that authorizes the commission to control the quality of the state's air; THSC, , concerning State Air Control Plan, that authorizes the commission to prepare and develop a general, comprehensive plan for the control of the state's air; THSC, , concerning Emission Inventory, that authorizes the commission to require a person whose activities cause air contaminant emissions to submit information to enable the commission to develop an emissions inventory; THSC, , concerning Monitoring Requirements; Examination of Records, that authorizes the commission to prescribe requirements for owners or operators of sources to make and maintain records of emissions measurements; and THSC, , concerning Sampling Methods and Procedures, that authorizes the commission to prescribe the sampling methods and procedures to determine compliance with its rules. The amended sections are also adopted under THSC, , concerning Orders, and , concerning Cooperation and Assistance. The rulemaking is also adopted under Federal Clean Air Act, 42 United 42 TexReg 5476 October 6, 2017 Texas Register

195 States Code, 7401, et seq., which requires states to submit SIP revisions that specify the manner in which the national ambient air quality standard will be achieved and maintained within each air quality control region of the state. The adopted amendments implement THSC, , , , , , , , and Definitions. Unless specifically defined in the Texas Clean Air Act or in 3.2 or of this title (relating to Definitions), the terms used by the commission have the meanings commonly ascribed to them in the field of air pollution control. In addition, the following words and terms, when used in this division, have the following meanings, unless the context clearly indicates otherwise. (1) Activity--The amount of activity at a facility or mobile source measured in terms of production, use, raw materials input, vehicle miles traveled, or other similar units that have a direct correlation with the economic output and emission rate of the facility or mobile source. (2) Actual emissions--the total emissions during a selected time period, using the facility's or mobile source's actual daily operating hours, production rates, or types of materials processed, stored, or combusted during that selected time period. (3) Area source--any facility included in the agency emissions inventory under the area source category. (4) Baseline emissions--the facility's emissions, in tons per year, before implementation of an emission reduction and calculated as the lowest of the facility's historical adjusted emissions or state implementation plan (SIP) emissions, except that the SIP emissions value is only considered for a facility in a nonattainment area. (5) Certified--Any emission reduction that is determined to be creditable upon review and approval by the executive director. (6) Curtailment--A reduction in activity level at any facility or mobile source. (7) Discrete emission credit--a discrete emission reduction credit or mobile discrete emission reduction credit. (8) Discrete emission reduction credit--a certified emission reduction that is created by reducing emissions from a facility during a generation period, quantified after the generation period, and expressed in tenths of a ton. (9) Emission rate--the facility's rate of emissions per unit of activity. (10) Emission reduction--a reduction in actual emissions from a facility or mobile source. (11) Emission reduction strategy--the method implemented to reduce the facility's or mobile source's emissions beyond that required by state or federal law, regulation, or agreed order. (12) Facility--As defined in of this title (relating to General Definitions). Original equipment and replacement-in-kind equipment that are the same or functionally equivalent are considered the same facility. For the purpose of generating a discrete emission reduction credit at an area source, multiple emissions points with common characteristics may be grouped in order to be considered as a single unit equivalent to a facility as long as the total grouping has emissions equal to or greater than 0.1 ton, even if points within the group have emissions of less than 0.1 ton. (13) Generation period--the discrete period of time, not exceeding 12 months, over which a discrete emission credit is created. (14) Generator--The owner or operator of a facility or mobile source that creates an emission reduction. (15) Historical adjusted emissions--the emissions occurring before implementation of an emission reduction strategy and adjusted for any local, state, or federal requirement, calculated using the following equation. Figure: 30 TAC (15) (16) Mobile discrete emission reduction credit--a certified emission reduction from a mobile source or group of mobile sources that is created during a generation period, quantified after the period in which emissions reductions are made, and expressed in tenths of a ton. (17) Mobile source--a source included in the agency's emissions inventory under the mobile source category. (18) Mobile source baseline activity--the level of activity of a mobile source during the applicable mobile source baseline emissions period. (19) Mobile source baseline emissions--the mobile source's actual emissions, in tons per year, occurring prior to a mobile emission reduction strategy calculated as the lowest of the historical adjusted emissions or state implementation plan emissions. (20) Mobile source baseline emissions rate--the mobile source's rate of emissions per unit of mobile source baseline activity during the mobile source baseline emissions period. (21) Ozone season--the portion of the year when ozone monitoring is federally required to occur in a specific geographic area, as defined in 40 Code of Federal Regulations Part 58, Appendix D, 2.5. (22) Point source--a facility included in the agency's emissions inventory under the point source category. (23) Primarily operated--when the activity is at least 75% within a specific nonattainment area. (24) Projection-base year--the year of the emissions inventory used to project or forecast future-year emissions for modeling point sources in a state implementation plan revision. (25) Protocol--A replicable and workable method of estimating emission rates or activity levels used to calculate the amount of emission reduction generated or credits required for facilities or mobile sources. (26) Quantifiable--An emission reduction that can be measured or estimated with confidence using replicable methodology. (27) Real reduction--a reduction in which actual emissions are reduced. Emissions reductions that result from any of the following are not considered a real reduction: (A) lowering the allowable emission limit in a permit without a physical change or change in method of operation; (B) shifting a vent gas stream or other pollution or waste stream to another site; (C) as intended; or a change in an emissions factor or emissions calcu- (D) lation equation. a mobile source that is not capable of being operated (28) Shutdown--The cessation of an activity producing emissions at a facility or mobile source. ADOPTED RULES October 6, TexReg 5477

196 (29) Site--As defined in of this title (relating to General Definitions). (30) State implementation plan--a plan that provides for attainment and maintenance of a primary or secondary national ambient air quality standard as adopted in 40 Code of Federal Regulations Part 52, Subpart SS. (31) State implementation plan (SIP) emissions--sip emissions are determined as follows. (A) For point sources, SIP emissions are facility-specific values based on the emissions data in the state's annual emissions inventory (EI) for the year used to develop the projection-base year inventory for the modeling included in an attainment demonstration (AD) SIP revision, used for the attainment inventory for a maintenance plan SIP revision, or used in an EI SIP revision, as applicable under subparagraph (B)(i) - (iii) of this paragraph. For area and mobile sources, SIP emissions are calculated values based on actual operations during the latest triennial National Emissions Inventory (NEI) year used to develop the modeling included in an AD SIP revision, used for the attainment inventory for a maintenance plan SIP revision, or used in an EI SIP revision, as applicable under subparagraph (B)(i)- (iii) of this paragraph. For point, area, and mobile sources located in a nonattainment area without an applicable SIP as determined under subparagraph (B)(i) - (iii) of this paragraph, SIP emissions are based on the year of the most recent NEI submitted to the United States Environmental Protection Agency (EPA) preceding that area's nonattainment designation for the current National Ambient Air Quality Standard (NAAQS). (B) The applicable SIP revision must be for the nonattainment area where the facility is located, or for mobile sources where the mobile source is primarily operated, and must be for the criteria pollutant, or include the precursor pollutant, for which the applicant is requesting credits. The applicable SIP revision is: (i) an AD SIP revision or a maintenance plan SIP revision, whichever was most recently submitted to the EPA for the current NAAQS; (ii) if the SIP revisions identified in clause (i) of this subparagraph have not been submitted to the EPA, an AD SIP revision or a maintenance plan SIP revision, whichever was most recently submitted to the EPA for an earlier NAAQS issued in the same averaging time and the same form as the current NAAQS; or (iii) if the SIP revisions identified in clauses (i) and (ii) of this subparagraph have not been submitted to the EPA, the most recent EI SIP revision submitted to the EPA. (C) The total amount of SIP emissions available for credit generation will be set for area, non-road mobile, and on-road mobile source categories. (i) Total creditable area source emissions are 75% of the total area source emissions excluding residential area sources in the applicable SIP revision. (ii) Total creditable non-road mobile source emissions are 75% of the total non-road mobile source emissions in the applicable SIP revision. (iii) Total creditable on-road mobile source emissions are 85% of the total on-road mobile source emissions in the applicable SIP revision. (D) The SIP emissions for a facility or mobile source may not exceed any applicable local, state, or federal requirement. (E) The year used to determine SIP emissions is as specified in subparagraph (A) of this paragraph, unless a different year is specifically identified otherwise by the commission in the most recent SIP revision adopted after December 31, (32) Strategy activity--the facility's or mobile source's level of activity during the discrete emission reduction credit generation period. (33) Strategy emission rate--the facility's or mobile source's emission rate during the discrete emission reduction credit generation period. (34) Surplus--An emission reduction that is not otherwise required of a facility or mobile source by any applicable local, state, or federal requirement and has not been otherwise relied upon in the state implementation plan. (35) Use period--the period of time over which the user applies discrete emission credits to an applicable emission reduction requirement. (36) User--The owner or operator of a facility or mobile source that acquires and uses discrete emission reduction credits to meet a regulatory requirement, demonstrate compliance, or offset an emission increase. (37) Use strategy--the compliance requirement for which discrete emission credits are being used General Provisions. (a) Applicable pollutants. (1) A discrete emission credit may be generated from a reduction of a criteria pollutant, excluding lead, or a precursor of a criteria pollutant. (2) A discrete emission credit generated from the reduction of one pollutant or precursor may not be used to meet the requirements for another pollutant or precursor, except as provided in of this title (relating to Discrete Emission Credit Use). (b) Eligible generator categories. Eligible categories include the following: (1) point source facilities; (2) mobile sources; (3) any facility, including area sources, or mobile source associated with actions by federal agencies under 40 Code of Federal Regulations Part 93, Subpart B, Determining Conformity of General Federal Actions to State or Federal Implementation Plans; and. (4) area source facilities, including those comprised of multiple emission points as allowed under (12) of this title (relating to Definitions). Credit generation from grouped emission points cannot exceed the lower of the group s actual emissions in the SIP emissions year or the historical adjusted emissions. Facilities comprised of grouped emission points may include equipment that was not operational during the SIP emissions year or the historical adjusted emissions years as long as the emissions from the group were present during the SIP emissions year. Characteristics that may be considered to determine if emission points qualify for consideration as a single facility for the purposes of generating emission credits, include but are not limited to: (A) (B) source classification codes; primary standard industrial classification code; (C) location, origin of, characteristics of, and controls on the emissions; (D) the generation period; and 42 TexReg 5478 October 6, 2017 Texas Register

197 (E) other credit calculation-related characteristics, such as fuel, equipment type, emissions reduction strategy, and quantification protocol. (c) Ineligible generator categories. The following categories are not eligible to generate discrete emission credits: (1) residential area sources; (2) on-road mobile sources that are not part of an industrial, commercial, nonprofit, institutional, or municipal/government fleet; and (3) mobile sources within a nonattainment area that do not primarily operate within that nonattainment area with the exception of marine and locomotive sources that use capture and control emissions reduction systems. (d) Discrete emission credit requirements. (1) A discrete emission reduction credit (DERC) is a certified emission reduction that: (A) must be real, quantifiable, and surplus at the time the DERC is generated; (B) must occur after the year used to determine the state implementation plan (SIP) emissions for a facility in a nonattainment area; and (C) must occur at a facility with SIP emissions for a facility in a nonattainment area. (2) To be creditable as a mobile discrete emission reduction credit, an emission reduction must meet the following: (A) the reduction must be real, quantifiable, and surplus at the time it is created; (B) the reduction must have occurred after the SIP emissions year for a mobile source in a nonattainment area; and (C) for a mobile source in a nonattainment area, the mobile source must have operated during the SIP emissions year. (3) Emission reductions from a facility or mobile source certified as discrete emission credits under this division cannot be recertified in whole or in part as emission credits under another division within this subchapter. (e) Protocol. (1) All generators or users of discrete emission credits must use a protocol which has been submitted by the executive director to the United States Environmental Protection Agency (EPA) for approval, if existing for the applicable facility or mobile source, to measure and calculate baseline emissions. If the generator or user wishes to deviate from a protocol submitted by the executive director, EPA approval is required before the protocol can be used. Protocols shall be used as follows. (A) The owner or operator of a facility subject to the emission specifications under , , , , , , , , or of this title (relating to Emission Specifications for Attainment Demonstration; Emission Specifications for Eight-Hour Attainment Demonstration; and Emission Specifications) shall use the testing and monitoring methodologies required under Chapter 117 of this title (relating to Control of Air Pollution from Nitrogen Compounds) to show compliance with the emission specification for that pollutant. (B) The owner or operator of a facility subject to the control requirements or emission specifications under Chapter 115 of this title (relating to Control of Air Pollution from Volatile Organic Compounds) shall use the testing and monitoring methodologies required under Chapter 115 of this title to show compliance with the applicable requirements. (C) For area sources, except as specified in subparagraphs (A) and (B) of this paragraph, the owner or operator of a facility subject to the requirements under Chapter 106 of this title (relating to Permits by Rule) or a permit issued under Chapter 116 of this title (relating to Control of Air Pollution by Permits for New Construction or Modification) shall use the testing and monitoring methodologies required under Chapter 106 of this title or a permit issued under Chapter 116 of this title to demonstrate compliance with the applicable requirements. (D) The executive director may approve the use of a methodology approved by the EPA to quantify emissions from the same type of facility. (E) Except as specified in subparagraph (D) of this paragraph, if the executive director has not submitted a protocol for the applicable facility or mobile source to the EPA for approval, the following applies: (i) the amount of discrete emission credits from a facility or mobile source, in tons, will be determined and certified based on quantification methodologies at least as stringent as the methods used to demonstrate compliance with any applicable requirements for the facility or mobile source; (ii) the generator shall collect relevant data sufficient to characterize the facility's or mobile source's emissions of the affected pollutant and the facility's or mobile source's activity level for all representative phases of operation in order to characterize the facility's or mobile source's baseline emissions; (iii) the owner or operator of a facility with a continuous emissions monitoring system or predictive emissions monitoring system in place shall use this data in quantifying emissions; (iv) the chosen quantification protocol must be made available for public comment for a period of 30 days and must be viewable on the commission's website; (v) the chosen quantification protocol and any comments received during the public comment period must, upon approval by the executive director, be submitted to the EPA for a 45-day adequacy review; and (vi) quantification protocols may not be accepted for use with this division if the executive director receives a letter objecting to the use of the protocol from the EPA during the 45-day adequacy review or the EPA proposes disapproval of the protocol in the Federal Register. (2) If the monitoring and testing data specified in paragraph (1) of this subsection is missing or unavailable, the generator or user shall determine the facility's emissions for the period of time the data is missing or unavailable using the most conservative method for replacing the data and these listed methods in the following order: (A) (B) (C) (D) continuous monitoring data; periodic monitoring data; testing data; manufacturer's data; (E) EPA Compilation of Air Pollution Emission Factors (AP-42), September 2000; or ADOPTED RULES October 6, TexReg 5479

198 (F) material balance. (3) When quantifying actual emissions in accordance with paragraph (2) of this subsection, the generator or user shall submit the justification for not using the methods in paragraph (1) of this subsection and submit the justification for the method used. (f) Credit application. Beginning January 1, 2018, a credit application must be submitted through the State of Texas Environmental Reporting System unless the applicant receives prior approval from the executive director for an alternative means of application submission. (g) Credit certification. (1) The amount of discrete emission credits must be rounded down to the nearest tenth of a ton when generated and must be rounded up to the nearest tenth of a ton when used. A facility, aggregated fugitive emissions, or aggregated mobile sources that cannot generate at least 0.1 ton of credit after all adjustments are applied may not generate discrete emission credits. Fugitive emissions or mobile source emissions aggregated to meet the requirement that emission reductions be certified for at least 0.1 ton must be represented on the same application and will have an application deadline determined by the earliest emission reduction date among the aggregated sources. (2) The executive director shall review an application for certification to determine the credibility of the reductions and may certify reductions. Each DERC certified will be assigned a certificate number. Reductions determined to be creditable will be certified by the executive director. (3) The applicant will be notified in writing if the executive director denies the discrete emission credit notification. The applicant may submit a revised application in accordance with the requirements of this division. (4) If a facility's or mobile source's emissions exceed any applicable local, state, or federal requirement, reductions of emissions exceeding the requirement may not be certified as discrete emission credits. (h) Geographic scope. Except as provided in paragraph (7) of this subsection and of this title (relating to Emission Reductions Achieved Outside the United States), only emission reductions generated in the State of Texas may be creditable and used in the state with the following limitations. (1) volatile organic compounds (VOC) and nitrogen oxides (NO X ) discrete emission credits generated in an ozone attainment area may be used in any county or portion of a county designated as attainment or unclassified, except as specified in paragraphs (4) and (5) of this subsection and may not be used in an ozone nonattainment area. (2) VOC and NO discrete emission credits generated in X an ozone nonattainment area may be used either in the same ozone nonattainment area in which they were generated, or in any county or portion of a county designated as attainment or unclassified. (3) VOC and NO X discrete emission credits generated in an ozone nonattainment area may not be used in any other ozone nonattainment area, except as provided in this subsection. (4) VOC discrete emission credits are prohibited from use within the covered attainment counties, as defined in of this title (relating to Definitions), if generated outside of the covered attainment counties. VOC discrete emission credits generated in a nonattainment area may be used in the covered attainment counties, except those generated in El Paso. (5) NO X discrete emission credits are prohibited from use within the covered attainment counties, as defined in of this title, if generated outside of the covered attainment counties. NO discrete emission credits generated in a nonattainment area, except those X generated in El Paso, may be used in the covered attainment counties. (6) carbon monoxide (CO), sulfur dioxide (SO ), and 2 particulate matter with diameters less than or equal to 10 micrometers (PM 10 ) discrete emission credits must be used in the same metropolitan statistical area (as defined in Office of Management and Budget Bulletin Number entitled "Revised Statistical Definitions for Metropolitan Areas" dated June 30, 1993) in which the reduction was generated. (7) VOC and NO X discrete emission credits generated in other counties, states, or emission reductions in other nations may be used in any attainment or nonattainment county provided a demonstration has been made and approved by the executive director and the EPA, to show that the emission reductions achieved in the other county, state, or nation improve the air quality in the county where the credit is being used. (i) Ozone season. In areas having an ozone season of less than 12 months (as defined in 40 Code of Federal Regulations Part 58, Appendix D) VOC and NO X discrete emission credits generated outside the ozone season may not be used during the ozone season. (j) Recordkeeping. The generator must maintain a copy of all forms and backup information submitted to the executive director for a minimum of five years, following the completion of the generation period. The user shall maintain a copy of all forms and backup information submitted to the executive director for a minimum of five years, following the completion of the use period. Other relevant reference material or raw data must also be maintained on-site by the participating facilities or mobile sources. The user must also maintain a copy of the generator's notice and backup information for a minimum of five years after the use is completed. The records must include, but not necessarily be limited to: (1) the name, emission point number, and facility identification number of each facility or any other identifying number for mobile sources using discrete emission credits; (2) the amount of discrete emission credits being used by each facility or mobile source; and (3) the certificate number of each discrete emission credit used by each facility or mobile source. (k) Public information. All information submitted with notices, reports, and trades regarding the nature, quantity of emissions, and sales price associated with the use, or generation of discrete emission credits is public information and may not be submitted as confidential. Any claim of confidentiality for this type of information, or failure to submit all information may result in the rejection of the discrete emission reduction application. All nonconfidential notices and information regarding the generation, use, and availability of discrete emission credits may be obtained from the registry. (l) Authorization to emit. A discrete emission credit created under this division is a limited authorization to emit the specified pollutants in accordance with the provisions of this section, the Federal Clean Air Act, and the Texas Clean Air Act, as well as regulations promulgated thereunder. A discrete emission credit does not constitute a property right. Nothing in this division should be construed to limit the authority of the commission or the EPA to terminate or limit such authorization. (m) Program participation. The executive director has the authority to prohibit a person from participating in discrete emission credit trading either as a generator or user, if the executive director de- 42 TexReg 5480 October 6, 2017 Texas Register

199 termines that the person has violated the requirements of the program or abused the privileges provided by the program. (n) Compliance burden and enforcement. (1) The user is responsible for assuring that a sufficient quantity of discrete emission credits are acquired to cover the applicable facility or mobile source's emissions for the entire use period. (2) The user is in violation of this section if the user does not possess enough discrete emission credits to cover the compliance need for the use period. If the user possesses an insufficient quantity of discrete emission credits to cover its compliance need, the user will be out of compliance for the entire use period. Each day the user is out of compliance may be considered a violation. (3) A user may not transfer its compliance burden and legal responsibilities to a third-party participant. A third-party participant may only act in an advisory capacity to the user. (o) Credit ownership. The owner of the initial discrete emission credit certificate shall be the owner or operator of the mobile source creating the emission reduction. The executive director may approve a deviation from this subsection considering factors such as, but not limited to: (1) whether an entity other than the owner or operator of the mobile source incurred the cost of the emission reduction strategy; or (2) whether the owner or operator of the mobile source lacks the potential to generate one tenth of a ton of credit Discrete Emission Reduction Credit Generation and Certification. (a) Emission reduction strategy. (1) A discrete emission reduction credit (DERC) may be generated using one of the following strategies or any other method that is approved by the executive director: (A) the installation and operation of pollution control equipment that reduces emissions below the baseline emissions for the facility; or (B) a change in the manufacturing process, other than a shutdown or curtailment, that reduces emissions below the baseline emissions for the facility. (2) A DERC may not be generated using the following strategies: (A) a shutdown or curtailment of an activity at a facility, either permanent or temporary; (B) a modification or discontinuation of any activity that is otherwise in violation of a local, state, or federal requirement; (C) an emission reduction required to comply with any provision under 42 United States Code (USC), Subchapter I regarding tropospheric ozone, or 42 USC, Subchapter IV-A regarding acid deposition control; (D) an emission reduction of hazardous air pollutants, as defined in 42 USC, 7412, from application of a standard promulgated under 42 USC, 7412; (E) an emission reduction from the shifting of activity from one facility to another facility at the same site; (F) an emission reduction credited or used under any other emissions trading program; (G) an emission reduction occurring at a facility that received an alternative emission limitation to meet a state reasonably available control technology requirement, except to the extent that the emissions are reduced below the level that would have been required had the alternative emission limitation not been issued; (H) an emission reduction from a facility authorized in a flexible permit, unless the reduction is permanent and enforceable or the generator can demonstrate that the emission reduction was not used to satisfy the conditions for the facilities under the flexible permit; (I) that portion of an emission reduction funded through a state or federal program, unless specifically allowed under that program; (J) an emission reduction from a facility subject to Division 2, 3, or 6 of this subchapter (relating to Emissions Banking and Trading Allowances; Mass Emissions Cap and Trade Program; and Highly Reactive Volatile Organic Compound Emissions Cap and Trade Program); or (K) an emission reduction from a facility without state implementation plan (SIP) emissions if the facility is located in a nonattainment area. (b) DERC baseline emissions. (1) For a facility located in an area designated as nonattainment for a criteria pollutant, and the pollutant being reduced is either the same criteria pollutant or a precursor of that criteria pollutant, the baseline emissions may not exceed the facility's SIP emissions. If the pollutant being reduced is not the same criteria pollutant for which the area is designated nonattainment or a precursor of that criteria pollutant, then baseline emissions are limited as specified in paragraph (3) of this subsection. (2) The activity and emission rate used to calculate the facility's historical adjusted emissions must be determined from the same two consecutive calendar years. (A) For point sources, the historical adjusted emissions must be from any two consecutive calendar years from the ten consecutive years immediately before the emissions reduction occurs. (B) For area sources, the historical adjusted emissions must be from any two consecutive calendar years from the five consecutive years immediately before the emissions reduction occurs unless detailed operational records are available for more than five years. The historical adjusted emissions for an area source may be determined from two consecutive calendar years up to six to ten consecutive years immediately before the emissions reduction is achieved when detailed operational records are available for those years. (3) For a facility located in an area that is not designated nonattainment for the criteria pollutant being reduced, or the pollutant being reduced is not a precursor of that criteria pollutant, the historical adjusted emissions must be determined from two consecutive calendar years that include or follow the 1990 emission inventory. (4) For emission reduction strategies that exceed 12 months, the baseline emissions are established after the first year of generation and are fixed for the life of each unique emission reduction strategy. A new baseline must be established if the commission adopts a SIP revision for the area where the facility is located. (5) For a facility in existence less than 24 months or not having two complete calendar years of activity data, a shorter period of not less than 12 months may be considered by the executive director. (c) DERC calculation. ADOPTED RULES October 6, TexReg 5481

200 (1) DERCs are calculated according to the following equation. Figure: 30 TAC (c)(1) (No change.) (2) For an area source facility, the amount of DERCs calculated will be adjusted based on the quality of the data used to quantify emissions. The adjustment will be: (A) no reduction for the same type of records that are required to be maintained by a point source facility; or (B) a reduction of 15% or 0.1 ton, whichever is greater, for records supporting approved alternative methods according to (e)(1)(E) of this title (relating to General Provisions). (3) For a facility located in an area designated nonattainment for a criteria pollutant, and the pollutant being reduced is either the same criteria pollutant or a precursor of that criteria pollutant, the sum of the reduction generated under paragraph (1) of this subsection and the total strategy emissions must not be greater than the facility's historical adjusted emissions or SIP emissions, whichever is less. (4) For a facility located in an area that is not designated nonattainment for the criteria pollutant being reduced, or the pollutant being reduced is not a precursor of that criteria pollutant, the sum of the reduction generated under paragraph (1) of this subsection and the total strategy emissions must not be greater than the facility's historical adjusted emissions. (d) DERC certification. (1) An application form specified by the executive director and signed by an authorized account representative must be submitted to the executive director no later than 90 days after the end of the generation period and no later than 90 days after completing each 12 months of generation. (2) A DERC must be quantified in accordance with (e) of this title. The executive director shall have the authority to inspect and request information to assure that the emission reductions have actually been achieved. (3) An application for DERCs must include, but is not limited to, a completed application form signed by an authorized representative of the applicant along with the following information for each pollutant reduced at each applicable facility: (A) the generation period; (B) a complete description of the generation activity; (C) the amount of DERCs generated; (D) for volatile organic compound reductions, a list of the specific compounds reduced; (E) documentation, including records for approved or approvable methods to quantify emissions, supporting the activity, emission rate, historical adjusted emissions, SIP emissions, strategy emission rate, and strategy activity; (F) for point sources emissions inventory data for the years used to determine the SIP emissions and historical adjusted emissions; (G) the most stringent emission rate for the facility, considering all applicable local, state, and federal requirements; (H) a complete description of the protocol used to calculate the DERC generated; and (I) the actual calculations performed by the generator to determine the amount of DERCs generated Mobile Discrete Emission Reduction Credit Generation and Certification. (a) Method of generation. (1) Mobile discrete emission reduction credits (MDERCs) may be generated by any mobile source emission reduction strategy that creates actual mobile source emission reductions under this division, and is subject to the approval of the executive director. The number of years that an emissions reduction strategy can be used to generate MDERCs is limited by the expected remaining useful life of the mobile source except if a capture and control system is used to reduce marine or locomotive mobile source emissions. (2) MDERCs may not be generated from the following strategies: (A) that portion of reductions funded through a state or federal program, unless specifically allowed under that program; (B) through the transfer of emissions from one mobile source to another mobile source within the same nonattainment area and under common ownership or control; or (C) reduction strategies resulting in secondary emissions increases that exceed limits established under state or federal rules or regulations. (b) MDERC baseline emissions. (1) Mobile source baseline emissions must be calculated with either measured emissions of an appropriately sized sample for the participating mobile sources using a United States Environmental Protection Agency (EPA)-approved test procedure, or estimated emissions of the participating mobile sources using the most recent edition of the EPA on-road or non-road mobile emissions factor model or other model as applicable. (2) The historical adjusted emissions and state implementation plan (SIP) emissions must only include actual emissions that occurred when the mobile source was operating inside a specific nonattainment area. (3) The activity data used to calculate mobile source's historical adjusted emissions must be from any two consecutive calendar years from the five consecutive years immediately before the emissions reduction occurs unless detailed operational records are available for more than five years. If these detailed operational records are available and do not demonstrate decreasing use due to vehicle age or inoperability, the historical adjusted emissions for a mobile source may be determined from two consecutive calendar years up to six to ten consecutive years immediately before the emissions reduction is achieved. (4) For a mobile source in existence less than 24 months or not having two complete calendar years of activity data, a shorter period of not less than 12 months may be approved by the executive director. (5) Baseline emissions for quantifying MDERCs should include, but not be limited to, the following information and data as appropriate: (A) the emission standard to which the mobile source is subject or the emission performance standard to which the mobile source is certified; (B) the estimated or measured in-use emissions levels per unit of use from all significant mobile source emissions sources; group; (C) the number of mobile sources in the participating 42 TexReg 5482 October 6, 2017 Texas Register

201 and (D) the type or types of mobile sources by model year; (E) the actual activity level, hours of operation, or miles traveled by type and model year. (c) MDERC calculation. The quantity of MDERCs must be calculated from the annual difference between the mobile source baseline emissions and the strategy emissions. The MDERC must be based on actual in-use emissions of the modified or substitute mobile source. (1) For mobile sources generating credits from a shutdown, the amount of MDERCs generated will be reduced by 15% or 0.1 ton, whichever is greater. (2) The amount of MDERCs generated will be adjusted to account for the quality of the data used to quantify the emissions. The reduction will be 15% or 0.1 ton, whichever is greater, for records supporting approved alternative methods according to (e)(1)(E) of this title (relating to General Provisions). (3) If the mobile source is subject to an adjustment based on both the reduction strategy being a shutdown and the quality of the data used to quantify the emissions, the total combined reduction will be 20% or 0.1 ton, whichever is greater. (4) If a capture and control system is used to reduce mobile source emissions, the strategy emissions used in the MDERC calculation must include the mobile source emissions that are not captured by the system, any emissions that are not controlled by the system, and any emissions caused by or as a result of operating and moving the system. The initial owner of the MDERCs is the owner or operator of the capture and control system. (d) Emission offsets. Mobile source reduction strategies that reduce emissions in one criteria pollutant or precursor for which an area is designated as nonattainment or near nonattainment, yet result in an emissions increase from the same mobile source in another criteria pollutant or precursor for which that same area is nonattainment or near nonattainment, must be offset at a 1:1 ratio with discrete emission reduction credits or MERCs. (e) MDERC certification. (1) A designated application form signed by an authorized account representative must be submitted to the executive director no later than 90 days after the end of the generation period, or no later than 90 days after the completion of each 12 months of generation. (2) MDERCs will be determined and certified in accordance with (e) of this title using: (A) EPA methodologies, when available; (B) actual monitoring results, when available; (C) calculations using the most current EPA mobile emissions factor model or other model as applicable; or (D) calculations using creditable emission reduction measurement or estimation methodologies that satisfactorily address the analytical uncertainties of mobile source emissions reduction strategies. The generator shall collect relevant data sufficient to characterize the process emissions of the affected pollutant and the process activity level for all representative phases of source operation during the period under which the MDERCs are created or used. (3) An application for MDERCs must include, but is not limited to, a completed application form signed by an authorized account representative, along with the following information for each pollutant reduced for each mobile source: (A) (B) the amount of discrete mobile source emission cred- (C) its generated; the date of the reduction; a complete description of the generation activity; (D) documentation, including records for approved or approvable methods to quantify emissions, supporting the mobile source baseline activity, mobile source baseline emission rate, mobile source baseline emissions, and the mobile source strategy emissions; (E) a complete description of the protocol used to calculate the discrete mobile source emission reduction generated; (F) the actual calculations performed by the generator to determine the amount of discrete mobile source emission credits generated; and (G) a demonstration that the reductions are surplus to all local, state, and federal rules and to emissions modeled in the SIP Discrete Emission Credit Use. (a) Requirements to use discrete emission credits. Discrete emission credits may be used if the following requirements are met. (1) The user shall have ownership of a sufficient amount of discrete emission credits before the use period for which the specific discrete emission credits are to be used. (2) The user shall hold sufficient discrete emission credits to cover the user's compliance obligation at all times. (3) The user shall acquire additional discrete emission credits during the use period if it is determined the user does not possess enough discrete emission credits to cover the entire use period. The user shall acquire additional credits as allowed under this section prior to the shortfall, or be in violation of this section. (4) The user may acquire and use only discrete emission credits listed in the registry. (5) The user shall obtain executive director approval to use nitrogen oxides (NO X ) discrete emission reduction credits (DERCs) in Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties as provided by subsection (f) of this section. (6) A discrete emission credit may not be used unless it is available in the account for the site where it will be used. (b) Use of discrete emission credits. With the exception of uses prohibited in subsection (c) of this section or precluded by a commission order or a condition within an authorization under the same commission account number, discrete emission credits may be used to meet or demonstrate compliance with any facility or mobile regulatory requirement including the following: (1) to exceed any allowable emission level, if the following conditions are met: (A) in ozone nonattainment areas, permitted facilities may use discrete emission credits to exceed permit allowables by no more than 10 tons for NO X or 5 tons for volatile organic compounds in a 12-month period as approved by the executive director. This use is limited to one exceedance, up to 12 months within any 24-month period, per use strategy. The user shall demonstrate that there will be no adverse impacts from the use of discrete emission credits at the levels requested; or (B) at permitted facilities in counties or portions of counties designated as attainment or, attainment/unclassifiable, or unclassifiable, discrete emission credits may be used to exceed permit allowables by values not to exceed the prevention of significant ADOPTED RULES October 6, TexReg 5483

202 deterioration significance levels as provided in 40 Code of Federal Regulations (CFR) 52.21(b)(23), as approved by the executive director before use. This use is limited to one exceedance, up to 12 months within any 24-month period, per use strategy. The user shall demonstrate that there will be no adverse impacts from the use of discrete emission credits at the levels requested; (2) as new source review (NSR) permit offsets, if the following requirements are met: (A) the user shall obtain the executive director's approval prior to the use of specific discrete emission credits to cover, at a minimum, one year of operation of the new or modified facility in the NSR permit; (B) the amount of discrete emission credits needed for NSR offsets equals the quantity of tons needed to achieve the maximum allowable emission level set in the user's NSR permit. The user shall also purchase and retire enough discrete emission credits to meet the offset ratio requirement in the user's ozone nonattainment area. The user shall purchase and retire either the environmental contribution of 10% or the offset ratio, whichever is higher; and (C) the user shall submit a completed application form specified by the executive director at least 90 days before the start of operation and at least 90 days before continuing operation for any period in which discrete emission credits not included in a prior application will be used as offsets; (3) to comply with the Mass Emissions Cap and Trade Program requirements as provided by (h) of this title (relating to Allowance Banking and Trading); or (4) to comply with Chapter 115 or 117 of this title (relating to Control of Air Pollution from Volatile Organic Compounds; and Control of Air Pollution from Nitrogen Compounds), as allowed. (c) Discrete emission credit use prohibitions. A discrete emission credit may not be used under this division: (1) before it has been acquired by the user; (2) for netting to avoid the applicability of federal and state NSR requirements; (3) to meet (as codified in 42 United States Code (USC), Federal Clean Air Act (FCAA)) requirements for: (A) new source performance standards under FCAA, 111 (42 USC, 7411); (B) lowest achievable emission rate standards under FCAA, 173(a)(2) (42 USC, 7503(a)(2)); (C) best available control technology standards under FCAA, 165(a)(4) (42 USC, 7475(a)(4)) or Texas Health and Safety Code, (b)(1); (D) hazardous air pollutants standards under FCAA, 112 (42 USC, 7412), including the requirements for maximum achievable control technology; (E) standards for solid waste combustion under FCAA, 129 (42 USC, 7429); (F) requirements for a vehicle inspection and maintenance program under FCAA, 182(b)(4) or (c)(3) (42 USC, 7511a(b)(4) or (c)(3)); (G) ozone control standards set under FCAA, 183(e) and (f) (42 USC, 7511b(e) and (f)); (H) clean-fueled vehicle requirements under FCAA, 246 (42 USC, 7586); (I) motor vehicle emissions standards under FCAA, 202 (42 USC, 7521); (J) standards for non-road vehicles under FCAA, 213 (42 USC, 7547); (K) requirements for reformulated gasoline under FCAA, 211(k) (42 USC, 7545); or (L) requirements for Reid vapor pressure standards under FCAA, 211(h) and (i) (42 USC, 7545(h) and (i)); (4) to allow an emissions increase of an air contaminant above a level authorized in a permit or other authorization that exceeds the limitations of or of this title (relating to Facilities (Emission Limitations); and Facilities (Emission and Distance Limitations)) except as approved by the executive director and the United States Environmental Protection Agency (EPA). This paragraph does not apply to limit the use of discrete emission credits in lieu of allowances under of this title; (5) to authorize a facility whose emissions are enforceably limited to below applicable major source threshold levels, as defined in of this title (relating to General Definitions), to operate with actual emissions above those levels without triggering applicable requirements that would otherwise be triggered by such major source status; (6) to exceed an allowable emission level where the exceedance would cause or contribute to a condition of air pollution as determined by the executive director; or (7) in Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties, if the NO DERC usage X requested exceeds the limit specified in subsection (f) of this section. (d) Notice of intent to use. (1) A completed application form specified by the executive director, signed by an authorized representative of the applicant, must be submitted to the executive director in accordance with the following requirements. (A) Discrete emission credits may be used only after the applicant has submitted the notice and received executive director approval. (B) The application must be submitted: (i) except as provided in subsection (f)(4) of this section, for NO DERC use in Collin, Dallas, Denton, Ellis, Johnson, X Kaufman, Parker, Rockwall, and Tarrant Counties, by August 1 before the beginning of the calendar year in which the DERCs are intended for use; (ii) for use for the Mass Emissions Cap and Trade Program in accordance with of this title, by October 1 of the control period in which the DERC are intended for use; or (iii) for use for NSR offsets, as required by subsection (b)(2)(c) of this section; or (iv) for all other use, at least 45 days before the first day of the use period if the discrete emission credits were generated from a facility, 90 days if the discrete emission credits were generated from a mobile source, and every 12 months thereafter for each subsequent year if the use period exceeds 12 months. 42 TexReg 5484 October 6, 2017 Texas Register

203 (C) A copy of the application must also be sent to the federal land manager 30 days prior to use if the user is located within 100 kilometers of a Class I area, as listed in 40 CFR Part 81 (2001). (D) The application must include, but is not limited to, the following information for each use: (i) the applicable state and federal requirements that the discrete emission credits will be used to comply with and the intended use period; (ii) the amount of discrete emission credits needed; (iii) the baseline emission rate, activity level, and total emissions for the applicable facility or mobile source; (iv) the actual emission rate, activity level, and total emissions for the applicable facility or mobile source; (v) the most stringent emission rate and the most stringent emission level for the applicable facility or mobile source, considering all applicable local, state, and federal requirements; (vi) a complete description of the protocol, as submitted by the executive director to the EPA for approval, used to calculate the amount of discrete emission credits needed; (vii) the actual calculations performed by the user to determine the amount of discrete emission credits needed; acquired; (viii) the date that the discrete emission credits were (ix) the discrete emission credit generator and the original certificate number of the discrete emission credits acquired; (x) the price of the discrete emission credits acquired, except for transfers between sites under common ownership or control; (xi) a statement that due diligence was taken to verify that the discrete emission credits were not previously used, the discrete emission credits were not generated as a result of actions prohibited under this regulation, and the discrete emission credits will not be used in a manner prohibited under this regulation; and (xii) a certification of use, that must contain certification under penalty of law by a responsible official of the user of truth, accuracy, and completeness. This certification must state that based on information and belief formed after reasonable inquiry, the statements and information in the document are true, accurate, and complete. (2) Discrete emission credit use calculation. (A) To calculate the amount of discrete emission credits necessary to comply with , , , , , , or of this title (relating to Source Cap; and System Cap), a user may use the equations listed in those sections, or the following equations. (i) For the rolling average cap: Figure: 30 TAC (d)(2)(A)(i) (ii) For maximum daily cap: Figure: 30 TAC (d)(2)(A)(ii) (B) The amount of discrete emission credits needed to demonstrate compliance or meet a regulatory requirement is calculated as follows. Figure: 30 TAC (d)(2)(B) (No change.) (C) The amount of discrete emission credits needed to exceed an allowable emissions level is calculated as follows. Figure: 30 TAC (d)(2)(C) (D) The user shall retire 10% more discrete emission credits than are needed, as calculated in this paragraph, to ensure that the facility or mobile source environmental contribution retirement obligation will be met. (E) If the amount of discrete emission credits needed to meet a regulatory requirement or to demonstrate compliance is greater than 10 tons, an additional 5.0% of the discrete emission credits needed, as calculated in this paragraph, must be acquired to ensure that sufficient discrete emission credits are available to the user with an adequate compliance margin. (3) A user may submit a late application in the case of an emergency, or other exigent circumstances, but the notice must be submitted before the discrete emission credits can be used. The user shall include a complete description of the situation in the notice of intent to use. All other notices submitted less than 45 days prior to use, or 90 days prior to use for a mobile source, will be considered late and in violation. (4) The user is responsible for determining the credits it will purchase and notifying the executive director of the selected generating facility or mobile source in the application. If the generator's credits are rejected or the application is incomplete, the use of discrete emission credits by the user may be delayed by the executive director. The user cannot use any discrete emission credits that have not been certified by the executive director. The executive director may reject the use of discrete emission credits by a facility or mobile source if the credit and use cannot be demonstrated to meet the requirements of this section. (5) If the facility is in an area with an ozone season less than 12 months, the user shall calculate the amount of discrete emission credits needed for the ozone season separately from the non-ozone season. (e) Notice of use. (1) The user shall calculate: (A) the amount of discrete emission credits used, including the amount of discrete emission credits retired to cover the environmental contribution, as described in subsection (d)(2)(d) of this section, associated with actual use; and (B) the amount of discrete emission credits not used, including the amount of excess discrete emission credits that were purchased to cover the environmental contribution, as described in subsection (d)(2)(d) of this section, but not associated with the actual use, and available for future use. (2) Discrete emission credit use is calculated by the following equations. (A) The amount of discrete emission credits used to demonstrate compliance or meet a regulatory requirement is calculated as follows. Figure: 30 TAC (e)(2)(A) (No change.) (B) The amount of discrete emission credits used to comply with permit allowables is calculated as follows. Figure: 30 TAC (e)(2)(B) (No change.) (3) A form specified by the executive director for using credits must be submitted to the executive director in accordance with the following requirements. (A) The notice must be submitted within 90 days after the end of the use period. Each use period must not exceed 12 months. ADOPTED RULES October 6, TexReg 5485

204 (B) The notice is to be used as the mechanism to update or amend the notice of intent to use and must include any information different from that reported in the notice of intent to use, including, but not limited to, the following items: (i) purchase price of the discrete emission credits obtained prior to the current use period, except for transfers between sites under common ownership or control; (ii) the actual amount of discrete emission credits possessed during the use period; (iii) the actual emissions during the use period for volatile organic compounds and NO X ; used; (iv) the actual amount of discrete emission credits (v) the actual environmental contribution; and (vi) the amount of discrete emission credits available for future use. (4) Discrete emission credits that are not used during the use period are surplus and remain available for transfer or use by the holder. In addition, any portion of the calculated environmental contribution not attributed to actual use is also available. (5) The user is in violation of this section if the user submits the report of use later than the allowed 90 days following the conclusion of the use period. (f) DERC use in Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties. (1) For the 2015 calendar year, the use of NO DERCs in X Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties may not exceed 42.8 tons per day. (2) Beginning in the 2016 calendar year, the use of NO X DERCs in Collin, Dallas, Denton, Ellis, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties may not exceed 17.0 tons per day. (3) If the total number of DERCs submitted for the upcoming calendar year in all applications received by the August 1 deadline in subsection (d)(1)(b)(i) of this section is greater than the applicable limit in paragraph (1) or (2) of this subsection, the executive director shall apportion the number of DERCs for use. (A) In determining the amount of DERC use to approve for each application, the executive director may take into consideration: (i) the total number of DERCs existing in the nonattainment area bank; (ii) the total number of DERCs submitted for use in the upcoming control period; (iii) the proportion of DERCs requested for use to the total amount requested; (iv) the amount of DERCs required by the applicant for compliance; (v) the technological and economic aspects of other compliance options available to the applicant; and (vi) the location of the facilities for which owners or operators are requesting use of DERCs. (B) The executive director shall consider the appropriate amount of DERCs allocated for each application submitted on a case-by-case basis. (4) If the total number of DERCs submitted for use during the upcoming calendar year in all applications received by the August 1 deadline in subsection (d)(1)(b)(i) of this section is less than the limit, the executive director may: (A) approve all requests for DERC usage provided that all other requirements of this section are met; and (B) consider any late application submitted as provided under subsection (d)(3) of this section that is not an Electric Reliability Council of Texas, Inc. (ERCOT)-declared emergency situation as defined in paragraph (5) of this subsection, but will not otherwise approve a late submittal that would exceed the limit established in this subsection. (5) If the applications are submitted in response to an ER- COT-declared emergency situation, the request will not be subject to the limit established in this subsection and may be approved provided all other requirements are met. For the purposes of this paragraph, an ERCOT-declared emergency situation is defined as the period of time that an ERCOT-issued emergency notice or energy emergency alert (EEA) (as defined in ERCOT Nodal Protocols, Section 2: Definitions and Acronyms (June 1, 2012) and issued as specified in ERCOT Nodal Protocols, Section 6: Adjustment Period and Real-Time Operations (June 1, 2012)) is applicable to the serving electric power generating system. The emergency situation is considered to end upon expiration of the emergency notice or EEA issued by ERCOT. (g) Inter-pollutant use of discrete emission credits. With prior approval from the executive director and the EPA, a NO or VOC X discrete emission credit may be used to meet the nonattainment new source review offset requirements for the other ozone precursor if photochemical modeling demonstrates that overall air quality and the regulatory design value in the nonattainment area of use will not be adversely affected by the substitution. 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 September 22, TRD Robert Martinez Director, Environmental Law Division Texas Commission on Environmental Quality Effective date: October 12, 2017 Proposal publication date: March 24, 2017 For further information, please call: (512) TITLE 34. PUBLIC FINANCE PART 1. COMPTROLLER OF PUBLIC ACCOUNTS CHAPTER 3. TAX ADMINISTRATION SUBCHAPTER V. FRANCHISE TAX 34 TAC The Comptroller of Public Accounts adopts amendments to 3.585, concerning margin: annual report extensions, with changes to the proposed text as published in the May 5, 2017, issue of the Texas Register (42 TexReg 2394). The amend- 42 TexReg 5486 October 6, 2017 Texas Register

205 ments implement a policy change with respect to combined groups requesting an extension of time to file a report when there is a change in the members of the group; clarify penalty and interest assessments for late payment; correct grammatical errors; and update the section to improve readability. Amendments throughout the section correct grammatical errors and make minor revisions. Subsection (a) amendment adds language to indicate that, where noted, the provisions of this section apply to reports other than those originally due on or after January 1, Written comments were received from Dale Craymer, representing the Texas Taxpayers and Research Association, and David Colmenero, representing the State Bar of Texas, Tax Section, regarding the omission of the reference to the extended due date of the report from the proposed rule. Mr. Craymer and Mr. Colmenero requested that the comptroller amend the rule to provide that the due date of the report will reflect any extension granted. Mr. Colmenero specifically requested that the comptroller "insert in the Proposed Rule a new subsection providing that, for purposes of Tax Code , 'the last day on which a payment is required' by Chapter 171 is the date to which a taxpayer has been granted an extension of the due date for a report." The comptroller agrees that revisions are needed but has chosen to revise existing subsections as opposed to adding a new subsection. The comptroller has revised subsections (c), (f), and (g) to clarify that these subsections relate specifically to the extension of the due date of the report. Amendments to subsection (c)(3)(b), regarding the 100% option for requesting an extension, restructure the information for combined groups into three clauses. Clause (i) provides the policy, effective for reports due prior to January 1, 2017, regarding a combined group's request for extension when a change in combined group members occurs. Clause (ii) adds the revised policy, effective for reports due on or after January 1, 2017, that allows a combined group to file an extension request using the 100% option even if the combined group has added members since the previous year. Clause (iii) provides information that currently appears in (c)(3)(b), without change. Subsection (e) amendments retitle the subsection to clarify that it provides penalty and interest information only for taxable entities not required to pay by electronic funds transfer. Amendments to subsection (e) and paragraphs (1), (2), and (3) remove all references to "due date" and rewrite the provisions to make them easier to read, without making substantive changes to the information. Amendments to subsection (f)(3)(b), regarding mandatory electronic funds transfer filers 100% option for requesting an extension, restructures the information for combined groups into three clauses. Clause (i) provides the policy, effective for reports due prior to January 1, 2017, regarding a combined group's request for extension when a change in combined group members occurs. Clause (ii) adds the revised policy, effective for reports due on or after January 1, 2017, that allows a combined group to file an extension request using the 100% option even if the combined group has added members since the previous year. Clause (iii) provides information that currently appears in (f)(3)(b), without change. Subsection (h) amendments retitle the subsection to clarify that it provides penalty and interest information for taxable entities required to pay by electronic funds transfer. Amendments to subsection (h) and paragraphs (1), (2), and (3) remove all references to "due date" and rewrite the provisions to make them easier to read, without making substantive changes to the information. This amendment is adopted under Tax Code, (Comptroller's Rules; Compliance; Forfeiture), which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2. The amendment implements Tax Code, (Annual Report) and (Penalty for Failure to Pay Tax or File Report) Margin: Annual Report Extension. (a) Effective date. Except as otherwise provided, the provisions of this section apply to franchise tax reports originally due on or after January 1, (b) Taxable and nontaxable entities. See of this title (relating to Margin: Taxable and Nontaxable Entities) for a list of taxable and nontaxable entities. (c) Extension of due date to November 15. Except for a taxable entity that has been notified by the comptroller that it is required to make its franchise tax payments by electronic funds transfer (see subsections (d), (f), and (g) of this section), a taxable entity will be granted an extension to file an annual report and the due date of the report is extended to the next November 15, if the taxable entity: (1) requests the extension on or before May 15; (2) requests the extension on a form provided by the comptroller; and (3) remits with the extension request: (A) 90% or more of the amount of tax reported as due on the report filed on or before November 15; or (B) 100% of the tax reported as due for the previous calendar year on the report due in the previous calendar year and filed on or before May 14 of the year for which the extension is requested. (i) For reports originally due prior to January 1, 2017, a combined group may only use this 100% option if the combined group has lost a member or if the members of the combined group are the same as they were on the last day of the period upon which the report due in the previous calendar year was based. (ii) For reports originally due on or after January 1, 2017, a combined group may use this 100% option regardless of any changes in combined group members. (iii) A separate entity that was included in a combined group report originally due in the previous calendar year may not use the 100% extension option. (d) No previous report. An extension shall not be granted under subsection (c)(3)(b) or (f)(3)(b) of this section, if no report was due in the previous calendar year or the report due in the previous calendar year is not filed on or before May 14 of the year for which the extension is requested. (e) Penalty and interest for taxable entities not required to pay by electronic funds transfer. Penalty and interest, except for a taxable entity that has been notified by the comptroller that it is required to make its franchise tax payments by electronic funds transfer (see subsection (h) of this section), will be calculated in the following manner. (1) If a taxable entity is granted an extension by remitting, on or before May 15, at least 100% of the tax reported as due for the previous calendar year on the report due in the previous calendar year ADOPTED RULES October 6, TexReg 5487

206 and filed on or before May 14 of the year for which the extension is requested, then no penalty or interest will be assessed if the remaining tax due is remitted on or before November 15. (2) If a taxable entity is granted an extension by remitting, on or before May 15, 90% or more of the tax that will be reported as due on or before November 15, then no penalty or interest will be assessed if the remaining tax due is remitted on or before November 15. (3) If a taxable entity, on or before May 15, requests an extension but does not meet the requirements of paragraph (1) or (2) of this subsection, then penalty and interest will be assessed on the difference between 90% of the tax finally determined to be due and the amount remitted on or before May 15. Penalty and interest will also be assessed on 10% of the tax finally determined to be due if not remitted on or before November 15. (f) Required electronic funds transfer extension of the due date to August 15. Subject to paragraphs (1) - (3) of this subsection, a taxable entity that has been notified by the comptroller that it is required to make its franchise tax payments by electronic funds transfer (see 3.9 of this title (relating to Electronic Filing of Returns and Reports; Electronic Transfer of Certain Payments by Certain Taxpayers)) will be granted an extension to file an annual report and the due date of the report is extended to the next August 15. A combined group is required to make its franchise tax payments by electronic funds transfer if any member of the combined group receives notice of the requirement. An extension of the due date to August 15 will be granted if the taxable entity: (1) requests the extension on or before May 15; (2) requests the extension on a form provided by the comptroller; and (3) remits with the extension request: (A) 90% or more of the amount of tax reported as due on the report filed on or before August 15; or (B) 100% of the tax reported as due for the previous calendar year on the report due in the previous calendar year and filed on or before May 14 of the year for which the extension is requested. (i) For reports originally due prior to January 1, 2017, a combined group may only use this 100% option if the combined has lost a member or if the members of the combined group are the same as they were on the last day of the period upon which the report due in the previous calendar year was based. (ii) For reports originally due on or after January 1, 2017, a combined group may use this 100% option regardless of any changes in combined group members. (iii) A separate entity that was included in a combined group report originally due in the previous calendar year may not use the 100% extension option. (g) Required electronic funds transfer second extension of the due date to November 15. A taxable entity granted an extension under subsection (f) of this section will be granted an extension to file an annual report and the due date of the report is extended to the next November 15 if the taxable entity: (1) requests the extension on or before August 15; (2) requests the extension on a form provided by the comptroller; and (3) remits with the request the difference between the amount paid previously for the current reporting period and 100% of the amount of tax reported as due on the report filed on or before November 15. (h) Penalty and interest for taxable entities required to pay by electronic funds transfer. Penalty and interest will be calculated in the following manner. (1) If a taxable entity is granted an extension until August 15 by remitting, on or before May 15, at least 100% of the tax reported as due for the previous calendar year on the report due in the previous calendar year and filed on or before May 14 of the year for which the extension is requested, then no penalty or interest will be assessed if the remaining tax due is remitted on or before August 15. However, if the taxable entity requests, on or before August 15, an extension until November 15, and remits, on or before August 15, at least 99% of the amount reported as due on or before November 15, then no penalty will be assessed. Interest will be assessed on the remaining tax due if not remitted on or before November 15. (2) If a taxable entity is granted an extension until August 15 by remitting, on or before May 15, 90% or more of the tax that will be reported as due on or before August 15, then no penalty or interest will be assessed if the remaining tax due is remitted on or before August 15. However, if the taxable entity requests, on or before August 15, an extension until November 15, and remits, on or before August 15, at least 99% of the amount reported as due on or before November 15, then no penalty will be assessed. Interest will be assessed on the remaining tax due if not remitted on or before November 15. (3) If a taxable entity, on or before May 15, requests an extension until August 15, but does not meet the requirements of paragraph (1) or (2) of this subsection, then penalty and interest will be assessed on the difference between 90% of the tax finally determined to be due and the amount remitted on or before May 15. Penalty and interest will also be assessed on 10% of the tax finally determined to be due if not remitted on or before August 15. However, if the taxable entity requests, on or before August 15, an extension until November 15, and remits on or before August 15 at least 99% of the amount reported as due on or before November 15, then penalty and interest will be assessed on the difference between 90% of the tax finally determined to be due and the amount remitted on or before May 15. No penalty will be assessed on the remaining tax due if remitted on or before November 15. Interest will be assessed on the remaining tax due if not remitted on or before November 15. (i) No additional extensions. No additional extensions will be granted for annual franchise tax reports pursuant to Tax 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 September 21, TRD Lita Gonzalez General Counsel Comptroller of Public Accounts Effective date: October 11, 2017 Proposal publication date: May 5, 2017 For further information, please call: (512) TexReg 5488 October 6, 2017 Texas Register

207 TITLE 37. PUBLIC SAFETY AND CORREC- TIONS PART 15. TEXAS FORENSIC SCIENCE COMMISSION CHAPTER 651. DNA, CODIS, FORENSIC ANALYSIS, AND CRIME LABORATORIES SUBCHAPTER A. ACCREDITATION 37 TAC The Texas Forensic Science Commission ("Commission") adopts amendments to 37 TAC to edit and correct internal rule citations, statutory citations and heading titles and to add fire scene investigation including but not limited to cause and origin determinations to its list of forensic disciplines exempt from Commission accreditation requirements. The amendments are necessary to correct references to rules and statutes, to modify headings so they are accurate, and to add fire scene investigation to the Commission s list of forensic disciplines exempt from accreditation requirements. The amendments are adopted with changes to the proposed text as published in the June 16, 2017, issue of the Texas Register (42 TexReg 3126). All changes reflect rule adoptions made by the Commission at its May 26, 2017, quarterly meeting and were made pursuant to Tex. Code Crim. Procedure art d, which mandates the Commission establish an accreditation process for crime laboratories and other entities conducting forensic analyses of physical evidence for use in criminal proceedings. Summary of Comments. No comments were received regarding the edits and amendments to these sections, but two additional, non-substantive edits to proposed rules were made--1) references to the recognized accrediting body American Society of Crime Laboratory Directors, Laboratory Accreditation Board (ASCLD/LAB) were changed throughout to read "ANSI-ASQ National Accreditation Board (ANAB)" due to a change in corporate structure of the organization and 2) references to "subdiscipline" or "subdisciplines" were changed to read "categories of analysis" to harmonize the Commission s rules with the way accrediting bodies use the reference. Statutory Authority. The amendments are adopted under Article d, Code of Criminal Procedure. Cross reference to statute. The adoption affects 37 TAC Purpose. (a) Generally. This subchapter contains the Texas Forensic Science Commission (Commission) rules adopted under The Code of Criminal Procedure, Article d, that govern: (1) the recognition of an accrediting body by the Commission; and (2) the accreditation by the Commission of a crime laboratory or other entity conducting forensic analyses of physical evidence for use in criminal proceedings. (b) Accreditation sequence. To be accredited by the Commission under this subchapter, a crime laboratory or other entity must first be accredited by a recognized accrediting body. (c) Source of evidence predicate. The Code of Criminal Procedure, Article 38.35, requires Commission accreditation of a crime laboratory or other entity for admission of evidence or testimony if the crime laboratory or other entity conducts a forensic analysis of physical evidence for use in a criminal proceeding. (d) Statutory Commission accreditation. A crime laboratory or other entity may apply to the Commission for accreditation if accreditation is required for evidence admissibility under Code of Criminal Procedure, Article Definitions. The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise. (1) Environmental testing--an analysis by a laboratory conducted for the purpose of determining the chemical, molecular, carcinogenic, radioactive, or pathogenic components of air, water, soil, or other environmental media for use in an administrative, civil, or criminal matter. (2) Forensic analysis--has the meaning assigned by Code of Criminal Procedure, Article The term does not include: (A) latent print examination; (B) a test of a specimen of breath under Chapter 724, Transportation Code; an examination or test excluded by rule under Article 38.01; (C) (D) digital evidence; (E) a presumptive test performed for the purposes of determining compliance with a term or condition of community supervision or parole and conducted by or under contract with a community supervision and corrections department, the parole division of the Texas Department of Criminal Justice, or the Board of Pardons and Paroles; or (F) an expert examination or test conducted principally for the purpose of scientific research, medical practice, civil or administrative litigation, or other purpose unrelated to determining the connection of physical evidence to a criminal action. (3) Forensic pathology--includes that portion of an autopsy conducted by a medical examiner or other forensic pathologist who is a licensed physician. (4) Crime Laboratory--Includes a public or private laboratory or other entity that conducts forensic analysis as set forth in Article 38.35, Code of Criminal Procedure. The term includes a forensic DNA laboratory and a CODIS user laboratory. (5) Physical evidence--has the meaning assigned by Article 38.35, Code of Criminal Procedure Recognition Process. The Commission shall recognize an accrediting body under this section if the Commission determines that the accrediting body: (1) issues an accreditation that is accepted throughout the relevant scientific community and appropriate or available to a crime laboratory or other entity that conduct forensic analyses of physical evidence for use in criminal proceedings; (2) has established adequate accreditation criteria reasonably likely to ensure trustworthy forensic analysis; ADOPTED RULES October 6, TexReg 5489

208 (3) requires a periodic competency audit or review of the personnel, facilities, and procedures employed by a crime laboratory or other entity to conduct a forensic analysis; and (4) withholds, grants, or withdraws its accreditation of a crime laboratory or other entity based on its own determination of a reasonable likelihood of meaningful corrective action for each deficiency noted during the periodic audit or review List of Recognized Accrediting Bodies. (a) The Commission recognizes the accrediting bodies in this subsection, subject to the stated discipline or category of analysis limitations: (1) American Board of Forensic Toxicology (ABFT)--recognized for accreditation of toxicology discipline only. (2) ANSI-ASQ National Accreditation Board (ANAB)-- recognized for accreditation of all disciplines which are eligible for accreditation under this subchapter. (3) Substance Abuse and Mental Health Services Administration of the Department of Health and Human Services (HHS/SAMSHA), formerly known as the National Institute on Drug Abuse of the Department of Health and Human Services (HHS/NIDA)--recognized for accreditation of toxicology discipline in the category of analysis for Urine Drug Testing for all classes of drugs approved by the accrediting body. (4) College of American Pathologists (CAP)--recognized for accreditation of toxicology discipline. (5) American Association for Laboratory Accreditation (A2LA)--recognized for accreditation of all disciplines which are eligible for accreditation under this chapter. (b) If an accrediting body is recognized under subsection (a) of this section and the recognized body approves a new discipline, category of analysis or procedure, the Commission may temporarily recognize the new discipline, category of analysis or procedure. A temporary approval shall be effective for 120 days Forensic Disciplines and Procedures Subject to Commission Accreditation. (a) Forensic analysis/recognized accreditation. This section describes a discipline or category of analysis that involves forensic analysis for use in a criminal proceeding and for which accreditation is available from a recognized accrediting body. (b) By discipline or category of analysis. A crime laboratory may apply for Commission accreditation for one or more of the following disciplines: (1) Seized Drugs. Categories of analysis may include one or more of the following categories: qualitative determination, quantitative measurement, weight measurement, and volume measurement; (2) Toxicology. Categories of analysis may include one or more of the following categories: qualitative determination and quantitative measurement; (3) Forensic Biology. Categories of analysis may include one or more of the following categories: collection, DNA-STR, DNA- YSTR, DNA-Mitochondrial, DNA-SNP, body fluid identification, relationship testing, microbiology, and individual characteristic database; (4) Firearms/Toolmarks. Categories of analysis may include one or more of the following categories: collection, physical comparison, determination of functionality, length measurement, serial number restoration, trigger pull force measurement, qualitative chemical determination, distance determination, ejection pattern determination, trajectory determination, product (make/model) determination, and individual characteristic database; (5) Document Examination. Categories of analysis may include one or more of the following categories: document authentication, physical comparison, and product determination; (6) Materials (Trace). Categories of analysis may include one or more of the following categories: collection, physical determination, chemical determination, physical/chemical comparison, product (make/model) determination, gunshot residue (collection and qualitative determination), and fire debris and explosives (qualitative determination); or (7) other discipline and its related categories of analysis if accredited by a recognized accrediting body and approved by the Commission. (c) Cross-disciplines and categories of analysis. A laboratory may choose to assign a particular discipline or category of analysis to a different administrative section or unit in the laboratory than the sections indicated herein. (d) If an accreditation for a category of analysis is accompanied by the term 'only' or a similar notation, the Commission will deem the accreditation to exclude other categories of analysis in that discipline. (e) Accreditation of a confirmation test procedure does not carry automatic accreditation of an associated field, spot, screening, or other presumptive test Forensic Disciplines and Procedures to Which Commission Accreditation Does Not Apply by Statute. This section describes a discipline, category of analysis, or procedure that is excluded from the definition of forensic analysis or otherwise exempted by the Code of Criminal Procedure, Article No crime laboratory accreditation is currently required for the following disciplines: (1) latent print examination; (2) breath specimen testing under Transportation Code, Chapter 724; (3) digital evidence (including computer forensics, audio, or imaging); or (4) an examination or test excluded by rule under Code of Criminal Procedure, Article d(c) and set forth in this subchapter. (5) a presumptive test performed for the purposes of determining compliance with a term or condition of community supervision or parole and conducted by or under contract with a community supervision and corrections department, the parole division of the Texas Department of Criminal Justice, or the Board of Pardons and Paroles; (6) an expert examination or test conducted principally for the purpose of scientific research, medical practice, civil or administrative litigation, or other purpose unrelated to determining the connection of physical evidence to a criminal action; or (7) the portion of an autopsy conducted by a medical examiner or other forensic pathologist who is a licensed physician Forensic Disciplines and Procedures Exempt from Commission Accreditation Requirements by Administrative Rule. (a) The Commission has exempted the following categories of forensic analysis from the accreditation requirement by administrative rule: 42 TexReg 5490 October 6, 2017 Texas Register

209 (1) sexual assault examination of a person; (2) forensic anthropology, entomology, or botany; (3) environmental testing; (4) facial or traffic accident reconstruction; (5) serial number restoration; (6) polygraph examination; (7) voice stress, voiceprint, or similar voice analysis; (8) statement analysis; (9) forensic odontology for purposes of human identification or age assessment, not to include bite mark comparison related to patterned injuries; (10) testing and/or screening conducted for sexually transmitted diseases; (11) fire scene investigation, including but not limited to cause and origin determinations; or (12) other discipline or category of analysis so determined by the Commission, including those identified and listed at the Commission s website. (b) A request for exemption shall be submitted in writing to the Commission. (c) This subsection describes a discipline, category of analysis, or procedure that does not normally involve forensic analysis of physical evidence for use in a criminal proceeding and for which recognized accreditation is inappropriate or unavailable. Accordingly, accreditation is not required for the following: (1) forensic photography; (2) non-criminal paternity testing; (3) non-criminal testing of human or nonhuman blood, urine, or tissue; (4) a crime scene investigation team (whether or not associated with an accredited laboratory) if the team does not engage in forensic analysis because it only engages in the location, identification, collection or preservation of physical evidence and the activity is not integral to an expert examination or test; (5) forensic psychology, including profiling, memory analysis and other forms of forensic psychology; (6) other evidence processing or handling that is excluded under 651.2(2) of this subchapter; or (7) other discipline or category of analysis as so determined by the Commission Full Commission Accreditation. (a) Issuance and renewal. The Commission may issue or renew accreditation under this section. (b) Application. An applicant for full Commission accreditation shall complete and submit to the Commission a current Laboratory Accreditation Form and attach copies of the following: (1) an accreditation certificate and letter of notification of accreditation from a recognized accrediting body; and (2) each document provided by the recognized accrediting body that identifies the discipline or category of analysis for which the laboratory has received accreditation and any limitation or restriction regarding that accreditation. (c) Additional information. The Commission may require additional information to properly evaluate the application either as part of the original application or as supplemental information. (d) Reports to the Commission. (1) If accredited by ANAB, a laboratory shall provide the Commission with a copy of each Annual Accreditation Review Report. If accredited by another recognized accrediting body, a laboratory shall provide the Commission with a copy of each equivalent annual accreditation assessment document. The copy shall be submitted to the Commission at the same time that it is due to the recognized accrediting body. (2) A laboratory shall provide the Commission with a copy of correspondence and each report or communication between the laboratory and the recognized accrediting body. The laboratory shall submit the copy to the Commission no later than 30 days after the date the laboratory receives or transmits the correspondence, report, or communication. (3) A laboratory that discontinues a specific forensic discipline or category of analysis: (A) if known beforehand, should submit written notification to the Commission at least 30 days before the effective date of the discontinuation; or (B) if unknown beforehand, shall submit written notification to the Commission at least 5 business days after the effective date of the discontinuation. (e) Federal forensic laboratories. A federal forensic laboratory is deemed to be accredited by the Commission without application provided that the laboratory is accredited by a recognized accrediting body as provided under of this subchapter (relating to List of Recognized Accrediting Bodies). A laboratory deemed accredited is not subject to the reporting requirements of this subchapter or the processes provided under Subchapter B of this chapter (relating to Complaints, Special Review, and Administrative Action) Provisional Commission Accreditation. (a) Issuance and renewal. The Commission may issue provisional accreditation under this section that is non-renewable for that discipline, category of analysis, or procedure. (b) Application. An applicant for provisional Commission accreditation shall complete and submit to the Commission a current Laboratory Accreditation Form as referenced in 651.8(b) of this subchapter (relating to Full Commission Accreditation) and attach copies of the following: (1) the application for accreditation by a recognized accrediting body; (2) the initial audit, inspection, or review report from an independent auditor based on the standards of the recognized accrediting body; (3) a full response in writing to the initial audit, inspection, or review report described in paragraph (2) of this subsection; and (4) each document provided by the recognized accrediting body that identifies the discipline or category of analysis for which the laboratory seeks accreditation. (c) Provisional-Interim. If a laboratory is in good standing with its accrediting body and has made application to renew or replace its accreditation, the laboratory may apply for Provisional Commission Accreditation if necessary to cover a period between times that it qualifies for full Commission accreditation. For this Provisional Com- ADOPTED RULES October 6, TexReg 5491

210 mission Accreditation, the laboratory may complete and submit to the Commission a current Laboratory Accreditation Form as referenced in 651.8(b) of this subchapter and attach copies of the following: (1) the application for accreditation by a recognized accrediting body; and (2) each document provided by the recognized accrediting body that identifies the discipline or sub-discipline for which the laboratory seeks accreditation. (d) Additional information. The Commission may require additional information to properly evaluate the application either as part of the original application or as supplemental information. (e) Reports to the Commission. (1) The laboratory shall request that the recognized accrediting body provide the Commission with a copy of each audit, inspection, or review report conducted before full Commission accreditation. (2) A laboratory shall provide the Commission with a copy of correspondence and each report or communication between the laboratory and the recognized accrediting body. The laboratory shall submit the copy to the Commission no later than 30 days after the date the laboratory receives or transmits the correspondence, report, or communication. (3) A laboratory that discontinues a specific forensic discipline, category of analysis, or procedure shall submit written notification to the Commission at least 30 days before the effective date of the discontinuation. (f) Second sample required. A laboratory with provisional Commission accreditation under this section must: (1) preserve one or more separate samples of the physical evidence for use by the defense attorney or use under order of the convicting court; and (2) agree to preserve, and preserve those samples until all appeals in the criminal case are final Accreditation Term. (a) Normal term. The normal term for Commission accreditation: (1) begins on the date of issuance of the initial Commission accreditation letter; and (2) extends until withdrawn by the recognized accrediting body or by the Commission under of this subchapter (relating to Withdrawal of Commission Accreditation). (b) Provisional term. (1) A laboratory that applies for accreditation from a recognized accrediting body may apply to the Commission for provisional accreditation in accordance with of this subchapter (relating to Provisional Commission Accreditation) for a term not to exceed one year from the date the Commission issues the accreditation unless formally extended for good cause by the Commission. (2) If a currently accredited laboratory is in the process of renewing or replacing its accreditation from a recognized accrediting body, prior to the end of its term, and applies for provisional Commission accreditation, the term of that provisional accreditation may not exceed six (6) months. (c) Limited term. A laboratory, including an out of state, federal, or private laboratory, may request Commission accreditation for a term less than the term normally available under this subchapter. 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 September 18, TRD Leigh Savage Associate General Counsel Texas Forensic Science Commission Effective date: October 8, 2017 Proposal publication date: June 16, 2017 For further information, please call: (512) TITLE 40. SOCIAL SERVICES AND ASSIS- TANCE PART 1. DEPARTMENT OF AGING AND DISABILITY SERVICES CHAPTER 15. LICENSING STANDARDS FOR PRESCRIBED PEDIATRIC EXTENDED CARE CENTERS The Texas Health and Human Services Commission (HHSC) adopts amended 15.5, concerning Definitions; amended , concerning Change of Ownership License Application Procedures and Issuance; and the repeal of , concerning Change of Ownership, in Chapter 15, Licensing Standards for Prescribed Pediatric Extended Care Centers. The amendment of 15.5 is adopted with changes to the proposed text as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1846) and will be published. The amendment to and the repeal of are adopted without changes and will not be republished. BACKGROUND AND JUSTIFICATION The adopted rules revise change of ownership requirements for a prescribed pediatric extended care center (PPECC) license holder. Under the adopted rules, a change of ownership occurs when the federal taxpayer identification number of a license holder changes. When this occurs, the license holder will be required to apply for a new license. If the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number, the license holder will not be required to apply for a new license. Changes in ownership structure must be reported to HHSC under other existing rules. The adopted rules also add definitions for terms related to a change of ownership and ownership interests. The adopted rules allow HHSC to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements. A change was made in 15.5, concerning Definitions, to the definition of "change of ownership" to clarify that any event that results in a change to the federal taxpayer identification number of the license holder of a PPECC is considered a change of ownership. COMMENTS 42 TexReg 5492 October 6, 2017 Texas Register

211 The 30 day comment period ended May 7, During this period, HHSC did not receive any comments regarding adoption of the amendments and repeal. SUBCHAPTER A. PURPOSE, SCOPE, LIMITATIONS, COMPLIANCE, AND DEFINITIONS 40 TAC 15.5 STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, 248A.101, which requires the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers Definitions. The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise. (1) Active Play--Any physical activity from which a minor derives amusement, entertainment, enjoyment, or satisfaction by taking a participatory rather than a passive role. Active play includes various forms of activities, from the exploration of objects and toys to the structured play of formal games, sports, and hobbies. (2) Actual census--the number of minors at a center at any given time. (3) Administration of medication--the direct application of a medication to the body of a minor by any route. This includes removing an individual or unit dose from a previously dispensed, correctly labeled container, verifying it with the medication order, giving the correct medication and the correct dose to the correct minor at the correct time by the correct route, and accurately recording the time and dose given. (4) Administrator--The person who is responsible for implementing and supervising the administrative polices and operations of a center and for administratively supervising the provision of services to minors and their parents on a day-to-day basis. (5) Adult minor--a minor who is 18 years of age or older or is emancipated, and has not been adjudged incompetent. that is: (6) Affiliate--With respect to an applicant or license holder (A) a corporation--means an officer, director, or stockholder with direct ownership or disclosable interest of at least five percent, a subsidiary, or a parent company; (B) a limited liability company--means an officer, member, or parent company; (C) an individual--means: (i) the individual's spouse; (ii) each partnership and each partner thereof of which an individual or any affiliate of an individual is a partner; and (iii) each corporation in which an individual is an officer, director, or stockholder with a direct ownership of at least five percent; (D) a partnership--means a partner or a parent company of the partnership; and (E) a group of co-owners under any other business arrangement means an officer, director, or the equivalent under the specific business arrangement or a parent company. (7) Applicant--A person who applies for a license to operate a center under THSC Chapter 248A and this chapter. The applicant is the person in whose name DADS issues the license. (8) Audiologist--A person who has a valid license under Texas Occupations Code, Chapter 401, as an audiologist. (9) Basic services--include: (A) the development, implementation, and monitoring of a comprehensive protocol of care that: (i) is provided to a medically dependent or technologically dependent minor; is developed in conjunction with the minor's parent; and (ii) (iii) specifies the medical, nursing, psychosocial, therapeutic, and developmental services required by the minor; and (B) the caregiver training needs of a medically dependent or technologically dependent minor's parent. (10) Behavioral emergency--a situation that occurs after which preventative, or de-escalating techniques are attempted and determined to be ineffective and it is immediately necessary to restrain a minor to prevent immediate probable death or substantial bodily harm to the minor or to others because the minor is attempting serious bodily harm or immediate physical harm to the minor or to others. (11) Business day--any day except a national or state holiday listed in Texas Government Code (a) or (b). The term includes Saturday or Sunday if the center is open on that day. (12) Center--A prescribed pediatric extended care center. A facility operated for profit or on a nonprofit basis that provides nonresidential basic services to four or more medically dependent or technologically dependent minors who require the services of the facility and who are not related by blood, marriage, or adoption to the owner or operator of the facility. (13) 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. (14) Chemical restraint--the use of any chemical, including pharmaceuticals, through topical application, oral administration, injection, or other means, to restrict the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior and which is not a standard treatment for a minor's medical or psychosocial condition. (15) Chief financial officer--an individual who is responsible for supervising and managing all financial activities for a center. (16) Clinical note--a notation of a contact with a minor or a minor's family member that is written and dated by any staff providing services on behalf of a center and that describes signs and symptoms of the minor, and treatments and medications administered to the minor, including the minor's reaction or response, and any changes in physical, emotional, psychosocial, or spiritual condition of the minor during a given period of time. (17) Commission--The Texas Health and Human Services Commission. (18) Commissioner--The commissioner of DADS. ADOPTED RULES October 6, TexReg 5493

212 (19) Community disaster resources--a local, statewide, or nationwide emergency system that provides information and resources during a disaster, including weather information, transportation, evacuation and shelter information, disaster assistance and recovery efforts, evacuee and disaster victim resources, and resources for locating evacuated friends and relatives. (20) Complaint--An allegation against a center or involving services provided at a center that involves a violation of this chapter or THSC Chapter 248A. (21) Continuous face-to-face observation--maintaining an in-person line of sight of a minor that is uninterrupted and free from distraction. (22) Contractor--An individual providing services ordered by a prescribing physician on behalf of a center that the center would otherwise provide by its employees. (23) Controlling person--a person who has the ability, acting alone or in concert with others, to directly or indirectly influence, direct, or cause the direction of the management of, expenditure of money for, or policies of a center or other person. (A) A controlling person includes: (i) a management company, landlord, or other business entity that operates or contracts with another person for the operation of a center; (ii) any person who is a controlling person of a management company or other business entity that operates a center or that contracts with another person for the operation of a center; and (iii) any other person who, because of a personal, familial, or other relationship with the owner, manager, landlord, tenant, or provider of a center, is in a position of actual control of or authority with respect to the center, regardless of whether the person is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the center. (B) Notwithstanding any other provision of this paragraph, a controlling person of a center or of a management company or other business entity described by subparagraph (A)(i) of this paragraph that is a publicly traded corporation or is controlled by a publicly traded corporation means an officer or director of the corporation. The term does not include a shareholder or lender of the publicly traded corporation. (C) A controlling person described by subparagraph (A)(iii) of this paragraph does not include a person, including an employee, lender, secured creditor, or landlord, who does not exercise any formal or actual influence or control over the operation of the center. (24) Conviction--An adjudication of guilt based on a finding of guilt, a plea of guilty, or a plea of nolo contendere. (25) DADS--Department of Aging and Disability Services or its successor agency. (26) Daily census--the number of minors served at a center during a center's hours of operation for a 24-hour period, starting at midnight. (27) Day--A calendar day, unless otherwise specified in the text. A calendar day includes Saturday, Sunday, and a holiday. (28) Dietitian--A person who has a valid license under the Licensed Dietitian Act, Texas Occupations Code, Chapter 701, as a licensed dietitian or provisional licensed dietitian, or who is registered as a dietitian by the Commission on Dietetic Registration of the American Dietetic Association. (29) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (30) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (31) Emergency situation--an impending or actual situation that: interferes with normal activities of a center or mi- (A) nors at a center; the center; or (B) (i) (ii) may: cause injury or death to a minor or individual at cause damage to the center's property; (C) requires the center to respond immediately to mitigate or avoid injury, death, damage, or interference; and (D) does not include a situation that arises from the medical condition of a minor such as cardiac arrest, obstructed airway, or cerebrovascular accident. (32) Executive commissioner--the executive commissioner of the Texas Health and Human Services Commission. (33) Functional assessment--an evaluation of a minor's abilities, wants, interests, and needs related to self-care, communication skills, social skills, motor skills, play with toys or objects, growth, and development appropriate for age. (34) Health care provider--an individual or facility licensed, certified, or otherwise authorized to administer health care in the ordinary course of business or professional practice. (35) Health care setting--a location at which licensed, certified, or otherwise regulated health care is administered. (36) IDT--Interdisciplinary team. Individuals who work together to meet the medical, nursing, psychosocial, and developmental needs of a minor and a minor's parent's training needs. (37) Inactive medical record--a record for a minor who was admitted by a center to receive services and was subsequently discharged by the center. (38) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (39) Inspection--An on-site examination or audit of a center by DADS to determine compliance with THSC Chapter 248A and this chapter. (40) Isolation--The involuntary confinement of a minor in a room of a center for the purposes of infection control, assessment, and observation away from other minors in a room at the center. When in isolation, a minor is physically prevented from contact with other minors. (41) Joint training--training provided by DADS to service providers and DADS inspectors on subjects that address the 10 most commonly cited violations of state law governing centers, as published in DADS annual reports. DADS determines the frequency of joint training. 42 TexReg 5494 October 6, 2017 Texas Register

213 (42) License--A license to operate a center issued by DADS under THSC Chapter 248A and this chapter. The term includes initial, renewal, and temporary licenses unless specifically stated otherwise. (43) Licensed assistant in speech-language pathology--a person who has a valid license under Texas Occupations Code, Chapter 401, as a licensed assistant in speech-language pathology and who provides speech language support services under the supervision of a licensed speech-language pathologist. (44) License holder--a person that holds a license to operate a center under THSC Chapter 248A and this chapter. (45) Licensed vocational nurse--lvn. A person who has a valid license under Texas Occupations Code, Chapter 301, as a licensed vocational nurse. (46) Life Safety Code--A publication of the National Fire Protection Association (NFPA), also known as NFPA 101, 2000 edition. (47) Local emergency management agencies--the local emergency management coordinator, fire, police, and emergency medical services. (48) Local emergency management coordinator--the person identified as the emergency management coordinator by the mayor or county judge for the geographical area in which a center is located. (49) Mechanical restraint--the use of any mechanical device, material, or equipment to restrict the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior. (50) Medical director--a physician who has the qualifications described in of this chapter (relating to Medical Director Qualifications and Conditions) and has the responsibilities described in of this chapter (relating to Medical Director Responsibilities). (51) Medical record--a record composed first-hand for a minor who has or is receiving services at a center. (52) Medically dependent or technologically dependent-- The condition of an individual who, because of an acute, chronic, or intermittent medically complex or fragile condition or disability, requires ongoing, technology-based skilled nursing care prescribed by a physician to avert death or further disability, or the routine use of a medical device to compensate for a deficit in a life-sustaining body function. The term does not include a controlled or occasional medical condition that does not require continuous nursing care, including asthma or diabetes, or a condition that requires an epinephrine injection. (53) Medication administration record--a record used to document the administration of a minor's medications and pharmaceuticals. (54) Medication list--a list that includes all prescriptions, over-the-counter pharmaceuticals, and supplements that a minor is prescribed or taking, including the dosage, preparation, frequency, and the method of administration. (55) Minor--An individual younger than 21 years of age who is medically dependent or technologically dependent. (56) Mitigation--An action taken to eliminate or reduce the probability of an emergency or public health emergency, or reduce an emergency's severity or consequences. (57) Nursing director--the individual responsible for supervising skilled services provided at a center and who has the qualifications described in of this chapter (relating to the Nursing Director and Alternate Nursing Director Qualifications and Conditions). (58) Nutritional counseling--advising and assisting an adult minor or a minor's parent or family on appropriate nutritional intake by integrating information from a nutrition assessment with information on food and other sources of nutrients and meal preparation consistent with cultural background and socioeconomic status, with the goal being health promotion, disease prevention, and nutrition education. The term includes: (A) dialogue with an adult minor or a minor's parent to discuss current eating habits, exercise habits, food budget, and problems with food preparation; (B) discussion of dietary needs to help an adult minor or the minor's parent understand why certain foods should be included or excluded from the minor's diet and to help with adjustment to the new or revised or existing diet plan; (C) a personalized written diet plan as ordered by the minor's physician, to include instructions for implementation; (D) providing the adult minor or the minor's parent with motivation to help them understand and appreciate the importance of the diet plan in getting and staying healthy; or (E) working with the adult minor or the minor's parent by recommending ideas for meal planning, food budget planning, and appropriate food gifts. (59) Occupational therapist--a person who has a valid license under Texas Occupations Code, Chapter 454, as an occupational therapist. (60) Occupational therapy assistant--a person who has a valid license under Texas Occupations Code, Chapter 454, as an occupational therapy assistant who assists in the practice of occupational therapy under the general supervision of an occupational therapist. (61) Operating hours--the days of the week and the hours of day a center is open for services to a minor as identified in a center's written policy as required by of this chapter (relating to Operating Hours). (62) Overnight--The hours between 9:00 p.m. and 5:00 a.m. during the days of the week a center operates. (63) Over-the-counter pharmaceuticals--a drug or formulary for which a physician's prescription is not needed for purchase or administration. (64) Parent--A person authorized by law to act on behalf of a minor with regard to a matter described in this chapter. The term includes: (A) (B) (C) a biological, adoptive, or foster parent; a guardian; a managing conservator; and (D) a non-parent decision-maker as authorized by Texas Family Code (65) Parent company--a person, other than an individual, who has a direct 100 percent ownership interest in the owner of a center. (66) Person--An individual, firm, partnership, corporation, association, or joint stock association, and the legal successor thereof. (67) Personal care services--services required by a minor, including: ADOPTED RULES October 6, TexReg 5495

214 (A) bathing; (B) maintaining personal hygiene; (C) routine hair and skin care; (D) grooming; (E) dressing; (F) feeding; (G) eating; (H) toileting; (I) maintaining continence; (J) positioning; (K) mobility and bed mobility; (L) transfer and ambulation; (M) range of motion; (N) exercise; and (O) use of durable medical equipment. (68) Pharmaceuticals--Of or pertaining to drugs, including over-the-counter drugs and those requiring a physician's prescription for purchase or administration. (69) Pharmacist--A person who is licensed to practice pharmacy under Texas Occupations Code, Chapter 558. (70) Pharmacy--A facility at which a prescription drug or medication order is received, processed, or dispensed as defined in Texas Occupations Code (71) Physical restraint--the use of physical force, except for physical guidance or prompting of brief duration, that restricts the free movement of all or a portion of a minor's body for the purpose of modifying or controlling the minor's behavior. (72) Physical therapist--a person who has a valid license under Texas Occupations Code, Chapter 453, as a physical therapist. (73) Physical therapist assistant--a person who has a valid license under Texas Occupations Code, Chapter 453, as a physical therapist assistant and: (A) who assists and is supervised by a physical therapist in the practice of physical therapy; and (B) whose activities require an understanding of physical therapy. (74) Physician--A person who: (A) has a valid license in Texas to practice medicine or osteopathy in accordance with Texas Occupations Code, Chapter 155; (B) has a valid license in Arkansas, Louisiana, New Mexico, or Oklahoma to practice medicine, who is the treating physician of a minor, and orders services for the minor, in accordance with Texas Occupations Code, Chapter 151; or (C) is a commissioned or contract physician or surgeon who serves in the United States uniformed services or Public Health Service if the person is not engaged in private practice, in accordance with Texas Occupations Code, Chapter 151. (75) Place of business--an office of a center where medical records are maintained and from which services are directed. (76) Plan of care--a protocol of care. (77) Positive intervention--an intervention that is based on or uses a minor's preferences as positive reinforcement, and focuses on positive outcomes and wellness for the minor. (78) Pre-licensing program training--computer-based training, available on DADS website, designed to acquaint center staff with licensure standards. (79) Preparedness--Actions taken in anticipation of a disaster including a public health disaster. (80) Prescribing physician--a physician who is authorized to write and issue orders for services at a center. (81) Progress note--a dated and signed written notation summarizing facts about services provided to a minor and the minor's response during a given period of time. (82) Protective device--a mechanism or treatment, including sedation, that is: (A) (i) used: for body positioning; (ii) to immobilize a minor during a medical, dental, diagnostic, or nursing procedure; for a medical condition diagnosed by a physician; and (B) (iii) (iv) to permit wounds to heal; or not used as a restraint to modify or control behavior. (83) Protocol of care--a comprehensive, interdisciplinary plan of care that includes the medical physician's plan of care, nursing care plan and protocols, psychosocial needs, and therapeutic and developmental service needs required by a minor and family served. (84) Psychologist--A person who has a valid license under Texas Occupations Code, Chapter 501, as a psychologist. (85) Psychosocial treatment--the provision of skilled services to a minor under the direction of a physician that includes one or more of the following: (A) assessment of alterations in mental status or evidence of suicide ideation or tendencies; (B) (C) (D) teaching coping mechanisms or skills; counseling activities; or evaluation of a plan of care. (86) Public health disaster declaration--a governor's announcement based on a determination by the Department of State Health Services that there exists an immediate threat from a communicable disease that: (A) poses a high risk of death or serious long-term disability to a large number of people; and (B) creates a substantial risk of public exposure because of the disease's high level of contagion or the method by which the disease is transmitted. (87) Quiet time--a behavior management technique used to provide a minor with an opportunity to regain self-control, where the minor enters and remains for a limited period of time in a designated area from which egress is not prevented. (88) Recovery--Activities implemented during and after a disaster response, including a public health disaster response, designed to return a center to its normal operations as quickly as possible. 42 TexReg 5496 October 6, 2017 Texas Register

215 (89) Registered nurse--rn. A person who has a valid license under Texas Occupations Code, Chapter 301, to practice professional nursing. (90) Relocation--The closing of a center and the movement of its business operations to another location. (91) Respiratory therapist--a person who has a valid license under Texas Occupations Code, Chapter 604, as a respiratory care practitioner. (92) Response--Actions taken immediately before an impending disaster or during and after a disaster, including a public health disaster, to address the immediate and short-term effects of the disaster. (93) Restraint--Physical restraint, chemical restraint, or mechanical restraint. (94) RN delegation--delegation of tasks by an RN in accordance with 22 TAC Chapter 224 (relating to Delegation of Nursing Tasks by Registered Professional Nurses to Unlicensed Personnel for Clients with Acute Conditions or in Acute Care Environments). (95) Sedation--The act of allaying nervous excitement by administering medication that commonly induces the nervous system to calm. Sedation is a protective device. (96) Social worker--a person who has a valid license under Texas Occupations Code, Chapter 505, as a social worker. (97) Speech-language pathologist--a person who has a valid license under Texas Occupations Code, Chapter 401, as a speech-language pathologist. (98) Substantial compliance--a finding in which a center receives no recommendation for enforcement action after an inspection. (99) Supervision--Authoritative procedural guidance by a qualified person that instructs another person and assists in accomplishing a function or activity. Supervision includes initial direction and periodic inspection of the actual act of accomplishing the function or activity. (100) Support services--social, spiritual, and emotional care provided to a minor and a minor's parent by a center. (101) THSC--Texas Health and Safety Code. (102) Total census--the total number of minors with active plans of care at a center. (103) Transition support--planning, coordination, and assistance to move the location of services provided to a minor from a center to the least restrictive setting appropriate. (104) Violation--A finding of noncompliance with this chapter or THSC Chapter 248A resulting from an inspection. (105) Volunteer--An individual who provides assistance to a center without compensation other than reimbursement for actual expenses. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER B. LICENSING APPLICATION, MAINTENANCE, AND FEES 40 TAC The repeal is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, 248A.101, which requires the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) TAC The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, 248A.101, which requires the HHSC executive commissioner to adopt rules governing the licensure of prescribed pediatric extended care centers. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) ADOPTED RULES October 6, TexReg 5497

216 CHAPTER 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION The Texas Health and Human Services Commission (HHSC) adopts amendments to , concerning Definitions; and , concerning Change of Ownership License, in Chapter 19, Nursing Facility Requirements for Licensure and Medicaid Certification. The amendment to is adopted without changes. The amendment to is adopted with changes to the proposed text as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1851). BACKGROUND AND JUSTIFICATION The adopted rules revise the definitions and rules regarding a change of ownership to simplify the process for determining when a nursing facility (NF) is required to obtain a new license as a result of a change of ownership. Under the adopted rules, a change of ownership occurs when the federal taxpayer identification number of a license holder changes. When this occurs, a license holder is required to apply for a new license. If the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number, the license holder is not required to apply for a new license. Changes in ownership structure must be reported to DADS under other existing rules. A change was made in , concerning Definitions, to the definition of "change of ownership" to clarify that any event that results in a change to the federal taxpayer identification number of the license holder of a NF is considered a change of ownership. COMMENTS The 30-day comment period ended May 7, During this period, HHSC received comments regarding the proposed rules from one commenter, the Coalition for Nurses in Advanced Practice. A summary of the comments and HHSC's responses follows. Comment: Regarding the proposed amendment to , Definitions, the commenter noted that the definition of "nurse practitioner" (NP) incorrectly implies that a nurse practitioner is the only type of advanced practice registered nurse (APRN), and that this can lead to confusion since other types of APRNs may also provide services in nursing facilities. The commenter requested a change in the definition of "nurse practitioner" from "an advanced practice registered nurse" to "one type of advance practice registered nurse." Response: No change was made in response to this comment as the term "nurse practitioner" was not related to the rule changes that were proposed. HHSC will consider this change in future rule amendments. Comment: Regarding , Definitions, the commenter suggested amending the definition of "therapeutic diet" to provide that the term includes a diet ordered by a clinical nurse specialist, nurse practitioner, physician assistant, or dietician, if the task of ordering a diet is delegated to one of those professionals by a resident's attending physician. Response: Physicians are permitted to delegate tasks to certain health care professionals in accordance with 42 CFR (e). In addition, Texas Health and Safety Code (b) allows an APRN or a physician assistant to perform certain responsibilities of an attending physician pursuant to protocols developed with the physician. Texas Occupations Code, Chapter 157 also authorizes a physician to delegate medical actions to another person under certain circumstances. Therefore, HHSC has concluded it is not necessary to specify in rule that a physician may delegate specific responsibilities. No change was made in response to the comment. SUBCHAPTER B. DEFINITIONS 40 TAC STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires the HHSC executive commissioner to adopt rules for the operation and provision of services by the health and human services agencies; and Texas Health and Safety Code, Chapter , which requires HHSC to license nursing facilities 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) (i) natural person, which includes each: 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. (10) Agent--An adult to whom authority to make health care decisions is delegated under a durable power of attorney for health care. 42 TexReg 5498 October 6, 2017 Texas Register

217 (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 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 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 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 Department of Aging and Disability Services 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 DADS, unless the context concerns an administrative hearing. Administrative hearings were formerly 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: ADOPTED RULES October 6, TexReg 5499

218 (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). (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. (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). (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 DADS. 42 TexReg 5500 October 6, 2017 Texas Register

219 (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 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 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)--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 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--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) Manager--A person, other than a licensed nursing home administrator, having a contractual relationship to provide management services to a facility. (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. (76) MDS--Minimum data set. See Resident Assessment Instrument (RAI). (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. (78) Medicaid applicant--a person who requests the determination of eligibility to become a Medicaid recipient. (79) Medicaid nursing facility vendor payment system--electronic billing and payment system for reimbursement to nursing facilities for services provided to eligible Medicaid recipients. (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. (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. (82) Medical power of attorney--the legal document that designates an agent to make treatment decisions if the individual designator becomes incapable. Plan. (83) Medical-social care plan--see Interdisciplinary Care (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. (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. (86) Misappropriation of funds--the taking, secretion, misapplication, deprivation, transfer, or attempted transfer to any 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. (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 ADOPTED RULES October 6, TexReg 5501

220 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. (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. (89) NHIC--This term referred to the National Heritage Insurance Corporation. It now refers to the state Medicaid claims administrator. (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. (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. (92) Nurse aide trainee--an individual who is attending a program teaching nurse aide skills. nurse. (93) Nurse practitioner--an advanced practice registered (94) Nursing assessment--see definition of "comprehensive assessment" and "comprehensive care plan." (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. (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. (97) Nursing facility/home administrator--see the definition of "licensed nursing home (facility) administrator." (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. (99) Objectives--See definition of "goals." (100) OBRA--Omnibus Budget Reconciliation Act of 1987, which includes provisions relating to nursing home reform, as amended. (101) Ombudsman--An advocate who is a certified representative, staff member, or volunteer of the DADS Office of the State Long Term Care Ombudsman. (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. (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. (104) PASARR or PASRR--Preadmission Screening and Resident Review. (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. (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. (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. (108) Pharmacist--An individual, licensed by the Texas State Board of Pharmacy to practice pharmacy, who prepares and dispenses medications prescribed by a practitioner. (109) Physical restraint--see Restraints (physical). (110) Physician--A doctor of medicine or osteopathy currently licensed by the Texas Medical Board. (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: (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, TexReg 5502 October 6, 2017 Texas Register

221 (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. (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. (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. (115) PRN (pro re nata)--as needed. (116) Provider--The individual or legal business entity that is contractually responsible for providing Medicaid services under an agreement with DADS. (117) Psychoactive drugs--drugs prescribed to control mood, mental status, or behavior. (118) Qualified mental health professional - community services--has the meaning given in 25 TAC (relating to Definitions). (119) Qualified surveyor--an employee of DADS who has completed state and federal training on the survey process and passed a federal standardized exam. (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. (121) Quality-of-care monitor--a registered nurse, pharmacist, or dietitian employed by 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 DADS Regulatory Services Division. (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. (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. (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. (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. (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. (129) Resident--Any individual residing in a nursing facility. (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) (C) (D) plan resident activities; participate in educational activities; or for any other purpose. (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. (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. (133) Restraints (chemical)--psychoactive drugs administered for the purposes of discipline, or convenience, and not required to treat the resident's medical symptoms. (134) Restraints (physical)--any manual method, or physical or mechanical device, material or equipment attached, or 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. (135) RN--Registered nurse. An individual currently licensed by the Texas Board of Nursing as a registered nurse. (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 DADS. (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 DADS pays a nursing facility for services provided to the recipient. (138) Secretary--Secretary of the U.S. Department of Health and Human Services. (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 fam- ADOPTED RULES October 6, TexReg 5503

222 ily setting. Services required on a regular basis include continuous or periodic nursing observation, assessment, and intervention in all areas of resident care. (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. (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. (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. (143) Standards--The minimum conditions, requirements, and criteria established in this chapter with which an institution must comply to be licensed under this chapter. (144) State Medicaid claims administrator--the entity under contract with HHSC to process Medicaid claims in Texas. (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. (146) State survey agency--dads is the agency, which through contractual agreement with CMS is responsible for Title XIX (Medicaid) survey and certification of nursing facilities. (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). (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. (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. (150) Supervision--General supervision, unless otherwise identified. (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. (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. (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. (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 (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. (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. (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. (158) Title II--Federal Old-Age, Survivors, and Disability Insurance Benefits of the Social Security Act. (159) Title XVI--Supplemental Security Income (SSI) of the Social Security Act. (160) Title XVIII--Medicare provisions of the Social Security Act. (161) Title XIX--Medicaid provisions of the Social Security Act. (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. Section. (163) UAR--HHSC's Utilization and Assessment Review (164) Uniform data set--see RAI (Resident Assessment Instrument). (165) Universal precautions--the use of barrier and other precautions to prevent the spread of blood-borne diseases. (166) Unreasonable confinement--involuntary seclusion. (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. 42 TexReg 5504 October 6, 2017 Texas Register

223 (168) Vendor payment--payment made by 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. (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. (170) Working day--any 24-hour period, Monday through Friday, excluding state and federal holidays. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER C. NURSING FACILITY LICENSURE APPLICATION PROCESS 40 TAC The amendment is adopted under Texas Government Code, , which requires the HHSC executive commissioner to adopt rules for the operation and provision of services by the health and human services agencies; and Texas Health and Safety Code, Chapter , which requires HHSC to license nursing facilities. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) CHAPTER 90. INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS The Texas Health and Human Services Commission (HHSC) adopts amendments to 90.3, concerning Definitions; and 90.16, concerning Change of Ownership and Notice of Changes, in Chapter 90, Intermediate Care Facilities for Indi - viduals with an Intellectual Disability or Related Conditions. Th e amendment to is adopted without changes. The amend - ment to 90.3 is adopted with changes to the proposed text a s published in the April 7, 2017, issue of the Texas Register. (42 TexReg 1860). BACKGROUND AND JUSTIFICATION The adopted rules revise requirements related to a change o f ownership of a license holder for an intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID). Under the adopted rules, a change of ownership occurs when the federal taxpayer identification number of a licens e holder changes. When this occurs, a license holder is required to apply for a new license. If the ownership structure of the li - cense holder changes but the license holder is the same legal entity, as evidenced by having the same federal tax identification number, the license holder is not required to apply for a new li - cense. The adopted rules require a license holder that does no t undergo a change of ownership but adds an owner with a dis - closable interest to notify HHSC of the addition no later than 3 0 days after the addition of the owner. The adopted rules add definitions for terms related to a chang e of ownership and ownership interests. The adopted rules also allow HHSC to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements. A change was made in 90.3, concerning Definitions, to the definition of "change of ownership" to clarify that any event that re - sults in a change to the federal taxpayer identification number of the license holder of an ICF/IID is considered a change of own - ership. COMMENTS The 30-day comment period ended May 7, During this period, HHSC did not receive any comments regarding adoption of the amendments. SUBCHAPTER A. INTRODUCTION 40 TAC 90.3 STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires the HHSC executive commissione r to adopt rules for the operation and provision of health an d human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adop t rules related to the licensure an ICF/IID Definitions. The following words and terms, when used in this chapter, have th e following meanings, unless the context clearly indicates otherwise. In - dividual subchapters may have definitions that are specific to the subchapter. (1) Addition--The addition of floor space to a facility. (2) Administrator--The administrator of a facility. ADOPTED RULES October 6, TexReg 5505

224 (3) Administration of medication--removing a unit or dose of medication from a previously dispensed, properly labeled container; verifying the medication with the medication order; giving the proper medication in the proper dosage to the proper resident at the proper time by the proper administration route; and recording the time of administration and dosage administered. (4) Advanced practice nurse--a person licensed to practice professional nursing in accordance with Texas Occupations Code, Chapter 301, and authorized by the Texas Board of Nursing to practice as an advanced practice nurse. (5) Applicant--A person applying for a license under Texas Health and Safety Code, Chapter 252. (6) APA--The Administrative Procedure Act, Texas Government Code, Chapter (7) Attendant personnel--all persons who are responsible for direct and non-nursing services to residents of a facility. (Nonattendant personnel are all persons who are not responsible for direct personal services to residents.) Attendant personnel come within the categories of: administration, dietitians, medical records, activities, housekeeping, laundry, and maintenance. (8) Behavioral emergency--a situation in which severely aggressive, destructive, violent, or self-injurious behavior exhibited by a resident: (A) poses a substantial risk of imminent probable death of, or substantial bodily harm to, the resident or others; (B) has not abated in response to attempted preventive de-escalatory or redirection techniques; (D) does not occur during a medical or dental procedure. (C) is not addressed in a behavior therapy program; and (9) Care and treatment--services required to maximize resident independence, personal choice, participation, health, self-care, psychosocial functioning and provide reasonable safety, all consistent with the preferences of the resident. (10) 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. (11) CMS--Centers for Medicare & Medicaid Services. The federal agency that provides funding and oversight for the Medicare and Medicaid programs. CMS was formerly known as the Health Care Financing Administration (HCFA). (12) Controlled substance--a drug, substance, or immediate precursor as defined in the Texas Controlled Substance Act, Health and Safety Code, Chapter 481, as amended, or the Federal Controlled Substance Act of 1970, Public Law , as amended. (13) Controlling person of an applicant, license holder, or facility--a person who, acting alone or with others, has the ability to directly or indirectly influence or direct the management, expenditure of money, or policies of an applicant or license holder or of a facility owned by an applicant or license holder. (A) The term includes: (i) a spouse of the applicant or license holder; (ii) an officer or director, if the applicant or license holder is a corporation; partnership; (iii) a partner, if the applicant or license holder is a (iv) a trustee or trust manager, if the applicant or license holder is a trust; (v) operate the facility; a person that operates or contracts with others to (vi) a person who, because of a personal, familial, or other relationship is in a position of actual control or authority over the facility, without regard to whether the person is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the facility; and (vii) a person who would be a controlling person of an entity described in clauses (i) - (vi) of this subparagraph, if that entity were the applicant or license holder. (B) The term does not include an employee, lender, secured creditor, or other person who does not exercise formal or actual influence or control over the operation of a facility. (14) DADS--The Department of Aging and Disability Services or its successor agency. (15) Dangerous drug--any drug as defined in the Texas Dangerous Drug Act, Health and Safety Code, Chapter 483. (16) Department--The Department of Aging and Disability Services. (17) Designee--A state agency or entity with which DADS contracts to perform specific, identified duties related to the fulfillment of a responsibility prescribed by this chapter. (18) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (19) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (20) Drug (also referred to as medication)--a drug is: (A) any substance recognized as a drug in the official United States Pharmacopeia, official Homeopathic Pharmacopeia 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 human body; 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. (21) Establishment--A place of business or a place where business is conducted which includes staff, fixtures, and property. (22) Facility--A facility serving persons with an intellectual disability or related conditions licensed under this chapter as described in 90.2 of this chapter (relating to Scope) and required to be licensed under the Health and Safety Code, Chapter 252, or the entity that operates such a facility; or, in Subchapters C, D, and F of this chapter, a program provider that must comply with those subchapters in accordance with of this title (relating to Non-licensed Providers Meeting Licensure Standards). (23) Governmental unit--a state or a political subdivision of the state, including a county or municipality. 42 TexReg 5506 October 6, 2017 Texas Register

225 (24) Health care professional--a person licensed, certified, or otherwise authorized to administer health care, for profit or otherwise. The term includes a physician, licensed nurse, physician assistant, podiatrist, dentist, physical therapist, speech therapist, and occupational therapist. (25) Hearing--A contested case hearing held in accordance with the Administrative Procedure Act, Government Code, Chapter 2001, and the formal hearing procedures in 1 TAC Chapter 357, Subchapter I. (26) Immediate and serious threat--a situation in which there is a high probability that serious harm or injury to residents could occur at any time or has already occurred and may occur again if residents are not protected effectively from the harm or if the threat is not removed. (27) Immediate jeopardy to health and safety--a situation in which immediate corrective action is necessary because the facility's noncompliance with one or more requirements has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident receiving care in the facility. (28) Incident--An unusual or abnormal event or occurrence in, at, or affecting the facility or the residents of the facility. (29) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (30) Inspection--Any on-site visit to or survey of a facility by DADS for the purpose of inspection of care, licensing, monitoring, complaint investigation, architectural review, or similar purpose. (31) IPP--Individual program plan. A plan developed by the interdisciplinary team of a facility resident that identifies the resident's training, treatment, and habilitation needs, and describes programs and services to meet those needs. beds. (32) Large facility--facilities with 17 or more resident (33) Legal guardian--a person who is appointed guardian under 693 of the Probate Code. (34) Legally authorized representative--a person authorized by law to act on behalf of a person with regard to a matter described in this chapter, and may include a parent, guardian, or managing conservator of a minor, or the guardian of an adult. (35) License--Approval from DADS to establish or operate a facility. (36) License holder--a person that holds a license to operate a facility. (37) Licensed nurse--a licensed vocational nurse, registered nurse, or advanced practice nurse. (38) Life Safety Code--NFPA 101. (39) Life safety features--fire safety components required by the Life Safety Code such as building construction, fire alarm systems, smoke detection systems, interior finishes, sizes and thicknesses of doors, exits, emergency electrical systems, sprinkler systems, etc. (40) Local authorities--a local health authority, fire marshal, building inspector, etc., who may be authorized by state law, county order, or municipal ordinance to perform certain inspections or certifications. (41) Local health authority--the physician having local jurisdiction to administer state and local laws or ordinances relating to public health, as described in the Texas Health and Safety Code, (42) LVN--Licensed vocational nurse. A person licensed to practice vocational nursing in accordance with Texas Occupations Code, Chapter 301. (43) 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 shall not include contracts solely for maintenance, laundry, or food services. (44) Metered dose inhaler--a device that delivers a measured amount of medication as a mist that can be inhaled. (45) NFPA--The National Fire Protection Association. If the term is immediately followed by a number, it is a reference to a publication of NFPA, as referenced in NFPA 101. (46) NFPA 99--NFPA 99, Health Care Facilities Code, 2012 Edition. A publication of the NFPA that provides minimum requirements for the installation, testing, maintenance, performance, and safe practices for health care facilities and for material, equipment, and appliances, used for patient care in health care facilities. The Centers for Medicare and Medicaid Services has incorporated NFPA 99, 2012 Edition, except Chapters 7, 8, 12, and 13, by reference as a Condition of Participation in the ICF/IID program for facilities that meet the definition of a health care occupancy. Copies of NFPA 99 may be obtained from NFPA, 1 Batterymarch Park, Quincy, MA (47) NFPA 101--NFPA 101, Life Safety Code, 2012 Edition. A publication of the NFPA that provides minimum requirements, with due regard to function, for the design, operation, and maintenance of buildings and structures for safety to life from fire. The Centers for Medicare and Medicaid Services has incorporated NFPA 101, 2012 Edition, by reference as a Condition of Participation in the ICF/IID program. Copies of NFPA 101 may be obtained from NFPA, 1 Batterymarch Park, Quincy, MA (48) Oral medication--medication administered by way or through the mouth and does not include sublingual or buccal. (49) Person--An individual, firm, partnership, corporation, association, or joint stock company, and any legal successor of those entities. (50) Personal 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. (51) QIDP--Qualified intellectual disability professional. A person who has at least one year of experience working directly with persons with an intellectual disability or related conditions and is one of the following: (A) (B) a doctor of medicine or osteopathy; a registered nurse; or (C) an individual who holds at least a bachelor's degree in one of the following areas: ADOPTED RULES October 6, TexReg 5507

226 (i) occupational therapy; (ii) physical therapy; (iii) social work; (iv) speech-language pathology or audiology; (v) recreation or a specialty area such as art, dance, music or physical education; (vi) dietetics; or (vii) human services, such as sociology, special education, rehabilitation counseling, or psychology (as specified in Title 42, Code of Federal Regulations, (b)(5)(x)(W180)). (52) Quality-of-care monitor--a registered nurse, pharmacist, or dietitian, employed by DADS, who is trained and experienced in long-term care regulations, standards of practice in long-term care, and evaluation of resident care and functions independently of DADS Regulatory Services Division. (53) Registered nurse--a person licensed to practice professional nursing in accordance with Texas Occupations Code, Chapter 301. (54) Remodeling--The construction, removal, or relocation of walls and partitions, or construction of foundations, floors, or ceiling-roof assemblies, including expanding of safety systems (i.e., sprinkler systems, fire alarm systems), that will change the existing plan and use areas of the facility. (55) Renovation--The restoration to a former better state by cleaning, repairing, or rebuilding, e.g., routine maintenance, repairs, equipment replacement, painting. (56) Restraint--A manual method, or a physical or mechanical device, material, or equipment attached or adjacent to the resident's body that the resident cannot remove easily, that restricts freedom of movement or normal access to the resident's body. This term includes a personal hold. (57) Seclusion--The involuntary separation of a resident away from other residents and the placement of the resident alone in an area from which the resident is prevented from leaving. beds. (58) Small facilities--facilities with 16 or fewer resident (59) Specialized staff--personnel with expertise in developmental disabilities. (60) Standards--The minimum conditions, requirements, and criteria with which a facility will have to comply to be licensed under this chapter. (61) Topical medication--medication applied to the skin but does not include medication administered in the eyes. (62) Universal precautions--the use of barrier precautions by facility personnel to prevent direct contact with blood or other body fluids that are visibly contaminated with blood. (63) 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. (64) Well-recognized church or religious denomination--an organization which has been granted a tax-exempt status as a religious association from the state or federal government. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER B. APPLICATION PROCEDURES 40 TAC The amendment is adopted under Texas Government Code, , which requires the HHSC executive commissioner to adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure an ICF/IID. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) CHAPTER 90. INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH AN INTELLECTUAL DISABILITY OR RELATED CONDITIONS The Texas Health and Human Services Commission (HHSC) adopts amendments to 90.3, 90.50, 90.61, and in Texas Administrative Code, Title 40, Chapter 90, Intermediate Care Facilities for Individuals with an Intellectual Disability or Related Conditions. The amendments are adopted without changes to the proposed text as published in the March 31, 2017, issue of the Texas Register (42 TexReg 1728), and therefore will not be republished. BACKGROUND AND JUSTIFICATION The Centers for Medicare & Medicaid Services (CMS) adopted a rule that made the 2012 edition of two publications of the National Fire Protection Association (NFPA)-the Life Safety Code (NFPA 42 TexReg 5508 October 6, 2017 Texas Register

227 101) and the Health Care Facilities Code (NFPA 99)-apply to an intermediate care facility for individuals with an intellectual disability or related conditions (ICF/IID). Therefore, the adopted amendments refer to the 2012 editions of those publications and make references to the publications consistent throughout the amended sections. Consistent with the CMS rule, the amendments allow an existing small facility until July 5, 2019, to be in compliance with the NFPA provisions in Chapter 33 regarding sprinklers and heat detection systems in attics. COMMENTS The 30-day comment period ended May 1, During this period, DADS and HHSC received one comment regarding the proposed rules from a member of the public. A summary of the comment relating to the rule and DADS response follows. Comment: Regarding proposed 90.3, Definitions, the commenter noted that the definition of "renovation" includes painting whereas the 2012 edition of the Life Safety Code ( in Chapter 43 of NFPA 101) indicates that painting is a "repair." The commenter suggested the deletion of the definitions of "remodeling" and "renovation" in 90.3 and the replacement of each with a reference to Chapter 43 of the 2012 edition of the Life Safety Code (NFPA 101). The commenter also stated that Chapter 43 of NFPA 101 has definitions of repair, renovation, modification, reconstruction, change of use, change of occupancy classification, and addition. Response: HHSC declines to delete the definitions of "remodeling" and "renovation" in 90.3 because both terms are used in Chapter 90 and the definitions are useful to clarify the rules. In addition, HHSC notes that the definitions in 90.3 are specific to Chapter 90, while the definitions of terms in NFPA 101 apply when those terms are used in that publication. HHSC does not believe that the definitions of these terms conflict. SUBCHAPTER A. INTRODUCTION 40 TAC 90.3 STATUTORY AUTHORITY The amendment is adopted 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; Texas Government Code, , which provides HHSC with the authority to administer federal funds and plan and direct the Medicaid program in each agency that operates a portion of the Medicaid program; and Texas Human Resources Code, , which provides that HHSC shall adopt necessary rules for the proper and efficient operation of the Medicaid program. 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 September 22, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 12, 2017 Proposal publication date: March 31, 2017 For further information, please call: (512) SUBCHAPTER C. STANDARDS FOR LICENSURE 40 TAC The amendment is adopted 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; Texas Government Code, , which provides HHSC with the authority to administer federal funds and plan and direct the Medicaid program in each agency that operates a portion of the Medicaid program; and Texas Human Resources Code, , which provides that HHSC shall adopt necessary rules for the proper and efficient operation of the Medicaid program. 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 September 22, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 12, 2017 Proposal publication date: March 31, 2017 For further information, please call: (512) SUBCHAPTER D. GENERAL REQUIRE- MENTS FOR FACILITY CONSTRUCTION 40 TAC 90.61, The amendments are adopted 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; Texas Government Code, , which provides HHSC with the authority to administer federal funds and plan and direct the Medicaid program in each agency that operates a portion of the Medicaid program; and Texas Human Resources Code, , which provides that HHSC shall adopt necessary rules for the proper and efficient operation of the Medicaid program. 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 September 22, TRD ADOPTED RULES October 6, TexReg 5509

228 Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 12, 2017 Proposal publication date: March 31, 2017 For further information, please call: (512) CHAPTER 92. LICENSING STANDARDS FOR ASSISTED LIVING FACILITIES The Texas Health and Human Services Commission (HHSC) adopts amendments to 92.2, concerning Definitions; and 92.16, concerning Change of Ownership, in Chapter 92, Licensing Standards for Assisted Living Facilities. The amendments are adopted with changes to the proposed text as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1864). BACKGROUND AND JUSTIFICATION The adopted rules revise the definitions and rules regarding a change of ownership to simplify the process for determining when an assisted living facility (ALF) is required to obtain a new license as a result of a change of ownership. Under the adopted rules, a change of ownership occurs when the federal taxpayer identification number of the license holder changes. When this occurs the license holder is required to apply for a new license. If the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal taxpayer identification number, the license holder is not required to apply for a new license. A change was made in 92.2, concerning Definitions, to the definition of "change of ownership" to clarify that any event that results in a change to the federal taxpayer identification number of the license holder of an ALF is considered a change of ownership. COMMENTS The 30-day comment period ended May 7, During this period, HHSC received comments regarding the proposed rules from two commenters, the Coalition for Nurses in Advanced Practice and Texas Assisted Living Association (TALA). A summary of the comments and HHSC s responses follows. Comment: Regarding the proposed amendment of 92.2, Definitions, a commenter requested that in the definition for "practitioner" the term "advanced practice registered nurse (APRN)" be used instead of using the phrase "a registered nurse approved by the Texas Board of Nursing to practice as an advanced practice registered nurse". The commenter stated this change would reflect current terminology and be consistent with terms used for the other professions listed in the definition as well as allow the APRN to be licensed in a state other than Texas. Response: No change was made in response to this comment as the term "practitioner" is not related to the rule changes that are proposed. HHSC will consider this change in future rule amendments. Comment: One commenter requested that definition of "disclosable interest" contain an exception for publicly traded corporations based on the definition of "controlling person" in Texas Health and Safety Code Response: HHSC did not add the exception for publicly traded companies to the definition of disclosable interest. However, to address the concern of the commenter, 92.16(k) was revised so that a license holder, that is a publicly traded company, is not required to notify HHSC if the license holder adds an owner with a disclosable interest. SUBCHAPTER A. INTRODUCTION 40 TAC 92.2 STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure an ALF Definitions. The following words and terms, when used in this chapter, have the following meaning, unless the context clearly indicates otherwise. (1) Abuse-- (A) for a person under 18 years of age who is not and has not been married or who has not had the disabilities of minority removed for general purposes, the term has the meaning in Texas Family Code (1), which is an intentional, knowing, or reckless act or omission by an employee, volunteer, or other individual working under the auspices of a facility or program that causes or may cause emotional harm or physical injury to, or the death of, a child served by the facility or program as further described by rule or policy; and (B) for a person other than one described in subparagraph (A) of this paragraph, the term has the meaning in Texas Health and Safety Code 260A.001(1), which is: (i) the negligent or willful infliction of injury, unreasonable confinement, intimidation, or cruel punishment with resulting physical or emotional harm or pain to a resident by the resident's caregiver, family member, or other individual who has an ongoing relationship with the resident; or (ii) sexual abuse of a resident, including any involuntary or nonconsensual sexual conduct that would constitute an offense under Section 21.08, Penal Code (indecent exposure), or Chapter 22, Penal Code (assaultive offenses), committed by the resident's caregiver, family member, or other individual who has an ongoing relationship with the resident. (2) Accreditation commission--has the meaning given in Texas Health and Safety Code, (3) Advance directive--has the meaning given in Texas Health and Safety Code, (4) Affiliate--With respect to: (A) a partnership, each partner thereof; (B) a corporation, each officer, director, principal stockholder, subsidiary, and each person with a disclosable interest, as the term is defined in this section; and (C) (i) a natural person: said person's spouse; (ii) each partnership and each partner thereof of which said person or any affiliate of said person is a partner; and 42 TexReg 5510 October 6, 2017 Texas Register

229 (iii) each corporation in which said person is an officer, director, principal stockholder, or person with a disclosable interest. (5) Alzheimer's Assisted Living Disclosure Statement form--the DADS-prescribed form a facility uses to describe the nature of care or treatment of residents with Alzheimer's disease and related disorders. (6) Alzheimer's disease and related disorders--alzheimer's disease and any other irreversible dementia described by the Centers for Disease Control and Prevention (CDC) or the most current edition of the Diagnostic and Statistical Manual of Mental Disorders. (7) Alzheimer's facility--a type B assisted living facility that is certified to provide specialized services to residents with Alzheimer's or a related condition. (8) Applicant--A person applying for a license to operate an assisted living facility under Texas Health and Safety Code, Chapter 247. (9) Attendant--A facility employee who provides direct care to residents. This employee may serve other functions, including cook, janitor, porter, maid, laundry worker, security personnel, bookkeeper, activity director, and manager. (10) Authorized electronic monitoring (AEM)--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. (11) Behavioral emergency--has the meaning given in 92.41(p)(2) of this chapter (relating to Standards for Type A and Type B Assisted Living Facilities). (12) 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. (13) Commingles--The laundering of apparel or linens of two or more individuals together. (14) Controlling person--a person with the ability, acting alone or with others, to directly or indirectly influence, direct, or cause the direction of the management, expenditure of money, or policies of an assisted living facility or other person. A controlling person includes: (A) a management company, landlord, or other business entity that operates or contracts with others for the operation of an assisted living facility; (B) any person who is a controlling person of a management company or other business entity that operates an assisted living facility or that contracts with another person for the operation of an assisted living 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 an assisted living facility, is in a position of actual control or authority with respect to the facility, without regard to whether the individual is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the facility, except an employee, lender, secured creditor, landlord, or other person who does not exercise formal or actual influence or control over the operation of an assisted living facility. (15) Covert electronic monitoring--the placement and use of an electronic monitoring device that is not open and obvious, and the facility and 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. (16) DADS--The Department of Aging and Disability Services. (17) DHS--Formerly, this term referred to the Texas Department of Human Services; it now refers to DADS. (18) Dietitian--A person who currently holds a license or provisional license issued by the Texas State Board of Examiners of Dietitians. (19) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (20) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (21) Disclosure statement--a DADS form for prospective residents or their legally authorized representatives that a facility must complete. The form contains information regarding the preadmission, admission, and discharge process; resident assessment and service plans; staffing patterns; the physical environment of the facility; resident activities; and facility services. (22) 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. (23) Exploitation-- (A) for a person under 18 years of age who is not and has not been married or who has not had the disabilities of minority removed for general purposes, the term has the meaning in Texas Family Code (2), which is the illegal or improper use of a child or of the resources of a child for monetary or personal benefit, profit, or gain by an employee, volunteer, or other individual working under the auspices of a facility or program as further described by rule or policy; and (B) for a person other than one described in subparagraph (A) of this paragraph, the term has the meaning in Texas Health and Safety Code 260A.001(4), which is the illegal or improper act or process of a caregiver, family member, or other individual who has an ongoing relationship with the resident using the resources of a resident for monetary or personal benefit, profit, or gain without the informed consent of the resident. (24) Facility--An entity required to be licensed under the Assisted Living Facility Licensing Act, Texas Health and Safety Code, Chapter 247. (25) Fire suppression authority--the paid or volunteer firefighting organization or tactical unit that is responsible for fire suppression operations and related duties once a fire incident occurs within its jurisdiction. (26) Flame spread--the rate of fire travel along the surface of a material. This is different than other requirements for time-rated ADOPTED RULES October 6, TexReg 5511

230 "burn through" resistance ratings, such as one-hour rated. Flame spread ratings are Class A (0-25), Class B (26-75), and Class C (76-200). (27) Governmental unit--the state or any county, municipality, or other political subdivision, or any department, division, board, or other agency of any of the foregoing. (28) Health care professional--an individual licensed, certified, or otherwise authorized to administer health care, for profit or otherwise, in the ordinary course of business or professional practice. The term includes a physician, registered nurse, licensed vocational nurse, licensed dietitian, physical therapist, and occupational therapist. (29) Immediate threat--there is considered to be an immediate threat to the health or safety of a resident, or a situation is considered to put the health or safety of a resident in immediate jeopardy, if there is a situation in which an assisted living facility s noncompliance with one or more requirements of licensure has caused, or is likely to cause, serious injury, harm, impairment, or death to a resident. (30) Immediately available--the capacity of facility staff to immediately respond to an emergency after being notified through a communication or alarm system. The staff are to be no more than 600 feet from the farthest resident and in the facility while on duty. (31) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (32) Large facility--a facility licensed for 17 or more residents. (33) Legally authorized representative--a person authorized by law to act on behalf of a person with regard to a matter described in this chapter, and may include a parent, guardian, or managing conservator of a minor, or the guardian of an adult. (34) License holder--a person that holds a license to operate a facility. (35) Listed--Equipment, materials, or services included in a list published by an organization concerned with evaluation of products or services, that maintains periodic inspection of production of listed equipment or materials or periodic evaluation of services, and whose listing states that either the equipment, material, or service meets appropriate designated standards or has been tested and found suitable for a specified purpose. The listing organization must be acceptable to the authority having jurisdiction, including DADS or any other state, federal or local authority. (36) Local code--a model building code adopted by the local building authority where the assisted living facility is constructed or located. (37) 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, transportation, or food services. (38) Manager--The individual in charge of the day-to-day operation of the facility. (39) Medication-- (A) Medication is any substance: (i) recognized as a drug in the official United States Pharmacopoeia, Official Homeopathic Pharmacopoeia of the United States, Texas Drug Code Index or official National Formulary, or any supplement to any of these official documents; (ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; (iii) other than food intended to affect the structure or any function of the body; and (iv) intended for use as a component of any substance specified in this definition. (B) Medication includes both prescription and over-the-counter medication, unless otherwise specified. (C) Medication does not include devices or their components, parts, or accessories. (40) Medication administration--the direct application of a medication or drug to the body of a resident by an individual legally allowed to administer medication in the state of Texas. (41) Medication assistance or supervision--the assistance or supervision of the medication regimen by facility staff. Refer to 92.41(j) of this chapter. (42) Medication (self-administration)--the capability of a resident to administer the resident s own medication or treatments without assistance from the facility staff. (43) Neglect-- (A) for a person under 18 years of age who is not and has not been married or who has not had the disabilities of minority removed for general purposes, the term has the meaning in Texas Family Code, (3), which is a negligent act or omission by an employee, volunteer, or other individual working under the auspices of a facility or program, including failure to comply with an individual treatment plan, plan of care, or individualized service plan, that causes or may cause substantial emotional harm or physical injury to, or the death of, a child served by the facility or program as further described by rule or policy; and (B) for a person other than one described in subparagraph (A) of this paragraph, the term has the meaning in Texas Health and Safety Code 260A.001(6), which is the failure to provide for one s self the goods or services, including medical services, which are necessary to avoid physical or emotional harm or pain or the failure of a caregiver to provide such goods or services. (44) NFPA 101--The 2000 publication titled "NFPA 101 Life Safety Code" published by the National Fire Protection Association, Inc., 1 Batterymarch Park, Quincy, Massachusetts (45) Ombudsman--Has the meaning given in 85.2 of this title (relating to Definitions). (46) Person--Any individual, firm, partnership, corporation, association, or joint stock association, and the legal successor thereof. (47) Personal care services--assistance with feeding, dressing, moving, bathing, or other personal needs or maintenance; or general supervision or oversight of the physical and mental well-being of a person who needs assistance to maintain a private and independent residence in the facility or who needs assistance to manage his or her personal life, regardless of whether a guardian has been appointed for the person. (48) Physician--A practitioner licensed by the Texas Medical Board. (49) Practitioner--An individual who is currently licensed in a state in which the individual practices as a physician, dentist, podiatrist, or a physician assistant; or a registered nurse approved by the 42 TexReg 5512 October 6, 2017 Texas Register

231 Texas Board of Nursing to practice as an advanced practice registered nurse. (50) Qualified medical personnel--an individual who is licensed, certified, or otherwise authorized to administer health care. The term includes a physician, registered nurse, and licensed vocational nurse. (51) Resident--An individual accepted for care in a facility. (52) Respite--The provision by a facility of room, board, and care at the level ordinarily provided for permanent residents of the facility to a person for not more than 60 days for each stay in the facility. (53) 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) normal access by a resident to a portion of the resident s body. (B) Physical guidance or prompting of brief duration becomes a restraint if the resident resists the guidance or prompting. (54) Restraints--Chemical restraints are psychoactive drugs administered for the purposes of discipline or convenience and are not required to treat the resident s medical symptoms. Physical restraints are any manual method, or physical or mechanical device, material, or equipment attached or adjacent to the resident that restricts freedom of movement. Physical restraints include restraint holds. (55) Safety--Protection from injury or loss of life due to such conditions as fire, electrical hazard, unsafe building or site conditions, and the hazardous presence of toxic fumes and materials. (56) Seclusion--The involuntary separation of a resident from other residents and the placement of the resident alone in an area from which the resident is prevented from leaving. (57) Service plan--a written description of the medical care, supervision, or nonmedical care needed by a resident. (58) Short-term acute episode--an illness of less than 30 days duration. (59) Small facility--a facility licensed for 16 or fewer residents. (60) Staff--Employees of an assisted living facility. (61) Standards--The minimum conditions, requirements, and criteria established in this chapter with which a facility must comply to be licensed under this chapter. (62) Terminal condition--a medical diagnosis, certified by a physician, of an illness that will result in death in six months or less. (63) Universal precautions--an approach to infection control in which blood, any body fluids visibly contaminated with blood, and all body fluids in situations where it is difficult or impossible to differentiate between body fluids are treated as if known to be infectious for HIV, hepatitis B, and other blood-borne pathogens. (64) Vaccine Preventable Diseases--The diseases included in the most current recommendations of the Advisory Committee on Immunization Practices of the CDC. (65) Working day--any 24-hour period, Monday through Friday, excluding state and federal holidays. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER B. APPLICATION PROCEDURES 40 TAC The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure an ALF Change of Ownership and Notice of Changes. (a) A license holder may not transfer its license. (b) At least 30 days before the anticipated date of a change of ownership, the prospective license holder must notify DADS of the change of ownership by submitting an application for an initial license based on a change of ownership under of this subchapter (relating to Initial Application Procedures and Requirements) and the fee required in 92.4 of this chapter (relating to License Fees). (c) To avoid a facility operating while unlicensed, an applicant must submit an application for an initial license based on a change of ownership at least 30 days before the anticipated date of the change of ownership. The effective date of the change of ownership cannot precede the date the application is received by DADS Licensing and Credentialing Section, Regulatory Services Division. (d) DADS may assess an administrative penalty in accordance with Subchapter H, Division 9 of this chapter (relating to Administrative Penalties) against a person who fails to notify DADS before the effective date of the change of ownership. (e) Pending DADS review of the application for an initial license based on a change of ownership, the current license holder must continue to meet all requirements for operation of the facility. (f) DADS conducts an on-site health inspection to verify compliance with the licensure requirements before issuing a license based on a change of ownership. DADS may conduct a desk review instead of an on-site health inspection if DADS determines that the facility was required to obtain a new tax identification number and: (1) less than 50 percent of the direct or indirect ownership interest in the former license holder changed when compared to the new license holder; or (2) every owner with a disclosable interest in the new license holder had a disclosable interest in the former license holder. ADOPTED RULES October 6, TexReg 5513

232 (g) DADS, in its sole discretion, may conduct an on-site Life Safety Code inspection of the facility before issuing a license based on a change of ownership. (h) DADS issues the license within 30 days after DADS determines that the applicant and the facility have met the licensure requirements of this section. The issuance of a license constitutes DADS official written notice to the facility of the approval of the application for a change of ownership. (i) DADS may deny an application for a change of ownership if the applicant, controlling person, or any person required to submit background and qualification information fails to meet the criteria for a license established in of this subchapter (relating to Criteria for Licensing). (j) If DADS denies an application for an initial license based on a change of ownership, DADS sends the applicant a written notice of the denial and informs the applicant of the applicant s right to request an administrative hearing to appeal the denial. The administrative hearing is held in accordance with Texas Health and Human Services Commission rules at 1 TAC Chapter 357, Subchapter I (relating to Hearings Under the Administrative Procedure Act). (k) If a license holder that is not a publicly traded company adds an owner with a disclosable interest but the license holder does not undergo a change of ownership, the license holder must notify DADS no later than 30 days after the addition of the owner. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) CHAPTER 97. LICENSING STANDARDS FOR HOME AND COMMUNITY SUPPORT SERVICES AGENCIES The Texas Health and Human Services Commission (HHSC) adopts amendments to 97.2, concerning Definitions, and 97.23, concerning Change of Ownership, in Chapter 97, Licensing Standards for Home and Community Support Services Agencies. The amendments to 97.2 are adopted with changes as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1868). The amendments to are adopted without changes to the proposed text as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1872). BACKGROUND AND JUSTIFICATION The adopted rules revise requirements related to change of ownership of a license holder for a home and community support services agency (HCSSA). Under the adopted rules, a license holder is not required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal taxpayer identification number. Changes in ownership structure must be reported to HHSC under other existing rules. The adopted rules add definitions for terms related to a change of ownership and ownership interests. The adopted amendments also allow for HHSC to conduct a desk review instead of an on-site health survey if the applicant for a license resulting from a change of ownership meets certain requirements. A change was made in 97.2, concerning Definitions, to the definition of "change of ownership" to clarify that any event that results in a change to the federal taxpayer identification number of the license holder of a HCSSA is considered a change of ownership. COMMENTS The 30-day comment period ended May 7, During this period, HHSC received comments regarding the proposed rules from one commenter, the Coalition for Nurses in Advanced Practice. A summary of the comments and HHSC's responses follows. Comment: Regarding the proposed amendment to 97.2, Definitions, a commenter requested that in the definition for "practitioner" the term "advanced practice registered nurse (APRN)" be used instead of using the phrase "a person who is a registered nurse registered with the Texas Board of Nursing as an advanced practice nurse." The commenter stated this change would reflect current terminology and be consistent with terms used for the other professions listed in the definition as well as allow the APRN to be licensed in a state other than Texas. Response: No change was made in response to this comment as the term "practitioner" is not related to the rule changes that are proposed. HHSC will consider this change in future rule amendments. Comment: Regarding the definition of "psychoactive treatment" the commenter requested that the phrase "under the direction of a physician" be replaced with the phrase "including consultation with the client's physician or mental health provider, as needed" as the commenter could not find any state or federal law that requires this type of skilled nursing visit be under the direction of a physician. Response: No change was made in response to this comment as the term "psychoactive treatment" is not related to the rule changes that are proposed. HHSC will consider this change in future rule amendments. SUBCHAPTER A. GENERAL PROVISIONS 40 TAC 97.2 STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure of an HCSSA Definitions. The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise. (1) Accessible and flexible services--services that are delivered in the least intrusive manner possible and are provided in all settings where individuals live, work, and recreate. 42 TexReg 5514 October 6, 2017 Texas Register

233 (2) Administration of medication--the direct application of any medication by injection, inhalation, ingestion, or any other means to the body of a client. The preparation of medication is part of the administration of medication and is the act or process of making ready a medication for administration, including the calculation of a client's medication dosage; altering the form of the medication by crushing, dissolving, or any other method; reconstitution of an injectable medication; drawing an injectable medication into a syringe; preparing an intravenous admixture; or any other act required to render the medication ready for administration. (3) Administrative support site--a facility or site where an agency performs administrative and other support functions but does not provide direct home health, hospice, or personal assistance services. This site does not require an agency license. (4) Administrator--The person who is responsible for implementing and supervising the administrative polices and operations of a home and community support services agency and for administratively supervising the provision of all services to agency clients on a day-to-day basis. (5) ADS--Alternate delivery site. A facility or site, including a residential unit or an inpatient unit: (A) that is owned or operated by an agency providing hospice services; (B) that is not the hospice's principal place of business, which for the purposes of this definition, means it is not the parent agency; (C) that is located in the geographical area served by the hospice; and (D) from which the hospice provides hospice services. (6) Advanced practice nurse--an advanced practice registered nurse. (7) Advanced practice registered nurse--a person licensed by the Texas Board of Nursing as an advanced practice registered nurse. The term is synonymous with "advanced practice nurse." (8) Advisory committee--a committee, board, commission, council, conference, panel, task force, or other similar group, or any subcommittee or other subgroup, established for the purpose of obtaining advice or recommendations on issues or policies that are within the scope of a person's responsibility. that is: (9) Affiliate--With respect to an applicant or license holder (A) a corporation--means each officer, director, and stockholder with direct ownership of at least 5.0 percent, subsidiary, and parent company; (B) a limited liability company--means each officer, member, and parent company; (C) an individual--means: (i) the individual's spouse; (ii) each partnership and each partner thereof of which the individual or any affiliate of the individual is a partner; and (iii) each corporation in which the individual is an officer, director, or stockholder with a direct ownership or disclosable interest of at least 5.0 percent. (D) a partnership--means each partner and any parent company; and (E) a group of co-owners under any other business arrangement--means each officer, director, or the equivalent under the specific business arrangement and each parent company. agency. (10) Agency--A home and community support services (11) Applicant--The owner of an agency that is applying for a license under the statute. This is the person in whose name the license will be issued. (12) Assistance with self-administration of medication--any needed ancillary aid provided to a client in the client's self-administered medication or treatment regimen, such as reminding a client to take a medication at the prescribed time, opening and closing a medication container, pouring a predetermined quantity of liquid to be ingested, returning a medication to the proper storage area, and assisting in reordering medications from a pharmacy. Such ancillary aid includes administration of any medication when the client has the cognitive ability to direct the administration of their medication and would self-administer if not for a functional limitation. (13) Association--A partnership, limited liability company, or other business entity that is not a corporation. (14) Audiologist--A person who is currently licensed under the Texas Occupations Code, Chapter 401, as an audiologist. (15) Bereavement--The process by which a survivor of a deceased person mourns and experiences grief. (16) Bereavement services--support services offered to a family during bereavement. Services may be provided to persons other than family members, including residents of a skilled nursing facility, nursing facility, or intermediate care facility for individuals with an intellectual disability or related conditions, when appropriate and identified in a bereavement plan of care. (17) Biologicals--A medicinal preparation made from living organisms and their products, including serums, vaccines, antigens, and antitoxins. (18) Boarding home facility--an establishment defined in Texas Health and Safety Code (2). (19) Branch office--a facility or site in the service area of a parent agency from which home health or personal assistance services are delivered or where active client records are maintained. This does not include inactive records that are stored at an unlicensed site. (20) Care plan-- (A) a written plan prepared by the appropriate health care professional for a client of the home and community support services agency; or (B) for home dialysis designation, a written plan developed by the physician, registered nurse, dietitian, and qualified social worker to personalize the care for the client and enable long- and short-term goals to be met. (21) Case conference--a conference among personnel furnishing services to the client to ensure that their efforts are coordinated effectively and support the objectives outlined in the plan of care or care plan. (22) Certified agency--a home and community support services agency, or portion of the agency, that: (A) provides a home health service; and (B) is certified by an official of the Department of Health and Human Services as in compliance with conditions of ADOPTED RULES October 6, TexReg 5515

234 participation in Social Security Act, Title XVIII (42 United States Code (USC) 1395 et seq.). (23) Certified home health services--home health services that are provided by a certified agency. (24) CFR--Code of Federal Regulations. The regulations and rules promulgated by agencies of the Federal government that address a broad range of subjects, including hospice care and home health services. (25) Change of ownership--an event that results in a change to the federal taxpayer identification number of the license holder of an agency. The substitution of a personal representative for a deceased license holder is not a change of ownership. (26) CHAP--Community Health Accreditation Program, Inc. An independent, nonprofit accrediting body that publicly certifies that an organization has voluntarily met certain standards for home and community-based health care. (27) Chief financial officer--an individual who is responsible for supervising and managing all financial activities for a home and community support services agency. (28) Client--An individual receiving home health, hospice, or personal assistance services from a licensed home and community support services agency. This term includes each member of the primary client's family if the member is receiving ongoing services. This term does not include the spouse, significant other, or other family member living with the client who receives a one-time service (for example, vaccination) if the spouse, significant other, or other family member receives the service in connection with the care of a client. (29) Clinical note--a dated and signed written notation by agency personnel of a contact with a client containing a description of signs and symptoms; treatment and medication given; the client's reaction; other health services provided; and any changes in physical and emotional condition. (30) CMS--Centers for Medicare & Medicaid Services. The federal agency that administers the Medicare program and works in partnership with the states to administer Medicaid. (31) Complaint--An allegation against an agency regulated by DADS or against an employee of an agency regulated by DADS that involves a violation of this chapter or the statute. (32) Community disaster resources--a local, statewide, or nationwide emergency system that provides information and resources during a disaster, including weather information, transportation, evacuation, and shelter information, disaster assistance and recovery efforts, evacuee and disaster victim resources, and resources for locating evacuated friends and relatives. (33) Controlling person--a person with the ability, acting alone or with others, to directly or indirectly influence, direct, or cause the direction of the management, expenditure of money, or policies of an agency or other person. (A) A controlling person includes: (i) a management company or other business entity that operates or contracts with others for the operation of an agency; (ii) a person who is a controlling person of a management company or other business entity that operates an agency or that contracts with another person for the operation of an agency; and (iii) any other individual who, because of a personal, familial, or other relationship with the owner, manager, or provider of an agency, is in a position of actual control or authority with respect to the agency, without regard to whether the individual is formally named as an owner, manager, director, officer, provider, consultant, contractor, or employee of the agency. (B) A controlling person, as described by subparagraph (A)(iii) of this paragraph, does not include an employee, lender, secured creditor, or other person who does not exercise formal or actual influence or control over the operation of an agency. (34) Conviction--An adjudication of guilt based on a finding of guilt, a plea of guilty, or a plea of nolo contendere. (35) Counselor--An individual qualified under Medicare standards to provide counseling services, including bereavement, dietary, spiritual, and other counseling services to both the client and the family. (36) DADS--Department of Aging and Disability Services or its successor agency. (37) Day--Any reference to a day means a calendar day, unless otherwise specified in the text. A calendar day includes weekends and holidays. (38) Deficiency--A finding of noncompliance with federal requirements resulting from a survey. (39) Designated survey office--a DADS Home and Community Support Services Agencies Program office located in an agency's geographic region. (40) Dialysis treatment record--for home dialysis designation, a dated and signed written notation by the person providing dialysis treatment which contains a description of signs and symptoms, machine parameters and pressure settings, type of dialyzer and dialysate, actual pre- and post-treatment weight, medications administered as part of the treatment, and the client's response to treatment. (41) Dietitian--A person who is currently licensed under the laws of the State of Texas to use the title of licensed dietitian or provisional licensed dietitian, or who is a registered dietitian. (42) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (43) Disaster--The occurrence or imminent threat of widespread or severe damage, injury, or loss of life or property resulting from a natural or man-made cause, such as fire, flood, earthquake, wind, storm, wave action, oil spill or other water contamination, epidemic, air contamination, infestation, explosion, riot, hostile military or paramilitary action, or energy emergency. In a hospice inpatient unit, a disaster also includes failure of the heating or cooling system, power outage, explosion, and bomb threat. (44) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (45) ESRD--End stage renal disease. For home dialysis designation, the stage of renal impairment that appears irreversible and permanent and requires a regular course of dialysis or kidney transplantation to maintain life. (46) Functional need--needs of the individual that require services without regard to diagnosis or label. (47) Habilitation--Habilitation services, as defined by Texas Government Code , provided by an agency licensed under this chapter. (48) Health assessment--a determination of a client's physical and mental status through inventory of systems. 42 TexReg 5516 October 6, 2017 Texas Register

235 (49) Home and community support services agency--a person who provides home health, hospice, or personal assistance services for pay or other consideration in a client's residence, an independent living environment, or another appropriate location. (50) Home health aide--an individual working for an agency who meets at least one of the requirements for home health aides as defined in of this chapter (relating to Home Health Aides). (51) Home health medication aide--an unlicensed person issued a permit by DADS to administer medication to a client under the Texas Health and Safety Code, Chapter 142, Subchapter B. (52) Home health service--the provision of one or more of the following health services required by an individual in a residence or independent living environment: (A) nursing, including blood pressure monitoring and diabetes treatment; (B) physical, occupational, speech, or respiratory therapy; (C) medical social service; (D) intravenous therapy; (E) dialysis; (F) service provided by unlicensed personnel under the delegation or supervision of a licensed health professional; (G) the furnishing of medical equipment and supplies, excluding drugs and medicines; or (H) nutritional counseling. (53) Hospice--A person licensed under this chapter to provide hospice services, including a person who owns or operates a residential unit or an inpatient unit. (54) Hospice aide--a person working for an agency licensed to provide hospice services who meets the qualifications for a hospice aide as described in of this chapter (relating to Hospice Aide Qualifications). (55) Hospice homemaker--a person working for an agency licensed to provide hospice services who meets the qualifications described in of this chapter (relating to Hospice Homemaker Qualifications). (56) Hospice services--services, including services provided by unlicensed personnel under the delegation of a registered nurse or physical therapist, provided to a client or a client's family as part of a coordinated program consistent with the standards and rules adopted under this chapter. These services include palliative care for terminally ill clients and support services for clients and their families that: (A) are available 24 hours a day, seven days a week, during the last stages of illness, during death, and during bereavement; (B) are provided by a medically directed interdisciplinary team; and (C) may be provided in a home, nursing facility, residential unit, or inpatient unit according to need. These services do not include inpatient care normally provided in a licensed hospital to a terminally ill person who has not elected to be a hospice client. For the purposes of this definition, the word "home" includes a person's "residence" as defined in this section. (57) IDR--Informal dispute resolution. An informal process that allows an agency to refute a violation or condition-level deficiency cited during a survey. (58) Independent living environment--a client's residence, which may include a group home, foster home, or boarding home facility, or other settings where a client participates in activities, including school, work, or church. (59) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (60) Individual and family choice and control--individuals and families who express preferences and make choices about how their support service needs are met. (61) Individualized service plan--a written plan prepared by the appropriate health care personnel for a client of a home and community support services agency licensed to provide personal assistance services. (62) Inpatient unit--a facility, also referred to as a hospice freestanding inpatient facility, that provides a continuum of medical or nursing care and other hospice services to clients admitted into the unit and that is in compliance with: (A) the conditions of participation for inpatient units adopted under Social Security Act, Title XVIII (42 United States Code 1395 et seq.); and (B) standards adopted under this chapter. (63) JCAHO--Joint Commission on Accreditation of Healthcare Organizations. An independent, nonprofit organization for standard-setting and accrediting in-home care and other areas of health care. (64) Joint training--training provided by DADS at least semi-annually for home and community support services agencies and DADS surveyors on subjects that address the 10 most commonly cited violations of federal or state law by home and community support services agencies as published in DADS annual reports. (65) LAR--Legally authorized representative. A person authorized by law to act on behalf of a client with regard to a matter described in this chapter, and may include a parent of a minor, guardian of an adult or minor, managing conservator of a minor, agent under a medical power of attorney, or surrogate decision-maker under Texas Health and Safety Code, (66) License holder--a person that holds a license to operate an agency. (67) Licensed vocational nurse--a person who is currently licensed under Texas Occupations Code, Chapter 301, as a licensed vocational nurse. (68) Life Safety Code (also referred to as NFPA 101)--The Code for Safety to Life from Fire in Buildings and Structures, Standard 101, of the National Fire Protection Association (NFPA). (69) Local emergency management agencies--the local emergency management coordinator, fire, police, and emergency medical services. (70) Local emergency management coordinator-- The person identified as the emergency management coordinator by the mayor or county judge in an agency's service area. (71) Manager--An employee or independent contractor responsible for providing management services to a home and commu- ADOPTED RULES October 6, TexReg 5517

236 nity support services agency for the overall operation of a home and community support services agency including administration, staffing, or delivery of services. Examples of contracts for services that will not be considered contracts for management services include contracts solely for maintenance, laundry, or food services. (72) Medication administration record--a record used to document the administration of a client's medications. (73) Medication list--a list that includes all prescription and over-the-counter medication that a client is currently taking, including the dosage, the frequency, and the method of administration. (74) Mitigation--An action taken to eliminate or reduce the probability of a disaster, or reduce a disaster's severity or consequences. (75) Multiple location--a Medicare-approved alternate delivery site that meets the definition in 42 CFR (76) Notarized copy--a sworn affidavit stating that attached copies are true and correct copies of the original documents. (77) Nursing facility--an institution licensed as a nursing home under the Texas Health and Safety Code, Chapter 242. (78) Nutritional counseling--advising and assisting individuals or families on appropriate nutritional intake by integrating information from the nutrition assessment with information on food and other sources of nutrients and meal preparation consistent with cultural background and socioeconomic status, with the goal being health promotion, disease prevention, and nutrition education. Nutritional counseling may include the following: (A) dialogue with the client to discuss current eating habits, exercise habits, food budget, and problems with food preparation; (B) discussion of dietary needs to help the client understand why certain foods should be included or excluded from the client's diet and to help with adjustment to the new or revised or existing diet plan; (C) a personalized written diet plan as ordered by the client's physician or practitioner, to include instructions for implementation; (D) providing the client with motivation to help the client understand and appreciate the importance of the diet plan in getting and staying healthy; or (E) working with the client or the client's family members by recommending ideas for meal planning, food budget planning, and appropriate food gifts. (79) Occupational therapist--a person who is currently licensed under the Occupational Therapy Practice Act, Texas Occupations Code, Chapter 454, as an occupational therapist. (80) Operating hours--the days of the week and the hours of day an agency's place of business is open as identified in an agency's written policy as required by of this chapter (relating to Agency Operating Hours). (81) Original active client record--a record composed first-hand for a client currently receiving services. (82) Palliative care--intervention services that focus primarily on the reduction or abatement of physical, psychosocial, and spiritual symptoms of a terminal illness. It is client and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and facilitating client autonomy, access to information, and choice. (83) Parent agency--an agency that develops and maintains administrative controls and provides supervision of branch offices and alternate delivery sites. (84) Parent company--a person, other than an individual, who has a direct 100 percent ownership interest in the owner of an agency. (85) Person--An individual, corporation, or association. (86) Personal assistance services--routine ongoing care or services required by an individual in a residence or independent living environment that enable the individual to engage in the activities of daily living or to perform the physical functions required for independent living, including respite services. The term includes: (A) personal care; (B) health-related services performed under circumstances that are defined as not constituting the practice of professional nursing by the Texas Board of Nursing through a memorandum of understanding with DADS in accordance with Texas Health and Safety Code, ; and (C) health-related tasks provided by unlicensed personnel under the delegation of a registered nurse or that a registered nurse determines do not require delegation. (87) Personal care--the provision of one or more of the following services required by an individual in a residence or independent living environment: (A) (B) (C) (D) (E) (F) (G) (H) (I) (J) bathing; dressing; grooming; feeding; exercising; toileting; positioning; assisting with self-administered medications; routine hair and skin care; and transfer or ambulation. (88) Pharmacist--A person who is licensed to practice pharmacy under the Texas Pharmacy Act, Texas Occupations Code, Chapter 558. (89) Pharmacy--A facility defined in the Texas Occupations Code, (31), at which a prescription drug or medication order is received, processed, or dispensed. (90) Physical therapist--a person who is currently licensed under Texas Occupations Code, Chapter 453, as a physical therapist. (91) Physician--This term includes a person who is: (A) licensed in Texas to practice medicine or osteopathy in accordance with Texas Occupations Code, Chapter 155; (B) licensed in Arkansas, Louisiana, New Mexico, or Oklahoma to practice medicine, who is the treating physician of a client and orders home health or hospice services for the client, in accordance with the Texas Occupations Code, (b)(4); or 42 TexReg 5518 October 6, 2017 Texas Register

237 (C) a commissioned or contract physician or surgeon who serves in the United States uniformed services or Public Health Service if the person is not engaged in private practice, in accordance with the Texas Occupations Code, (a)(8). (92) Physician assistant--a person who is licensed under the Physician Assistant Licensing Act, Texas Occupations Code, Chapter 204, as a physician assistant. (93) Physician-delegated task--a task performed in accordance with the Texas Occupations Code, Chapter 157, including orders signed by a physician that specify the delegated task, the individual to whom the task is delegated, and the client's name. (94) Place of business--an office of a home and community support services agency that maintains client records or directs home health, hospice, or personal assistance services. This term includes a parent agency, a branch office, and an alternate delivery site. The term does not include an administrative support site. (95) Plan of care--the written orders of a practitioner for a client who requires skilled services. (96) Practitioner--A person who is currently licensed in a state in which the person practices as a physician, dentist, podiatrist, or a physician assistant, or a person who is a registered nurse registered with the Texas Board of Nursing as an advanced practice nurse. (97) Preparedness--Actions taken in anticipation of a disaster. (98) Presurvey conference--a conference held with DADS staff and the applicant or the applicant's representatives to review licensure standards and survey documents, and to provide consultation before the survey. (99) Progress note--a dated and signed written notation by agency personnel summarizing facts about care and the client's response during a given period of time. (100) Psychoactive treatment--the provision of a skilled nursing visit to a client with a psychiatric diagnosis under the direction of a physician that includes one or more of the following: (A) assessment of alterations in mental status or evidence of suicide ideation or tendencies; (B) teaching coping mechanisms or skills; (C) counseling activities; or (D) evaluation of the plan of care. (101) Recovery--Activities implemented during and after a disaster response designed to return an agency to its normal operations as quickly as possible. (102) Registered nurse delegation--delegation by a registered nurse in accordance with: (A) 22 TAC Chapter 224 (concerning Delegation of Nursing Tasks by Registered Professional Nurses to Unlicensed Personnel for Clients with Acute Conditions or in Acute Care Environments); and (B) 22 TAC Chapter 225 (relating to RN Delegation to Unlicensed Personnel and Tasks Not Requiring Delegation in Independent Living Environments for Clients with Stable and Predictable Conditions). (103) Residence--A place where a person resides, including a home, a nursing facility, a convalescent home, or a residential unit. (104) Residential unit--a facility that provides living quarters and hospice services to clients admitted into the unit and that is in compliance with standards adopted under the Texas Health and Safety Code, Chapter 142. (105) Respiratory therapist--a person who is currently licensed under Texas Occupations Code, Chapter 604, as a respiratory care practitioner. (106) Respite services--support options that are provided temporarily for the purpose of relief for a primary caregiver in providing care to individuals of all ages with disabilities or at risk of abuse or neglect. (107) Response--Actions taken immediately before an impending disaster or during and after a disaster to address the immediate and short-term effects of the disaster. (108) Restraint--A restraint is: (A) a manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a client in a hospice inpatient unit to move his or her arms, legs, body, or head freely, but does not include a device, such as an orthopedically prescribed device, a surgical dressing or bandage, a protective helmet, or other method that involves the physical holding of the client for the purpose of: test; (i) (ii) conducting a routine physical examination or protecting the client from falling out of bed; or (iii) permitting the client to participate in activities without the risk of physical harm, not including a physical escort; or (B) a drug or medication when used as a restriction to manage a client's behavior or restrict the client's freedom of movement in a hospice inpatient unit, but not as a standard treatment or medication dosage for the client's condition. (109) RN--Registered nurse. A person who is currently licensed under the Nursing Practice Act, Texas Occupations Code, Chapter 301, as a registered nurse. (110) Seclusion--The involuntary confinement of a client alone in a room or an area in a hospice inpatient unit from which the client is physically prevented from leaving. (111) Section--A reference to a specific rule in this chapter. (112) Service area--a geographic area established by an agency in which all or some of the agency's services are available. (113) Skilled services--services in accordance with a plan of care that require the skills of: (A) (B) (C) (D) (E) (F) (G) (H) (I) a registered nurse; a licensed vocational nurse; a physical therapist; an occupational therapist; a respiratory therapist; a speech-language pathologist; an audiologist; a social worker; or a dietitian. ADOPTED RULES October 6, TexReg 5519

238 (114) Social worker--a person who is currently licensed as a social worker under Texas Occupations Code, Chapter 505. (115) Speech-language pathologist--a person who is currently licensed as a speech-language pathologist under Texas Occupations Code, Chapter (116) Statute--The Texas Health and Safety Code, Chapter (117) Substantial compliance--a finding in which an agency receives no recommendation for enforcement action after a survey. (118) Supervised practical training--hospice aide training that is conducted in a laboratory or other setting in which the trainee demonstrates knowledge while performing tasks on an individual. The training is supervised by a registered nurse or by a licensed vocational nurse who works under the direction of a registered nurse. (119) Supervising nurse--the person responsible for supervising skilled services provided by an agency and who has the qualifications described in (c) of this chapter (relating to Administrator Qualifications and Conditions and Supervising Nurse Qualifications). This person may also be known as the director of nursing or similar title. (120) Supervision--Authoritative procedural guidance by a qualified person for the accomplishment of a function or activity with initial direction and periodic inspection of the actual act of accomplishing the function or activity. (121) Support services--social, spiritual, and emotional care provided to a client and a client's family by a hospice. (122) Survey--An on-site inspection or complaint investigation conducted by a DADS representative to determine if an agency is in compliance with the statute and this chapter or in compliance with applicable federal requirements or both. (123) Terminal illness--an illness for which there is a limited prognosis if the illness runs its usual course. (124) Unlicensed person--a person not licensed as a health care provider. The term includes home health aides, hospice aides, hospice homemakers, medication aides permitted by DADS, and other unlicensed individuals providing personal care or assistance in health services. (125) Unsatisfied judgments--a failure to fully carry out the terms or meet the obligation of a court's final disposition on the matters before it in a suit regarding the operation of an agency. (126) Violation--A finding of noncompliance with this chapter or the statute resulting from a survey. (127) Volunteer--An individual who provides assistance to a home and community support services agency without compensation other than reimbursement for actual expenses. (128) Working day--any day except Saturday, Sunday, a state holiday, or a federal holiday. 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 September 21, TRD Karen Ray General Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER B. CRITERIA AND ELIGIBILITY, APPLICATION PROCEDURES, AND ISSUANCE OF A LICENSE 40 TAC The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Health and Safety Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure of a HCSSA. 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 September 21, TRD Karen Ray General Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) CHAPTER 98. DAY ACTIVITY AND HEALTH SERVICES REQUIREMENTS The Texas Health and Human Services Commission (HHSC) adopts amendments to 98.2, concerning Definitions, and 98.16, concerning Criteria for Denying a License or Renewal of a License, in Chapter 98, Day Activity and Health Services Requirements. The amendment to is adopted without changes. The amendment to 98.2 is adopted with changes to the proposed text as published in the April 7, 2017, issue of the Texas Register (42 TexReg 1872). BACKGROUND AND JUSTIFICATION The adopted amendments revise requirements related to change of ownership of a license holder of a day activity and health services (DAHS) facility. Under the amended rules, a license holder is not required to apply for a new license if the ownership structure of the license holder changes but the license holder is the same legal entity, as evidenced by having the same federal taxpayer identification number. The amendment requires a license holder that does not undergo a change of ownership but adds an owner with a disclosable interest to notify HHSC of the addition no later than 30 days after the addition of the owner. The amendments allow HHSC to conduct a desk review instead of an on-site health survey if 42 TexReg 5520 October 6, 2017 Texas Register

239 the applicant for a license resulting from a change of ownership meets certain requirements. A change was made in 98.2, concerning Definitions, to the definition of "change of ownership" to clarify that any event that results in a change to the federal taxpayer identification number of the license holder of a DAHS is considered a change of ownership. COMMENTS The 30 day comment period ended May 7, During this period, HHSC did not receive any comments regarding adoption of the amendments. SUBCHAPTER A. INTRODUCTION 40 TAC 98.2 STATUTORY AUTHORITY The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Human Resources Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure of a day activity and health services facility Definitions. The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise. (1) Abuse--The negligent or willful infliction of injury, unreasonable confinement, intimidation, or cruel punishment with resulting physical or emotional harm or pain to an elderly or disabled person by the person's caretaker, family member, or other individual who has an ongoing relationship with the person, or sexual abuse of an elderly or disabled person, including any involuntary or nonconsensual sexual conduct that would constitute an offense under Texas Penal Code, 21.08, (indecent exposure) or Texas Penal Code, Chapter 22, (assaultive offenses) committed by the person's caretaker, family member, or other individual who has an ongoing relationship with the person. (2) Adult--A person 18 years of age or older, or an emancipated minor. (3) Affiliate--With respect to a: (A) partnership, each partner of the partnership; (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 the person is an officer, director, principal stockholder, or person with a disclosable interest. (4) Ambulatory--Mobility not relying on walker, crutch, cane, other physical object, or use of wheelchair. (5) Applicant--A person applying for a license under Texas Human Resources Code, Chapter 103. (6) Authorization--A case manager's decision, before DAHS begins and before payment can be made, that DAHS may be provided to an individual. (7) Case manager--a DADS employee who is responsible for DAHS case management activities. Activities include eligibility determination, individual enrollment, assessment and reassessment of an individual's need, service plan development, and intercession on the individual's behalf. (8) Caseworker--Case manager. (9) 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. (10) Client--Individual. (11) Construction, existing--see definition of existing building (12) Construction, new--construction begun after April 1, (13) Construction, permanent--a building or structure that meets a nationally recognized building code's details for foundations, floors, walls, columns, and roofs. (14) DADS--The Department of Aging and Disability Services or its successor agency. (15) DAHS--Day activity and health services. Health, social, and related support services. (16) DAHS facility-- A facility that provides services under a day activity and health services program on a daily or regular basis, but not overnight, to four or more elderly persons or persons with disabilities who are not related by blood, marriage or adoption to the owner of the facility. (17) DAHS program--a structured, comprehensive program offered by a DAHS facility that is designed to meet the needs of adults with functional impairments by providing DAHS in accordance with individual plans of care in a protective setting. (18) Days--Calendar days, unless otherwise specified. (19) Department--Department of Aging and Disability Services or its successor agency. (20) Dietitian consultant--a registered dietitian; a person licensed by the Texas State Board of Examiners of Dietitians; or a person with a bachelor's degree with major studies in food and nutrition, dietetics, or food service management. (21) Direct service staff--an employee or contractor of a facility who directly provides services to individuals, including the director, a licensed nurse, the activities director, and an attendant. An attendant includes a driver, food service worker, aide, janitor, porter, maid, and laundry worker. A dietitian consultant is not a member of the direct service staff. (22) Director--The person responsible for the overall operation of a facility. (23) Direct ownership interest--ownership of equity in the capital, stock, or profits of, or a membership interest in, an applicant or license holder. (24) Disclosable interest--five percent or more direct or indirect ownership interest in an applicant or license holder. (25) Elderly person--a person 65 years of age or older. (26) Existing building--a building or portion thereof that, at the time of initial inspection by DADS, is used as an adult day care occupancy, as defined by Life Safety Code, NFPA 101, 2000 edition, ADOPTED RULES October 6, TexReg 5521

240 Chapter 17 for existing adult day care occupancies; or has been converted from another occupancy or use to an adult day care occupancy, as defined by Chapter 16 for new adult day care occupancies. (27) Exploitation--An illegal or improper act or process of a caretaker, family member, or other individual, who has an ongoing relationship with the elderly person or person with a disability, using the resources of an elderly person or person with a disability for monetary or personal benefit, profit, or gain without the informed consent of the elderly person or person with a disability. (28) Facility--A licensed DAHS facility. (29) Fence--A barrier to prevent elopement of an individual or intrusion by an unauthorized person, consisting of posts, columns, or other support members, and vertical or horizontal members of wood, masonry, or metal. (30) FM--FM Global (formerly known as Factory Mutual). A corporation whose approval of a product indicates a level of testing and certification that is acceptable to DADS. (31) Fraud--A deliberate misrepresentation or intentional concealment of information to receive or to be reimbursed for service delivery to which an individual is not entitled. (32) Functional impairment--a condition that requires assistance with one or more personal care services. (33) Health assessment--an assessment of an individual by a facility used to develop the individual's plan of care. (34) Health services--services that include personal care, nursing, and therapy services. (ix) assistance with other personal needs or maintenance. changes; and (iii) monitoring the health condition of the individual. (A) Personal care services include: (i) bathing; (ii) dressing; (iii) preparing meals; (iv) feeding; (v) grooming; (vi) taking self-administered medication; (vii) toileting; (viii) ambulation; and (B) Nursing services may include: (i) the administration of medications; (ii) physician-ordered treatments, such as dressing (C) Therapy services may include: (i) physical; (ii) occupational; and (iii) speech therapy. (35) Human services--include the following services: (A) personal social services, including: (i) DAHS; (B) (C) (D) public housing; and (E) (F) (ii) (iii) (iv) (i) (ii) (iii) (iv) (v) (i) (ii) (iii) (i) (ii) (i) (ii) counseling; in-home care; and protective services; health services, including: home health; family planning; preventive health programs; nursing facility; and hospice; education services, meaning: all levels of school; Head Start; and vocational programs; housing and urban environment services, including income transfer services, including; Temporary Assistance for Needy Families; and Supplemental Nutrition Assistance Program; justice and public safety services, including: parole and probation; and rehabilitation. (36) Human service program--an intentional, organized, ongoing effort designed to provide good to others. The characteristics of a human service program are: (A) dependent on public resources and are planned and provided by the community; (B) directed toward meeting human needs arising from day-to-day socialization, health care, and developmental experiences; and or need. (C) used to aid, rehabilitate, or treat people in difficulty (37) Indirect ownership interest--any ownership or membership interest in a person that has a direct ownership interest in an applicant or license holder. (38) Individual--A person who applies for or is receiving services at a facility. (39) License holder--a person that holds a license to operate a facility. (40) Licensed vocational nurse (LVN)--A person licensed by the Texas Board of Nursing who works under the supervision of a registered nurse (RN) or a physician. (41) Life Safety Code, NFPA 101--The Code for Safety to Life from Fire in Buildings and Structures, NFPA 101, a publication of the National Fire Protection Association, Inc. that: (A) addresses the construction, protection, and occupancy features necessary to minimize danger to life from fire, including smoke, fumes, or panic; and 42 TexReg 5522 October 6, 2017 Texas Register

241 (B) establishes minimum criteria for the design of egress features so as to permit prompt escape of occupants from buildings or, where desirable, into safe areas within the building. (42) Long-term care facility--a facility that provides care and treatment or personal care services to four or more unrelated persons, including: (A) a nursing facility licensed under Texas Health and Safety Code, Chapter 242; (B) an assisted living facility licensed under Texas Health and Safety Code, Chapter 247; and (C) an intermediate care facility serving individuals with an intellectual disability or related conditions licensed under Texas Health and Safety Code, Chapter 252. (43) 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, and delivery of services. Management services do not include contracts solely for maintenance, laundry, or food services. (44) Manager--A person having a contractual relationship to provide management services to a facility. (45) Medicaid-eligible--An individual who is eligible for Medicaid. (46) Medically related program--a human services program under the human services-health services category in the definition of human services in this section. (47) Neglect--The failure to provide for one's self the goods or services, including medical services, that are necessary to avoid physical harm, mental anguish, or mental illness; or the failure of a caregiver to provide these goods or services. (48) NFPA--The National Fire Protection Association. NFPA is an organization that develops codes, standards, recommended practices, and guides through a consensus standards development process approved by the American National Standards Institute. (49) NFPA 10--Standard for Portable Fire Extinguishers. A standard developed by NFPA for the selection, installation, inspection, maintenance, and testing of portable fire extinguishing equipment. (50) NFPA 13--Standard for the Installation of Sprinkler Systems. A standard developed by NFPA for the minimum requirements for the design and installation of automatic fire sprinkler systems, including the character and adequacy of water supplies and the selection of sprinklers, fittings, pipes, valves, and all maintenance and accessories. (51) NFPA 70--National Electrical Code. A code developed by NFPA for the installation of electric conductors and equipment. (52) NFPA 72--National Fire Alarm Code. A code developed by NFPA for the application, installation, performance, and maintenance of fire alarm systems and their components. (53) NFPA 90A--Standard for the Installation of Air Conditioning and Ventilating Systems. A standard developed by NFPA for systems for the movement of environmental air in structures that serve spaces over 25,000 cubic feet or buildings of certain heights and construction types, or both. (54) NFPA 90B--Standard for the Installation of Warm Air Heating and Air-Conditioning Systems. A standard developed by the NFPA for systems for the movement of environmental air in one- or two-family dwellings and structures that serve spaces not exceeding 25,000 cubic feet. (55) NFPA 96--Standard for Ventilation Control and Fire Protection of Commercial Cooking Operations. A standard developed by NFPA that provides the minimum fire safety requirements related to the design, installation, operation, inspection, and maintenance of all public and private cooking operations, except for single-family residential usage. (56) Nurse--A registered nurse (RN) or a licensed vocational nurse (LVN) licensed in the state of Texas. (57) Nursing services--services provided by a nurse, including: (A) (B) (C) observation; promotion and maintenance of health; prevention of illness and disability; (D) management of health care during acute and chronic phases of illness; guidance and counseling of individuals and families; and (E) (F) referral to physicians, other health care providers, and community resources when appropriate. (58) Person--An individual, corporation, or association. (59) Person with a disability--a person whose functioning is sufficiently impaired to require frequent medical attention, counseling, physical therapy, therapeutic or corrective equipment, or another person's attendance and supervision. (60) Physician's orders--an order that is signed and dated by a medical doctor (MD) or doctor of osteopathy (DO) who is licensed to practice medicine in the state of Texas. The DADS physician's order form used by a DAHS facility that contracts with DADS must include the MD's or DO's license number. (61) Plan of care-- A written plan, based on a health assessment and developed jointly by a facility and an individual or the individual's responsible party, that documents the functional impairment of the individual and the DAHS needed by the individual. (62) Protective setting--a setting in which an individual's safety is ensured by the physical environment by staff. (63) Registered nurse (RN)--A person licensed by the Texas Board of Nursing to practice professional nursing. (64) Related support services--services to an individual, family member, or caregiver that may improve the person's ability to assist with an individual's independence and functioning. Services include: (A) (B) (C) (D) (E) (F) (G) information and referral; transportation; teaching caregiver skills; respite; counseling; instruction and training; and support groups. (65) Responsible party--a person designated by an individual as the individual's representative. ADOPTED RULES October 6, TexReg 5523

242 (66) Safety--Protection from injury or loss of life due to conditions such as fire, electrical hazard, unsafe building or site conditions, and the presence of hazardous materials. (67) Sanitation--Protection from illness, the transmission of disease, or loss of life due to unclean surroundings, the presence of disease transmitting insects or rodents, unhealthful conditions or practices in the preparation of food and beverage, or the care of personal belongings. (68) Semi-ambulatory--Mobility relying on a walker, crutch, cane, other physical object, or independent use of wheelchair. (69) Serious injury--an injury requiring emergency medical intervention or treatment by medical personnel, either at a facility or at an emergency room or medical office. (70) Social activities--therapeutic, educational, cultural enrichment, recreational, and other activities in a facility or in the community provided as part of a planned program to meet the social needs and interests of an individual. (71) UL--Underwriters Laboratories, Inc. A corporation whose approval of a product indicates a level of testing and certification that is acceptable to DADS. (72) Working with people--responsible for the delivery of services to individuals either directly or indirectly. Experience as a manager would meet this definition; however, an administrative support position such as a bookkeeper does not. Experience does not have to be in a paid capacity. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) SUBCHAPTER B. APPLICATION PROCEDURES 40 TAC The amendment is adopted under Texas Government Code, , which requires that the HHSC executive commissioner shall adopt rules for the operation and provision of health and human services; and Texas Human Resources Code, , which requires the HHSC executive commissioner to adopt rules related to the licensure of a day activity and health services facility. 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 September 21, TRD Karen Ray Chief Counsel Department of Aging and Disability Services Effective date: October 11, 2017 Proposal publication date: April 7, 2017 For further information, please call: (512) PART 20. TEXAS WORKFORCE COMMISSION CHAPTER 802. INTEGRITY OF THE TEXAS WORKFORCE SYSTEM SUBCHAPTER D. AGENCY MONITORING ACTIVITIES 40 TAC The Texas Workforce Commission (TWC) adopts amendments to the following section of Chapter 802, relating to the Integrity of the Workforce System, without changes, as published in the August 4, 2017, issue of the Texas Register (42 TexReg 3866): Subchapter D. Agency Monitoring Activities, PART I. PURPOSE, BACKGROUND, AND AUTHORITY PART II. EXPLANATION OF INDIVIDUAL PROVISIONS WITH COMMENTS AND RESPONSES PART I. PURPOSE, BACKGROUND, AND AUTHORITY The purpose of the adopted Chapter 802 rule change is to facilitate the timely issuance of TWC reports following compliance reviews of Local Workforce Development Boards (Boards), Adult Education and Literacy (AEL) grant recipients, and TWC grantees or contractors. The rule change ensures that monitored entities maintain full due process in responding to and resolving any findings or questioned costs. Finally, the rule change clarifies to whom TWC monitoring reports are sent. Currently, requires that, following a monitoring visit, the TWC's Subrecipient Monitoring department (SRM) take the following actions: --If no issues or questioned costs are identified, issues a management letter and closes the review; --If there are issues, issues a draft report, which, if the monitored entity responds with documentation resolving the finding, prompts SRM to issue a management letter to close the review; or --If there are issues and the monitored entity concurs with the draft report finding, issues a final report. Issuance of the final report transfers monitoring findings and questioned costs to the audit resolution process. The draft report, which is not required under the uniform grant guidance provisions of 2 CFR Part 200, was intended to allow monitored entities the opportunity to provide input into potential administrative findings and questioned costs, which would then be considered by SRM before issuance of the final report. As a practical matter, the draft report has become de facto audit resolution and has the effect of delaying the final report. Additionally, 42 TexReg 5524 October 6, 2017 Texas Register

243 if findings or questioned costs remain in the final report, audit resolution simply resumes. In contrast, when the US Department of Labor (DOL) audits grantees and subrecipients, DOL's audit team issues one monitoring report and gives the monitored entity 45 calendar days to address the findings. When all findings have been resolved, DOL issues a monitoring closure letter. This approach provides a streamlined and efficient transition between monitoring activities, report issuance, and final audit resolution. PART II. EXPLANATION OF INDIVIDUAL PROVISIONS WITH COMMENTS AND RESPONSES (Note: Minor editorial changes are made that do not change the meaning of the rules and, therefore, are not discussed in the Explanation of Individual Provisions.) SUBCHAPTER D. AGENCY MONITORING ACTIVITIES TWC adopts the following amendments to Subchapter D: Agency Monitoring Reports and Resolution Amended (a) stipulates that following monitoring activities, the TWC's monitoring department will issue a single monitoring report that summarizes the results of those activities. If no administrative findings or questioned costs are noted as a result of the audit, the monitoring report will be a management letter. The amendment clarifies that only Boards, AEL grant recipients, and TWC grantees or contractors will be issued the monitoring report. With regard to Boards, the monitoring report will be provided to the Board's chair and executive director. The monitoring report will also be provided to the designated representatives of the federal oversight agencies responsible for the programs reviewed by the TWC's monitoring staff to ensure compliance with any and all federal reporting requirements. The monitoring report will also be provided to the three-member Commission and TWC executive staff. Amended (b) designates the initial resolution contact as the initial resolution notification. The amendment clarifies that only Boards, AEL grant recipients, and TWC grantees or contractors will be issued the notification. The amendment also stipulates that the recipient of the notification has 45 calendar days from the date the notification was mailed in which to respond. Amended (b)(1)(B) clarifies that the TWC's audit resolution department will continue to coordinate with the monitored entity in the event that findings are not resolved and remain open until the following year s audit. New (b)(3)(A) clarifies that the TWC may impose corrective actions under Chapter 802, Subchapter G, at any time during the resolution process. It is the intent of this amendment to stipulate that the TWC is not precluded from imposing corrective action allowed under Subchapter G, regardless of the status of TWC monitoring and resolution activities or reports thereto. Amended (c) clarifies that only Boards, AEL grant recipients, and TWC grantees or contractors will be issued an initial determination. Finally, amended (d) clarifies that only Boards, AEL grant recipients, and TWC grantees or contractors will be issued a final determination. COMMENT: One commenter, a Board, did not concur with removing the draft report before issuing a final report. The commenter did not consider the draft report to be the de facto report. The commenter expressed concern that the lack of a draft report would cause unnecessary concern by reviewers who consider the report as final. The commenter felt that removing the draft report also removed the opportunity to review and comment on the findings prior to the final report being sent. Finally, the commenter felt that the draft report also serves as a record of agreement that all individuals involved understand the issues prior to the final report being produced. RESPONSE: The Commission reiterates its conclusion that under the current process, the back-and-forth review between SRM and the auditee prior to report issuance is, in fact, audit resolution, and has the effect of delaying the final report. The Commission respectfully disagrees that the draft report serves as a "record of agreement" among the parties, regarding issues identified during the monitoring review. The draft report serves as notice of findings, to which the auditee responds with concurrence or non-concurrence, and generally includes actions undertaken by the auditee. Those actions constitute the audit resolution. Under the new rules, the auditee will still retain the ability to dispute findings with which it does not agree, and through the audit resolution process, those findings may be removed and an audit resolution closure letter issued. Finally, the process outlined by the amended rules mirrors the one used by DOL, to which the commenter would be subject if the Board were selected for an audit by DOL. COMMENTS WERE RECEIVED FROM: Brazos Valley Workforce Development Board The amendments are adopted under Texas Labor Code , which provides TWC with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of TWC services and activities. The adopted rules affect Texas Labor Code, Title 4. 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 September 21, TRD Patricia Gonzalez Deputy Director, Workforce Development Division Programs Texas Workforce Commission Effective date: October 11, 2017 Proposal publication date: August 4, 2017 For further information, please call: (512) ADOPTED RULES October 6, TexReg 5525

244

245 Proposed Rule Reviews Texas Education Agency Title 19, Part 2 The State Board of Education (SBOE) proposes the review of 19 TAC Chapter 74, Curriculum Requirements, pursuant to the Texas Government Code, The rules being reviewed by the SBOE in 19 TAC Chapter 74 are organized under the following subchapters: Subchapter A, Required Curriculum; Subchapter B, Graduation Requirements; Subchapter C, Other Provisions; Subchapter D, Graduation Requirements, Beginning with School Year ; Subchapter E, Graduation Requirements, Beginning with School Year ; Subchapter F, Graduation Requirements, Beginning with School Year ; and Subchapter G, Graduation Requirements, Beginning with School Year As required by the Texas Government Code, , the SBOE will accept comments as to whether the reasons for adopting 19 TAC Chapter 74, Subchapters A-G, continue to exist. The comment period begins with the publication of this notice and must last a minimum of 30 days. Comments or questions regarding this rule review 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 rules@tea.texas.gov. TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Filed: September 25, 2017 The Texas Education Agency (TEA) proposes the review of 19 TAC Chapter 74, Curriculum Requirements, pursuant to the Texas Government Code, The rules being reviewed by the TEA in 19 TAC Chapter 74 are organized under the following subchapters: Subchapter AA, Commissioner's Rules on College Readiness; and Subchapter BB, Commissioner's Rules Concerning High School Graduation. As required by the Texas Government Code, , the TEA will accept comments as to whether the reasons for adopting 19 TAC Chapter 74, Subchapters AA and BB, continue to exist. The public comment period on the review of 19 TAC Chapter 74, Subchapters AA and BB, begins October 6, 2017, and ends November 6, Comments or questions regarding this rule review 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 rules@tea.texas.gov. TRD Cristina De La Fuente-Valadez Director, Rulemaking Texas Education Agency Filed: September 25, 2017 RULE REVIEW October 6, TexReg 5527

246

247 TABLES AND GRAPHICS October 6, TexReg 5529

248 42 TexReg 5530 October 6, 2017 Texas Register

249 TABLES AND GRAPHICS October 6, TexReg 5531

250 42 TexReg 5532 October 6, 2017 Texas Register

251 TABLES AND GRAPHICS October 6, TexReg 5533

252 42 TexReg 5534 October 6, 2017 Texas Register

253 TABLES AND GRAPHICS October 6, TexReg 5535

254 42 TexReg 5536 October 6, 2017 Texas Register

255 TABLES AND GRAPHICS October 6, TexReg 5537

256 42 TexReg 5538 October 6, 2017 Texas Register

257 TABLES AND GRAPHICS October 6, TexReg 5539

258 42 TexReg 5540 October 6, 2017 Texas Register

259 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 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: Harris County, Texas, and the State of Texas v. Meng L. Hsieh, Cause No A, 133rd Judicial District Court, Harris County, Texas. Nature of the case: Defendant Meng L. Hsieh ("Hsieh") owned a tract of land located at Mesa Drive, Houston, Harris County, Texas (the "Site"), which he leased to a wood processing and mulching operation that did not have authorization to store, process, or dispose of municipal solid waste. Subsequent to the lawsuit, Hsieh evicted the wood processing and mulching operation from the Site and entered into an indemnity agreement with the buyers, who agreed to undertake environmental clean-up at the Site. Proposed Agreed Judgment: The Agreed Final Judgment orders civil penalties of $20,000 against Hsieh, to be equally divided between Harris County and the State. Furthermore, Hsieh will pay Harris County and the Sate $1,500 each in attorney's fees. For a complete description of the proposed settlement, the proposed Agreed Final Judgment should be reviewed in its entirety. Requests for copies of the judgment, and written comments on the proposed settlement, should be directed to Erin Snody, Assistant Attorney General, Office of the Attorney General, P.O. Box 12548, MC 066, Austin, Texas ; phone (512) , facsimile (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: September 25, 2017 Texas Water 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. 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 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. Case Title and Court: State of Texas v. Maaz M. Moonis, Cause No. D-1-GN , 126th Judicial District Court, Travis County, Texas. Nature of the case: Defendant Maaz M. Moonis ("Moonis") owns and operates a convenience store with retail sales of gasoline located at 2400 North Washington Avenue in Livingston, Polk County, Texas (the "Site"). The Site has been the subject of an administrative order issued by the Texas Commission on Environmental Quality ("TCEQ") for improper maintenance and operation of underground petroleum storage tanks ("USTs") located beneath its surface. The State filed suit to enforce the order and State laws regulating USTs. Proposed Agreed Judgment: The Agreed Final Judgment and Permanent Injunction orders Moonis to either take the existing UST temporarily out of service or permanently remove it from service, in accordance with State laws and TCEQ rules. It assesses against Moonis $25,000 in civil penalties, $7,500 of which may be deferred upon timely compliance with the injunction; and $3,500 in attorney's fees. For a complete description of the proposed settlement, the proposed Agreed Final Judgment and Permanent Injunction should be reviewed in its entirety. Requests for copies of the judgment, and written comments on the proposed settlement, should be directed to Ekaterina DeAngelo, Assistant Attorney General, Office of the Attorney General, P.O. Box 12548, MC 066, Austin, Texas ; phone (512) , facsimile (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: September 26, 2017 Comptroller of Public Accounts Certification of the Average Closing Price of Gas and Oil - August 2017 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 August 2017 is $36.04 per barrel for the three-month period beginning on May 1, 2017, and ending July 31, Therefore, pursuant to Tax Code, , oil produced during the month of August 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 August 2017 is $2.20 per mcf for the three-month period beginning on May 1, 2017, and ending July 31, Therefore, pursuant to Tax Code, , gas produced during the month of Au- IN ADDITION October 6, TexReg 5541

260 gust 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 August 2017 is $48.06 per barrel. Therefore, pursuant to Tax Code, (r), a taxable entity shall not exclude total revenue received from oil produced during the month of August 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 August 2017 is $2.91 per MMBtu. Therefore, pursuant to Tax Code, (r), a taxable entity shall exclude total revenue received from gas produced during the month of August 2017, from a qualified lowproducing gas well. Inquiries should be submitted to Teresa G. Bostick, Director, Tax Policy Division, P.O. Box 13528, Austin, Texas TRD Lita Gonzalez General Counsel Comptroller of Public Accounts Filed: September 21, 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. The weekly ceiling as prescribed by and for the period of 10/02/17-10/08/17 is 18% for Consumer 1 /Agricultural/Commercial 2 credit through $250,000. The weekly ceiling as prescribed by and for the period of 10/02/17-10/08/17 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 Pettijohn Commissioner Office of Consumer Credit Commissioner Filed: September 26, 2017 Texas Commission on Environmental Quality Agreed Orders The Texas Commission on Environmental Quality (TCEQ 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 November 6, 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 November 6, 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: Barbara M. Whorton dba Whorton Mobile Home Park; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Lubbock, Lubbock County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC , , and (a) and (c), by failing to meet the adequacy requirements of the Consumer Confidence Report (CCR) distributed to the customers of the facility for calendar year 2014; 30 TAC (c)(2)(A) and (f), by failing to provide public notification and submit a copy of the public notification to the executive director (ED) regarding the failure to submit a Disinfectant Level Quarterly Operating Report to the ED for the first and second quarters of 2013 and regarding the failure to collect lead and copper tap samples for the January 1, December 31, 2014, and January 1, December 31, 2015, monitoring periods; 30 TAC (i)(6) and (j), by failing to provide a consumer notification of lead tap water monitoring results to persons served at the sites that were tested, and failing to mail a copy of the consumer notification of tap results to the ED along with certification that the consumer notification has been distributed for the January 1, December 31, 2016, monitoring period; 30 TAC (b) and (a) and (c), by failing to mail or directly deliver one copy of the CCR to each bill paying customer by July 1st for each year, and failing to submit to the TCEQ a copy of the annual CCR and certification that the CCR has been distributed to the customers of the facility and that the information in the CCR is correct and consistent with compliance monitoring data for calendar year 2015; and 30 TAC (b)(3)(A) and (f), by failing to provide public notification and submit a copy of the public notification to the ED regarding the failure to comply with the maximum contaminant levels for arsenic and fluoride for the fourth quarter of 2016; PENALTY: $510; ENFORCEMENT COORDINATOR: Ross Luedtke, (512) ; REGIONAL OFFICE: th Street, Suite 100, Lubbock, Texas , (806) (2) COMPANY: CELL-KAY, INCORPORATED dba Korner Market 2; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Brownsville, Cameron County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 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 (b)(1)(A) and (2), and (d)(1)(b)(ii) and TWC, (b) and (c)(1), by failing 42 TexReg 5542 October 6, 2017 Texas Register

261 to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month, failing to conduct reconciliation of detailed inventory control records at least once each month, in a manner sufficiently accurate to detect a release as small as the sum of 1.0 % of the total substance flow-through for the month plus 130 gallons, and failing to provide release detection for the suction piping associated with the UST system; 30 TAC (i) and TWC, (c)(2), by failing to inspect all sumps, manways, overspill containers, or catchment basins associated with a UST system at least once every 60 days to assure that their sides, bottoms, and any penetration points are maintained liquid tight; and 30 TAC (a), by failing to designate, train, and certify at least one individual for each class of operator - Class A, Class B, and Class C for the facility; PENALTY: $6,853; ENFORCEMENT COORDINATOR: Jonathan Nguyen, (512) ; REGIONAL OFFICE: 1804 West Jefferson Avenue, Harlingen, Texas , (956) (3) COMPANY: City of Blue Ridge; DOCKET NUMBER: MWD-E; IDENTIFIER: RN ; LOCATION: Blue Ridge, Collin County; TYPE OF FACILITY: wastewater treatment plant; RULES VIOLATED: TWC, (a)(1), 30 TAC (1), and Texas Pollutant Discharge Elimination System (TPDES) Permit Number WQ , Effluent Limitations and Monitoring Requirements Number 1, by failing to comply with permitted effluent; 30 TAC (1) and (17) and and TPDES Permit Number WQ , Monitoring and Reporting Requirements Number 1, by failing to timely submit effluent monitoring results at the intervals specified in the permit; 30 TAC (1) and (17) and TPDES Permit Number WQ , Sludge Provisions, by failing to submit the annual sludge report for the monitoring period ending July 31, 2015, by September 30, 2015; and 30 TAC (1), 319.4, and 319.5(b) and TPDES Permit Number WQ , Monitoring and Reporting Requirements Numbers 1 and 3.a, by failing to analyze effluent samples at the intervals specified in the permit; PENALTY: $10,375; Supplemental Environmental Project offset amount of $8,300; ENFORCEMENT COORDINATOR: Claudia Corrales, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (4) COMPANY: Duval County Conservation and Reclamation District; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Realitos, Duval County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (e)(4)(A) and (f)(3), by failing to submit a Disinfectant Level Quarterly Operating Report (DLQOR) to the executive director (ED) each quarter by the tenth day of the month following the end of each quarter for the second and third quarters of 2016; 30 TAC (c)(2)(A), (h), and (i)(1), by failing to collect lead and copper tap samples at the required ten sample sites, have the samples analyzed, and report the results to the ED for the January 1, June 30, 2016, monitoring period; 30 TAC (c)(2)(B) and (C), (h), and (i)(1) and (c)(2)(A) and (f), by failing to collect lead and copper tap samples at the required five sample sites, have the samples analyzed, and report the results to the ED for the January 1, December 31, 2014, and January 1, December 31, 2015, monitoring periods, and failing to provide public notification and submit a copy of the public notification to the ED regarding the failure to collect lead and copper tap samples for the January 1, December 31, 2014, and January 1, December 31, 2015, monitoring periods; and 30 TAC (c)(2)(A) and (f), by failing to provide public notification and submit a copy of the public notification to the ED regarding the failure to submit a DLQOR for the second and fourth quarters of 2015; PENALTY: $845; ENFORCEMENT COORDINATOR: Sarah Kim, (512) ; REGIONAL OFFICE: 707 East Calton Road, Suite 304, Laredo, Texas , (956) (5) COMPANY: Enterprise Products Operating LLC; DOCKET NUMBER: IWD-E; IDENTIFIER: RN ; LO- CATION: Houston, Harris County; TYPE OF FACILITY: wastewater treatment facility; RULES VIOLATED: 30 TAC (1), TWC, (a)(1), and Texas Pollutant Discharge Elimination System Permit Number WQ , Effluent Limitations and Monitoring Requirements Number 1, by failing to comply with permitted effluent limitations; PENALTY: $1,300; ENFORCEMENT COORDINATOR: Melissa Castro, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (6) COMPANY: Fly By Night Cattle Company Private Club, Incorporated; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LOCATION: Cleburne, Johnson County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (c)(3)(A) and TCEQ Agreed Order Docket Number PWS-E, Ordering Provision Number 2.c, by failing to obtain approval by the executive director prior to placing a water well into service as a public water supply; PENALTY: $72; ENFORCEMENT COORDINATOR: Ross Luedtke, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (7) COMPANY: GONZALES COUNTY WATER SUPPLY CORPO- RATION; DOCKET NUMBER: MLM-E; IDENTIFIER: RN ; LOCATION: Gonzales, Gonzales County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (b) and TWC, (a)(1), by failing to obtain authorization to discharge municipal waste; 30 TAC (f)(1)(E)(ii), by failing to provide adequate containment facilities for all liquid chemical storage tanks; 30 TAC (j)(1)(A) and Texas Health and Safety Code, , by failing to notify the executive director (ED) prior to making any significant change or addition where the change in the existing distribution system results in an increase or decrease in production, treatment, storage, and/or pressure maintenance capacity; 30 TAC (m), by failing to initiate maintenance and housekeeping practices to ensure the good working condition and general appearance of the system's facilities and equipment; 30 TAC (m) and (e), by failing to provide an intruder-resistant fence around all water treatment plants and appurtenances thereof, potable water storage tanks, and pressure maintenance facilities that remains locked during periods of darkness and when the facility is unattended; 30 TAC (m)(4), by failing to maintain all distribution system lines, storage and pressure maintenance facilities, water treatment units and all related appurtenances in a watertight condition; 30 TAC (e)(1)(G), by failing to notify the ED prior to construction of a new surface water intake; 30 TAC (e)(3)(G), by failing to obtain an exception, in accordance with 30 TAC (l), prior to using blended water containing chloramines and water containing free chlorine; 30 TAC (l)(4) and (5), by failing to meet the conditions for an issued exception; 30 TAC (f)(1)(C), by failing to provide all chemical bulk storage facilities and day tanks with a label that identifies the facility's or tank's contents; 30 TAC (h)(1)(A), by failing to install backflow prevention assemblies or an air gap at all residences or establishments where an actual or potential contamination hazard exists, as identified in 30 TAC (f); 30 TAC (f)(4)(B), by failing to test gauges used in the testing of backflow prevention assemblies for accuracy annually; 30 TAC (t), by failing to post a legible sign at the facility's production, treatment, and storage facilities that contains the name of the facility and emergency phone numbers where a responsible official can be contacted; 30 TAC (z), by failing to create a nitrification action plan for a system distributing chloraminated water; IN ADDITION October 6, TexReg 5543

262 30 TAC (s)(1), by failing to calibrate the facility's two treated water meters at the surface water treatment plant at least once every 12 months; 30 TAC (f)(2), (3)(B)(iv) and (viii), and (C)(iv), by failing to properly maintain water works operation and maintenance records and make them available for review to the ED during the investigation; 30 TAC (c)(5), by failing to conduct chloramine effectiveness sampling to ensure that monochloramine is the prevailing chloramine species and that nitrification is controlled; 30 TAC (d)(2)(B), by failing to conduct chloramine effectiveness sampling to ensure that monochloramine is the prevailing chloramine species and that nitrification is controlled; 30 TAC (d)(2)(B), by failing to ensure that the disinfection contact time used by the facility is based on tracer study data or a theoretical analysis approved by the ED and the actual flow rate that is occurring at the time that monitoring occurs; 30 TAC (h), by failing to properly complete the Surface Water Monthly Operating Reports submitted to the commission; 30 TAC (a) and (b), by failing to maintain a complete and up-to-date chemical and microbiological monitoring plan that identifies all sampling locations, describes the sampling frequency, and specifies the analytical procedures and laboratories that the facility will use to comply with the monitoring requirements; and 30 TAC (c)(4), by failing to provide all water storage tanks with an appropriate liquid level indicator located at the tan site for the Pilgrim standpipe; PENALTY: $8,055; ENFORCEMENT COORDI- NATOR: Katy Montgomery, (210) ; REGIONAL OFFICE: 6300 Ocean Drive, Suite 1200, Corpus Christi, Texas , (361) (8) COMPANY: Gulmohar Enterprises Incorporated dba Honey Grove Gas and Grocery; DOCKET NUMBER: PST-E; IDEN- TIFIER: RN ; LOCATION: Honey Grove, Fannin County; TYPE OF FACILITY: convenience store with retail sales of gasoline; RULES VIOLATED: 30 TAC (b)(1)(A) and (2) and TWC, (a) and (c)(1), by failing to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month, and failing to provide release detection for the pressurized piping associated with the UST system; PENALTY: $3,129; ENFORCE- MENT COORDINATOR: Ken Moller, (512) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (9) COMPANY: HB Estates Water Supply Corporation; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Hitchcock, Galveston 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 , , and (c), by failing to meet the adequacy requirements of the Consumer Confidence Report distributed to the customers of the facility for calendar year 2015; PENALTY: $225; ENFORCEMENT COORDINATOR: Melissa Castro, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (10) COMPANY: INSTITUTE IN BASIC LIFE PRINCIPLES, IN- CORPORATED and International A.L.E.R.T. Academy; DOCKET NUMBER: MWD-E; IDENTIFIER: RN ; LO- CATION: Big Sandy, Upshur County; TYPE OF FACILITY: wastewater treatment facility; RULES VIOLATED: TWC, (a)(1) and TCEQ Permit Number WQ , Permit Conditions Number 2.g, by failing to prevent the discharge of wastewater into or adjacent to water of the state; and 30 TAC 317.7(e), by failing to ensure the facility is completely fenced and has lockable gates at all access points; PENALTY: $14,238; ENFORCEMENT COORDINATOR: Melissa Castro, (512) ; REGIONAL OFFICE: 2916 Teague Drive, Tyler, Texas , (903) (11) COMPANY: Legacy Reserves Operating LP; DOCKET NUM- BER: AIR-E; IDENTIFIER: RN ; LOCATION: Dew, Freestone County; TYPE OF FACILITY: natural gas compressor station; RULES VIOLATED: 30 TAC (4) and (2), Texas Health and Safety Code, (b), and Federal Operating Permit Number O2455/General Operating Permit Number 514, Sitewide Requirements Number (b)(3), by failing to submit a Permit Compliance Certification no later than 30 days after the end of the certification period; PENALTY: $2,813; ENFORCEMENT COORDINATOR: Jo Hunsberger, (512) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (12) COMPANY: Legacy Reserves Operating LP; DOCKET NUM- BER: AIR-E; IDENTIFIER: RN ; LOCATION: Dew, Freestone County; TYPE OF FACILITY: natural gas compressor station; RULES VIOLATED: 30 TAC (4) and (2), Texas Health and Safety Code, (b), and Federal Operating Permit Number O2454/General Operating Permit Number 514, Sitewide Requirements Number (b)(3), by failing to submit a Permit Compliance Certification no later than 30 days after the end of the certification period; PENALTY: $4,500; ENFORCEMENT COORDINATOR: Jo Hunsberger, (512) ; REGIONAL OFFICE: 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (13) COMPANY: Monahans-Wickett-Pyote Independent School District; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Monahans, Ward County; TYPE OF FACILITY: fleet refueling facility; RULES VIOLATED: 30 TAC (b)(1)(A) and (2) and TWC, (a) and (c)(1), by failing to monitor the underground storage tanks (USTs) for releases at a frequency of at least once every month, and failing to provide release detection for the pressurized piping associated with the UST system; PENALTY: $3,504; ENFORCEMENT COORDINATOR: Melissa Castro, (512) ; REGIONAL OFFICE: 9900 West IH-20, Suite 100, Midland, Texas 79706, (432) (14) COMPANY: OIL PURIFICATION SPECIALISTS, IN- CORPORATED dba OPS Fuel Service; DOCKET NUMBER: PST-E; IDENTIFIER: RN ; LOCATION: Conroe, Montgomery County; TYPE OF FACILITY: common carrier; RULES VIOLATED: 30 TAC 334.5(b)(1)(A) and TWC, (d), by failing to deposit a regulated substance into a regulated underground storage tank system that was not covered by a valid, current TCEQ delivery certificate; PENALTY: $1,233; ENFORCE- MENT COORDINATOR: Keith Frank, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) (15) COMPANY: PVR Real Estate Holdings, Limited; DOCKET NUMBER: PWS-E; IDENTIFIER: RN ; LO- CATION: Roanoke, Tarrant County; TYPE OF FACILITY: public water supply; RULES VIOLATED: 30 TAC (b)(1) and (e)(2), by failing to provide disinfection facilities for the groundwater supply for the purpose of microbiological control and distribution protection; 30 TAC (e)(1) and (h)(1) and Texas Health and Safety Code, (a), by failing to submit plans and specifications to the executive director (ED) for review and approval prior to the construction of a new public water system; 30 TAC (c)(3)(A), by failing to submit well completion data for review and approval prior to placing a public drinking water well into service; 30 TAC (d)(1), by failing to give all water secured from a surface source complete treatment at a plant which provides facilities for pretreatment disinfection, taste and odor control, continuous coagulation, sedimentation, filtration, covered clearwell storage, and terminal disinfection of the water with 42 TexReg 5544 October 6, 2017 Texas Register

263 chlorine or suitable chlorine compound; and 30 TAC (e), by failing to operate the production, treatment, and distribution facilities at the public water system at all times under the direct supervision of a water works operator who holds an applicable, valid license issued by the ED; PENALTY: $1,647; ENFORCEMENT COORDINATOR: Yuliya Dunaway, (210) ; REGIONAL OFFICE: 2309 Gravel Drive, Fort Worth, Texas , (817) (16) COMPANY: SilverBow Resources Operating, LLC; DOCKET NUMBER: AIR-E; IDENTIFIER: RN ; LOCA- TION: Tilden, McMullen County; TYPE OF FACILITY: tank battery; RULES VIOLATED: 30 TAC (4) and (2), Texas Health and Safety Code (THSC), (b), and General Operating Permit (GOP) Number O514/Federal Operating Permit (FOP) Number O3790, Site-wide Requirements (b)(3), by failing to submit a Permit Compliance Certification no later than 30 days after the end of the certification period; and 30 TAC (4) and (2)(C), THSC, (b), and GOP Number O514/FOP Number O3790, Site-wide Requirements (b)(2), by failing to submit a deviation report no later than 30 days after the end of the reporting period; PENALTY: $7,276; ENFORCEMENT COORDINATOR: Jo Hunsberger, (512) ; REGIONAL OFFICE: 707 East Calton Road, Suite 304, Laredo, Texas , (956) (17) COMPANY: Texas Sterling Construction Company; DOCKET NUMBER: WQ-E; IDENTIFIER: RN ; LO- CATION: Houston, Harris County; TYPE OF FACILITY: concrete batch plant; RULES VIOLATED: 30 TAC (a)(4) and 40 Code of Federal Regulations (c), by failing to obtain authorization under Texas Pollutant Discharge Elimination System General Permit Number TXR to discharge stormwater associated with industrial activities; PENALTY: $4,605; ENFORCEMENT CO- ORDINATOR: Farhaud Abbaszadeh, (512) ; REGIONAL OFFICE: 5425 Polk Street, Suite H, Houston, Texas , (713) TRD Gitanijali Yadav Acting Director, Litigation Division Texas Commission on Environmental Quality Filed: September 26, 2017 Enforcement Orders An agreed order was adopted regarding City of Kilgore, Docket No MWD-E on September 26, 2017, assessing $6,188 in administrative penalties with $1,237 deferred. Information concerning any aspect of this order may be obtained by contacting Cheryl Thompson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding BASF Corporation, Docket No AIR-E on September 26, 2017, assessing $7,387 in administrative penalties with $1,477 deferred. Information concerning any aspect of this order may be obtained by contacting Raime Hayes- Falero, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Texas Department of Transportation, Docket No PST-E on September 26, 2017, assessing $4,313 in administrative penalties with $862 deferred. Information concerning any aspect of this order may be obtained by contacting Steven Stump, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Redwater, Docket No MWD-E on September 26, 2017, assessing $5,822 in administrative penalties with $1,164 deferred. Information concerning any aspect of this order may be obtained by contacting Caleb Olson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Samuel Zuniga Corona, Docket No MSW-E on September 26, 2017, assessing $3,750 in administrative penalties. Information concerning any aspect of this order may be obtained by contacting Eric Grady, Staff Attorney at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Juana Roman, Docket No WQ-E on September 26, 2017, assessing $2,813 in administrative penalties with $562 deferred. Information concerning any aspect of this order may be obtained by contacting Caleb Olson, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding James A. Bray dba Texas Pride Trailers, Docket No AIR-E on September 26, 2017, assessing $1,125 in administrative penalties with $225 deferred. 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 An agreed order was adopted regarding University of Texas Medical Branch at Galveston, Docket No AIR-E on September 26, 2017, assessing $3,000 in administrative penalties with $600 deferred. Information concerning any aspect of this order may be obtained by contacting Abigail Lindsey, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas. An agreed order was adopted regarding Burleson Trucking I, LP dba Burleson Tree Service, Docket No MSW-E on September 26, 2017, assessing $3,893 in administrative penalties with $778 deferred. Information concerning any aspect of this order may be obtained by contacting Jim Baldwin, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Jong Chul Lim dba Kountry Korner, Docket No PST-E on September 26, 2017, assessing $3,375 in administrative penalties with $675 deferred. Information concerning any aspect of this order may be obtained by contacting Jason Fraley, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding SONA STORES, INC. dba Sunshine Grocery, Docket No PST-E on September 26, 2017, assessing $7,188 in administrative penalties with $1,437 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 An agreed order was adopted regarding MONTGOMERY PLACE WATER SYSTEM, INC., Docket No PWS-E on September 26, 2017, assessing $165 in administrative penalties with $33 deferred. 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 IN ADDITION October 6, TexReg 5545

264 An agreed order was adopted regarding Juan Sanchez and Maribel Ortiz, Docket No MSW-E on September 26, 2017, assessing $1,337 in administrative penalties with $267 deferred. Information concerning any aspect of this order may be obtained by contacting Margarita Dennis, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding NIROJ CORPORATION dba Cigarette Mart, Docket No PST-E on September 26, 2017, assessing $3,504 in administrative penalties with $700 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 An agreed order was adopted regarding Sneha Enterprises, Inc. dba Circle S Food Stop 1, Docket No PST-E on September 26, 2017, assessing $3,750 in administrative penalties with $750 deferred. Information concerning any aspect of this order may be obtained by contacting Stephanie McCurley, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding UVM INVESTMENT INC dba Conoco Express, Docket No PST-E on September 26, 2017, assessing $4,688 in administrative penalties with $937 deferred. Information concerning any aspect of this order may be obtained by contacting Danielle Porras, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Shady Grove Management Group, Inc dba Gopher Mart, Docket No PST-E on September 26, 2017, assessing $6,000 in administrative penalties with $1,200 deferred. Information concerning any aspect of this order may be obtained by contacting Danielle Porras, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding CtgTx Inc. dba Valley Ranch Shell, Docket No PST-E on September 26, 2017, assessing $3,375 in administrative penalties with $675 deferred. Information concerning any aspect of this order may be obtained by contacting Epifanio Villarreal, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Roger R. Groce dba Rockin G Oil, Docket No PST-E on September 26, 2017, assessing $5,625 in administrative penalties with $1,125 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 MAHEEN ENTERPRISES, INC dba Sheldon King Savers, Docket No PST-E on September 26, 2017, assessing $7,034 in administrative penalties with $1,406 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 Dwain Self, Docket No WQ-E on September 26, 2017, assessing $1,025 in administrative penalties with $205 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 An agreed order was adopted regarding INEOS Styrolution America LLC, Docket No AIR-E on September 26, 2017, assessing $3,338 in administrative penalties with $667 deferred. Information concerning any aspect of this order may be obtained by contacting Jo Hunsberger, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding BARNHART WATER SUP- PLY CORPORATION, Docket No PWS-E on September 26, 2017, assessing $301 in administrative penalties with $60 deferred. 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 An agreed order was adopted regarding Diamond Shamrock Refining Company, L.P., Docket No AIR-E on September 26, 2017, assessing $4,650 in administrative penalties with $930 deferred. Information concerning any aspect of this order may be obtained by contacting David Carney, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Freeway Investment, Inc dba Daily Stop, Docket No PST-E on September 26, 2017, assessing $2,566 in administrative penalties with $513 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 An agreed order was adopted regarding TXI Operations, L.P., Docket No WQ-E on September 26, 2017, assessing $2,875 in administrative penalties with $575 deferred. Information concerning any aspect of this order may be obtained by contacting James Boyle, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Violet Water Supply Corporation, Docket No PWS-E on September 26, 2017, assessing $321 in administrative penalties with $64 deferred. Information concerning any aspect of this order may be obtained by contacting Jason Fraley, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Intercontinental Terminals Company LLC, Docket No AIR-E on September 26, 2017, assessing $3,983 in administrative penalties with $796 deferred. Information concerning any aspect of this order may be obtained by contacting Raime Hayes-Falero, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding City of Gatesville, Docket No MWD-E on September 26, 2017, assessing $2,550 in administrative penalties with $510 deferred. Information concerning any aspect of this order may be obtained by contacting Ariel Ramirez, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Ridgewood Custom Homes, LLC, Docket No WQ-E on September 26, 2017, assessing $1,125 in administrative penalties with $225 deferred. Information concerning any aspect of this order may be obtained by contact- 42 TexReg 5546 October 6, 2017 Texas Register

265 ing Ariel Ramirez, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding AADIT PETROTECH LLC dba Alligator Express, Docket No PST-E on September 26, 2017, assessing $6,813 in administrative penalties with $1,362 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 An agreed order was adopted regarding Jefferson Railport Terminal I (Texas) LLC, Docket No IWD-E on September 26, 2017, assessing $2,875 in administrative penalties with $575 deferred. Information concerning any aspect of this order may be obtained by contacting Steven Van Landingham, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Mazin Foteh, Docket No EAQ-E on September 26, 2017, assessing $3,375 in administrative penalties with $675 deferred. Information concerning any aspect of this order may be obtained by contacting Sandra Douglas, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas An agreed order was adopted regarding Trinidad Medina, Jr. dba Medina Pride RV, Docket No PWS-E on September 26, 2017, assessing $420 in administrative penalties with $84 deferred. 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 field citation was adopted regarding David P. Everett Sr., Docket No WOC-E on September 26, 2017, assessing $175 in administrative penalties. Information concerning any aspect of this citation may be obtained by contacting Abigail Lindsey, Enforcement Coordinator at (512) , Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas A field citation was adopted regarding Amos Blake Benson, Docket No WOC-E on September 26, 2017, assessing $175 in administrative penalties. Information concerning any aspect of this citation may be obtained by contacting Abigail Lindsey, 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: September 27, 2017 Notice of Application and Preliminary Decision for an Air Quality Permit Proposed Permit Number: 74746L004 APPLICATION AND PRELIMINARY DECISION. Anderson Columbia Co., Inc., P.O. Box 1829, Lake City, Florida , has applied to the Texas Commission on Environmental Quality (TCEQ) for issuance of Air Quality Permit Number 74746L004, which would authorize a change of location of a Rock Crusher. The applicant has provided the following directions to the site: at the intersection of Coyote Run and Old Nacogdoches, go north on Coyote Run 0.4 miles and the plant will be located on the east side of the road, Schertz, Comal County, Texas This application was processed in an expedited manner, as allowed by the commission's rules in 30 Texas Administrative Code, Chapter 101, Subchapter J. This application was submitted to the TCEQ on April 24, The facility will emit the following contaminants: carbon monoxide, nitrogen oxides, organic compounds, particulate matter including particulate matter with diameters of 10 microns or less and 2.5 microns or less and sulfur dioxide. The executive director has completed the technical review of the application and 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 to issue the permit because it meets all rules and regulations. The permit application, executive director's preliminary decision, and draft permit will be available for viewing and copying at the TCEQ central office, the TCEQ San Antonio regional office, and the New Braunfels Public Library, 700 East Common Street, New Braunfels, Comal County, Texas, beginning the first day of publication of this notice. The facility's compliance file, if any exists, is available for public review at the TCEQ San Antonio Regional Office, Judson Rd., San Antonio, Texas. PUBLIC COMMENT/PUBLIC MEETING. The TCEQ will hold a public meeting for this application. You may submit public comments on this application or request a contested case hearing to the TCEQ Office of the Chief Clerk at the address below. The purpose of a public meeting is to provide the opportunity to submit comments or to ask questions about the application. Please be advised that this public meeting will concurrently provide an opportunity to submit comments or to ask questions about the application for issuance of Air Quality Permit Number L001, which would authorize construction of a Rock Crushing Plant at the same site. A public meeting is not a contested case hearing. The TCEQ will consider all public comments in developing a final decision on the application. The public meeting 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. However, informal comments made during the Informal Discussion Period will not be considered by the TCEQ Commissioners 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 formal comments into the official record. A written response to all formal comments will be prepared by the Executive Director and considered by the Commissioners before they reach a decision on the permit. The Public Meeting is to be held: Tuesday, October 17, 2017, at 7:00 p.m. Courtyard New Braunfels River Village (Guadalupe/Comal Room) 750 IH 35 North New Braunfels, Texas After the deadline for public comments, the executive director will consider the comments and prepare a response to all relevant and material or significant public comments. The response to comments, along with the executive director's decision on the application will be mailed to everyone who submitted formal public comments or who requested to be on the mailing list for this application and provides a mailing address. You may submit additional written public comments within 30 days of the date of newspaper publication of this notice in the manner set forth in the AGENCY CONTACTS AND INFORMATION paragraph below. Only relevant and material issues raised during the formal comment period can be considered if a contested case hearing is granted. IN ADDITION October 6, TexReg 5547

266 OPPORTUNITY FOR A CONTESTED CASE HEARING. A contested case hearing is a legal proceeding similar to a civil trial in a state district court. A person who may be affected by emissions of air contaminants from the facility is entitled to request a hearing. A contested case hearing request must include the following: (1) your name (or for a group or association, an official representative), mailing address, daytime phone number; (2) applicant's name and permit number; (3) the statement "I/we request a contested case hearing;" (4) a specific description of how you would be adversely affected by the application and air emissions from the facility in a way not common to the general public; (5) the location and distance of your property relative to the facility; (6) a description of how you use the property which may be impacted by the facility; and (7) a list of all disputed issues of fact that you submit during the comment period. If the request is made by a group or association, one or more members who have standing to request a hearing must be identified by name and physical address. The interests the group or association seeks to protect must also be identified. You may also submit your proposed adjustments to the application/permit which would satisfy your concerns. Requests for a contested case hearing must be submitted in writing within 30 days following this notice to the Office of the Chief Clerk, at the address provided in the information section below. A contested case hearing will only be granted based on disputed issues of fact or mixed questions of fact and law that are relevant and material to the Commission's decisions on the application. The Commission may only grant a request for a contested case hearing on issues the requestor submitted in their timely comments that were not subsequently withdrawn. Issues that are not submitted in public comments may not be considered during a hearing. EXECUTIVE DIRECTOR ACTION. A timely hearing request has been received by the TCEQ. However, if all timely contested case hearing requests have been withdrawn and no additional comments are received, the executive director may issue final approval of the application. The response to comments, along with the executive director's decision on the application will be mailed to everyone who submitted public comments or is on a mailing list for this application, and will be posted electronically to the Commissioners' Integrated Database (CID). If all timely hearing requests are not withdrawn, the executive director will not issue final approval of the permit and will forward the application and requests to the Commissioners for their consideration at a scheduled commission meeting. INFORMATION AVAILABLE ONLINE. When they become available, the executive director's response to comments and the final decision on this application will be accessible through the Commission's website at Once you have access to the CID using the above link, enter the permit number for this application which is provided at the top of this notice. 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. MAILING LIST. You may ask to be placed on a mailing list to obtain additional information on this application by sending a request to the Office of the Chief Clerk at the address below. AGENCY CONTACTS AND INFORMATION. Public comments and requests must be submitted either electronically at or in writing to the Texas Commission on Environmental Quality, Office of the Chief Clerk, MC-105, P.O. Box 13087, Austin, Texas Any personal information you submit to the TCEQ will become part of the agency's record; this includes addresses. For 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 Anderson Columbia Co., Inc. at the address stated above or by calling Mrs. Katy Sipe, Westward Environmental Inc., at (830) Persons with disabilities who need special accommodations at the public meeting should call the Office of the Chief Clerk at (512) or (800) RELAY-TX (TDD) at least one week prior to the meeting. Notice Issuance Date: September 21, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: September 27, 2017 Notice of Application and Preliminary Decision for an Air Quality Permit Proposed Permit Number: L001 APPLICATION AND PRELIMINARY DECISION. Anderson Columbia Co., Inc., P.O. Box 1829, Lake City, Florida , has applied to the Texas Commission on Environmental Quality (TCEQ) for issuance of Proposed Air Quality Permit Number L001, which would authorize construction of a Rock Crushing Plant. The following directions have been provided by the applicant: from the intersection of Coyote Run and Old Nacogdoches Road go north on Coyote Run approximately 180 feet and the entrance to site is on the east side of Coyote Run, Schertz, Comal County, Texas This application was processed in an expedited manner, as allowed by the commission's rules in 30 Texas Administrative Code, Chapter 101, Subchapter J. This application was submitted to the TCEQ on May 15, The proposed facility will emit the following contaminants: particulate matter including particulate matter with diameters of 10 microns or less and 2.5 microns or less. The executive director has completed the technical review of the application and 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 to issue the permit because it meets all rules and regulations. The permit application, executive director's preliminary decision, and draft permit will be available for viewing and copying at the TCEQ central office, the TCEQ San Antonio regional office, and the New Braunfels Public Library, 700 East Common Street, New Braunfels, Comal County, Texas, beginning the first day of publication of this notice. The facility's compliance file, if any exists, is available for public review at the TCEQ San Antonio Regional Office, Judson Road, San Antonio, Texas. PUBLIC COMMENT/PUBLIC MEETING. The TCEQ will hold a public meeting for this application. You may submit public comments on this application or request a contested case hearing to the TCEQ Office of the Chief Clerk at the address below. The purpose of a public meeting is to provide the opportunity to submit comments or to ask questions about the application. Please be advised that this public meeting will concurrently provide an opportunity to submit comments or to ask questions about the application for issuance of Air Quality Permit Number 74746L004, which would authorize a change of location of a Rock Crusher at the same site. A public meeting is not a contested case hearing. The TCEQ will consider all public comments in developing a final decision on the application. The public meeting 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 42 TexReg 5548 October 6, 2017 Texas Register

267 application. However, informal comments made during the Informal Discussion Period will not be considered by the TCEQ Commissioners 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 formal comments into the official record. A written response to all formal comments will be prepared by the Executive Director and considered by the Commissioners before they reach a decision on the permit. The Public Meeting is to be held: Tuesday, October 17, 2017, at 7:00 p.m. Courtyard New Braunfels River Village (Guadalupe/Comal Room) 750 IH 35 North New Braunfels, Texas After the deadline for public comments, the executive director will consider the comments and prepare a response to all relevant and material or significant public comments. The response to comments, along with the executive director's decision on the application, will be mailed to everyone who submitted formal public comments or who requested to be on the mailing list for this application and provides a mailing address. You may submit additional written public comments within 30 days of the date of newspaper publication of this notice in the manner set forth in the AGENCY CONTACTS AND INFORMATION paragraph below. Only relevant and material issues raised during the formal comment period can be considered if a contested case hearing is granted. OPPORTUNITY FOR A CONTESTED CASE HEARING. A contested case hearing is a legal proceeding similar to a civil trial in a state district court. A person who may be affected by emissions of air contaminants from the facility is entitled to request a hearing. A contested case hearing request must include the following: (1) your name (or for a group or association, an official representative), mailing address, daytime phone number; (2) applicant's name and permit number; (3) the statement "I/we request a contested case hearing;" (4) a specific description of how you would be adversely affected by the application and air emissions from the facility in a way not common to the general public; (5) the location and distance of your property relative to the facility; (6) a description of how you use the property which may be impacted by the facility; and (7) a list of all disputed issues of fact that you submit during the comment period. If the request is made by a group or association, one or more members who have standing to request a hearing must be identified by name and physical address. The interests the group or association seeks to protect must also be identified. You may also submit your proposed adjustments to the application/permit which would satisfy your concerns. Requests for a contested case hearing must be submitted in writing within 30 days following this notice to the Office of the Chief Clerk, at the address provided in the information section below. A contested case hearing will only be granted based on disputed issues of fact or mixed questions of fact and law that are relevant and material to the Commission's decisions on the application. The Commission may only grant a request for a contested case hearing on issues the requestor submitted in their timely comments that were not subsequently withdrawn. Issues that are not submitted in public comments may not be considered during a hearing. EXECUTIVE DIRECTOR ACTION. A timely hearing request has been received by the TCEQ. However, if all timely contested case hearing requests have been withdrawn and no additional comments are received, the executive director may issue final approval of the application. The response to comments, along with the executive director's decision on the application, will be mailed to everyone who submitted public comments or is on a mailing list for this application, and will be posted electronically to the Commissioners' Integrated Database (CID). If all timely hearing requests are not withdrawn, the executive director will not issue final approval of the permit and will forward the application and requests to the Commissioners for their consideration at a scheduled commission meeting. INFORMATION AVAILABLE ONLINE. When they become available, the executive director's response to comments and the final decision on this application will be accessible through the Commission's Web site at Once you have access to the CID using the above link, enter the permit number for this application which is provided at the top of this notice. 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. MAILING LIST. You may ask to be placed on a mailing list to obtain additional information on this application by sending a request to the Office of the Chief Clerk at the address below. AGENCY CONTACTS AND INFORMATION. Public comments and requests must be submitted either electronically at or in writing to the Texas Commission on Environmental Quality, Office of the Chief Clerk, MC-105, P.O. Box 13087, Austin, Texas Any personal information you submit to the TCEQ will become part of the agency's record; this includes addresses. For 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 Anderson Columbia Co., Inc. at the address stated above or by calling Mr. David Knollhoff, CCM, Westward Environmental Inc., at (830) Persons with disabilities who need special accommodations at the public meeting should call the Office of the Chief Clerk at (512) or (800) RELAY-TX (TDD) at least one week prior to the meeting. Notice Issuance Date: September 21, 2017 TRD Bridget C. Bohac Chief Clerk Texas Commission on Environmental Quality Filed: September 27, 2017 Notice of Opportunity to Comment on Agreed Orders of Administrative Enforcement Actions The Texas Commission on Environmental Quality (TCEQ 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 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 November 6, 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 IN ADDITION October 6, TexReg 5549

268 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 A, 3rd Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about an AO should be sent to the attorney designated for the AO at the commission's central office at P.O. Box 13087, MC 175, Austin, Texas and must be received by 5:00 p.m. on November 6, Comments may also be sent by facsimile machine to the attorney at (512) The designated attorney is available to discuss the AO and/or the comment procedure at the listed phone number; however, TWC, provides that comments on an AO shall be submitted to the commission in writing. (1) COMPANY: Jose H. Rodriguez; DOCKET NUMBER: WQ-E; TCEQ ID NUMBER: RN ; LOCA- TION: 54 Midnight Lane, Georgetown, Williamson County; TYPE OF FACILITY: property; RULES VIOLATED: 30 TAC (a)(4) and 40 Code of Federal Regulations (c), by failing to obtain authorization to discharge storm water associated with construction activities; PENALTY: $3,937; STAFF ATTORNEY: Amanda Patel, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: Austin Regional Office, Park 35 Circle, Building A, Room 179, Austin, Texas 78753, (512) (2) COMPANY: Texas Land Reclamation, LLC dba UTW Transportation; DOCKET NUMBER: MSW-E; TCEQ ID NUMBER: RN ; LOCATION: 3005 North Val Verde Road, Donna, Hidalgo County; TYPE OF FACILITY: scrap tire facility; RULES VI- OLATED: 30 TAC 330.7(a) and (a) and (c), by causing suffering, allowing, or permitting the unauthorized disposal of municipal solid waste; and 30 TAC (d), by failing to identify any vehicle or trailer used to transport used or scrap tires or tire pieces on both sides and the rear of the vehicle; PENALTY: $19,688; STAFF ATTOR- NEY: Audrey Liter, Litigation Division, MC 175, (512) ; RE- GIONAL OFFICE: Harlingen Regional Office, 1804 West Jefferson Avenue, Harlingen, Texas , (956) TRD Gitanijali Yadav Acting Director, Litigation Division Texas Commission on Environmental Quality Filed: September 26, 2017 Notice of Opportunity to Comment on Default Orders of Administrative Enforcement Actions The Texas Commission on Environmental Quality (TCEQ or commission) staff is providing an opportunity for written public comment on the listed Default Orders (DOs). The commission staff proposes a DO when the staff has sent an executive director's preliminary report and petition (EDPRP) to an entity outlining the alleged violations; the proposed penalty; the proposed technical requirements necessary to bring the entity back into compliance; and the entity fails to request a hearing on the matter within 20 days of its receipt of the EDPRP or requests a hearing and fails to participate at the hearing. Similar to the procedure followed with respect to Agreed Orders entered into by the executive director of the commission, in accordance with Texas Water Code (TWC), 7.075, this notice of the proposed order and the opportunity to comment is 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 November 6, The commission will consider any written comments received, and the commission may withdraw or withhold approval of a DO if a comment discloses facts or considerations that indicate that consent to the proposed DO 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 DO is not required to be published if those changes are made in response to written comments. A copy of each proposed DO is available for public inspection at both the commission's central office, located at Park 35 Circle, Building A, 3rd Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about the DO should be sent to the attorney designated for the DO at the commission's central office at P.O. Box 13087, MC 175, Austin, Texas and must be received by 5:00 p.m. on November 6, Comments may also be sent by facsimile machine to the attorney at (512) The commission's attorneys are available to discuss the DOs and/or the comment procedure at the listed phone numbers; however, TWC, provides that comments on the DOs shall be submitted to the commission in writing. (1) COMPANY: B.V.S. Construction, Inc.; DOCKET NUMBER: MLM-E; TCEQ ID NUMBERS: RN and RN ; LOCATIONS: approximately 2,000 feet west of the Brazos River on Farm-to-Market Road 485, Cameron, Milam County (Site 1) and 7116 Raymond Stotzer Parkway, Bryan, Brazos County (Site 2); TYPE OF FACILITIES: aggregate production operation and an asphalt supply operation; RULES VIOLATED: TWC, (a)(3), 30 TAC (a)(4), and 40 Code of Federal Regulations (CFR) (c), by failing to obtain authorization to discharge storm water associated with industrial activities at Site 1 under Texas Pollutant Discharge Elimination System (TPDES) General Permit Number TXR050000; TWC, (a)(3), 30 TAC (a)(4), and 40 CFR (c), by failing to obtain authorization to discharge storm water associated with industrial activities at Site 2 under TPDES General Permit Number TXR050000; and 30 TAC 327.5(a), by failing to immediately abate and contain a spill or discharge and failing to begin reasonable response actions; PENALTY: $6,561; STAFF ATTORNEY: Ryan Rutledge, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: Waco Regional Office, 6801 Sanger Avenue, Suite 2500, Waco, Texas , (254) (2) COMPANY: Martin Parker dba Bird's Tire Service; DOCKET NUMBER: MSW-E; TCEQ ID NUMBER: RN ; LOCATION: 3502 East 7th Street, Austin, Travis County; TYPE OF FACILITY: used tire sales and repair shop; RULES VIOLATED: 30 TAC (c), by failing to use manifests, work orders, invoices, or other records to document the removal and management of all scrap tires generated on-site; and 30 TAC (c), by failing to register as a scrap tire facility before processing scrap tires; PENALTY: $5,000; STAFF ATTORNEY: Clayton Smith, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: Austin Regional Office, Park 35 Circle, Building A, Room 179, Austin, Texas 78753, (512) TRD Gitanijali Yadav Acting Director, Litigation Division Texas Commission on Environmental Quality Filed: September 26, TexReg 5550 October 6, 2017 Texas Register

269 Notice of Opportunity to Comment on Shutdown/Default Order of Administrative Enforcement Actions The Texas Commission on Environmental Quality (TCEQ or commission) staff is providing an opportunity for written public comment on the listed Shutdown/Default Order (S/DO). Texas Water Code (TWC), authorizes the commission to order the shutdown of any underground storage tank (UST) system found to be noncompliant with release detection, spill and overfill prevention, and/or, after December 22, 1998, cathodic protection regulations of the commission, until such time as the owner/operator brings the UST system into compliance with those regulations. The commission proposes a Shutdown Order after the owner or operator of a UST facility fails to perform required corrective actions within 30 days after receiving notice of the release detection, spill and overfill prevention, and/or after December 22, 1998, cathodic protection violations documented at the facility. The commission proposes a Default Order when the staff has sent an executive director's preliminary report and petition (EDPRP) to an entity outlining the alleged violations, the proposed penalty, the proposed technical requirements necessary to bring the entity back into compliance, and the entity fails to request a hearing on the matter within 20 days of its receipt of the EDPRP or requests a hearing and fails to participate at the hearing. In accordance with TWC, 7.075, this notice of the proposed order and the opportunity to comment is 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 November 6, The commission will consider any written comments received and the commission may withdraw or withhold approval of an S/DO if a comment discloses facts or considerations that indicate that consent to the proposed S/DO 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 S/DO is not required to be published if those changes are made in response to written comments. A copy of the proposed S/DO is available for public inspection at both the commission's central office, located at Park 35 Circle, Building A, 3rd Floor, Austin, Texas 78753, (512) and at the applicable regional office listed as follows. Written comments about the S/DO shall be sent to the attorney designated for the S/DO at the commission's central office at P.O. Box 13087, MC 175, Austin, Texas and must be received by 5:00 p.m. on November 6, Written comments may also be sent by facsimile machine to the attorney at (512) The commission's attorneys is available to discuss the S/DO and/or the comment procedure at the listed phone number; however, comments on the S/DO shall be submitted to the commission in writing. (1) COMPANY: SAHAD INVESTMENTS, INC. dba Riverside Market; DOCKET NUMBER: PST-E; TCEQ ID NUM- BER: RN ; LOCATION: 491 South Main Street, Boerne, Kendall County; TYPE OF FACILITY: UST system and a convenience store with retail sales of gasoline; RULES VIOLATED: TWC, (c)(1) and 30 TAC (b)(1)(A), by failing to monitor the USTs for releases at a frequency of at least once every month (not to exceed 35 days between each monitoring); PENALTY: $4,500; STAFF ATTORNEY: Ryan Rutledge, Litigation Division, MC 175, (512) ; REGIONAL OFFICE: San Antonio Regional Office, Judson Road, San Antonio, Texas , (210) TRD Gitanijali Yadav Acting Director, Litigation Division Texas Commission on Environmental Quality Filed: September 26, 2017 Texas Ethics Commission List of Late Filers Below is a list from the Texas Ethics Commission naming the filers who failed to pay the penalty fine for failure to file the report, or filing a late report, in reference to the specified filing deadline. If you have any questions, you may contact Sue Edwards at (512) Deadline: Lobby Activities Report due December 12, 2016 Katheryn Johnson, 919 Congress Ave., Ste. 1500, Austin, Texas Deadline: Lobby Activities Report due February 10, 2017 Katheryn Johnson, 919 Congress Ave., Ste. 1500, Austin, Texas Deadline: Lobby Activities Report due July 10, 2017 Leticia M. Caballero, 1780 Hughes Landing Blvd., The Woodlands, Texas L. Alan Gray, 1122 Colorado St., Ste. 108, Austin, Texas Bradley O'Furey, 221 E. 9th St., Ste. 302, Austin, Texas Steven C. Ray, P.O. Box 1377, Austin, Texas Morgan F. Sanders, 2992 Peacemaker St., Round Rock, Texas Deadline: Semiannual Report due January 17, 2017 for Candidates and Officeholders Patrick D. Wentworth, 3822 Levee Circle West 140, Benbrook, Texas TRD Seana Willing Executive Director Texas Ethics Commission Filed: September 21, 2017 Texas Health and Human Services Commission Public Notice - Amendment to the Texas Healthcare Transformation Quality Improvement Program Waiver The Health and Human Services Commission (HHSC) is submitting a request to the Centers for Medicare & Medicaid Services (CMS) for an amendment to the Texas Healthcare Transformation Quality Improvement Program (THTQIP) waiver under section 1115 of the Social Security Act. CMS has approved this waiver through December 31, Assuming CMS approves an extension of the waiver, the proposed effective date for this amendment is March 22, With this amendment, HHSC proposes that CMS waive 42 U.S.C. 1396a(bb), regarding payment for Federally Qualified Health Centers (FQHCs), to the extent 1396a(bb) has been interpreted by a federal court to require HHSC to pay FQHCs for non-emergency, non-prior authorized, out-of-network services. To obtain copies of the proposed waiver amendment, interested parties may contact Sallie Allen by mail at Texas Health and Human Services Commission, P.O. Box 13247, Mail Code H-600, Austin, Texas ; by phone at (512) ; by fax at (512) ; or by at TX_Medicaid_Waivers@hhsc.state.tx.us. IN ADDITION October 6, TexReg 5551

270 TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Filed: September 21, 2017 Public Notice - Procurement of Services by Area Agencies on Aging The Health and Human Services Commission (HHSC), Access and Eligibility Services, Community Supports, Office of Area Agencies on Aging oversees the delivery of Older Americans Act services for individuals 60 years of age and older, their family members, and other caregivers through area agencies on aging located throughout the state. These 28 area agencies on aging are currently seeking qualified entities to provide services such as: congregate meals, home-delivered meals, transportation, personal assistance, homemaker, and caregiver, as well as other related services. Parties interested in providing services must contact the area agency on aging operating within their service area to obtain information relating to open enrollment, requests for proposals, the contracting process, the types of services being considered, and the actual funding available. The comprehensive list identifies all area agencies on aging, contact information, addresses, telephone numbers, and service area. 42 TexReg 5552 October 6, 2017 Texas Register

271 IN ADDITION October 6, TexReg 5553

272 42 TexReg 5554 October 6, 2017 Texas Register

273 IN ADDITION October 6, TexReg 5555

274 42 TexReg 5556 October 6, 2017 Texas Register

275 IN ADDITION October 6, TexReg 5557

276 42 TexReg 5558 October 6, 2017 Texas Register

277 IN ADDITION October 6, TexReg 5559

278 TRD Karen Ray Chief Counsel Texas Health and Human Services Commission Filed: September 21, 2017 Texas Department of Insurance Company Licensing Application to do business in the state of Texas for LIBERTY DEN- TAL INSURANCE COMPANY, a foreign life, accident and/or health company. The home office is in Irvine, California. Application for MILWAUKEE CASUALTY INSURANCE COM- PANY, a foreign fire and/or casualty company, to change its name to MILFORD CASUALTY INSURANCE COMPANY. The home office is in Madison, Wisconsin. Any objections must be filed with the Texas Department of Insurance, within twenty (20) calendar days from the date of the Texas Register publication, addressed to the attention of Jeff Hunt, 333 Guadalupe Street, MC 305-2C, Austin, Texas TRD Norma Garcia General Counsel Texas Department of Insurance Filed: September 27, 2017 Texas Department of Licensing and Regulation Notice of Vacancies on Hearing Instrument Fitters and Dispensers Advisory Board The Texas Department of Licensing and Regulation (Department) announces two vacancies on the Hearing Instrument Fitters and Dispensers Advisory Board (Board) established by Texas Occupations Code, Chapter 402. The purpose of the Hearing Instrument Fitters and Dispensers Advisory Board is to provide advice and recommendations to the Department on technical matters relevant to the administration of this chapter. This announcement is for two public members. The Board consists of the following nine members appointed by the presiding officer of the Texas Commission of Licensing and Regulation (Commission), with the approval of the Commission: (1) six members licensed under this chapter who have been engaged in fitting and dispensing hearing instruments for at least five years preceding appointment, not more than one of whom may be licensed under Chapter 401; (2) one member who is actively practicing as a physician licensed by the Texas Medical Board and who: (A) is a citizen of the United States; and (B) specializes in the practice of otolaryngology; and (3) two members of the public. Members serve staggered six-year terms. The terms of three members expire on February 1 of each odd-numbered year. Interested persons should submit an application on the Department website at: Applicants can also request an application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on Elevator Advisory Board The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Elevator Advisory Board (Board) established by Texas Health and Safety Code, Chapter 754, and The pertinent rules may be found in 16 Texas Administrative Code The purpose of the Elevator Advisory Board (Board) is to advise the Texas Commission of Licensing and Regulation (Commission) on the adoption of appropriate standards for the installation, alteration, operation and inspection of equipment; the status of equipment used by the public in this state; sources of information relating to equipment safety; public awareness programs related to elevator safety, including programs for sellers and buyers of single-family dwellings with elevators, chairlifts, or platform lifts; and any other matter considered relevant by the Commission. This announcement is for a public member with a physical disability. The Board is composed of the following nine members appointed by the presiding officer of the Commission, with the Commission's approval: (1) a representative of the insurance industry or a certified elevator inspector; (2) a representative of equipment constructors; (3) a representative of owners or managers of a building having fewer than six stories and having equipment; (4) a representative of owners or managers of a building having six stories or more and having equipment; (5) a representative of independent equipment maintenance companies; (6) a representative of equipment manufacturers; (7) a licensed or registered engineer or architect; (8) a public member; and (9) a public member with a physical disability. Members serve at the will of the Commission. Service is voluntary and compensation is not authorized by law. Interested persons should complete an application on the Department website at: Applicants can also request a paper application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on Polygraph Advisory Committee The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Polygraph Advisory Committee established by Texas Occupations Code, Chapter The purpose of the Polygraph Advisory Committee (Committee) is to advise the Texas Commission of Licensing and Regulation (Commission) and the Depart- 42 TexReg 5560 October 6, 2017 Texas Register

279 ment on: educational requirements for a polygraph examiner; the content of licensing examination; technical issues related to a polygraph examination; the specific offenses for which a conviction would constitute grounds for the department to take action under Section ; and administering and enforcing Chapter This announcement is for a public member. The Committee is composed of five members appointed by the presiding officer of the Commission, with the Commission's approval. The advisory board consists of the following members: (1) two polygraph examiner members who are qualified polygraph examiners for a governmental law enforcement agency; (2) two polygraph examiner members who are qualified polygraph examiners in the commercial field; and (3) one member who represents the public. A member must have been a United States citizen and a resident of this state for at least two years before the date of appointment. A polygraph examiner member must be actively engaged as a polygraph examiner on the date of appointment. Two committee members may not be employed by the same person. Members serve terms of six years, with the terms of one or two members, as appropriate, expiring on February 1 of each odd-numbered year. Interested persons should complete an application on the Department website at: Applicants can also request a paper application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on Speech-Language Pathologists and Audiologists Advisory Board The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Speech-Language Pathologists and Audiologists Advisory Board (Board) established by Texas Occupations Code, Chapter 401. The purpose of the Speech-Language Pathologists and Audiologists Advisory Board is to provide advice and recommendations to the Department on technical matters relevant to the administration of this chapter. This announcement is for a speech-language pathologist. The Board consists of the following nine members appointed by the presiding officer of the Texas Commission of Licensing and Regulation (Commission), with the approval of the Commission: (1) three audiologists; (2) three speech-language pathologists; and (3) three members who represent the public. Advisory board members must: (1) be from the various geographic regions of the state; and (2) be from varying employment settings. The advisory board members appointed under subsections (a)(1) and (2) must: (a) have been engaged in teaching, research, or providing services in speech-language pathology or audiology for at least five years; and (b) be licensed under this chapter. One of the public members must be a physician licensed in this state and certified in otolaryngology or pediatrics. Members are appointed for staggered six-year terms. The terms of three members expire September 1 of each odd-numbered year. Interested persons should submit an application on the Department website at: Applicants can also request an application from the Department by telephoning (800) or ing advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on the Advisory Board on Cosmetology The Texas Department of Licensing and Regulation (Department) announces one vacancy on the Advisory Board on Cosmetology (Board) established by Texas Occupations Code, Chapter The pertinent rules may be found in 16 Texas Administrative Code The purpose of the Advisory Board on Cosmetology is to advise the Texas Commission of Licensing and Regulation (Commission) and Department on: education and curricula for applicants; the content of examinations; proposed rules and standards on technical issues related to cosmetology; and other issues affecting cosmetology. This announcement is for one member who holds a license for a beauty shop that is not part of a chain of beauty shops. The Board is composed of the following nine members appointed by the presiding officer of the Commission, with the Commission's approval: (1) one member who holds a license for a beauty shop that is part of a chain of beauty shops; (2) one member who holds a license for a beauty shop that is not part of a chain of beauty shops; (3) one member who holds a private beauty culture school license; (4) two members who each hold an operator license; (5) one member who represents a licensed public secondary or post secondary beauty culture school; (6) one member who represents a licensed public secondary beauty culture school; and (7) two public members. Members serve staggered six-year terms, with the terms of one or two members expiring on the same date each odd-numbered year. Interested persons should submit an application on the Department website at: Applicants can also request an application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 IN ADDITION October 6, TexReg 5561

280 Notice of Vacancy on the Auctioneer Advisory Committee The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Auctioneer Advisory Committee (Committee) established by Texas Occupations Code, Chapter The pertinent rules may be found in 16 Texas Administrative Code The purpose of the Auctioneer Advisory Committee is to advise the Texas Commission of Licensing and Regulation (Commission) on educational matters, operational matters, and common practices within the auction industry. This announcement is for a public member. The Committee is composed of seven members appointed by the presiding officer of the Commission, with the Commission's approval. (1) Four members are licensed auctioneers; (2) one member is the administrative head, or the administrative head's designee, of any state agency or office that is selected by the Commission; and (3) two public members. The auctioneer members appointed under Section (a)(1) serve two-year terms that expire on September 1 and may not serve more than two consecutive terms. Interested persons should submit an application on the Department website at: Applicants can also request an application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on the Board of Boiler Rules The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Board of Boiler Rules (Board) established by Texas Health and Safety Code, Chapter 755. The pertinent rules may be found in 16 Texas Administrative Code The purpose of the Board of Boiler Rules is to advise the Texas Commission of Licensing and Regulation (Commission) in the adoption of definitions and rules relating to the safe construction, installation, inspection, operating limits, alteration, and repair of boilers and their appurtenances. This announcement is for a public member. The Board is composed of eleven members appointed by the presiding officer of the Commission, with the Commission's approval. The Board consists of the following: (1) three members representing persons who own or use boilers in this state; (2) three members representing companies that insure boilers in this state; (3) one member representing boiler manufacturers or installers; (4) one member representing organizations that repair or alter boilers in this state; (5) one member representing a labor union, and (6) two public members. Members serve staggered six-year terms, with the terms of three members expiring January 31 of each odd-numbered year. Interested persons should apply on the Department website at: Applicants can also request an application from the Department by telephone at (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Notice of Vacancy on the Dietitians Advisory Board The Texas Department of Licensing and Regulation (Department) announces a vacancy on the Dietitians Advisory Board (Board) established by Texas Occupations Code, Chapter 701. The purpose of the Dietitians Advisory Board is to provide advice and recommendations to the Department on technical matters relevant to the administration of this chapter. This announcement is for a public member. The Board consists of the following nine members appointed by the presiding officer of the Texas Commission of Licensing and Regulation (Commission), with the approval of the Commission: (1) six licensed dietitians, each of whom has been licensed under Chapter 701 for not less than three years before the member's date of appointment; and In appointing dietitian members to the advisory board, the presiding officer of the commission shall attempt to maintain balanced representation among the following primary areas of expertise included in the professional discipline of dietetics: (a) clinical; (b) educational; (c) management; (d) consultation; and (e) community. (2) three members who represent the public. Members serve staggered six-year terms. The terms of three members begin on September 1 of each odd-numbered year. Interested persons should submit an application on the Department website at: Applicants can also request an application from the Department by telephone (800) or advisory.boards@tdlr.texas.gov. TRD Brian Francis Executive Director Texas Department of Licensing and Regulation Filed: September 27, 2017 Texas Lottery Commission Scratch Ticket Game Number 2006 "Holiday Wishes" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "HOLIDAY WISHES". The play style is "row". 1.1 Price of Scratch Ticket Game. 42 TexReg 5562 October 6, 2017 Texas Register

281 A. The price for Scratch Ticket Game No shall be $3.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol- The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, $3.00, $5.00, $10.00, $20.00, $50.00, $100, $500, $5,000, $50,000, GIFT SYMBOL, SLEIGH SYMBOL, SNOWMAN SYMBOL, SWEATER SYMBOL, SNOWFLAKE SYMBOL, MITTEN SYMBOL, ORNA- MENT SYMBOL, SCARF SYMBOL and SNOW GLOBE SYMBOL. D. Play Symbol Caption- The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. Row style games do not typically have Play Symbol Captions. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: IN ADDITION October 6, TexReg 5563

282 42 TexReg 5564 October 6, 2017 Texas Register

283 E. Serial Number- A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Scratch Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (2006), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 125 within each Pack. The format will be: H. Pack - A Pack of the "HOLIDAY WISHES" Scratch Ticket Game contains 125 Scratch Tickets, packed in plastic shrink-wrapping and fanfolded in pages of one (1). Ticket 001 will be shown on the front of the Pack; the back of Ticket 125 will be revealed on the back of the Pack. All Packs will be tightly shrink-wrapped. There will be no breaks between the Tickets in a Pack. Every other Pack will reverse i.e., reverse order will be: the back of Ticket 001 will be shown on the front of the Pack and the front of Ticket 125 will be shown on the back of the Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - Texas Lottery "HOL- IDAY WISHES" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "HOLIDAY WISHES" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 79 (seventy-nine) Play Symbols. MAIN PLAY AREA: The player must scratch all the YOUR 18 LETTERS. Then the player must scratch all the letters found in GAMES 1 through 10 that exactly match the YOUR 18 LETTERS. If the player matches all the letters in the same GAME with the YOUR 18 LETTERS, the player wins the PRIZE for that GAME. BONUS PLAY AREA: The player must scratch the $10 BONUS play area to reveal a Play Symbol. If the player reveals a GIFT Play Symbol, the player wins $10 instantly. No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 79 (seventy-nine) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption. Row style games do not typically have Play Symbol Captions; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 79 (seventy-nine) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; IN ADDITION October 6, TexReg 5565

284 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 79 (seventy-nine) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 79 (seventy-nine) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. Programmed Game Parameters. A. GENERAL: Consecutive Non-Winning Tickets within a Pack will not have matching patterns of either Play Symbols or Prize Symbols. B. GENERAL: A Ticket will win as indicated by the prize structure. C. MAIN PLAY AREA: Each Ticket consists of a YOUR 18 LETTERS play area, a BONUS play area and GAMES D. MAIN PLAY AREA: Each letter will only appear once per Ticket in the YOUR 18 LETTERS play area. E. MAIN PLAY AREA: Each word will appear only once per Ticket in GAMES F. MAIN PLAY AREA: There will be a minimum of three (3) vowels in the YOUR 18 LETTERS play area. Vowels are A, E, I, O and U. G. MAIN PLAY AREA: The length of words found in GAMES 1-10 will range from three (3) to seven (7) letters, as shown on the artwork. H. MAIN PLAY AREA: Complete three (3) and four (4) letter words win the prizes between $3 and $20. Complete five (5) and six (6) letter words win the prizes between $10 and $500. Complete seven (7) letter words win the prizes between $100 and $50,000. I. MAIN PLAY AREA: Only words from the approved word list (Texas_Bonus_v2_2July2015.doc) will appear in GAMES J. MAIN PLAY AREA: None of the prohibited words (Texas_Prohibited_v3_2July2015.doc) that contain three (3) or more letters will appear vertically (in either direction) or diagonally (in either direction) in GAMES K. MAIN PLAY AREA: None of the prohibited words (Texas_Prohibited_v3_2July2015.doc) will appear horizontally (in either direction), vertically (in either direction) or diagonally (in any direction) in the YOUR 18 LETTERS play area. L. MAIN PLAY AREA: A player will never find a word horizontally (in any direction), vertically (in any direction) or diagonally (in any direction) in the YOUR 18 LETTERS play area that matches a word in GAMES M. MAIN PLAY AREA: A minimum of fourteen (14) YOUR 18 LET- TERS will open at least one (1) letter in GAMES N. MAIN PLAY AREA: On winning and Non-Winning Tickets, each GAME in GAMES 1-6 will contain at least one (1) letter that is not duplicated in any of those GAMES. O. BONUS PLAY AREA: The "GIFT" (WIN$10) Play Symbol will never appear on a Non-Winning Ticket. Procedure for Claiming Prizes. A. To claim a "HOLIDAY WISHES" Scratch Ticket Game prize of $3.00, $5.00, $10.00, $20.00, $50.00, $100 or $500, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $50.00, $100 or $500 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "HOLIDAY WISHES" Scratch Ticket Game prize of $5,000 or $50,000, the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery's Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "HOLIDAY WISHES" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; 42 TexReg 5566 October 6, 2017 Texas Register

285 b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "HOLIDAY WISHES" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "HOLIDAY WISHES" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 6,000,000 Scratch Tickets in Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: IN ADDITION October 6, TexReg 5567

286 A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 2006, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: September 27, 2017 Scratch Ticket Game Number 2007 "Holiday Gift Pack" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "HOLIDAY GIFT PACK". The play style is "other". 1.1 Price of Scratch Ticket Game. A. The price for Scratch Ticket Game No shall be $5.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: SNOW- MAN SYMBOL, SWEATER SYMBOL, ANGEL SYMBOL, HORN SYMBOL, GARLAND SYMBOL, TREE SYMBOL, WREATH SYMBOL, 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, STAR SYMBOL, BOW SYMBOL, LIGHTS SYMBOL, SLEIGH SYMBOL, DRUM SYMBOL, STOCKING SYMBOL, CANDY CANE SYMBOL, GINGERBREAD SYMBOL, ELF SYMBOL, $1.00, $2.00, $5.00, $10.00, $20.00, $50.00, $100, $250, $500, $5,000 and $50,000. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: 42 TexReg 5568 October 6, 2017 Texas Register

287 IN ADDITION October 6, TexReg 5569

288 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (2007), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 080 within each Pack. The format will be: H. Pack - A Pack of the "HOLIDAY GIFT PACK" Scratch Ticket Game contains twenty (20) pouches with 080 Tickets, packed in plastic shrink-wrapping and fanfolded twenty (20) strips, pouched in strips of one (1) Ticket with four (4) individual games in one (1) pouch with Tickets numbered 1-80, fan-folded and banded in books of 20 strips. Strips of four (4) Tickets will be folded in 1/2 then pouched in clear pouching material. All packs will be tightly banded. There will be no breaks between tickets in a pack. Pouches of 20 strips will then be shrink-wrapped with the generic insert placed on the low Ticket side of the Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - Texas Lottery "HOL- IDAY GIFT PACK" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "HOLIDAY GIFT PACK" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose: 8 (eight) Play Symbols in HOLIDAY DOUGH; 23 (twentythree) Play Symbols in HOLIDAY BUCKS; 8 (eight) Play Symbols in HOLIDAY CASH; and 23 (twenty-three) Play Symbols in HOLIDAY RICHES. In HOLIDAY DOUGH - If a player reveals a "TREE" Play Symbol, the player wins the prize for that Play Symbol. If a player reveals a "WREATH" Play Symbol, the player wins DOUBLE the prize for that Play Symbol. In HOLIDAY BUCKS - If a player matches any of YOUR NUMBERS Play Symbols to any of the WINNING NUM- BERS Play Symbols, the player wins the prize for that number. If the player reveals a "STAR" Play Symbol, the player wins DOUBLE the prize for that Play Symbol. In HOLIDAY CASH - If a player reveals a "CANDY CANE" Play Symbol, the player wins the prize for that Play Symbol. If a player reveals a "GINGERBREAD" Play Symbol, the player wins DOUBLE the prize for that Play Symbol. In HOLIDAY RICHES - If a player matches any of YOUR NUMBERS Play Symbols to any of the WINNING NUMBERS Play Symbols, the player wins the prize for that number. If a player reveals an "ELF" Play Symbol, the player wins DOUBLE the prize for that Play Symbol. No portion of the 42 TexReg 5570 October 6, 2017 Texas Register

289 Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 8 (eight) Play Symbols in HOLIDAY DOUGH, 23 (twentythree) Play Symbols in HOLIDAY BUCKS, 8 (eight) Play Symbols in HOLIDAY CASH and 23 (twenty-three) Play Symbols in HOLIDAY RICHES must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 8 (eight) Play Symbols in HOLIDAY DOUGH, 23 (twentythree) Play Symbols in HOLIDAY BUCKS, 8 (eight) Play Symbols in HOLIDAY CASH and 23 (twenty-three) Play Symbols in HOLI- DAY RICHES under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 8 (eight) Play Symbols in HOLIDAY DOUGH, 23 (twenty-three) Play Symbols in HOLIDAY BUCKS, 8 (eight) Play Symbols in HOLIDAY CASH and 23 (twenty-three) Play Symbols in HOLIDAY RICHES must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 8 (eight) Play Symbols in HOLIDAY DOUGH, 23 (twenty-three) Play Symbols in HOLIDAY BUCKS, 8 (eight) Play Symbols in HOLIDAY CASH and 23 (twenty-three) Play Symbols in HOLIDAY RICHES on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. 2.2 Programmed Game Parameters. A. GENERAL: Consecutive pouches within a Pack will not contain non-winning matching Tickets that have matching patterns of either Play Symbols or Prize Symbols (i.e., Holiday Dough symbols in one pouch will not match Holiday Dough symbols of a consecutive pouch). B. GENERAL: A pouch can win up to six (6) times. Each Ticket in a pouch can win up to three (3) times as per the prize structure. C. GENERAL: In all pouches, the top cash prizes of $5,000 and $50,000 will each appear at least once over the four (4) Tickets. D. HOLIDAY DOUGH: On winning and Non-Winning Tickets, all non-winning Play Symbols will be different and all non-winning Prize Symbols will be different. E. HOLIDAY DOUGH: On winning Tickets, all non-winning Prize Symbols will be different from winning Prize Symbols. F. HOLIDAY DOUGH: The "TREE" (WIN) and "WREATH" (DBL) Play Symbols will never appear on a Non-Winning Ticket. G. HOLIDAY BUCKS: No matching non-winning YOUR NUMBERS Play Symbols will appear on a Ticket. H. HOLIDAY BUCKS: Non-winning Prize Symbols will not match a winning Prize Symbol on a Ticket. I. HOLIDAY BUCKS: No matching WINNING NUMBERS Play Symbols will appear on a Ticket. J. HOLIDAY BUCKS: YOUR NUMBERS Play Symbols will never equal the corresponding Prize Symbol (i.e., 1 and $1, 2 and $2, 5 and $5, 10 and $10, 20 and $20). K. HOLIDAY BUCKS: On all Tickets, a Prize Symbol will not appear more than two (2) times, except as required by the prize structure to create multiple wins. IN ADDITION October 6, TexReg 5571

290 L. HOLIDAY BUCKS: On Non-Winning Tickets, a WINNING NUM- BERS Play Symbol will never match a YOUR NUMBERS Play Symbol. M. HOLIDAY BUCKS: The "STAR" (DBL) Play Symbol will never appear as a WINNING NUMBER Play Symbol. N. HOLIDAY BUCKS: The "STAR" (DBL) Play Symbol will win DOUBLE the prize for that Play Symbol and will win as per the prize structure. O. HOLIDAY BUCKS: The "STAR" (DBL) Play Symbol will never appear on a Non-Winning Ticket. P. HOLIDAY CASH: On winning and Non-Winning Tickets, all nonwinning Play Symbols will be different and all non-winning Prize Symbols will be different. Q. HOLIDAY CASH: On winning Tickets, all non-winning Prize Symbols will be different from winning Prize Symbols. R. HOLIDAY CASH: The "CANDY CANE" (WIN) and "GINGER- BREAD" (DBL) Play Symbols will never appear on a Non-Winning Ticket. S. HOLIDAY RICHES: No matching non-winning YOUR NUMBERS Play Symbols will appear on a Ticket. T. HOLIDAY RICHES: Non-winning Prize Symbols will not match a winning Prize Symbol on a Ticket. U. HOLIDAY RICHES: No matching WINNING NUMBERS Play Symbols will appear on a Ticket. V. HOLIDAY RICHES: YOUR NUMBERS Play Symbols will never equal the corresponding Prize Symbol (i.e., 1 and $1, 2 and $2, 5 and $5, 10 and $10, 20 and $20). W. HOLIDAY RICHES: On all Tickets, a Prize Symbol will not appear more than two (2) times, except as required by the prize structure to create multiple wins. X. HOLIDAY RICHES: On Non-Winning Tickets, a WINNING NUMBERS Play Symbol will never match a YOUR NUMBERS Play Symbol. Y. HOLIDAY RICHES: The "ELF" (DBL) Play Symbol will never appear as a WINNING NUMBERS Play Symbol. Z. HOLIDAY RICHES: The "ELF" (DBL) Play Symbol will win DOUBLE the prize for that Play Symbol and will win as per the prize structure. AA. HOLIDAY RICHES: The "ELF" (DBL) Play Symbol will never appear on a Non-Winning Ticket. 2.3 Procedure for Claiming Prizes. A. To claim a "HOLIDAY GIFT PACK" Scratch Ticket Game prize of $1.00, $2.00, $4.00, $5.00, $6.00, $8.00, $10.00, $20.00, $30.00, $40.00, $50.00, $100, $250 or $500, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $30.00, $40.00, $50.00, $100, $250 or $500 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "HOLIDAY GIFT PACK" Scratch Ticket Game prize of $5,000 or $50,000, the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery's Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "HOLIDAY GIFT PACK" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "HOLIDAY GIFT PACK" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "HOLIDAY GIFT PACK" Scratch Ticket Game, 42 TexReg 5572 October 6, 2017 Texas Register

291 the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 6,600,000 pouches of 4 Scratch Tickets in Scratch Ticket Game No A. The approximate number and value of prizes in the pouches are as follows: B. The approximate number and value of prizes for the Scratch Tickets are as follows: IN ADDITION October 6, TexReg 5573

292 C. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 2007, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: September 26, 2017 Scratch Ticket Game Number 2008 "Season's Greetings" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "SEASON'S GREETINGS". The play style is "multiple games". 1.1 Price of Scratch Ticket Game. A. The price for Scratch Ticket Game No shall be $10.00 per Scratch Ticket. 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: CANDY CANE SYMBOL, CANDLE SYMBOL, STOCKING SYM- BOL, GINGERBREAD SYMBOL, SNOW GLOBE SYMBOL, HAT SYMBOL, REINDEER SYMBOL, SLEIGH SYMBOL, TREE SYM- BOL, CROWN SYMBOL, 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 42 TexReg 5574 October 6, 2017 Texas Register

293 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, COIN SYMBOL, MONEY BAG SYMBOL, WIN SYMBOL, VAULT SYMBOL, $10.00, $20.00, $40.00, $50.00, $100, $200, $500, $1,000, $10,000 and $250,000. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: IN ADDITION October 6, TexReg 5575

294 42 TexReg 5576 October 6, 2017 Texas Register

295 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Scratch Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (2008), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 020 within each Pack. The format will be: H. Pack - A Pack of the "SEASON'S GREETINGS" Scratch Ticket Game contains 020 Scratch Tickets, packed in plastic shrink-wrapping and fanfolded in pages of one (1). Ticket 001 will be shown on the front of the Pack; the back of Ticket 020 will be revealed on the back of the Pack fanfolded so that the backs are out on both sides. All Packs will be tightly shrink-wrapped. There will be no breaks between the Tickets in a Pack. I. Non-Winning Scratch Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - Texas Lottery "SEA- SON'S GREETINGS" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "SEASON'S GREETINGS" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 67 (sixty-seven) Play Symbols. GAME 1: The player must scratch each of the 31 play spots. The player then counts up the number of matching Play Symbols revealed and wins the corresponding prize in the PRIZE LEGEND shown on the Ticket. GAME 2: The player must scratch the entire play area to reveal 2 WINNING NUMBERS Play Symbols and 5 YOUR NUMBERS Play Symbols. If the player matches any of the YOUR NUMBERS Play Symbols to either of the WINNING NUMBERS Play Symbols, the player wins the prize for that number. If the player reveals a COIN Play Symbol, the player wins DOUBLE the prize for that symbol. GAME 3: The player must scratch the entire play area to reveal 2 WINNING NUMBERS Play Symbols and 5 YOUR NUMBERS Play Symbols. If the player matches any of the YOUR NUMBERS Play Symbols to either of the WINNING NUMBERS Play Symbols, the player wins the prize for that number. If the player reveals a MONEY BAG Play Symbol, the player wins DOUBLE the prize for that symbol. GAME 4: The player must scratch the entire play area to reveal 6 prize amounts. If the player reveals 3 matching prize amounts, the player wins that prize amount. If the player reveals 2 matching prize amounts and a WIN Play Symbol, the player wins TRIPLE that prize amount. GAME 5: The player must scratch the entire play area to reveal 6 prize amounts. If the player reveals 3 matching prize amounts, the player wins that prize amount. If the player reveals 2 matching prize amounts and a VAULT Play Symbol, the player wins TRIPLE that prize amount. No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: IN ADDITION October 6, TexReg 5577

296 1. Exactly 67 (sixty-seven) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 67 (sixty-seven) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 67 (sixty-seven) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 67 (sixty-seven) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. 2.2 Programmed Game Parameters. A. GENERAL: Consecutive Non-Winning Tickets within a Pack will not have matching patterns of either Play Symbols or Prize Symbols. B. GENERAL: A Ticket will win as indicated by the prize structure. C. GENERAL: A Ticket can win up to ten (10) times. D. GENERAL: On winning and Non-Winning Tickets, the top cash prizes of $10,000 and $250,000 will each appear at least once. E. GAME 1: There will be a random distribution of all Play Symbols on the game, unless restricted by other parameters, play action or prize structure. F. GAME 1: Each Play Symbol will not appear more times than the number needed to form a winning combination for that Play Symbol as per the PRIZE LEGEND. G. GAME 1: All Play Symbols will appear on every game. H. GAME 1: This game can win up to two (2) times. I. GAME 1: All Play Symbols cannot be used as a winning Play Symbol more than once. J. GAME 1: Winning games will display the number of Play Symbols as dictated in the PRIZE LEGEND shown on the Ticket. K. GAME 2: No matching non-winning YOUR NUMBERS Play Symbols will appear within GAME 2. L. GAME 2: Non-winning Prize Symbols will not match a winning Prize Symbol within GAME 2. M. GAME 2: Non-winning games will not contain more than two matching Prize Symbols within GAME 2. N. GAME 2: This game can win up to four (4) times. O. GAME 2: GAME 2 WINNING NUMBERS Play Symbols will be different and will not match any of the WINNING NUMBERS Play Symbols that appear in GAME 3. P. GAME 2: YOUR NUMBERS Play Symbols will never equal the corresponding Prize Symbol (i.e., 10 and $10, 20 and $20). Q. GAME 2: The "COIN" (DBL) Play Symbol will never appear as a WINNING NUMBERS Play Symbol. R. GAME 2: The "COIN" (DBL) Play Symbol will never appear on a non-winning game. S. GAME 2: The "COIN" (DBL) Play Symbol will never appear more than once on a game. T. GAME 3: No matching non-winning YOUR NUMBERS Play Symbols will appear within GAME 3. U. GAME 3: Non-winning Prize Symbols will not match a winning Prize Symbol within GAME 3. V. GAME 3: Non-winning games will not contain more than two matching Prize Symbols within GAME TexReg 5578 October 6, 2017 Texas Register

297 W. GAME 3: This game can win up to four (4) times. X. GAME 3: GAME 3 WINNING NUMBERS Play Symbols will be different and will not match any of the WINNING NUMBERS Play Symbols that appear in GAME 2. Y. GAME 3: YOUR NUMBERS Play Symbols will never equal the corresponding Prize Symbol (i.e., 10 and $10, 20 and $20). Z. GAME 3: The "MONEY BAG" (DBL) Play Symbol will never appear as a WINNING NUMBERS Play Symbol. AA. GAME 3: The "MONEY BAG" (DBL) Play Symbol will never appear on a non-winning game. BB. GAME 3: The "MONEY BAG" (DBL) Play Symbol will never appear more than once on a game. CC. GAME 4: The "WIN" (TPL) Play Symbol will never appear more than once on a game. DD. GAME 4: When the "WIN" (TPL) Play Symbol appears, there will never be more than two (2) matching Prize Symbols. EE. GAME 4: Winning games will not contain more than three (3) matching Prize Symbols. FF. GAME 4: Winning games will not contain two (2) sets of three (3) matching Prize Symbols. GG. GAME 4: Non-winning games will not contain more than two (2) matching Prize Symbols. HH. GAME 5: The "VAULT" (TPL) Play Symbol will never appear more than once on a game. II. GAME 5: When the "VAULT" (TPL) Play Symbol appears, there will never be more than two (2) matching Prize Symbols. JJ. GAME 5: Winning games will not contain more than three (3) matching Prize Symbols. KK. GAME 5: Winning games will not contain two (2) sets of three (3) matching Prize Symbols. LL. GAME 5: Non-winning games will not contain more than two (2) matching Prize Symbols. 2.3 Procedure for Claiming Prizes. A. To claim a "SEASON'S GREETINGS" Scratch Ticket Game prize of $10.00, $20.00, $40.00, $50.00, $100, $200 or $500, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $40.00, $50.00, $100, $200 or $500 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. To claim a "SEASON'S GREETINGS" Scratch Ticket Game prize of $1,000, $10,000 or $250,000, the claimant must sign the winning Scratch Ticket and present it at one of the Texas Lottery's Claim Centers. If the claim is validated by the Texas Lottery, payment will be made to the bearer of the validated winning Scratch Ticket for that prize upon presentation of proper identification. When paying a prize of $600 or more, the Texas Lottery shall file the appropriate income reporting form with the Internal Revenue Service (IRS) and shall withhold federal income tax at a rate set by the IRS if required. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. As an alternative method of claiming a "SEASON'S GREETINGS" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. D. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. E. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "SEASON'S GREETINGS" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "SEASON'S GREETINGS" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a IN ADDITION October 6, TexReg 5579

298 prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 4,560,000 Scratch Tickets in Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 2008, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: September 26, 2017 Scratch Ticket Game Number 2011 "$50 or $100!" 1.0 Name and Style of Scratch Ticket Game. A. The name of Scratch Ticket Game No is "$50 OR $100!". The play style is "key number match". 1.1 Price of Scratch Ticket Game. A. Tickets for Scratch Ticket Game No shall be $10.00 per Scratch Ticket. 42 TexReg 5580 October 6, 2017 Texas Register

299 1.2 Definitions in Scratch Ticket Game No A. Display Printing - That area of the Scratch Ticket outside of the area where the overprint and Play Symbols appear. B. Latex Overprint - The removable scratch-off covering over the Play Symbols on the front of the Scratch Ticket. C. Play Symbol - The printed data under the latex on the front of the Scratch Ticket that is used to determine eligibility for a prize. Each Play Symbol is printed in Symbol font in black ink in positive except for dual-image games. The possible black Play Symbols are: 01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, $50 BURST SYMBOL, $100 BILL SYMBOL, $50.00 and $100. D. Play Symbol Caption - The printed material appearing below each Play Symbol which explains the Play Symbol. One caption appears under each Play Symbol and is printed in caption font in black ink in positive. The Play Symbol Caption which corresponds with and verifies each Play Symbol is as follows: IN ADDITION October 6, TexReg 5581

300 42 TexReg 5582 October 6, 2017 Texas Register

301 E. Serial Number - A unique 13 (thirteen) digit number appearing under the latex scratch-off covering on the front of the Scratch Ticket. The Serial Number is for validation purposes and cannot be used to play the game. The format will be: F. Bar Code - A 24 (twenty-four) character interleaved two (2) of five (5) Bar Code which will include a four (4) digit game ID, the seven (7) digit Pack number, the three (3) digit Scratch Ticket number and the ten (10) digit Validation Number. The Bar Code appears on the back of the Scratch Ticket. G. Pack-Ticket Number - A 14 (fourteen) digit number consisting of the four (4) digit game number (2011), a seven (7) digit Pack number, and a three (3) digit Scratch Ticket number. Scratch Ticket numbers start with 001 and end with 050 within each Pack. The format will be: H. Pack - A Pack of "$50 OR $100!" Scratch Ticket Game contains 050 Scratch Tickets, packed in plastic shrink-wrapping and fanfolded in pages of five (5). Tickets 001 to 005 will be on the top page; Tickets 006 to 010 on the next page; etc.; and Tickets 046 to 050 will be on the last page with backs exposed. Ticket 001 will be folded over so the front of Ticket 001 and 010 will be exposed. I. Non-Winning Ticket - A Scratch Ticket which is not programmed to be a winning Scratch Ticket or a Scratch Ticket that does not meet all of the requirements of these Game Procedures, the State Lottery Act (Texas Government Code, Chapter 466), and applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401. J. Scratch Ticket Game, Scratch Ticket or Ticket - A Texas Lottery "$50 OR $100!" Scratch Ticket Game No Determination of Prize Winners. The determination of prize winners is subject to the general Scratch Ticket validation requirements set forth in Texas Lottery Rule , Instant Game Rules, these Game Procedures, and the requirements set out on the back of each Scratch Ticket. A prize winner in the "$50 OR $100!" Scratch Ticket Game is determined once the latex on the Scratch Ticket is scratched off to expose 56 (fifty-six) Play Symbols. If the player matches any of the YOUR NUMBERS Play Symbols to any of the WINNING NUM- BERS Play Symbols, the player wins the prize for that number. If the player reveals a "$50 BURST" Play Symbol, the player wins $50 instantly! If the player reveals a "$100 BILL" Play Symbol, the player wins $100 instantly! No portion of the Display Printing nor any extraneous matter whatsoever shall be usable or playable as a part of the Scratch Ticket. 2.1 Scratch Ticket Validation Requirements. A. To be a valid Scratch Ticket, all of the following requirements must be met: 1. Exactly 56 (fifty-six) Play Symbols must appear under the Latex Overprint on the front portion of the Scratch Ticket; 2. Each of the Play Symbols must have a Play Symbol Caption underneath, unless specified, and each Play Symbol must agree with its Play Symbol Caption; 3. Each of the Play Symbols must be present in its entirety and be fully legible; 4. Each of the Play Symbols must be printed in black ink except for dual image games; 5. The Scratch Ticket shall be intact; 6. The Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be present in their entirety and be fully legible; 7. The Serial Number must correspond, using the Texas Lottery's codes, to the Play Symbols on the Scratch Ticket; 8. The Scratch Ticket must not have a hole punched through it, be mutilated, altered, unreadable, reconstituted or tampered with in any manner; 9. The Scratch Ticket must not be counterfeit in whole or in part; 10. The Scratch Ticket must have been issued by the Texas Lottery in an authorized manner; 11. The Scratch Ticket must not have been stolen, nor appear on any list of omitted Scratch Tickets or non-activated Scratch Tickets on file at the Texas Lottery; 12. The Play Symbols, Serial Number, Retailer Validation Code and Pack-Scratch Ticket Number must be right side up and not reversed in any manner; 13. The Scratch Ticket must be complete and not miscut, and have exactly 56 (fifty-six) Play Symbols under the Latex Overprint on the front portion of the Scratch Ticket, exactly one Serial Number, exactly one Retailer Validation Code, and exactly one Pack-Scratch Ticket Number on the Scratch Ticket; 14. The Serial Number of an apparent winning Scratch Ticket shall correspond with the Texas Lottery's Serial Numbers for winning Scratch Tickets, and a Scratch Ticket with that Serial Number shall not have been paid previously; 15. The Scratch Ticket must not be blank or partially blank, misregistered, defective or printed or produced in error; 16. Each of the 56 (fifty-six) Play Symbols must be exactly one of those described in Section 1.2.C of these Game Procedures; 17. Each of the 56 (fifty-six) Play Symbols on the Scratch Ticket must be printed in the Symbol font and must correspond precisely to the artwork on file at the Texas Lottery; the Scratch Ticket Serial Numbers must be printed in the Serial font and must correspond precisely to the artwork on file at the Texas Lottery; and the Pack-Scratch Ticket Number must be printed in the Pack-Scratch Ticket Number font and must correspond precisely to the artwork on file at the Texas Lottery; IN ADDITION October 6, TexReg 5583

302 18. The Display Printing on the Scratch Ticket must be regular in every respect and correspond precisely to the artwork on file at the Texas Lottery; and 19. The Scratch Ticket must have been received by the Texas Lottery by applicable deadlines. B. The Scratch Ticket must pass all additional validation tests provided for in these Game Procedures, the Texas Lottery's Rules governing the award of prizes of the amount to be validated, and any confidential validation and security tests of the Texas Lottery. C. Any Scratch Ticket not passing all of the validation requirements is void and ineligible for any prize and shall not be paid. However, the Executive Director may, solely at the Executive Director's discretion, refund the retail sales price of the Scratch Ticket. In the event a defective Scratch Ticket is purchased, the only responsibility or liability of the Texas Lottery shall be to replace the defective Scratch Ticket with another unplayed Scratch Ticket in that Scratch Ticket Game (or a Scratch Ticket of equivalent sales price from any other current Texas Lottery Scratch Ticket Game) or refund the retail sales price of the Scratch Ticket, solely at the Executive Director's discretion. 2.2 Programmed Game Parameters. A. The top Prize Symbol will appear on every Ticket, unless restricted by other parameters, play action or prize structure. B. Consecutive Non-Winning Tickets in a Pack will not have matching play data, spot for spot. C. No matching non-winning YOUR NUMBERS Play Symbols on a Ticket. D. No matching WINNING NUMBERS Play Symbols on a Ticket. E. A Ticket may have up to fourteen (14) matching non-winning Prize Symbols, unless restricted by other parameters, play action or prize structure. F. The "$50 BURST" (WIN$50) Play Symbol will only appear on intended winning Tickets and will only appear with the $50 Prize Symbol. G. The "$100 BILL" (WIN$100) Play Symbol will only appear on intended winning Tickets and will only appear with the $100 Prize Symbol. H. The "$50 BURST" (WIN$50) Play Symbol may appear up to two (2) times on winning Tickets, unless restricted by other parameters, play action or prize structure. I. The "$100 BILL" (WIN$100) Play Symbol will never appear more than one time on intended winning Tickets. 2.3 Procedure for Claiming Prizes. A. To claim a "$50 OR $100!" Scratch Ticket Game prize of $50.00 or $100, a claimant shall sign the back of the Scratch Ticket in the space designated on the Scratch Ticket and present the winning Scratch Ticket to any Texas Lottery Retailer. The Texas Lottery Retailer shall verify the claim and, if valid, and upon presentation of proper identification, if appropriate, make payment of the amount due the claimant and physically void the Scratch Ticket; provided that the Texas Lottery Retailer may, but is not required, to pay a $50.00 or $100 Scratch Ticket Game. In the event the Texas Lottery Retailer cannot verify the claim, the Texas Lottery Retailer shall provide the claimant with a claim form and instruct the claimant on how to file a claim with the Texas Lottery. If the claim is validated by the Texas Lottery, a check shall be forwarded to the claimant in the amount due. In the event the claim is not validated, the claim shall be denied and the claimant shall be notified promptly. A claimant may also claim any of the above prizes under the procedure described in Section 2.3.B and Section 2.3.C of these Game Procedures. B. As an alternative method of claiming a "$50 OR $100!" Scratch Ticket Game prize, the claimant must sign the winning Scratch Ticket, thoroughly complete a claim form, and mail both to: Texas Lottery Commission, P.O. Box 16600, Austin, Texas The Texas Lottery is not responsible for Scratch Tickets lost in the mail. In the event that the claim is not validated by the Texas Lottery, the claim shall be denied and the claimant shall be notified promptly. C. Prior to payment by the Texas Lottery of any prize, the Texas Lottery shall deduct: 1. A sufficient amount from the winnings of a prize winner who has been finally determined to be: a. delinquent in the payment of a tax or other money to a state agency and that delinquency is reported to the Comptroller under Government Code ; b. in default on a loan made under Chapter 52, Education Code; or c. in default on a loan guaranteed under Chapter 57, Education Code; and 2. delinquent child support payments from the winnings of a prize winner in the amount of the delinquency as determined by a court or a Title IV-D agency under Chapter 231, Family Code. D. If a person is indebted or owes delinquent taxes to the State, other than those specified in the preceding paragraph, the winnings of a person shall be withheld until the debt or taxes are paid. 2.4 Allowance for Delay of Payment. The Texas Lottery may delay payment of the prize pending a final determination by the Executive Director, under any of the following circumstances: A. if a dispute occurs, or it appears likely that a dispute may occur, regarding the prize; B. if there is any question regarding the identity of the claimant; C. if there is any question regarding the validity of the Scratch Ticket presented for payment; or D. if the claim is subject to any deduction from the payment otherwise due, as described in Section 2.3.D of these Game Procedures. No liability for interest for any delay shall accrue to the benefit of the claimant pending payment of the claim. 2.5 Payment of Prizes to Persons Under 18. If a person under the age of 18 years is entitled to a cash prize under $600 from the "$50 OR $100!" Scratch Ticket Game, the Texas Lottery shall deliver to an adult member of the minor's family or the minor's guardian a check or warrant in the amount of the prize payable to the order of the minor. 2.6 If a person under the age of 18 years is entitled to a cash prize of $600 or more from the "$50 OR $100!" Scratch Ticket Game, the Texas Lottery shall deposit the amount of the prize in a custodial bank account, with an adult member of the minor's family or the minor's guardian serving as custodian for the minor. 2.7 Scratch Ticket Claim Period. All Scratch Ticket prizes must be claimed within 180 days following the end of the Scratch Ticket Game or within the applicable time period for certain eligible military personnel as set forth in Texas Government Code Any rights to a prize that is not claimed within that period, and in the manner specified in these Game Procedures and on the back of each Scratch Ticket, shall be forfeited. 2.8 Disclaimer. The number of prizes in a game is approximate based on the number of Scratch Tickets ordered. The number of actual prizes 42 TexReg 5584 October 6, 2017 Texas Register

303 available in a game may vary based on number of Scratch Tickets manufactured, testing, distribution, sales and number of prizes claimed. A Scratch Ticket Game may continue to be sold even when all the top prizes have been claimed. 3.0 Scratch Ticket Ownership. A. Until such time as a signature is placed upon the back portion of a Scratch Ticket in the space designated, a Scratch Ticket shall be owned by the physical possessor of said Scratch Ticket. When a signature is placed on the back of the Scratch Ticket in the space designated, the player whose signature appears in that area shall be the owner of the Scratch Ticket and shall be entitled to any prize attributable thereto. Notwithstanding any name or names submitted on a claim form, the Executive Director shall make payment to the player whose signature appears on the back of the Scratch Ticket in the space designated. If more than one name appears on the back of the Scratch Ticket, the Executive Director will require that one of those players whose name appears thereon be designated by such players to receive payment. B. The Texas Lottery shall not be responsible for lost or stolen Scratch Tickets and shall not be required to pay on a lost or stolen Scratch Ticket. 4.0 Number and Value of Scratch Ticket Prizes. There will be approximately 6,000,000 Scratch Tickets in the Scratch Ticket Game No The approximate number and value of prizes in the game are as follows: A. The actual number of Scratch Tickets in the game may be increased or decreased at the sole discretion of the Texas Lottery Commission. 5.0 End of the Scratch Ticket Game. The Executive Director may, at any time, announce a closing date (end date) for the Scratch Ticket Game No without advance notice, at which point no further Scratch Tickets in that game may be sold. The determination of the closing date and reasons for closing will be made in accordance with the Scratch Ticket Game closing procedures and the Instant Game Rules. See 16 TAC (j). 6.0 Governing Law. In purchasing a Scratch Ticket, the player agrees to comply with, and abide by, these Game Procedures for Scratch Ticket Game No. 2011, the State Lottery Act (Texas Government Code, Chapter 466), applicable rules adopted by the Texas Lottery pursuant to the State Lottery Act and referenced in 16 TAC, Chapter 401, and all final decisions of the Executive Director. TRD Bob Biard General Counsel Texas Lottery Commission Filed: September 22, 2017 North Central Texas Council of Governments Application for New Ideas for Blue-Green-Grey Initiative The North Central Texas Council of Governments (NCTCOG) is requesting applications from teams of individuals, private firms, nonprofits, or governmental agencies for new project ideas. Each project submitted must include three elements: Blue (water), Green (environment), and Grey (transportation infrastructure). Funds awarded as part of this initiative are intended to assist with the development of new ideas that could be transmitted to non-profit organizations, private sector companies or government agencies for funding of the next phase. Awarded applications may receive up to $50,000. Award of funding through this initiative is conditional on the identification of which implementation agency will receive the idea. Applications must be received no later than 5:00 p.m., on Friday, November 3, 2017, to Michael Morris, P.E., Director of Transportation, North Central Texas Council of Governments, 616 Six Flags Drive, Arlington, Texas Additional details about this opportunity will be available at by the close of business on Friday, October 6, NCTCOG encourages participation by disadvantaged business enterprises and does not discriminate on the basis of age, race, color, religion, sex, national origin, or disability. TRD R. Michael Eastland Executive Director North Central Texas Council of Governments Filed: September 27, 2017 North Texas Behavioral Health Authority Request for Proposal - Fiscal Year 2017 Annual Financial and Compliance Audit The North Texas Behavioral Health Authority ("NTBHA") is requesting proposals from public accounting firms to perform its annual financial and compliance audit for fiscal year NTBHA is contracted with the Texas Health and Human Services Commission, via IN ADDITION October 6, TexReg 5585

304 interlocal agreement, to function as the Local Behavioral Health Authority ("LBHA") for the following Texas counties: Dallas, Ellis, Hunt, Kaufman, Navarro and Rockwall. Respondents ("proposers") to this Request for Proposals must submit a technical bid conforming to the requirements described in the complete RFP document, which can be found at under Procurements or by the following link, at Bids must demonstrate the ability to perform the annual financial and compliance audit in accordance with generally accepted government auditing standards and furnish satisfactory evidence of ability to provide, in a professional and timely manner, the services stated in this Request for Proposal. The contract term for the audit services based upon Board of Trustee's approval of the Bid will be for the fiscal year ending August 31, NTBHA may request to extend the contract for up to five additional one year terms through August 31, 2023, following satisfactory delivery of the services specified in the Bid and engagement letter. The engagement can be terminated without cause. NTBHA reserves the right to withdraw this Request for Proposal at any time without award. Submissions to this Request for Proposal are due by: Monday, October 2nd, 2017, 12:00 p.m. (noon) Responses and/or inquiries to this Request for Proposal should be ed directly to Heath Frederick, Director of Contract Services at HFrederick@NTBHA.org. Submit responses and/or inquiries via with the following subject line: Response to RFP FY17 Annual Financial and Compliance Audit Proposers will be notified, via to the identified Representative, if any further information is needed to assist in the review process. TRD Heath Frederick Director of Contracting Services North Texas Behavioral Health Authority Filed: September 22, 2017 Public Utility Commission of Texas Notice of Application for Amendment to Certificated Service Area Boundary Notice is given to the public of an application filed on September 20, 2017, with the Public Utility Commission of Texas (commission) for an amendment to a certificated service area boundary in Harrison and Panola Counties, Texas. Docket Style and Number: Application of Eastex Telephone Cooperative, Inc. to Amend a Certificate of Convenience and Necessity for a Minor Service Area Boundary Change in Harrison and Panola Counties. Docket Number The Application: The minor boundary amendment is being filed to realign the boundaries between ETC's Elysian Fields exchange and De- Berry exchange and small areas contiguous to its current certificated service areas. Persons wishing to comment on the action sought or intervene should contact the commission by October 13, 2017, 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: September 21, 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 September 22, 2017, under the Public Utility Regulatory Act, Tex. Util. Code Ann and Docket Style and Number: Application of CSW Energy, Inc. for Approval under of the Public Utility Regulatory Act, Docket Number The Application: On September 22, 2017, CSW Energy, Inc. filed an application for approval of the sale of an interest in renewable energy generation facilities to Invenergy Renewables LLC. The current aggregate installed generation capacity that will be owned and controlled in, or capable of delivering into ERCOT, by CSW, Invenergy and their affiliates, totals MW. This represents approximately 2.2% of the total generation capacity in ERCOT. Persons wishing to intervene or comment on the action sought should contact the Public Utility Commission of Texas as soon as possible as an intervention deadline will be imposed. A comment or request to intervene should be mailed to 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: September 26, 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 September 22, 2017, in accordance with the Texas Water Code. Docket Style and Number: Application of Gulf Coast Utility Company, Inc. and Undine Texas Environmental, LLC for Sale, Transfer or Merger of Sewer Facilities and Certificate Rights in Brazoria County, Docket Number The Application: Gulf Coast Utility Company, Inc. and Undine Texas Environmental, LLC filed an application for approval of the sale, transfer, or merger of facilities and certificate rights in Brazoria County. Specifically, Undine Texas Environmental, LLC seeks approval to acquire all of the sewer system assets and certificated service area held by Gulf Coast under sewer certificate of convenience and necessity (CCN) No , to be held under the same sewer CCN that will be assigned to Undine Texas, LLC in Docket No when final approval is issued in that docket. Gulf Coast's sewer CCN No will be cancelled. 42 TexReg 5586 October 6, 2017 Texas Register

305 Persons who wish to intervene in the proceeding or comment upon 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 Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas Further information may also be obtained by calling the commission's Office of Customer Protection at (512) or (888) Hearing and speech-impaired individuals with text telephones (TTY) may contact the commission through Relay Texas by dialing All correspondence should refer to Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: September 26, 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 September 22, 2017, in accordance with the Texas Water Code. Docket Style and Number: Application of Undine Texas, LLC and Gulf Coast Utility Company, Inc. For Sale, Transfer, or Merger of Water Facilities and Certificate Rights in Brazoria and Matagorda Counties, Docket Number The Application: Undine Texas, LLC and Gulf Coast Utility Company, Inc. filed an application for approval of the sale, transfer, or merger of facilities and certificate rights in Brazoria and Matagorda Counties. Specifically, Undine seeks approval to acquire all of the water system assets and certificated service area held by Gulf Coast under water certificate of convenience and necessity (CCN) No , to be held by Undine under the same water CCN that will be assigned to Undine in Docket No when final approval is issued in that docket. Gulf Coast's water CCN No will be cancelled. Persons who wish to intervene in the proceeding or comment upon 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 Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas Further information may also be obtained by calling the commission's Office of Customer Protection at (512) or (888) Hearing and speech-impaired individuals with text telephones (TTY) may contact the commission through Relay Texas by dialing All correspondence should refer to Docket Number TRD Adriana Gonzales Rules Coordinator Public Utility Commission of Texas Filed: September 26, 2017 Notice of Application to Amend a Sewer Certificate of Convenience and Necessity Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) of an application to amend a sewer certificate of convenience and necessity (CCN) in Johnson County. Docket Style and Number: Application of Johnson County Special Utility District to Amend a Sewer Certificate of Convenience and Necessity in Johnson County, Docket Number The Application: Johnson County Special Utility District filed an application to amend its sewer certificate of convenience and necessity number in Johnson County. Johnson County seeks dual certification in a portion of the requested service area where the City of Burleson has requested a CCN, and single certification in an area where the district already has facilities in place. The total service area being requested includes approximately 805 acres and 81 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: September 25, 2017 Notice of Application to Amend Service Provider Certificate of Operating Authority On September 21, 2017, Bandwidth.com CLEC, LLC filed an application with the Public Utility Commission of Texas (commission) to amend service provider certificate of operating authority No to reflect a change in ownership and control. Docket Style and Number: Application of Bandwidth.com CLEC, LLC for an Amendment to a Service Provider Certificate of Operating Authority, Docket Number Persons wishing to 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 no later than October 13, Hearing and speech-impaired individuals with text telephones (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: September 25, 2017 Notice of Petition for Amendment to a Water Certificate of Convenience and Necessity by Expedited Release Notice is given to the public of the filing with the Public Utility Commission of Texas (commission) on September 22, 2017, of a petition to amend a water certificate of convenience and necessity (CCN) by expedited release in Denton County. Docket Style and Number: Petition of Mike Hopkins, Executor of the Estate of Herman H. Hopkins to Amend Bolivar Water Supply Corporation's Certificate of Convenience and Necessity in Denton County by Expedited Release, Docket Number The Petition: A petition was filed by Mike Hopkins, as executor of the estate of Herman H. Hopkins, for expedited release of acres from Bolivar Water Supply Corporation's water certificate of conve- IN ADDITION October 6, TexReg 5587

306 nience and necessity No in Denton County under Texas Water Code (a 5) and 16 Texas Administrative Code (l). Persons wishing to comment on the action sought should contact the commission no later than October 23, 2017, 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: September 25, 2017 Texas Department of Transportation Public Notice - Aviation Pursuant to Transportation Code, , and Title 43, Texas Administrative Code, , the Texas Department of Transportation conducts public hearings to receive comments from interested parties concerning proposed approval of various aviation projects. For information regarding actions and times for aviation public hearings, please go to the following website: Or visit and under How Do I, choose Find Hearings and Meetings, then choose Hearings and Meetings, and then choose Schedule. Or contact Texas Department of Transportation, Aviation Division, 150 East Riverside, Austin, Texas 78704, (512) or (800) 68-PI- LOT. TRD Joanne Wright Deputy General Counsel Texas Department of Transportation Filed: September 21, 2017 Texas Veterans Commission Accepting Membership Applications for Advisory Committees The Texas Veterans Commission ("Commission") is accepting applications to fill membership vacancies on the following committees: Veterans Employment and Training Advisory Committee, Fund for Veterans' Assistance Advisory Committee, Veterans Communication Advisory Committee, and Veterans County Service Officer Advisory Committee. Each committee is composed of nine (9) members who are appointed by the Commission. The term of office for each member is two (2) years (staggered terms). Committees are required to meet at least four (4) times a year. The Fund for Veterans' Assistance Advisory Committee may meet as needed to make grant recommendations to the Commission. Committees generally meet at Commission headquarters in Austin, Texas or via telephone conference. As of September 1, 2017, the Commission is authorized to reimburse committee members for their travel expenses. Committee membership is voluntary. Committees. Each advisory committee will review issues and provide advice to the Commission, as charged by the Commission. Veterans Employment and Training Advisory Committee: Seeks the input of employers to better assist veterans in gaining successful employment and/or training. Fund for Veterans' Assistance Advisory Committee: Evaluates grant applications and makes recommendations to the Commission. Veterans Communication Advisory Committee: Develops recommendations to improve communications with veterans, their families, and the general public regarding the services provided by the Texas Veterans Commission and information on benefits and assistance available to veterans from federal, state, and private entities. Veterans County Service Officer Advisory Committee: Develops recommendations to improve the support and training of Veterans County Service Officers and to increase coordination between Veterans County Service Officers and the Commission related to the statewide network of services being provided to veterans. Qualifications for Membership. Veterans are strongly preferred. Applicants should identify how they meet these qualifications for each committee: Veterans Employment and Training Advisory Committee: Individuals who are recognized authorities in the fields of business, employment, training, rehabilitation or labor or are nominated by veterans' organizations that have a national employment program. Fund for Veterans' Assistance Advisory Committee: Representatives from veterans' organizations, non-profit or philanthropic organizations, veterans or family members of veterans, and other individuals with the experience and knowledge to assist the committee with achievement of its purpose. NOTE: FVA Advisory Committee members may not include officers, directors or employees of organizations or entities that have an open Fund for Veterans' Assistance grant during the member's tenure or that intend to submit an application for a Fund for Veterans' Assistance grant. Veterans Communication Advisory Committee: Representatives from the communications industry, state agencies, the Texas National Guard, U.S. Armed Forces reserve components, and other individuals with the experience and knowledge to assist the committee with achievement of its purpose. Veterans County Service Officer Advisory Committee: Current, former or retired Veterans County Service Officers, and may include representatives from veterans' organizations or other individuals with the experience and knowledge to assist the committee with achievement of its purpose. Application for Membership. To apply for membership on a committee, submit an online application through the Commission's website at Deadline for Application. Applications must be received no later than 5:00 p.m. (Central Time), Thursday, October 19, 2017, to be considered for membership on a committee. TRD Cruz Montemayor Deputy Executive Director Texas Veterans Commission Filed: September 27, 2017 Texas Water Development Board Notice of Public Hearing on Draft Amendments to the State Fiscal Year 2018 Clean and Drinking Water State Revolving Fund Intended Use Plans 42 TexReg 5588 October 6, 2017 Texas Register

307 The Texas Water Development Board (TWDB) will conduct a public hearing on draft amendments to the State Fiscal Year (SFY) 2018 Clean Water State Revolving Fund (CWSRF) Intended Use Plan (IUP) and SFY 2018 Drinking Water State Revolving Fund (DWSRF) IUP. The hearing will begin promptly at 9:00 a.m. on October 11, 2017, in Room 172 of the Stephen F. Austin Building at 1700 North Congress Avenue, Austin, Texas The CWSRF and DWSRF IUPs describe how the TWDB intends to use CWSRF and DWSRF program funds to support the overall goals of the programs. The draft amended SFY 2018 CWSRF and DWSRF IUPs have been prepared pursuant to rules adopted by the TWDB in 31 Texas Administrative Code Chapters 375 and 371 respectively. Interested persons are encouraged to attend the hearing and to present comments concerning the draft amended IUPs. Those who cannot attend the hearing may provide comments through the following three alternative methods: (1) submit comments via the online comment page: (2) comments to the electronic mail address: iupcomments@twdb.texas.gov; or (3) submit written comments to the postal mail address: Mr. Mark Wyatt Director, Program Administration and Reporting Texas Water Development Board P.O. Box Austin, Texas The deadline for comments will be specified in the draft amended CWSRF and DWSRF IUPs, which will be available at the TWDB's website at and respectively. Please note that time limits on public comments may be imposed to allow all attendees to be heard. Additionally, the TWDB discourages comments requesting a revised rating based on project information not previously submitted. Persons with disabilities who plan to attend this meeting and need auxiliary aids or services are requested to contact Merry Klonower at (512) two (2) business days prior to the hearing so that appropriate arrangements can be made. TRD Todd Chenoweth General Counsel Texas Water Development Board Filed: September 27, 2017 Workforce Solutions Deep East Texas Request For Applications for Consulting and Technical Writing Services, RFA Workforce Solutions Deep East Texas (WFSDET), is soliciting applications from a qualified individual or firms to provide specialized consulting services. These consulting and technical writing services will assist staff throughout the program year on an as-needed-basis. Any applicant responding to this RFA must have a minimum of five (5) years' experience in the subject matter indicated. All inquiries should be directed to Terry Campbell, at phone number: (936) or tcampbell@detwork.org. Mailed, hand delivered, or ed via PDF file responses are acceptable. Workforce Solutions Deep East Texas, a Proud Partner of the AmericanJobCenter Network, is an Equal Opportunity Employer/Program. Auxiliary aid and services are available upon request to individuals with disabilities. Relay Texas: (800) (TDD) and (800) or (Voice). TRD Terry Campbell Finance Director Workforce Solutions Deep East Texas Filed: September 27, 2017 IN ADDITION October 6, TexReg 5589

308 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:

309 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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